1
EXHIBIT 10.7
LOAN AGREEMENT
($10,000,000 TERM LOAN FACILITY
AND
$18,000,000 REVOLVING LOAN FACILITY)
DATED AS OF JUNE 30, 1997
AMONG
NATIONAL TANK COMPANY,
AS BORROWER,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS AGENT AND AS A LENDER,
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
2
TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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2. Commitments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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2.2 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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2.3 Terminations or Reductions of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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2.4 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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2.5 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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2.6 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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2.7 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3. Borrowings, Payments, Prepayments and Interest Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3.1 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3.2 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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3.3 Interest Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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4. Payments; Pro Rata Treatment; Computations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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4.2 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.3 Certain Actions, Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.4 Non-Receipt of Funds by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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4.5 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.1 Initial Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.2 All Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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6.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.3 Enforceable Obligations; Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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6.4 Other Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.6 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.8 Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.9 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.10 No Untrue or Misleading Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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6.12 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.13 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.14 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.15 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.16 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.18 Collateral Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7.1 Taxes, Existence, Regulations, Property, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7.2 Financial Statements and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7.3 Financial Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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7.4 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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7.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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7.6 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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7.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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7.8 Notice of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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7.9 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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7.10 ERISA Information and Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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7.11 Additional Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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8. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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8.1 Borrowed Money Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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8.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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8.3 Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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8.4 Mergers, Consolidations and Acquisitions and Dispositions of Assets . . . . . . . . . . . . . . . 52
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8.5 Redemption, Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.6 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.7 Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.8 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.9 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.10 Key Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.11 Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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8.12 Unfunded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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8.13 Operating Lease Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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8.14 Sale/Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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8.15 Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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8.16 Negative Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
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9.2 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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9.3 Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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9.4 Preservation of Security for Letter of Credit Liabilities . . . . . . . . . . . . . . . . . . . . 58
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9.5 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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10. Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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10.1 Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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10.2 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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10.3 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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10.4 Material Written Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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10.5 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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10.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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10.7 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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10.8 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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10.9 Resignation or Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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10.10 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
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10.11 Authority of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.3 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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11.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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11.5 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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11.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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11.7 Limitation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
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11.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.9 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.13 Tax Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.14 Conflicts Between This Agreement and the Other Loan Documents . . . . . . . . . . . . . . . . . . 70
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11.15 Limitation on Charges; Substitute Lenders; Non-Discrimination . . . . . . . . . . . . . . . . . . 70
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11.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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EXHIBITS
A -- Request for Extension of Credit
B -- Rate Designation Notice
C -- Term Note
D -- Revolving Note
E -- Assignment and Acceptance
F -- Compliance Certificate
G -- Borrowing Base Certificate
I -- Existing Letters of Credit
H -- Permitted Sales
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of June 30, 1997 (the
"Effective Date"), by and among NATIONAL TANK COMPANY, a Delaware corporation
(together with its permitted successors and assigns, herein called the
"Borrower"); each of the lenders which is or may from time to time become a
party hereto (individually, a "Lender" and, collectively, the "Lenders"), and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), a national banking
association, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Agent").
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
In this Agreement, terms defined above shall have the meanings
ascribed to them above. Unless a particular term, word or phrase is otherwise
defined or the context otherwise requires, capitalized terms, words and phrases
used herein or in the Loan Documents (as hereinafter defined) have the
following meanings (all definitions that are defined in this Agreement or in
the Loan Documents in the singular have the same meanings when used in the
plural and vice versa):
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of Texas as Sections 1 through 11 of the Texas Business and Commerce
Code, in force on the Effective Date.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest
on the Notes at the Stated Rate) which, under applicable laws, are or may be
deemed to constitute interest on the indebtedness evidenced by the Notes or any
other amounts owing under any Loan Document.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional Collateral Event shall have the meaning ascribed to such
term in Section 7.8 hereof.
Adjusted LIBOR means, with respect to each Interest Period applicable
to a LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
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Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance
sheet as of the end of the fiscal year relating thereto and an income statement
and a statement of cash flows for such fiscal year, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP in all material respects, and accompanied by
the opinion of independent certified public accountants of recognized national
standing, which shall state that such financial statements present fairly in
all material respects the financial position of such Person and, if such Person
has any Subsidiaries, its consolidated Subsidiaries as of the date thereof and
the results of its operations for the period covered thereby in conformity with
GAAP. As to Borrower only, Annual Financial Statements shall also include
unaudited consolidating financial statements for Borrower and unaudited
consolidated financial statements for Borrower and its Subsidiaries (other than
NATCO Canada), each in Proper Form, certified in each case by the chief
financial officer or other authorized officer of Borrower as presenting fairly
in all material respects the consolidating financial position of the applicable
Person.
Applications means all applications and agreements for Letters of
Credit, or similar instruments or agreements, in Proper Form, now or hereafter
executed by any Person in connection with any Letter of Credit now or hereafter
issued or to be issued under the terms hereof at the request of Borrower.
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6(b) hereof.
Bankruptcy Code means the United States Bankruptcy Code, as amended,
and any successor statute.
Base Rate means for any day a rate per annum equal to the lesser of
(a) the then applicable Margin Percentage from time to time in effect plus the
greater of (1) the Prime Rate for that day and (2) the Federal Funds Rate for
that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason Agent
shall have determined (which determination shall be conclusive and binding,
absent manifest error) that it is unable to ascertain the Federal Funds Rate
for any reason, including, without limitation, the inability or failure of
Agent to obtain sufficient quotations in accordance with the terms hereof, the
Base Rate shall, until the circumstances giving rise to such inability no
longer exist, be the lesser
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of (a) the Prime Rate plus the then applicable Margin Percentage from time to
time in effect or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person,
without duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments evidencing borrowed money, (iii) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property purchased by such Person, (iv) all obligations of such Person issued
or assumed as the deferred purchase price of Property or services (excluding
obligations of such Person to creditors for raw materials, inventory, services
and supplies and deferred payments for services to employees and former
employees incurred in the ordinary course of such Person's business), (v) all
lease obligations of such Person which have been capitalized on the balance
sheet of such Person in accordance with GAAP, (vi) all obligations of others
secured by any Lien on Property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, equal to the lesser of
the amount of such obligation or the fair market value of such Property, (vii)
Interest Rate Risk Indebtedness of such Person, (viii) all obligations of such
Person in respect of outstanding letters of credit issued for the account of
such Person and (ix) all guarantees of such Person.
Borrowing Base means, as at any date, the amount of the Borrowing Base
shown on the Borrowing Base Certificate then most recently delivered pursuant
to Section 7.2(b) hereof, determined by calculating the amount equal to:
(i) the sum of (x) 50% of that portion of Eligible Accounts of
Borrower and its Subsidiaries (other than NATCO Canada) at
said date which consists of Accounts to be repurchased
pursuant to the Purchase Agreement and (y) 80% of the
aggregate amount of all other Eligible Accounts of Borrower
and its Subsidiaries (other than NATCO Canada) at said date,
plus
(ii) the sum of (w) 75% of that portion of Eligible Inventory of
Test, Inc. at said date (determined at the lower of cost or
market on a consistent basis) which consists of costs in
excess of xxxxxxxx and which relate to signed time tickets,
(x) 20% of that portion of Eligible Inventory of Borrower and
its Subsidiaries (other than NATCO Canada) at said date
(determined at the lower of cost or market on a consistent
basis) which consists of used finished goods, (y) 25% of that
portion of Eligible Inventory of Borrower and its Subsidiaries
(other than NATCO Canada) at said date (determined at the
lower of cost or market on a consistent basis) which consists
of work-in-process relating to projects for customers that
are not Account debtors with respect to any Accounts
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owing to Borrower or any of its Subsidiaries (other than NATCO
Canada) which are not Eligible Accounts and (z) 50% of the
aggregate amount of all other Eligible Inventory of Borrower
and its Subsidiaries (other than NATCO Canada) at said date
(determined at the lower of cost or market on a consistent
basis); provided that the amount calculated pursuant to this
clause (ii) shall not exceed 50% of the Borrowing Base.
In the absence of a current Borrowing Base Certificate, Agent shall determine
the Borrowing Base from time to time in its reasonable discretion, taking into
account all information reasonably available to it, and the Borrowing Base from
time to time so determined shall be the Borrowing Base for all purposes of this
Agreement until a current Borrowing Base Certificate, in Proper Form, is
furnished to and accepted by Agent.
Borrowing Base Certificate shall mean a certificate, duly executed by
the chief executive officer, chief financial officer, treasurer or controller
of Borrower, appropriately completed and in substantially the form of Exhibit G
hereto. Each Borrowing Base Certificate shall be effective only as accepted by
Agent (and with such revisions, if any, as Agent may reasonably require as a
condition to such acceptance).
Business Day means any day other than a day on which commercial banks
are authorized or required to close in Houston, Texas.
Capital Expenditures means, with respect to any Person for any period,
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations incurred during such period (to the extent not
already included), which would be reflected as additions to Property, plant or
equipment on a balance sheet of such Person and its consolidated Subsidiaries,
if any, prepared in accordance with GAAP; but excluding expenditures during
such period for the repair or replacement of any fixed or capital asset which
was destroyed, damaged or taken, in whole or in part, to the extent financed by
the proceeds of an insurance policy maintained by such Person or the proceeds
of a condemnation award.
Ceiling Rate means, on any day, with respect to any Person, the maximum
nonusurious rate of interest permitted for that day by whichever of applicable
federal or Texas (or any jurisdiction whose usury laws are deemed to apply to
the Notes or any other Loan Documents despite the intention and desire of the
parties to apply the usury laws of the State of Texas) laws permits the higher
interest rate, stated as a rate per annum. On each day, if any, that Chapter
One establishes the Ceiling Rate, the Ceiling Rate shall be the "indicated rate
ceiling" (as defined in Chapter One) for that day, to the extent Chapter One
applies. Agent may from time to time, as to current and future balances,
implement any other ceiling under Chapter One by notice to Borrower if and to
the extent permitted by Chapter One. Without notice to Borrower or any other
Person, the Ceiling Rate shall automatically fluctuate upward and downward as
and in the amount by which such maximum nonusurious rate of interest permitted
by applicable law fluctuates.
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Chapter One means Chapter One of Title 79, Texas Revised Civil
Statutes, 1925, as amended.
Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal
or mixed, now or hereafter subject to the Liens created pursuant to any of the
Security Documents.
Commitment Fee Percentage means (i) on any day prior to July 1, 1997,
0.50% and (ii) on and after July 1, 1997, the applicable per annum percentage
set forth at the appropriate intersection in the table shown below, based on
the Debt to Capitalization Ratio as of the last day of the most recently ended
fiscal quarter of Borrower calculated by Agent as soon as practicable after
receipt by Agent of all financial reports required under this Agreement with
respect to such fiscal quarter (including a Compliance Certificate) (provided,
however, that if the Commitment Fee Percentage is increased as a result of the
reported Debt to Capitalization Ratio, such increase shall be retroactive to
the date that Borrower was obligated to deliver such financial reports to Agent
pursuant to the terms of this Agreement and provided further, however, that if
the Commitment Fee Percentage is decreased as a result of the reported Debt to
Capitalization Ratio, and such financial reports are delivered to Agent not
more than ten (10) calendar days after the date required to be delivered
pursuant to the terms of this Agreement, such decrease shall be retroactive to
the date that Borrower was obligated to deliver such financial reports to Agent
pursuant to the terms of this Agreement):
Debt to Commitment
Capitalization Ratio Fee Percentage
-------------------- --------------
Greater than 50% 0.50
Greater than 40% but
less than or equal to 50% 0.375
Greater than 20% but
less than or equal to 40% 0.25
Less than or equal to 20% 0.20
Compliance Certificate shall have the meaning given to it in Section
7.2(c) hereof.
Controlled Group means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, are treated as a single employer
under Section 414 of the Code.
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Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
Cover for Letter of Credit Liabilities shall be effected by paying to
Agent immediately available funds, to be held by Agent in a collateral account
maintained by Agent at its Principal Office and collaterally assigned as
security for the financial accommodations extended pursuant to this Agreement
using documentation reasonably satisfactory to Agent, in the amount required by
any applicable provision hereof. Such amount shall be retained by Agent in
such collateral account until such time as in the case of the Cover being
provided pursuant to Sections 2.2(a) or 9.3 hereof, the applicable Letter of
Credit shall have expired and the Reimbursement Obligations, if any, with
respect thereto shall have been fully satisfied; provided, however, that at
such time if a Default or Event of Default has occurred and is continuing,
Agent shall not be required to release such amount in such collateral account
until such Default or Event of Default shall have been cured or waived.
Xxxxxxxx means Xxxxxxxx Point Industries, Inc., a Delaware
corporation.
Debt Service means, with respect to any Person for any period, the sum
of (i) Interest Expense for such period and (ii) scheduled principal payments
on obligations included within Borrowed Money Indebtedness for such period.
Debt to Capitalization Ratio means, as of any day, the ratio,
expressed as a percentage, of (a) Borrowed Money Indebtedness of Borrower and
its Subsidiaries (other than NATCO Canada) as of such date (exclusive of the
categories of Borrowed Money Indebtedness described in clauses (vii), (viii)
and (ix) of the definition of "Borrowed Money Indebtedness" set forth in this
Section 1.1) to (b) Total Capitalization as of such date.
Default means an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of
Default.
Dollars and $ means lawful money of the United States of America.
EBITDA means, without duplication, for any period the consolidated net
earnings (excluding any extraordinary gains or losses) of Borrower and its
Subsidiaries (other than NATCO Canada) plus, to the extent deducted in
calculating consolidated net income, depreciation, amortization, other non-cash
items, Interest Expense, federal and state income tax expense and non-operating
and medical retiree expenses of Borrower and minus, to the extent added in
calculating consolidated net income, any non-cash items.
Eligible Accounts shall mean, as at any date of determination thereof,
each Account of Borrower or any of its Subsidiaries (other than NATCO Canada)
which is subject to a Lien created by any Security Document and on which Agent
shall have a first-priority perfected Lien (subject only to Permitted Liens)
which is at said date payable to Borrower or any such Subsidiary and which
complies with the following requirements: (a) (i) the subject goods have been
sold to an account
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debtor on an absolute sale basis on open account and not on consignment, on
approval or on a "sale or return" basis or subject to any other repurchase or
return agreement and no material part of the subject goods has been returned,
rejected, lost or damaged (provided that the foregoing shall not disqualify
accounts arising from goods sold with usual and customary sales warranties or
having warranty claims which are not material), (ii) the Account is stated to
be payable in Dollars and is not evidenced by chattel paper or an instrument of
any kind (unless Agent has a perfected first priority Lien (subject only to
Permitted Liens) on such chattel paper or instrument) and said account debtor
is not insolvent or the subject of any bankruptcy or insolvency proceedings of
any kind unless Borrower or its applicable Subsidiary, as the case may be, has
received a letter of credit, bond or other financial guarantee in an amount
equal to or greater than such Account issued by a Qualified Institution and
otherwise in form and substance satisfactory to Agent or such Account is to be
repurchased pursuant to the Purchase Agreement; (b) the account debtor must be
located in the United States, except for (x) Accounts as to which Borrower or
its applicable Subsidiary, as the case may be, has received a letter of credit,
bond or other financial guarantee in an amount equal to or greater than such
Account issued by a Qualified Institution and otherwise in form and substance
satisfactory to Agent and (y) other Accounts approved in writing by Agent; (c)
it is a valid obligation of the account debtor thereunder and is not subject to
any offset or other defense on the part of such account debtor or to any claim
on the part of such account debtor denying liability thereunder (provided that
the foregoing shall not disqualify accounts arising from goods sold with usual
and customary sales warranties or having warranty claims which are not
material); (d) it is subject to no Lien whatsoever, except for the Liens
created or permitted pursuant to the Loan Documents; (e) it is evidenced by an
invoice submitted to the account debtor in timely fashion and in the normal
course of business; (f) it has not remained unpaid beyond 90 days after the
date of the invoice; (g) it does not arise out of transactions with an
employee, officer, agent, director or stockholder of Borrower or any of its
Subsidiaries or any Affiliate of Borrower or any of its Subsidiaries; (h) not
more than 20% (or such higher percentage as Agent may approve in writing for
any particular account debtor) of the other Accounts of the applicable account
debtor or any of its Affiliates fail to satisfy all of the requirements of an
"Eligible Account"; (i) inclusion of the applicable Account does not cause the
total Eligible Accounts with respect to the applicable account debtor and its
Affiliates, in the aggregate, to exceed 10% of the total Eligible Accounts, and
(j) each of the representations and warranties set forth in the Security
Documents executed by Borrower and its Subsidiaries with respect thereto is
true and correct in all material respects on such date. In the event of any
dispute under the foregoing criteria, about whether an Account is or has ceased
to be an Eligible Account, the decision of Agent, made in good faith, shall be
conclusive and binding, absent manifest error.
Eligible Inventory shall mean, as at any date of determination
thereof, Inventory of Borrower or any of its Subsidiaries (other than NATCO
Canada) which is subject to a Lien created by any Security Documents and on
which Agent shall have a first-priority perfected Lien (subject only to
Permitted Liens) and which complies with the following requirements: (a) such
Inventory shall be valued in accordance with GAAP and consist of (i) eligible
raw materials, (ii) work-in-process and (iii) finished goods, provided that all
such Inventory shall be within the United States of America; (b) it is in good
condition, meets all standards imposed by any Governmental Authority having
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regulatory authority over it, its use and/or sale and is either currently
usable or currently salable in the normal course of business of the Borrower or
its applicable Subsidiary, as the case may be; (c) it is not in the possession
or control of any warehouseman, bailee, or any agent or processor for or
customer of Borrower or any of its Subsidiaries or, if it is, (i) Borrower or
its applicable Subsidiary, as the case may be, shall have notified, in a manner
that effectively under applicable law creates a valid and first priority Lien
in favor of Agent in such Inventory, such warehouseman, bailee, agent,
processor or customer of Agent's Lien and (ii) such warehouseman, bailee,
agent, processor or customer has subordinated any Lien it may claim therein and
agreed to hold all such Inventory during the continuance of an Event of Default
for Agent's account subject to the Agent's instructions, and (d) each of the
representations and warranties set forth in the Security Documents executed by
Borrower and its Subsidiaries with respect thereto is true and correct in all
material respects on such date. In the event of any dispute under the
foregoing criteria, about whether a portion of Inventory is or has ceased to be
Eligible Inventory, the decision of Agent, made in good faith, shall be
conclusive and binding, absent manifest error.
Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances. An "Environmental Claim" includes,
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.
Environmental Liabilities means all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to Property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and
obligations, and all costs and expenses necessary to cause the issuance,
reissuance or renewal of any Environmental Permit including reasonable
attorneys' fees and court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or
wastes into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture,
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processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the U.S. Department
of Labor thereunder.
Eurodollar Rate means for any day during an Interest Period for a
LIBOR Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
then applicable Margin Percentage from time to time in effect and (b) the
Ceiling Rate. Each Eurodollar Rate is subject to adjustments as provided for
in Sections 3.3(c) and 11.15 hereof.
Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar
Reserve Requirement by Agent shall be conclusive and binding, absent manifest
error, and may be computed using any reasonable averaging and attribution
method.
Event of Default shall have the meaning assigned to it in Section 9.1
hereof.
Excess Cash Flow means, without duplication, for any period, (i) EBITDA
for such period less (ii) the sum of the principal component of all Debt
Service of Borrower and its Subsidiaries (other than NATCO Canada) (other than
mandatory prepayments of the Term Loans calculated on the basis of Excess Cash
Flow), cash Interest Expense of Borrower and its Subsidiaries (other than NATCO
Canada), voluntary prepayments of all Borrowed Money Indebtedness of Borrower
and its Subsidiaries (other than NATCO Canada), federal and state income taxes
allocated to Borrower and its Subsidiaries (other than NATCO Canada), Permitted
Dividends and Capital Expenditures of Borrower and its Subsidiaries (other than
NATCO Canada) for such period.
EXIM Facility means that certain International Revolving Loan
Agreement dated concurrently herewith executed by and between Borrower and TCB
and the other security documents contemplated thereby (as the foregoing may be
amended from time to time).
Existing Letters of Credit means the letters of credit described on
Exhibit H hereto, the obligations in respect of which have been assumed by
Borrower concurrently with the execution of this Agreement.
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of
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the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any such day which is a Business Day, the average of the
quotations for such day on such transactions received by Agent from three
Federal funds brokers of recognized standing selected by Agent in its sole and
absolute discretion.
Financing Statements means all such Uniform Commercial Code financing
statements as Agent shall reasonably require, in Proper Form, duly executed by
Borrower (or any other applicable Obligor) to give notice of and to perfect or
continue perfection of Agent's Liens in any applicable Collateral, as any of
the foregoing may from time to time be amended, modified, supplemented or
restated.
Fixed Charge Coverage Ratio means, as of any day, the ratio, expressed
as a percentage, of (a) EBITDA for the 12 months ending on such day plus cash
dividends paid to Borrower by NATCO Canada during such 12-month period less
the current portion of federal and state income tax expense recognized during
such 12-month period to (b) the sum of the principal component of Debt Service
plus cash Interest Expense and Capital Expenditures paid by Borrower and its
Subsidiaries (other than NATCO Canada) for such 12-month period plus Permitted
Dividends by Borrower or by any Subsidiary of Borrower to any Person other
than Borrower for such 12-month period.
Foreign Subsidiaries means Subsidiaries which are organized under the
laws of a jurisdiction other than the United States of America, any State of
the United States or any political subdivision thereof.
Funding Loss means, with respect to (a) Borrower's payment of principal
of a LIBOR Borrowing on a day prior to the last day of the applicable Interest
Period; (b) Borrower's failure to borrow a LIBOR Borrowing on the date
specified by Borrower; (c) Borrower's failure to make any prepayment of the
Loans (other than Base Rate Borrowings) on the date specified by Borrower, or
(d) any cessation of a Eurodollar Rate to apply to the Loans or any part
thereof pursuant to Section 3.3, in each case whether voluntary or involuntary,
any loss, expense, penalty, premium or liability actually incurred by any
Lender (including but not limited to any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain a Loan).
GAAP means, as to a particular Person, such accounting practice as, in
the opinion of independent certified public accountants of recognized national
standing regularly retained by such Person, conforms at the time to generally
accepted accounting principles, consistently applied for all periods after the
Effective Date so as to present fairly the financial condition, and results of
operations and cash flows, of such Person. If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board,
all reports and financial statements required hereunder may be prepared in
accordance with such change so long as Borrower provides to Agent such
disclosures of the impact of such change as Agent may reasonably require. No
such change in
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any accounting principle or practice shall, in itself, cause a Default or Event
of Default hereunder (but Borrower, Agent and Lenders shall negotiate in good
faith to replace any financial covenants hereunder to the extent such
financial covenants are affected by such change in accounting principle or
practice).
Governmental Authority means any foreign governmental authority, the
United States of America, any State of the United States, and any political
subdivision of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having jurisdiction over
Agent, any Lender, any Obligor or their respective Property.
Guaranties means, collectively, (i) the Guaranties dated concurrently
herewith executed by Holdings, Xxxxxxxx and each of the current Subsidiaries of
Borrower (other than Foreign Subsidiaries) in favor of Agent, for the benefit
of Lenders, and (ii) any and all other guaranties hereafter executed in favor
of Agent, for the benefit of Lenders, relating to the Obligations, as any of
them may from time to time be amended, modified, restated or supplemented.
Hazardous Substance means petroleum products and any hazardous or
toxic waste or substance defined or regulated as such from time to time by any
law, rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Holdings means NATCO Holdings, Inc., a Delaware corporation.
Indebtedness means, without duplication, (a) all items which in
accordance with GAAP would be included in the liability section of a balance
sheet (other than trade accounts payable and accrued expenses (other than
Interest Expense) arising in the ordinary course of business) on the date as of
which Indebtedness is to be determined (excluding, to the extent applicable,
capital stock, surplus, surplus reserves and deferred credits); (b) all
guaranties, letter of credit contingent reimbursement obligations and other
contingent obligations in respect of, or any obligations to purchase or
otherwise acquire, Indebtedness of others, and (c) all Indebtedness secured by
any Lien existing on any interest of the Person with respect to which
Indebtedness is being determined in Property owned subject to such Lien whether
or not the Indebtedness secured thereby shall have been assumed, equal to the
lesser of the amount of such obligation or the fair market value of such
Property; provided, that the term "Indebtedness" shall not mean or include any
Indebtedness in respect of which monies sufficient to pay and discharge the
same in full (either on the expressed date of maturity thereof or on such
earlier date as such Indebtedness may be duly called for redemption and
payment) shall be deposited with a depository, agency or trustee reasonably
acceptable to Agent in trust for the payment thereof.
Interest Expense means, for any period, total interest expense
accruing on Borrowed Money Indebtedness of Borrower and its Subsidiaries (other
than NATCO Canada) during such period (including interest expense attributable
to capitalized leases and interest incurred under interest rate swap, collar,
cap or similar agreements providing interest rate protection), determined in
accordance with GAAP.
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Interest Options means the Base Rate and each Eurodollar Rate, and
"Interest Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings, June 30,
1997 and the last day of each March, June, September and December thereafter
prior to the Revolving Loan Maturity Date or the Term Loan Maturity Date, as
the case may be, and the Revolving Loan Maturity Date or the Term Loan Maturity
Date, as the case may be; and (b) for LIBOR Borrowings, the end of the
applicable Interest Period (and if such Interest Period exceeds three months'
duration, quarterly, commencing on the first quarterly anniversary of the first
day of such Interest Period) and the Revolving Loan Maturity Date or the Term
Loan Maturity Date, as the case may be.
Interest Period means, for each LIBOR Borrowing, a period commencing on the
date such LIBOR Borrowing began and ending on the numerically corresponding day
which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2, 3
or 6 months thereafter, as Borrower shall elect in accordance herewith;
provided, (1) unless Agent shall otherwise consent, no Interest Period with
respect to a LIBOR Borrowing shall commence on a date earlier than three (3)
Business Days after this Agreement shall have been fully executed; (2) any
Interest Period with respect to a LIBOR Borrowing which would otherwise end on
a day which is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day, unless such LIBOR Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding LIBOR Business Day; (3) any Interest Period with respect to a LIBOR
Borrowing which begins on the last LIBOR Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR Business
Day of the appropriate calendar month; (4) no Interest Period for a Revolving
Loan shall ever extend beyond the Revolving Loan Maturity Date and no
Interest Period for a Term Loan shall ever extend beyond the Term Loan Maturity
Date, and (5) no Interest Period for a Term Loan may commence before and end
after the due date of any installment of principal on such Term Loan to the
extent that such LIBOR Borrowing would have to be prepaid prior to the end of
such Interest Period in order for such installment to be paid when due.fp
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by Borrower or any of its Subsidiaries for the purpose
of reducing Borrower's or such Subsidiary's exposure to interest rate
fluctuations and not for speculative purposes, as it may from time to time be
amended, modified, restated or supplemented.
Interest Rate Risk Indebtedness means all obligations of Borrower with
respect to the program for the hedging of interest rate risk provided for in
any Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities
or Indebtedness of, or the making of any loan, advance, transfer of Property
(other than transfers in the ordinary course of business) or capital
contribution to, or the incurring of any liability (other than Accounts arising
in
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the ordinary course of business), contingently or otherwise, in respect of the
Indebtedness of, any Person.
Issuer means the issuer (or, where applicable, each issuer) of a
Letter of Credit under this Agreement.
Key Agreements means the Purchase Agreement, the EXIM Facility, the
NATCO Canada Credit Facility and any document or paper evidencing, securing or
otherwise relating to any Subordinated Indebtedness.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Letter of Credit shall have the meaning assigned to such term in
Section 2.2(a) hereof.
Letter of Credit Fee Percentage means (i) on any day prior to July 1,
1997, 1.75% and (ii) on and after July 1, 1997, the applicable per annum
percentage set forth at the appropriate intersection in the table shown below,
based on the Debt to Capitalization Ratio as of the last day of the most
recently ended fiscal quarter of Borrower calculated by Agent as soon as
practicable after receipt by Agent of all financial reports required under this
Agreement with respect to such fiscal quarter (including a Compliance
Certificate) (provided, however, that if the Letter of Credit Fee Percentage is
increased as a result of the reported Debt to Capitalization Ratio, such
increase shall be retroactive to the date that Borrower was obligated to
deliver such financial reports to Agent pursuant to the terms of this Agreement
and provided further, however, that if the Letter of Credit Fee Percentage is
decreased as a result of the reported Debt to Capitalization Ratio, and such
financial reports are delivered to Agent not more than ten (10) calendar days
after the date required to be delivered pursuant to the terms of this
Agreement, such decrease shall be retroactive to the date that Borrower was
obligated to deliver such financial reports to Agent pursuant to the terms of
this Agreement):
Debt to Letter of Credit
Capitalization Ratio Fee Percentage
-------------------- --------------
Greater than 40% 1.75
Greater than 30% but
less than or equal to 40% 1.50
Greater than 20% but
less than or equal to 30% 1.25
Less than or equal to 20% 1.00
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Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in
a currency other than Dollars, such amount shall be converted by Agent to
Dollars by any reasonable method, and such converted amount shall be conclusive
and binding, absent manifest error.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the
rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%)
equal to the average of the offered quotations appearing on Telerate Page 3750
(or if such Telerate Page shall not be available, any successor or similar
service as may be selected by Agent and Borrower) as of 11:00 a.m., Houston,
Texas time (or as soon thereafter as practicable) on the day two LIBOR Business
Days prior to the first day of such Interest Period for deposits in United
States dollars having a term comparable to such Interest Period and in an
amount comparable to the principal amount of the LIBOR Borrowing to which such
Interest Period relates. If none of such Telerate Page 3750 nor any successor
or similar service is available, then "LIBOR" shall mean, with respect to any
Interest Period for any applicable LIBOR Borrowing, the rate of interest per
annum, rounded upwards, if necessary, to the nearest 1/16th of 1%, quoted by
Agent at or before 11:00 a.m., Houston, Texas time (or as soon thereafter as
practicable), on the date two LIBOR Business Days before the first day of such
Interest Period, to be the arithmetic average of the prevailing rates per annum
at the time of determination and in accordance with the then existing practice
in the applicable market, for the offering to Agent by one or more prime banks
selected by Agent in its sole discretion, in the London interbank market, of
deposits in United States dollars for delivery on the first day of such
Interest Period and having a maturity equal to the length of such Interest
Period and in an amount equal (or as nearly equal as may be) to the LIBOR
Borrowing to which such Interest Period relates. Each determination by Agent
of LIBOR shall be conclusive and binding, absent manifest error, and may be
computed using any reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in United
States dollar deposits between lenders may be carried on in the London
interbank market.
Lien means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of
way, covenants, conditions, restrictions and other title exceptions.
Loans means the Revolving Loans and the Term Loans provided for by
Section 2.1 hereof.
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Loan Documents means, collectively, this Agreement, the Notes, the
Guaranties, all Applications, the Security Documents, the Notice of Entire
Agreement, all instruments, certificates and agreements now or hereafter
executed or delivered by any Obligor to Agent or any Lender pursuant to any of
the foregoing or in connection with the Obligations or any commitment regarding
the Obligations, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.
Majority Lenders means, at any time while no Loans are outstanding,
Lenders having greater than 66-2/3% of the aggregate amount of Revolving Loan
Commitments, and at any time while Loans are outstanding, Lenders having
greater than 66-2/3% of the aggregate amount of Term Loans outstanding plus
Revolving Loan Commitments outstanding.
Margin Percentage means (i) on any day prior to July 1, 1997, 1.00%
with respect to Base Rate Borrowings and 2.75% with respect to LIBOR Borrowings
and (ii) on and after July 1, 1997, the applicable per annum percentage set
forth at the appropriate intersection in the table shown below, based on the
Debt to Capitalization Ratio as of the last day of the most recently ended
fiscal quarter of Borrower calculated by Agent as soon as practicable after
receipt by Agent of all financial reports required under this Agreement with
respect to such fiscal quarter (including a Compliance Certificate) (provided,
however, that if the Margin Percentage is increased as a result of the reported
Debt to Capitalization Ratio, such increase shall be retroactive to the date
that Borrower was obligated to deliver such financial reports to Agent pursuant
to the terms of this Agreement and provided further, however, that if the
Margin Percentage is decreased as a result of the reported Debt to
Capitalization Ratio, and such financial reports are delivered to Agent not
more than ten (10) calendar days after the date required to be delivered
pursuant to the terms of this Agreement, such decrease shall be retroactive to
the date that Borrower was obligated to deliver such financial reports to Agent
pursuant to the terms of this Agreement):
Debt to LIBOR Borrowings Base Rate Borrowings
Capitalization Ratio Margin Percentage Margin Percentage
-------------------- ----------------- -----------------
Greater than 50% 2.75 1.00
Greater than 40% but
less than or equal to 50% 2.50 1.00
Greater than 30% but
less than or equal to 40% 2.00 0.50
Greater than 20% but
less than or equal to 30% 1.50 0.00
Less than or equal to 20% 1.00 0.00
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Material Adverse Effect means any material and adverse effect on the
ability of an Obligor to perform its obligations under any Loan Document to
which it is a party or on the business, condition (financial or otherwise),
results of operations, assets, liabilities or prospects of (i) Borrower and its
Subsidiaries (other than NATCO Canada) on a consolidated basis, (ii) Xxxxxxxx
or (iii) Holdings.
Maximum Revolving Loan Available Amount means, at any date, an amount
equal to the lesser of (i) the aggregate of the Revolving Loan Commitments or
(ii) the then effective Borrowing Base.
NATCO Canada means NATCO Canada, Ltd., a limited liability company
amalgamated under the laws of the Province of Alberta.
NATCO Canada Credit Facility means that certain Commitment Letter
dated November 24, 1994 executed by The Bank of Nova Scotia in favor of, and
accepted by, Natco Canada (without amendment, other than to increase the
aggregate loans thereunder to a maximum amount of $11,625,000 at any one time
outstanding, except as approved by Agent and the Majority Lenders).
Notes shall have the meaning assigned to such term in Section 2.6
hereof.
Notice of Entire Agreement means a notice of entire agreement, in
Proper Form, executed by Borrower, each other Obligor and Agent, as the same
may from time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of
the following: (i) the aggregate principal amount of Loans outstanding
hereunder on such date, plus (ii) the aggregate amount of the outstanding
Letter of Credit Liabilities hereunder on such date, plus (iii) all other
outstanding liabilities, obligations and indebtedness of any Obligor under this
Agreement, any Note, the Guaranties, all applications and the Security
Documents on such date.
Obligors means Borrower, Holdings, Xxxxxxxx, each Person now or
hereafter executing a Guaranty and/or a Security Agreement.
Organizational Documents means, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership and with respect to a trust, the instrument
establishing such trust and with respect to any other Person, the agreements or
instruments pursuant to which such Person was formed; in each case including
any and all modifications thereof and any and all future modifications thereof.
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Past Due Rate means, on any day, a rate per annum equal to the lesser
of (i) the Ceiling Rate for that day or (ii) the Base Rate plus the Margin
Percentage for Base Rate Borrowings then in effect plus three percent (3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Permitted Dividends means (i) dividends or distributions by a
Subsidiary of Borrower to Borrower or any other Subsidiary of Borrower, (ii)
stock dividends and (iii) so long as no Default or Event of Default shall have
occurred and be continuing (or would result therefrom), dividends paid by
Borrower to its shareholders in aggregate amounts not to exceed: (1) for the
fiscal year 1998, amounts to be applied to Subordinated Indebtedness of
Xxxxxxxx, corporate expenses of Holdings and NATCO (U.K.) Ltd., cash shortages
of NATCO (U.K.) Ltd. and Holdings's cash portion of retiree medical expenses,
such amounts not to exceed, in the aggregate $1,900,000 and (2) for the fiscal
years 1999, 2000, 2001 and 2002, amounts to be applied to Subordinated
Indebtedness of Xxxxxxxx, corporate expenses of Holdings and Holdings's cash
portion of retiree medical expenses, such amounts not to exceed, in the
aggregate $1,500,000 for the fiscal year 1999, $2,000,000 for the fiscal year
2000 or $2,200,000 for the fiscal year 2001 or the fiscal year 2002.
Permitted Investments means: (a) readily marketable securities issued
or fully guaranteed by the United States of America with maturities of not more
than one year; (b) commercial paper rated "Prime 1" by Xxxxx'x Investors
Service, Inc. or "A-1" by Standard and Poor's Ratings Services with maturities
of not more than 180 days, and (c) certificates of deposit or repurchase
obligations issued by any U.S. domestic bank having capital surplus of at least
$100,000,000 or by any other financial institution acceptable to Agent, all of
the foregoing not having a maturity of more than one year from the date of
issuance thereof.
Permitted Liens means each of the following: (a) artisans' or
mechanics' Liens arising in the ordinary course of business, and Liens for
taxes, but only to the extent that payment thereof shall not at the time be due
or if due, the payment thereof is being diligently contested in good faith and
adequate reserves computed in accordance with GAAP have been set aside
therefor; (b) Liens in effect on the Effective Date and disclosed to the
Lenders in the financial statements delivered on or prior to the Effective Date
pursuant to Section 6.2 hereof or in a schedule hereto; (c) normal
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions and encumbrances which do not secure Borrowed Money
Indebtedness and which do not materially impair the value or utility of the
applicable Property; (d) Liens in favor of Agent or any Lender under the Loan
Documents, including, without limitation, Liens securing Interest Rate Risk
Indebtedness owed to one or more of the Lenders (but not to any Person which is
not, at such time, a Lender); (e) Liens incurred or deposits made in the
ordinary course of business (1) in connection with workmen's compensation,
unemployment insurance, social security and other like laws, or (2) to secure
insurance in the ordinary course of business, the performance of bids, tenders,
contracts, leases, licenses, statutory obligations, surety, appeal and
performance bonds and other similar
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obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing
of money, the obtaining of advances or the payment of the deferred purchase
price of Property; (f) attachments, judgments and other similar Liens arising
in connection with court proceedings, provided that the execution and
enforcement of such Liens are effectively stayed and the claims secured thereby
are being actively contested in good faith with adequate reserves made therefor
in accordance with GAAP; (g) Liens imposed by law, such as landlords',
carriers', warehousemen's, mechanics', materialmen's and vendors' liens,
incurred in good faith in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings if adequate reserves with respect thereto are
maintained in accordance with GAAP; (h) zoning restrictions, easements,
licenses, reservations, provisions, covenants, conditions, waivers, and
restrictions on the use of Property, and which do not in any case singly or in
the aggregate materially impair the present value or utility of the applicable
Property; (i) Liens securing purchase money Indebtedness permitted under
Section 8.1 hereof and covering the Property so purchased; (j) capital leases
and sale/leaseback transactions permitted under the other provisions of this
Agreement, and (k) extensions, renewals and replacements of Liens referred to
in clauses (a) through (j) of this definition; provided that any such
extension, renewal or replacement Lien shall be limited to the Property or
assets covered by the Lien extended, renewed or replaced and that the Borrowed
Money Indebtedness secured by any such extension, renewal or replacement Lien
shall be in an amount not greater than the amount of the Indebtedness secured
by the Lien extended, renewed or replaced.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code and is either (a) maintained by Borrower or any member of the
Controlled Group for employees of Borrower or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which Borrower or any member of the Controlled Group is then making or accruing
an obligation to make contributions or has within the preceding five plan years
made contributions.
Prime Rate means, on any day, the prime rate for that day as
determined from time to time by TCB. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate or a favored rate, and
TCB, Agent and each Lender disclaims any statement, representation or warranty
to the contrary. TCB, Agent or any Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
Principal Office means the principal office of Agent, presently
located at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000.
Proper Form means in form and substance reasonably satisfactory to
Agent.
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Property means any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.
Purchase Agreement means that certain Stock Purchase Agreement dated
May 7, 1997, executed by and between Enterra Petroleum Equipment Group, Inc.
and Borrower , as the same may from time to time be amended, modified, restated
or supplemented.
Qualified Institution means (a) any bank or trust company which is
organized under the laws of any country which is a member of the Organization
for Economic Cooperation and Development or any political subdivision of any
such country; and having capital, surplus and undivided profits aggregating at
least $100,000,000.00 (or its equivalent in another currency) as of the date of
such Person's most recent financial reports, and (b) any other Person approved
in writing by Agent.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements means the quarterly financial statements
of a Person, which statements shall include a balance sheet as of the end of
such fiscal quarter and an income statement and a statement of cash flows for
such fiscal quarter and for the fiscal year to date, subject to normal year-end
adjustments, all setting forth in comparative form the corresponding figures as
of the end of and for the corresponding fiscal quarter of the preceding year,
prepared in accordance with GAAP in all material respects except that such
statements are condensed and exclude detailed footnote disclosures and
certified by the chief financial officer or other authorized officer of such
Person as fairly presenting, in all material respects, the financial condition
of such person as of such date. As to Borrower only, Quarterly Financial
Statements shall also include unaudited consolidating financial statements for
Borrower and unaudited consolidated financial statements for Borrower and its
Subsidiaries (other than NATCO Canada), each in Proper Form, certified in each
case by the chief financial officer or other authorized officer of Borrower as
presenting fairly in all material respects the consolidating financial position
of the applicable Person.
Rate Designation Date means that Business Day which is (a) in the case
of Base Rate Borrowings, 11:00 a.m., Houston, Texas time, on the date one
Business Day preceding the date of such borrowing and (b) in the case of LIBOR
Borrowings, 11:00 a.m., Houston, Texas time, on the date three LIBOR Business
Days preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the
form of Exhibit B.
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor
or other regulation relating to reserve requirements applicable to member banks
of the Federal Reserve System.
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Regulatory Change means, with respect to any Lender, any change on or
after the Effective Date in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of
any interpretation, directive or request applying to a class of lenders
including such Lender under any Legal Requirements (whether or not having the
force of law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, the obligations of
Borrower then outstanding, or which may thereafter arise, in respect of Letters
of Credit under this Agreement, to reimburse the applicable Issuers for the
amount paid by such Issuers in respect of any drawing under such Letters of
Credit, which obligations shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other
than Dollars.
Request for Extension of Credit means a request for extension of credit
duly executed by any responsible officer, which may include the president, the
chief executive officer, the chief financial officer, any vice president or the
treasurer of Borrower, appropriately completed and substantially in the form of
Exhibit A attached hereto.
Requirements of Environmental Law means all requirements imposed by
any law (including for example and without limitation The Resource Conservation
and Recovery Act and The Comprehensive Environmental Response, Compensation,
and Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture,
processing, distribution in commerce, use, discharge or storage of Hazardous
Substances.
Revolving Loan means a Loan made pursuant to Section 2.1(b) hereof.
Revolving Loan Availability Period means, for each Revolving Loan
Lender, the period from and including the Effective Date to (but not including)
the Revolving Loan Termination Date.
Revolving Loan Commitment means, as to any Lender, the obligation, if
any, of such Lender to make Revolving Loans and incur or participate in Letter
of Credit Liabilities in an aggregate principal amount at any one time
outstanding up to (but not exceeding) the amount, if any, set forth opposite
such Lender's name on the signature pages hereof under the caption "Revolving
Loan Commitment", or otherwise provided for in an Assignment and Acceptance
Agreement (as the same may be reduced from time to time pursuant to Section 2.3
hereof).
Revolving Loan Commitment Percentage means, as to any Revolving Loan
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Revolving
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Loan Commitment and the denominator of which is the aggregate amount of the
Revolving Loan Commitments of all Lenders.
Revolving Loan Lender means each Lender with (i) prior to the Revolving
Loan Termination Date, a Revolving Loan Commitment and (ii) on and after the
Revolving Loan Termination Date, any outstanding Revolving Loan Obligations.
Revolving Loan Maturity Date means the maturity of the Revolving
Notes, June 30, 2000.
Revolving Loan Obligations means, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of Revolving Loans outstanding hereunder plus (ii)
the aggregate amount of the Letter of Credit Liabilities hereunder.
Revolving Loan Termination Date means the earlier of (a) the Revolving
Loan Maturity Date or (b) the date specified or deemed specified by Agent in
accordance with Section 9.1 hereof.
Revolving Notes means the Notes of Borrower evidencing the Revolving
Loans, in substantially the form of Exhibit D hereto.
Secretary's Certificate means a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation certifying (a) that
attached thereto are true and correct copies of resolutions of the Board of
Directors of such corporation authorizing the execution, delivery and
performance of the Loan Documents to be executed by such corporation; (b) the
incumbency and signature of the officer of such corporation executing such Loan
Documents on behalf of such corporation, and (c) that attached thereto are true
and correct copies of the Organizational Documents of such corporation.
Security Agreements means security agreements, each in Proper Form,
executed or to be executed by Borrower (or any other applicable Obligor) in
favor of Agent covering all of the real Property (other than real Property
owned as of the Effective Date) and material personal Property of Borrower and
its Subsidiaries (other than Foreign Subsidiaries), as the same may from time
to time be amended, modified, restated or supplemented. Notwithstanding the
foregoing, Borrower shall not be required to xxxxx x Xxxx to Agent on more than
65% of the issued and outstanding equity interests owned by Borrower in its
Foreign Subsidiaries.
Security Documents means, collectively, the Security Agreements, the
Financing Statements and any and all other security documents now or hereafter
executed and delivered by any Obligor to secure all or any part of the
Obligations, as any of them may from time to time be amended, modified,
restated or supplemented.
Stated Rate means, with respect to any Lender, the effective weighted
per annum rate of interest applicable to the Loans made by such Lender;
provided, that if on any day such rate shall
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exceed the Ceiling Rate for that day, the Stated Rate shall be fixed at the
Ceiling Rate on that day and on each day thereafter until the total amount of
interest accrued at the Stated Rate on the unpaid principal balances of the
Notes plus the Additional Interest equals the total amount of interest which
would have accrued if there had been no Ceiling Rate. If the Notes mature (or
are prepaid) before such equality is achieved, then, in addition to the unpaid
principal and accrued interest then owing pursuant to the other provisions of
the Loan Documents, Borrower promises to pay on demand to the order of the
holder of each Note interest in an amount equal to the excess (if any) of (a)
the lesser of (i) the total interest which would have accrued on such Note if
the Stated Rate had been defined as equal to the Ceiling Rate from time to time
in effect and (ii) the total interest which would have accrued on such Note if
the Stated Rate were not so prohibited from exceeding the Ceiling Rate, over
(b) the total interest actually accrued on such Note to such maturity (or
prepayment) date. Without notice to Borrower or any other Person, the Stated
Rate shall automatically fluctuate upward and downward in accordance with the
provisions of this definition.
Subordinated Indebtedness means all Indebtedness of Borrower and its
Subsidiaries which has been subordinated on terms and conditions satisfactory
to the Majority Lenders, in their sole discretion, to the Obligations, whether
now existing or hereafter incurred. Indebtedness shall not be considered as
"Subordinated Indebtedness" unless and until Agent shall have received copies
of the documentation evidencing or relating to such Indebtedness together with
a subordination agreement, in Proper Form, duly executed by the holder or
holders of such Indebtedness and evidencing the terms and conditions of
subordination required by the Majority Lenders.
Subsidiary means, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity rights (whether
outstanding capital stock or otherwise) is at the time directly or indirectly
owned by, such parent Corporation.
Tangible Net Worth means, with respect to Borrower and its
Subsidiaries, the sum of preferred stock (if any), par value of common stock,
capital in excess of par value of common stock and retained earnings, less
treasury stock (if any), minus (i) goodwill and (ii) all other assets that are
properly classified as intangible assets, but plus the amount of noncash write
downs of long-lived assets in compliance with generally accepted accounting
principles or guidelines of the Securities Exchange Commission, and plus or
minus, as appropriate, foreign currency translation adjustments, all as
determined on a consolidated basis.
Taxes shall have the meaning ascribed to it in Section 4.1(d) hereof.
Term Loan means a Loan made pursuant to Section 2.1(a) hereof.
Term Loan Lender means each Lender with any outstanding Term Loans.
Term Loan Maturity Date means June 30, 2002.
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Term Notes means the Notes of Borrower evidencing the Term Loans, in
substantially the form of Exhibit C hereto.
Texas Credit Code means Title 79, Texas Revised Civil Statutes, 1925,
as amended.
Total Capitalization means the sum of, without duplication, the
Borrowed Money Indebtedness of Borrower and its Subsidiaries, on a consolidated
basis, and preferred stock and the consolidated stockholders' equity (including
paid-in capital and retained earnings) of Borrower and its Subsidiaries,
determined in accordance with GAAP.
Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent actuarial valuation report
for such Plan, but only to the extent that such excess represents a potential
liability of any member of the Controlled Group to the PBGC or a Plan under
Title IV of ERISA. With respect to multi-employer Plans, the term "Unfunded
Liabilities" shall also include contingent liability for withdrawal liability
under Section 4201 of ERISA to all multi-employer Plans to which Borrower or
any member of a Controlled Group for employees of Borrower contributes in the
event of complete withdrawal from such plans.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement.
2. Commitments and Loans.
2.1 Loans. Each Lender severally agrees, subject to all of the
terms and conditions of this Agreement (including, without limitation, Sections
5.1 and 5.2 hereof), to make Loans as follows:
(a) Term Loans. On the Effective Date, each Term Loan Lender
shall make a loan to Borrower in the amount set forth opposite such Term Loan
Lender's name on the signature pages hereof under the caption "Term Loans".
(b) Revolving Loans. From time to time on or after the Effective
Date and during the Revolving Loan Availability Period, each Revolving Loan
Lender shall make loans under this Section 2.1(b) to Borrower in an aggregate
principal amount at any one time outstanding (including its Revolving Loan
Commitment Percentage of all Letter of Credit Liabilities at such time) up to
but not exceeding such Lender's Revolving Loan Commitment Percentage of the
Maximum Revolving Loan Available Amount. Subject to the conditions in this
Agreement, any such Revolving Loan repaid prior to the Revolving Loan
Termination Date may be reborrowed pursuant to the terms of this Agreement;
provided, that any and all such Revolving Loans shall be due and payable in
full on the Revolving Loan Termination Date. Borrower, Agent and the Lenders
agree that Chapter 15
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of the Texas Credit Code shall not apply to this Agreement, the Revolving Notes
or any Revolving Loan Obligation. The aggregate of all Revolving Loans to be
made by the Lenders in connection with a particular borrowing shall be equal to
the lesser of (a) the remaining unused portion of the Revolving Loan
Commitments or (b) a multiple of $100,000.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of
this Agreement, and on the condition that aggregate Letter of Credit
Liabilities shall never exceed $5,000,000, (i) Borrower shall have the right
to, in addition to Loans provided for in Section 2.1 hereof, utilize the
Revolving Loan Commitments from time to time during the Revolving Loan
Availability Period by obtaining the issuance of letters of credit for the
account of Borrower if Borrower shall so request in the notice referred to in
Section 2.2(b)(i) hereof (such letters of credit, together with the Existing
Letters of Credit, as any of them may be amended, supplemented, extended or
confirmed from time to time, being herein collectively called the "Letters of
Credit)" and (ii) TCB agrees to issue such Letters of Credit. Upon the date of
the issuance of a Letter of Credit, the applicable Issuer shall be deemed,
without further action by any party hereto, to have sold to each Revolving Loan
Lender, and each such Lender shall be deemed, without further action by any
party hereto, to have purchased from the applicable Issuer, a participation, to
the extent of such Lender's Revolving Loan Commitment Percentage, in such
Letter of Credit and the related Letter of Credit Liabilities, which
participation shall terminate on the earlier of the expiration date of such
Letter of Credit or the Revolving Loan Termination Date. Any Letter of Credit
that shall have an expiration date after the Revolving Loan Termination Date
shall be subject to Cover or backed by a letter of credit in Proper Form issued
by a Qualified Institution to Agent. TCB or, with the prior approval of
Borrower and Agent, another Lender shall be the Issuer of each Letter of
Credit.
(b) Additional Provisions. The following additional provisions
shall apply to each Letter of Credit:
(i) Borrower shall give Agent notice requesting each
issuance of a Letter of Credit hereunder as provided in Section 4.3
hereof and shall furnish such additional information regarding such
transaction as Agent may reasonably request. Upon receipt of such
notice, Agent shall promptly notify each Revolving Loan Lender of the
contents thereof and of such Lender's Revolving Loan Commitment
Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving
effect thereto the sum of (A) the aggregate outstanding principal
amount of Revolving Loans plus (B) the aggregate Letter of Credit
Liabilities would exceed the Maximum Revolving Loan Available Amount.
On each day during the period commencing with the issuance of any
Letter of Credit and until such Letter of Credit shall have expired or
been terminated, the Revolving Loan Commitment of each Revolving Loan
Lender shall be deemed to be utilized for all purposes
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hereof, including Section 2.4(a), in an amount equal to such Lender's
Revolving Loan Commitment Percentage of the amount then available for
drawings under such Letter of Credit (or any unreimbursed drawings
under such Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, Agent shall promptly
notify Borrower and each Lender as to the amount to be paid as a
result of such demand and the payment date therefor. If at any time
prior to the earlier of the expiration date of a Letter of Credit or
the Revolving Loan Termination Date any Issuer shall have made a
payment to a beneficiary of a Letter of Credit in respect of a drawing
under such Letter of Credit, each Revolving Loan Lender will pay to
Agent immediately upon demand by such Issuer at any time during the
period commencing after such payment until reimbursement thereof in
full by Borrower, an amount equal to such Lender's Revolving Loan
Commitment Percentage of such payment, together with interest on such
amount for each day from the date of demand for such payment (or, if
such demand is made after 11:00 a.m. Houston time on such date, from
the next succeeding Business Day) to the date of payment by such
Lender of such amount at a rate of interest per annum equal to the
Federal Funds Rate for such period. To the extent that it is
ultimately determined that the Borrower is relieved of its obligation
to reimburse the applicable Issuer because of such Issuer's gross
negligence or willful misconduct in determining that documents
received under any applicable Letter of Credit comply with the terms
thereof, the applicable Issuer shall be obligated to refund to the
paying Lenders all amounts paid to such Issuer to reimburse Issuer for
the applicable drawing under such Letter of Credit.
(iv) Borrower shall be irrevocably and unconditionally
obligated forthwith to reimburse Agent, on the date on which the Agent
notifies Borrower of the date and amount of any payment by the Issuer
of any drawing under a Letter of Credit, for the amount paid by any
Issuer upon such drawing, without presentment, demand, protest or
other formalities of any kind, all of which are hereby waived. Such
reimbursement may, subject to satisfaction of the conditions in
Sections 5.1 and 5.2 hereof, the limitation on size contained in
Section 2.1(b) and to the Maximum Revolving Loan Available Amount
(after adjustment in the same to reflect the elimination of the
corresponding Letter of Credit Liability), be made by the borrowing of
Revolving Loans. Agent will pay to each Revolving Loan Lender such
Lender's Revolving Loan Commitment Percentage of all amounts received
from Borrower for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit, but only
to the extent such Lender has made payment to Agent in respect of such
Letter of Credit pursuant to clause (iii) above.
(v) Borrower will pay to Agent at the Principal Office
for the account of each Revolving Loan Lender a letter of credit fee
with respect to each Letter of Credit equal to the greater of (x) $300
or (y) the Letter of Credit Fee Percentage multiplied by the daily
average amount available for drawings under each Letter of Credit (and
computed on the basis of the actual number of days elapsed in a year
composed of 360 days), in each case for the period
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from and including the date of issuance of such Letter of Credit to
and including the date of expiration or termination thereof, such fee
to be due and payable quarterly in advance on the date of the issuance
thereof and on each three (3) month anniversary of such issuance (with
any unearned fees to be refunded upon the termination of or draw under
the applicable Letter of Credit). Agent will pay to each Revolving
Loan Lender, promptly after receiving any payment in respect of letter
of credit fees referred to in this clause (v), an amount equal to the
product of such Lender's Revolving Loan Commitment Percentage times
the amount of such fees. In addition to and cumulative of the above
described fees, Borrower shall pay to Agent, for the account of the
applicable Issuer, in advance on the date of the issuance of the
applicable Letter of Credit, a fronting fee in an amount equal to 1/8%
of the face amount of the applicable Letter of Credit (such fronting
fee to be retained by the applicable Issuer for its own account).
(vi) The issuance by the applicable Issuer of each Letter
of Credit shall, in addition to the conditions precedent set forth in
Section 5 hereof, be subject to the conditions precedent (A) that such
Letter of Credit shall be in such form and contain such terms as shall
be reasonably satisfactory to Agent, and (B) that Borrower shall have
executed and delivered such Applications and other instruments and
agreements relating to such Letter of Credit as Agent shall have
reasonably requested and are not inconsistent with the terms of this
Agreement. In the event of a conflict between the terms of this
Agreement and the terms of any Application, the Agent, each Issuer,
the Borrower and each Lender agree that the terms hereof shall
control.
(vii) Issuer will send to the Borrower and each Lender,
immediately upon issuance of any Letter of Credit issued by Issuer or
any amendment thereto, a true and correct copy of such Letter of
Credit or amendment.
(c) Indemnification; Release. Borrower hereby indemnifies and
holds harmless Agent, each Revolving Loan Lender and each Issuer from and
against any and all claims, damages, losses, liabilities, costs or expenses
which Agent, such Lender or such Issuer may incur (or which may be claimed
against Agent, such Lender or such Issuer by any Person whatsoever), REGARDLESS
OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE
INDEMNIFIED PARTIES, in connection with the execution and delivery of any
Letter of Credit or transfer of or payment or failure to pay under any Letter
of Credit; provided that Borrower shall not be required to indemnify or hold
harmless any party seeking indemnification for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by
(i) the willful misconduct or gross negligence of the party seeking
indemnification or exoneration, or (ii) the failure by the party seeking
indemnification to pay under any Letter of Credit after the presentation to it
of a request required to be paid under applicable law. Borrower hereby
releases, waives and discharges Agent, each Revolving Loan Lender and each
Issuer from any claims, causes of action, damages, losses, liabilities,
reasonable costs or expenses which may now exist or may hereafter arise,
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE
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NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason of or in connection
with the failure of Agent, any Issuer or any other Revolving Loan Lender to
fulfill or comply with its obligations to the other parties hereunder (but
nothing herein contained shall affect any rights Borrower may have against such
defaulting party). Nothing in this Section 2.2(c) is intended to limit the
obligations of Borrower under any other provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. Subject to
Sections 11.7 and 11.15 hereof, if as a result of any Regulatory Change there
shall be imposed, modified or deemed applicable any tax (other than any tax
based on or measured by net income), reserve, special deposit or similar
requirement against or with respect to or measured by reference to Letters of
Credit issued or to be issued hereunder or participations in such Letters of
Credit, and the result shall be to increase the cost to any Revolving Loan
Lender of issuing or maintaining any Letter of Credit or any participation
therein, or materially reduce any amount receivable by any Revolving Loan
Lender hereunder in respect of any Letter of Credit or any participation
therein (which increase in cost, or reduction in amount receivable, shall be
the result of such Lender's reasonable allocation of the aggregate of such
increases or reductions resulting from such event), then such Lender shall
notify Borrower through Agent (which notice shall be accompanied by a statement
setting forth in reasonable detail the basis for the determination of the
amount due), and within 15 Business Days after demand therefor by such Lender
through Agent, Borrower shall pay to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such increased costs or reductions in amount. Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to Borrower, shall be conclusive as to the
amount thereof, absent manifest error, and may be computed using any reasonable
averaging and attribution method. Each Lender will notify Borrower through
Agent of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this Section as promptly as
practicable after any executive officer of such Lender obtains knowledge
thereof and determines to request such compensation, and (if so requested by
Borrower through Agent) will designate a different lending office of such
Lender for the issuance or maintenance of Letters of Credit by such Lender or
will take such other action as Borrower may reasonably request if such
designation or action is consistent with the internal policy of such Lender and
legal and regulatory restrictions, can be undertaken at no additional cost
(unless Borrower agrees to pay such costs), will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender (provided that such Lender shall have
no obligation so to designate a different lending office which is not located
in the United States of America).
2.3 Terminations or Reductions of Commitments.
(a) Mandatory. On the Revolving Loan Termination Date, all
Revolving Loan Commitments shall be terminated in their entirety.
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(b) Optional. Borrower shall have the right to terminate or
reduce the unused portion of the Revolving Loan Commitments at any time or from
time to time, provided that (i) Borrower shall give notice of each such
termination or reduction to Agent as provided in Section 4.3 hereof and (ii)
each such partial reduction shall be in an integral multiple of $500,000.
(c) No Reinstatement. No termination or reduction of the
Revolving Loan Commitments may be reinstated without the written approval of
Agent and the Lenders.
2.4 Commitment Fees.
(a) Borrower shall pay to Agent for the account of each Revolving
Loan Lender revolving loan commitment fees for the Revolving Loan Availability
Period at a rate per annum equal to the Commitment Fee Percentage. Such
revolving loan commitment fees shall be computed (on the basis of the actual
number of days elapsed in a year composed of 360 days) on each day and shall be
based on the excess of (x) the aggregate amount of each Revolving Loan Lender's
Revolving Loan Commitment for such day over (y) the sum of (i) the aggregate
unpaid principal balance of such Lender's Revolving Note on such day plus (ii)
the aggregate Letter of Credit Liabilities as to such Lender for such day.
Accrued revolving loan commitment fees shall be payable in arrears on the
Quarterly Dates prior to the Revolving Loan Termination Date and on the
Revolving Loan Termination Date.
(b) All past due fees payable under this Section shall bear
interest at the Past Due Rate.
2.5 Several Obligations. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not relieve any
other Lender of its obligation to make its Loan on such date, but neither Agent
nor any Lender shall be responsible or liable for the failure of any other
Lender to make a Loan to be made by such other Lender or to participate in, or
co-issue, any Letter of Credit. Notwithstanding anything contained herein to
the contrary, (a) no Lender shall be required to make or maintain Revolving
Loans at any time outstanding if as a result the total Revolving Loan
Obligations to such Lender shall exceed the lesser of (1) such Lender's
Revolving Loan Commitment Percentage of all Revolving Loan Obligations and (2)
such Lender's Revolving Loan Commitment Percentage of the Maximum Revolving
Loan Available Amount and (b) if a Revolving Loan Lender fails to make a
Revolving Loan as and when required hereunder, then upon each subsequent event
which would otherwise result in funds being paid to the defaulting Lender, the
amount which would have been paid to the defaulting Lender shall be divided
among the non-defaulting Lenders ratably according to their respective shares
of the outstanding Revolving Loan Commitment Percentages until the Revolving
Loan Obligations of each Revolving Loan Lender (including the defaulting
Lender) are equal to such Lender's Revolving Loan Commitment Percentage of the
total Revolving Loan Obligations.
2.6 Notes. The Revolving Loans made by each Lender shall be
evidenced by a single Revolving Note of Borrower in substantially the form of
Exhibit D hereto payable to the order of
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such Lender in a principal amount equal to the Revolving Loan Commitment of
such Lender, and otherwise duly completed. The Term Loans made by each Lender
shall be evidenced by a single Term Note of Borrower in substantially the form
of Exhibit C hereto payable to the order of such Lender in a principal amount
equal to the sum of the outstanding principal balance of the Term Loans made by
such Lender, and otherwise duly completed. The promissory notes described in
this Section are each, together with all renewals, extensions, modifications
and replacements thereof and substitutions therefor, called a "Note" and
collectively called the "Notes". Each Lender is hereby authorized by Borrower
to endorse on the schedule (or a continuation thereof) that may be attached to
each Note of such Lender, to the extent applicable, the date, amount, type of
and the applicable period of interest for each Loan made by such Lender to
Borrower hereunder, and the amount of each payment or prepayment of principal
of such Loan received by such Lender, provided that any failure by such Lender
to make any such endorsement shall not affect the obligations of Borrower under
such Note or hereunder in respect of such Loan.
2.7 Use of Proceeds. The proceeds of the Loans shall be used to
refinance existing Borrowed Money Indebtedness of Borrower, to finance the
acquisition and related costs contemplated by the Purchase Agreement and for
other working capital and general corporate purposes. Neither Agent nor any
Lender shall have any responsibility as to the use of any proceeds of the
Loans.
3. Borrowings, Payments, Prepayments and Interest Options.
3.1 Borrowings. Borrower shall give Agent notice of each
borrowing to be made hereunder as provided in Section 4.3 hereof and Agent
shall promptly notify each Lender of such request. Not later than 11:00 a.m.
Houston time on the date specified for each such borrowing hereunder, each
Lender shall make available the amount of the Loan, if any, to be made by it on
such date to Agent at its Principal Office, in immediately available funds, for
the account of Borrower. Such amounts received by Agent will be held in an
account maintained by Borrower with Agent. The amounts so received by Agent
shall, subject to the terms and conditions of this Agreement, be made available
to Borrower by wiring or otherwise transferring, in immediately available
funds, such amount to an account designated by Borrower and approved by Agent.
3.2 Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3
hereof, Borrower shall have the right to prepay, on any Business Day, in whole
or in part, without the payment of any premium, penalty or fee, any Loans at
any time or from time to time, provided that Borrower shall give Agent notice
of each such prepayment as provided in Section 4.3 hereof. Each optional
prepayment on a Loan shall be in an amount equal to an integral multiple of
$500,000. Such optional prepayments of Term Loans shall be applied ratably
(based on outstanding principal balances) to all Term Notes and shall be
applied to scheduled principal installments in inverse order of their
maturities.
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(b) Mandatory Prepayments and Cover. Except, in each case, as
provided in Section 3.3 hereof,
(1) Insurance Proceeds and Condemnation Awards.
(i) Promptly following the receipt thereof by
Borrower or any of its Subsidiaries (other than Foreign
Subsidiaries), Borrower shall deposit or cause to be deposited
with Agent in an interest bearing account (but without any
obligation to maximize such interest) all of the net cash
proceeds of any payment or award in excess of $500,000 made to
any such Person under any policy of Property insurance with
respect to any Property owned by such Person or pursuant to
any condemnation award with respect to any such Property;
provided such amounts have not theretofore been reasonably
expended for the restoration or replacement of the asset in
respect of which such payment or award was made. Such amounts
shall be collaterally assigned to Agent as security for the
Obligations in a manner reasonably acceptable to Agent. Upon
delivery to Agent of written certification by Borrower that
the applicable Obligor has reasonably expended amounts or
committed in writing to expend amounts for the restoration or
replacement of the asset in respect of which such payment or
award was made, specifying the amount expended or committed,
so long as no Default or Event of Default shall have occurred
and be continuing any such amount deposited with Agent shall
be released by Agent to Borrower; provided, however, that, in
the event that within 180 days of receipt of such payment or
award by Borrower, to the extent Borrower shall not have
actually spent or certified to Agent its intention to expend a
substantially equivalent amount for the restoration or
replacement of the asset in respect of which such payment or
award was made or to purchase other assets that may be
productively used in the business of the Borrower or the
applicable Subsidiary, Borrower shall make a prepayment on the
Term Loans (using any funds deposited with Agent pursuant to
this Section 3.2(b)(1) or other funds) in the amount of the
excess of the amount of such payment or award over the amount
of such expenditures and/or commitment on such 180th day.
Such prepayment shall be applied to the Term Notes secured by
the applicable Collateral and shall be applied to scheduled
principal installments in inverse order of their maturities.
(ii) In cases where the amount of the net cash
proceeds of any payment or award is equal to or less than
$500,000 and no Default or Event of Default has occurred and
is continuing, such proceeds may be paid to any Obligor, and
if received by Agent shall be paid by Agent to Borrower, for
use in paying for replacements or repairs of or substitutes
for the damaged, destroyed or taken assets or in a manner
otherwise consistent with this Agreement.
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(2) Excess Cash Flow. Within fifteen (15)
Business Days after the delivery of the Annual Financial
Statements pursuant to Section 7.2 hereof with respect to each
fiscal year of Borrower (commencing with the fiscal year
ending on March 31, 1998), Borrower shall make a prepayment on
the Term Loans in an amount equal to (i) Excess Cash Flow for
such fiscal year times 50% less (ii) optional prepayments made
on the Term Loans during such fiscal year. Such prepayment
shall be applied ratably to the Term Notes (based on
outstanding principal balances) and shall be applied to
scheduled principal installments in inverse order of their
maturities.
(3) Borrowing Base. Borrower shall from time to
time on demand by Agent prepay the Revolving Loans (or provide
Cover for Letter of Credit Liabilities) in such amounts as
shall be necessary so that at all times the aggregate
outstanding amount of all Revolving Loan Obligations shall be
less than or equal to the Maximum Revolving Loan Available
Amount.
(4) Sale of Assets. Borrower shall make the
payments required by Section 8.4(c) hereof.
(c) Term Loan Amortization. The principal of the Term Notes
shall be due and payable in quarterly installments, each due on a Quarterly
Date, beginning on September 30, 1997, equal to $357,143 (in the aggregate for
all Term Notes) and allocated among the Term Loan Lenders pro rata in
accordance with the unpaid principal balances of the Term Notes held by the
Term Loan Lenders. On the Term Loan Maturity Date, the entire unpaid principal
balance of each Term Note and all accrued and unpaid interest on the unpaid
principal balance of each Term Note shall be finally due and payable.
(d) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Loans shall be due and payable on the Interest Payment
Dates.
(e) Payments and Interest on Reimbursement Obligations. Borrower
will pay to Agent for the account of each Lender the amount of each
Reimbursement Obligation as set forth in Section 2.2(b)(iv). Subject to
Section 11.7 hereof, Borrower will pay to Agent for the account of each Lender
interest at the applicable Past Due Rate on any Reimbursement Obligation and on
any other amount payable by Borrower hereunder to or for the account of such
Lender (but, if such amount is interest, only to the extent legally allowed),
which shall not be paid in full within five (5) days after the date due
(whether at stated maturity, by acceleration or otherwise), for the period
commencing on the expiration of such five (5) day period until the same is paid
in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the
Notes shall bear interest at the Base Rate; provided, that (1) all past due
amounts, both principal and accrued interest, shall
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bear interest at the Past Due Rate, and (2) subject to the provisions hereof,
Borrower shall have the option of having all or any portion of the principal
balances of the Notes from time to time outstanding bear interest at a
Eurodollar Rate. The records of Agent and each of the Lenders with respect to
Interest Options, Interest Periods and the amounts of Loans to which they are
applicable shall be binding and conclusive, absent manifest error. Interest on
the Loans shall be calculated at the Base Rate except where it is expressly
provided pursuant to this Agreement that a Eurodollar Rate is to apply.
Interest on the amount of each advance against the Notes shall be computed on
the amount of that advance and from the date it is made. Notwithstanding
anything in this Agreement to the contrary, for the full term of the Notes the
interest rate produced by the aggregate of all sums paid or agreed to be paid
to the holders of the Notes for the use, forbearance or detention of the debt
evidenced thereby (including all interest on the Notes at the Stated Rate plus
the Additional Interest) shall not exceed the Ceiling Rate.
(b) Designation and Conversion. Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Provided no Event of Default has occurred and is continuing and
subject to the last sentence of Section 3.3(a) and the provisions of Section
3.3(c), Borrower may elect to have a Eurodollar Rate apply or continue to apply
to all or any portion of the principal balance of the Notes. Each change in
Interest Options shall be a conversion of the rate of interest applicable to
the specified portion of the Loans, but such conversion shall not change the
respective outstanding principal balances of the Notes. The Interest Options
shall be designated or converted in the manner provided below:
(i) Borrower shall give Agent telephonic notice, promptly
confirmed by a Rate Designation Notice (and Agent shall
promptly inform each Lender thereof). Each such telephonic
and written notice shall specify the amount of the Loan and
type (i.e. Revolving Loan or Term Loan) which is the subject
of the designation, if any; the amount of borrowings into
which such borrowings are to be converted or for which an
Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period or Periods,
if any, selected by Borrower. Such telephonic notice shall be
irrevocable and shall be given to Agent no later than the
applicable Rate Designation Date.
(ii) No more than three (3) LIBOR Borrowings shall be in effect
with respect to the Revolving Loans at any time. No more than
three (3) LIBOR Borrowings shall be in effect with respect to
the Term Loans at any time.
(iii) Each designation or conversion of a LIBOR Borrowing shall
occur on a LIBOR Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR
Borrowing may be converted to a Base Rate Borrowing or another
LIBOR Borrowing on any day other than the last day of the
applicable Interest Period.
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(v) Each request for a LIBOR Borrowing shall be in the amount
equal to $500,000 or an integral multiple of $100,000 in
excess thereof.
(vi) Each designation of an Interest Option with respect to the
Revolving Notes shall apply to all of the Revolving Notes
ratably in accordance with their respective outstanding
principal balances. Each designation of an Interest Option
with respect to the Term Notes shall apply to all of the Term
Notes ratably in accordance with their respective outstanding
principal balances. If any Lender assigns an interest in any
of its Notes when any LIBOR Borrowing is outstanding with
respect thereto, then such assignee shall have its ratable
interest in such LIBOR Borrowing.
(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the Effective Date in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or other Governmental Authority shall at any
time make it unlawful or impossible for any Lender to permit the establishment
of or to maintain any LIBOR Borrowing, the commitment of such Lender to
establish such LIBOR Borrowing shall forthwith be canceled and Borrower shall
on the last day the Interest Period relating to any outstanding LIBOR Borrowing
(or within such earlier period as may be required by applicable law) (1)
convert the LIBOR Borrowing of such Lender to a Base Rate Borrowing; (2) pay
all accrued and unpaid interest to date on the amount so converted; and (3) pay
any amounts required to compensate each Lender for any additional cost or
expense which any Lender may incur as a result of such adoption of or change in
such Legal Requirement or in the interpretation or administration thereof and
any Funding Loss which any Lender may incur as a result of such conversion.
If, when Agent so notifies Borrower, Borrower has given a Rate Designation
Notice specifying a LIBOR Borrowing but the selected Interest Period has not
yet begun, as to the applicable Lender such Rate Designation Notice shall be
deemed to be of no force and effect, as if never made, and the balance of the
Loans made by such Lender specified in such Rate Designation Notice shall bear
interest at the Base Rate until a different available Interest Option shall be
designated in accordance herewith.
(ii) Increased Cost of Borrowings. Subject to Section 11.15, if
the adoption after the Effective Date of any applicable Legal Requirement or
any change after the Effective Date in any applicable Legal Requirement or in
the interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive (whether or not having
the force of law) issued after the Effective Date by any central bank or
Governmental Authority shall at any time as a result of any portion of the
principal balances of the Notes being maintained on the basis of a Eurodollar
Rate:
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(1) subject any Lender to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due
under any LIBOR Borrowing or other amount due
hereunder, other than income and franchise taxes of
the United States or its political subdivisions or
such other jurisdiction in which the applicable
Lender has its principal office or applicable lending
office; or
(2) change the basis of taxation of payments due from
Borrower to any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of taxation
of the overall net income of such Lender); or
(3) impose, modify, increase or deem applicable any
reserve requirement (excluding that portion of any
reserve requirement included in the calculation of
the applicable Eurodollar Rate), special deposit
requirement or similar requirement (including, but
not limited to, state law requirements) against
assets of any Lender, or against deposits with any
Lender, or against loans made by any Lender, or
against any other funds, obligations or other
Property owned or held by any Lender; or
(4) impose on any Lender any other condition regarding
any LIBOR Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by Agent (accompanied by a statement setting
forth in reasonable detail the applicable Lender's basis therefor), Borrower
shall pay to Agent additional amounts which shall compensate each Lender for
such increased cost or reduced amount. The determination by any Lender of the
amount of any such increased cost, increased reserve requirement or reduced
amount shall be conclusive and binding, absent manifest error. Borrower shall
have the right, if it receives from Agent any notice referred to in this
paragraph, upon three Business Days' notice to Agent (which shall notify each
affected Lender), either (i) to repay in full (but not in part) any borrowing
with respect to which such notice was given, together with any accrued interest
thereon, or (ii) to convert the LIBOR Borrowing which is the subject of the
notice to a Base Rate Borrowing; provided, that any such repayment or
conversion shall be accompanied by payment of (x) the amount required to
compensate each Lender for the increased cost or reduced amount referred to in
the preceding paragraph; (y) all accrued and unpaid interest to date on the
amount so repaid or converted, and (z) any Funding Loss which any Lender may
incur as a result of such repayment or conversion. Each Lender will notify
Borrower through Agent of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation, and (if so requested by Borrower through Agent) will
designate a different lending office of such Lender for the applicable LIBOR
Borrowing or will take such other action as Borrower may reasonable request if
such designation or action is consistent with the internal policy of such
Lender and legal and regulatory restrictions, will avoid the need for, or
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reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender (provided that such Lender shall
have no obligation so to designate a different lending office which is located
in the United States of America).
(iii) Inadequacy of Pricing and Rate Determination. If, for any
reason with respect to any Interest Period, Agent (or, in the case of clause 3
below, the applicable Lender) shall have determined (which determination shall
be conclusive and binding upon Borrower, absent manifest error) that:
(1) Agent is unable through its customary general
practices to determine any applicable Eurodollar
Rate, or
(2) by reason of circumstances affecting the applicable
market, generally, Agent is not being offered
deposits in United States dollars in such market, for
the applicable Interest Period and in an amount equal
to the amount of any applicable LIBOR Borrowing
requested by Borrower, or
(3) any applicable Eurodollar Rate will not adequately
and fairly reflect the cost to any Lender of making
and maintaining such LIBOR Borrowing hereunder for
any proposed Interest Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any Rate
Designation Notice previously given by Borrower designating the applicable
LIBOR Borrowing which has not commenced as of the date of such notice from
Agent shall be deemed for all purposes hereof to be of no force and effect, as
if never given, and (B) until Agent shall notify Borrower that the
circumstances giving rise to such notice from Agent no longer exist, each Rate
Designation Notice requesting the applicable Eurodollar Rate shall be deemed a
request for a Base Rate Borrowing, and any applicable LIBOR Borrowing then
outstanding shall be converted, without any notice to or from Borrower, upon
the termination of the Interest Period then in effect with respect to it, to a
Base Rate Borrowing.
(iv) Funding Losses. Borrower shall indemnify each Lender against
and hold each Lender harmless from any Funding Loss. Subject to Section 11.15,
this indemnity shall survive the payment of the Notes. Within 15 Business Days
after demand by Agent (accompanied by a certificate of such Lender setting
forth in reasonable detail the amount and calculation of the amount claimed as
to any Funding Losses, which shall be conclusive and binding upon Borrower,
absent manifest error), Borrower shall pay to Agent, for the account of such
Lender, the amount of such Funding Losses.
(d) Funding Offices; Adjustments Automatic; Calculation Year. Any
Lender may, if it so elects, fulfill its obligation as to any LIBOR Borrowing
by causing a branch or affiliate of such Lender to make such Loan and may
transfer and carry such Loan at, to or for the account of any branch office or
affiliate of such Lender; provided, that in such event for the purposes of this
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Agreement such Loan shall be deemed to have been made by such Lender and the
obligation of Borrower to repay such Loan shall nevertheless be to such Lender
and shall be deemed held by it for the account of such branch or affiliate.
Without notice to Borrower or any other Person, each rate required to be
calculated or determined under this Agreement shall automatically fluctuate
upward and downward in accordance with the provisions of this Agreement.
Interest at the Prime Rate shall be computed on the basis of the actual number
of days elapsed in a year consisting of 365 or 366 days, as the case may be.
All other interest required to be calculated or determined under this Agreement
shall be computed on the basis of the actual number of days elapsed in a year
consisting of 360 days, unless the Ceiling Rate would thereby be exceeded, in
which event, to the extent necessary to avoid exceeding the Ceiling Rate, the
applicable interest shall be computed on the basis of the actual number of days
elapsed in the applicable calendar year in which accrued.
(e) Funding Sources. Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be entitled to fund and maintain
its funding of all or any part of the Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if each Lender had actually funded and maintained
each LIBOR Borrowing during each Interest Period through the purchase of
deposits having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest, Reimbursement Obligations and other amounts to be made
by Borrower hereunder, under the Notes and under the other Loan Documents shall
be made in Dollars, in immediately available funds, to Agent at the Principal
Office (or in the case of a successor Agent, at the principal office of such
successor Agent in the United States), not later than 11:00 a.m. Houston time
on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day).
(b) Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to Agent the Loans or
other amounts payable by Borrower hereunder or thereunder to which such payment
is to be applied. Each payment received by Agent hereunder, under any Note or
under any other Loan Document for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds. If Agent fails to
send to any Lender the applicable amount by the close of business on the date
any such payment is received by Agent if such payment is received prior to
11:00 a.m. Houston time (or on the next succeeding Business Day with respect to
payments which are received after 11:00 a.m. Houston time), Agent shall pay to
the applicable Lender interest on such amount from such date at the Federal
Funds Rate. Borrower, the Lenders and Agent acknowledge and agree that this
provision and each other
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provision of this Agreement or any of the other Loan Documents relating to the
application of amounts in payment of the Obligations shall be subject to the
provisions of Section 4.2(d) regarding pro rata application of amounts after an
Event of Default shall have occurred and be continuing.
(c) If the due date of any payment hereunder or under any Note
falls on a day which is not a Business Day, the due date for such payments
(except as otherwise provided in clause (2) of the definition of "Interest
Period") shall be extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the period of such
extension.
(d) All payments by the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for or on
account of any present or future income, stamp, or other taxes, fees, duties,
withholding or other charges of any nature whatsoever imposed by any taxing
authority excluding in the case of Agent, each Issuer and each Lender taxes
imposed on or measured by its net income or franchise taxes imposed by the
jurisdiction in which it is organized or through which it acts for purposes of
this Agreement (such non-excluded items being hereinafter referred to as
"Taxes"). If as a result of any change in law (or the interpretation thereof)
after the date that Agent, the applicable Issuer or the applicable Lender
became a party to this Agreement, any withholding or deduction from any payment
to be made to, or for the account of, such Person by any Obligor hereunder or
under any other Loan Document is required in respect of any Taxes pursuant to
any applicable law, rule, or regulation, then the Borrower will (i) pay to the
relevant authority the full amount required to be so withheld or deducted; (ii)
to the extent available, promptly forward to the Agent an official receipt or
other documentation reasonably satisfactory to the Agent evidencing such
payment to such authority; and (iii) pay to the Agent, for the account of each
affected Person, such additional amount or amounts as are necessary to ensure
that the net amount actually received by such Lender will equal the full amount
such Person would have received had no such withholding or deduction been
required. Each such Person shall determine such additional amount or amounts
payable to it (which determination shall, in the absence of manifest error, be
conclusive and binding on the Borrower). If Agent, any Issuer or any Lender
becomes aware that any such withholding or deduction from any payment to be
made by any Obligor hereunder or under any other Loan Document is required,
then such Person shall promptly notify the Agent and the Borrower thereof
stating the reasons therefor and the additional amount required to be paid
under this Section. Each Lender shall execute and deliver to the Agent and
Borrower such forms as it may be required to execute and deliver pursuant to
Section 11.13 hereof. To the extent that any such withholding or deduction
results from the failure of a Lender to provide a form required by Section
11.13 hereof (unless such failure is due to some prohibition under applicable
Legal Requirements), the Borrower shall have no obligation to pay the
additional amount required by clause (iii) above. Anything in this Section
notwithstanding, if any Lender elects to require payment by the Borrower of any
material amount under this Section, the Borrower may, within 60 days after the
date of receiving notice thereof and so long as no Default shall have occurred
and be continuing, elect to terminate such Lender as a party to this Agreement;
provided that, concurrently with such termination the Borrower shall (i) if the
Agent and each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender through such
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date of termination or (ii) have arranged for another financial institution
approved by the Agent (such approval not to be unreasonably withheld or
delayed) as of such date, to become a substitute Lender for all purposes under
this Agreement in the manner provided in Section 11.6; provided further that,
prior to substitution for any Lender, the Borrower shall have given written
notice to the Agent of such intention and the Lenders shall have the option,
but no obligation, for a period of 60 days after receipt of such notice, to
increase their Commitments in order to replace the affected Lender in lieu of
such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
made (x) in the case of Term Loans, ratably from the Term Loan Lenders in
accordance with the amounts set forth opposite their signature lines hereto
under the heading "Term Loans" and (y) in the case of Revolving Loans, ratably
from the Revolving Loan Lenders in accordance with their respective Revolving
Loan Commitments; (b) each payment of revolving loan commitment fees shall be
made for the account of the Revolving Loan Lenders, and each termination or
reduction of the Revolving Loan Commitments of the Revolving Loan Lenders under
Section 2.3 hereof shall be applied, pro rata, according to the Revolving Loan
Lenders' respective Revolving Loan Commitments; (c) each payment by Borrower of
principal of or interest on the Term Loans or Revolving Loans, as the case may
be, prior to the occurrence of an Event of Default (or after the applicable
Event of Default shall have been fully cured or waived) shall be made to Agent
for the account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of such Term Loans or Revolving Loans, as the case may
be, held by the Lenders; (d) each payment by Borrower of principal of or
interest on the Term Loans or Revolving Loans, as the case may be, while an
Event of Default shall have occurred and be continuing shall be made to Agent
for the account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the Obligations held by the Lenders (i.e. such
payments shall be shared by all of the Lenders and not restricted to the
holders of Revolving Notes or Term Notes, regardless of any attempted contrary
designation by Borrower), and (e) the Revolving Loan Lenders (other than the
applicable Issuer) shall purchase from the applicable Issuer participations in
each Letter of Credit to the extent of their respective Revolving Loan
Commitment Percentages.
4.3 Certain Actions, Notices, Etc. Notices to Agent of any
termination or reduction of Revolving Loan Commitments and of borrowings and
optional prepayments of Loans and requests for issuances of Letters of Credit
shall be irrevocable and shall be effective only if received by Agent not later
than 11:00 a.m. Houston time on the number of Business Days prior to the date
of the relevant termination, reduction, borrowing and/or prepayment specified
below:
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Number of Business Days
Prior Notice
------------
Termination or Reduction of
Revolving Loan Commitments 5
Revolving Loan repayment same day
Borrowing at the Base Rate 1
Letter of Credit issuance 2
Prepayments required pursuant to
Section 3.2(b) same day
--------------
Optional prepayment of
Term Loan 5
Selection of a Eurodollar Rate 3 LIBOR
Business Days
Each such notice of termination or reduction shall specify the amount of the
applicable Revolving Loan Commitment to be terminated or reduced. Each such
notice of borrowing or prepayment shall specify the amount of the Loans to be
borrowed or prepaid and the date of borrowing or prepayment (which shall be a
Business Day). Agent shall promptly notify the affected Lenders of the
contents of each such notice.
4.4 Non-Receipt of Funds by Agent. Unless Agent shall have been
notified by a Lender or Borrower (the "Payor") prior to the date on which such
Lender is to make payment to Agent of the proceeds of a Loan (or funding of a
drawing under a Letter of Credit or reimbursement with respect to any drawing
under a Letter of Credit) to be made by it hereunder or Borrower is to make a
payment to Agent for the account of one or more of the Lenders, as the case may
be (such payment being herein called the "Required Payment"), which notice
shall be effective upon receipt, that the Payor does not intend to make the
Required Payment to Agent, Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date and,
if the Payor has not in fact made the Required Payment to Agent, the recipient
of such payment (or, if such recipient is the beneficiary of a Letter of
Credit, Borrower and, if Borrower fails to pay the amount thereof to Agent
forthwith upon demand, the Lenders ratably in proportion to their respective
Revolving Loan Commitment Percentages) shall, on demand, pay to Agent the
amount made available by Agent, together with interest thereon in respect of
the period commencing on the date such amount was so
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made available by Agent until the date Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of
any principal of or interest on any Loan made by it under this Agreement, on
any Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or Lien granted under Section 9.2 hereof),
banker's lien, counterclaim or similar right or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
then due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored.
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the Loans
made, or Reimbursement Obligations or other Obligations held, by other Lenders
may exercise all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans, Reimbursement Obligations or other Obligations in the
amount of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of Borrower.
5. Conditions Precedent.
5.1 Initial Loans and Letters of Credit. The obligation of each
Lender or each Issuer to make its initial Loans or issue or participate in a
Letter of Credit (if such Letter of Credit is issued prior to the funding of
the initial Loans) hereunder is subject to the following conditions precedent,
each of which shall have been fulfilled or waived to the satisfaction of Agent:
(a) Authorization and Status. Agent shall have received (i)
copies of the Organizational Documents of each Obligor certified as true and
correct by its secretary, assistant secretary or other equivalent officer, (ii)
evidence reasonably satisfactory to Agent of all action taken by each Obligor
authorizing the execution, delivery and performance of the Loan Documents and
all other documents related to this Agreement to which it is a party
(including, without limitation, a certificate of the secretary, assistant
secretary or other equivalent officer of each such party which is a corporation
setting forth the resolutions of its Board of Directors authorizing the
transactions contemplated thereby), and (iii) such certificates as may be
appropriate to demonstrate the qualification and good standing of each Obligor
in the jurisdiction of its organization and in each other jurisdiction where
the failure in which to qualify could reasonably be expected to have a Material
Adverse Effect.
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(b) Incumbency. Each Obligor shall have delivered to Agent a
certificate in respect of the name and signature of each of the officers (i)
who is authorized to sign on its behalf the applicable Loan Documents to which
it is a party related to any Loan or the issuance of any Letter of Credit and
(ii) who will, until replaced by another officer or officers duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with any
Loan or the issuance of any Letter of Credit. Agent and each Lender may
conclusively rely on such certificates until they receive notice in writing
from the applicable Obligor to the contrary.
(c) Notes. Agent shall have received the appropriate Notes of
Borrower for each Lender, duly completed and executed.
(d) Loan Documents. Each Obligor shall have duly executed and
delivered the Loan Documents to which it is a party (in such number of copies
as Agent shall have requested). Each such Loan Document shall be in
substantially the form furnished to the Lenders prior to their execution of
this Agreement, together with such changes therein as Agent may approve.
(e) Security Matters. All such action as Agent shall have
requested to perfect the Liens created pursuant to the Security Documents which
are in effect as of the Effective Date shall have been taken, including,
without limitation, where applicable, the filing and recording of the Security
Documents with the appropriate Governmental Authorities. Agent shall also have
received evidence satisfactory to it that the Liens created by the Security
Documents constitute first priority Liens, except for the exceptions expressly
provided for herein or therein, including, without limitation, Uniform
Commercial Code search reports, satisfactory title evidence in form and
substance acceptable to Agent, and executed releases of any prior Liens (except
as permitted by Section 8.2).
(f) Fees and Expenses. Borrower shall have paid to Agent all
unpaid fees in the amounts previously agreed upon in writing among Borrower and
Agent.
(g) Insurance. Borrower shall have delivered to Agent
certificates of insurance satisfactory to Agent evidencing the existence of all
insurance required to be maintained by each Obligor by this Agreement and the
Security Documents.
(h) Opinions of Counsel. Agent shall have received such opinions
of counsel to Obligors as Agent shall reasonably request with respect to
Obligors and the Loan Documents.
(i) Consents. Agent shall have received evidence satisfactory to
the Majority Lenders that all material consents of each Governmental Authority
and of each other Person, if any, reasonably required in connection with (a)
the Loans and the Letters of Credit and (b) the execution, delivery and
performance of this Agreement and the other Loan Documents have been
satisfactorily obtained.
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(j) Key Agreements. Agent shall have received copies of the Key
Agreements (other than the documents relating to the EXIM Facility, which shall
be delivered as soon as available), in Proper Form, and, where applicable,
shall have received evidence satisfactory to Agent that the transactions
contemplated therein have been consummated, subject only to the requested
funding of Loans. Upon request of Agent or the Majority Lenders, the copies of
any designated Key Agreements shall be certified as true, correct and complete
by Borrower.
(k) Equity. Borrower shall have received (through equity
contributions by Holdings to Borrower) not less than $10,000,000 in proceeds
from the sale of equity interests in Holdings.
(l) Purchase Agreement. Agent shall have received evidence
satisfactory to the Majority Lenders that, concurrently with the initial Loan
made hereunder, the acquisition contemplated by the Purchase Agreement shall be
consummated, including the delivery to Borrower of an indemnity regarding
environmental liabilities, in Proper Form, from Xxxxxxxxxxx Enterra, Inc.
(m) Other Documents. Agent shall have received such other
documents consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as Agent may reasonably request.
5.2 All Loans and Letters of Credit. The obligation of each
Lender to make any Loan to be made by it hereunder or to issue or participate
in any Letter of Credit is subject to: (a) the accuracy, in all material
respects, on the date of such Loan or such issuance of all representations and
warranties of each Obligor contained in this Agreement and the other Loan
Documents; (b) Agent shall have received the following, all of which shall be
duly executed and in Proper Form: (1) a Request for Extension of Credit as to
the Loan or the Letter of Credit, as the case may be, no later than 11:00 a.m.
Houston time on the Business Day on which such Request for Extension of Credit
must be given under Section 4.3 hereof, (2) in the case of a Letter of Credit,
an Application, and (3) such other documents as Agent may reasonably require;
(c) prior to the making of such Loan or the issuance of such Letter of Credit,
there shall have occurred no event which could reasonably be expected to have a
Material Adverse Effect; (d) no Default or Event of Default shall have occurred
and be continuing, and (e) the making of such Loan or the issuance of such
Letter of Credit shall not be illegal or prohibited by any Legal Requirement.
The submission by the Borrower of a Request for Extension of Credit shall be
deemed to be a representation and warranty that the conditions precedent to the
applicable Loan or Letter of Credit have been satisfied.
6. Representations and Warranties.
To induce Agent, the Issuers and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, Borrower represents and warrants (such representations and warranties
to survive any investigation and the making of the Loans and the issuance of
any Letters of Credit) to the Lenders, the Issuers and Agent as follows:
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6.1 Organization. Each Obligor (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all necessary power and authority to conduct its business
as presently conducted, and (c) is duly qualified to do business and in good
standing in the jurisdiction of its organization and in all jurisdictions in
which the failure to so qualify could reasonably be expected to have a Material
Adverse Effect.
6.2 Financial Statements. Borrower has furnished to Agent (i)
audited financial statements (including a balance sheet) as to Borrower which
fairly present in all material respects, in accordance with GAAP, the
consolidated financial condition and the results of operations of (a) Borrower
and its Subsidiaries, (b) NATCO Canada, (c) Xxxxxxxx and (d) Holdings,
respectively, as at the end of the fiscal year ended Xxxxx 00, 0000, (xx)
unaudited consolidating financial statements (including a balance sheet) as to
Borrower and its Subsidiaries which fairly present in all material respects, in
accordance with GAAP, the financial condition and the results of operations of
Borrower and its Subsidiaries, on a consolidating basis, as at the end of the
fiscal year ended March 31, 1996 and (iii) unaudited financial statements
(including a balance sheet) as to Borrower and its Subsidiaries which fairly
present in all material respects, in accordance with GAAP, the consolidated
financial condition and the results of operations of Borrower and its
Subsidiaries as at the end of the fiscal quarter ended December 31, 1996. No
events, conditions or circumstances have occurred from the date that the
financial statements were delivered to Agent through the Effective Date which
would cause said financial statements to be misleading in any material respect.
There are no material instruments or liabilities which should be reflected in
such financial statements provided to Agent which are not so reflected.
6.3 Enforceable Obligations; Authorization. The Loan Documents to
which the applicable Obligors are parties are legal, valid and binding
obligations of each applicable Obligor, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency and other
similar laws and judicial decisions affecting creditors' rights generally and
by general equitable principles. The execution, delivery and performance of
the Loan Documents by the respective Obligors (a) have all been duly authorized
by all necessary action; (b) are within the power and authority of each
applicable Obligor; (c) do not and will not contravene or violate any Legal
Requirement applicable to any applicable Obligor or the Organizational
Documents of any applicable Obligor, the contravention or violation of which
could reasonably be expected to have a Material Adverse Effect; (d) do not and
will not result in the breach of, or constitute a default under, any material
agreement or instrument by which any Obligor or any of its Property may be
bound, and (e) do not and will not result in the creation of any Lien upon any
Property of any Obligor, except in favor of Agent or as expressly contemplated
herein or therein. All necessary permits, registrations and consents for such
making and performance have been obtained. Except as otherwise expressly
stated in the Loan Documents, the Liens of the Security Documents, will
constitute valid and perfected first and prior Liens on the Property described
therein, subject to no other Liens whatsoever except Permitted Liens.
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6.4 Other Debt. No Obligor is in default in the payment of any
other Indebtedness or under any agreement, mortgage, deed of trust, security
agreement or lease to which it is a party and which default could reasonably be
expected to have a Material Adverse Effect.
6.5 Litigation. There is no litigation or administrative
proceeding, to the knowledge of any executive officer of Borrower, pending or
threatened against, nor any outstanding judgment, order or decree against, any
Obligor before or by any Governmental Authority which does or could reasonably
be expected to have a Material Adverse Effect. No Obligor is in default with
respect to any judgment, order or decree of any Governmental Authority where
such default could reasonably be expected to have a Material Adverse Effect.
6.6 Title. Each Obligor has good and marketable title to the
Collateral, if any, pledged (or purported to be pledged) by such Obligor
pursuant to the Security Documents, free and clear of all Liens except
Permitted Liens.
6.7 Taxes. Each Obligor has filed all tax returns required to
have been filed and paid all taxes shown thereon to be due, except those for
which extensions have been obtained and those which are being contested in good
faith or where the failure to make required filings or pay required taxes could
not reasonably be expected to have a Material Adverse Effect.
6.8 Regulations G, U and X. None of the proceeds of any Loan will
be used for the purpose of purchasing or carrying directly or indirectly any
margin stock or for any other purpose would constitute this transaction a
"purpose credit" within the meaning of Regulations G, U and X of the Board of
Governors of the Federal Reserve System, as any of them may be amended from
time to time.
6.9 Subsidiaries. As of the Effective Date, Borrower has no
Subsidiaries other than NATCO Canada, NATCO Japan Co., Inc., a Japanese
corporation, National Tank Company, S.A., a Venezuelan corporation, Total
Engineering Services Team, Inc., a Louisiana corporation, Test, Inc., a
Louisiana corporation, Test International, Inc., a Cayman Islands company, and
Test International E.C., a Bahranian company.
6.10 No Untrue or Misleading Statements. No document, instrument
or other writing furnished to the Lenders by or on behalf of any Obligor in
connection with the transactions contemplated in any Loan Document contains any
untrue material statement of fact or omits to state any such fact necessary to
make the representations, warranties and other statements contained herein or
in such other document, instrument or writing not misleading in any material
respect.
6.11 ERISA. With respect to each Plan, Borrower and each member of
the Controlled Group have fulfilled their obligations, including obligations
under the minimum funding standards of ERISA and the Code and are in compliance
in all material respects with the provisions of ERISA and the Code. No event
has occurred which could result in a liability of Borrower or any member
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of the Controlled Group to the PBGC or a Plan (other than to make contributions
in the ordinary course) could reasonably be expected to have a Material Adverse
Effect. There have not been any nor are there now existing any events or
conditions that would cause the Lien provided under Section 4068 of ERISA to
attach to any Property of Borrower or any member of the Controlled Group.
Unfunded Liabilities as of the date hereof do not exceed $500,000. No
"prohibited transaction" has occurred with respect to any Plan.
6.12 Investment Company Act. No Obligor is an investment company
within the meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any Person which
is an investment company, within the meaning of said Act.
6.13 Public Utility Holding Company Act. No Obligor is an
"affiliate" or a "subsidiary company" of a "public utility company," or a
"holding company," or an "affiliate" or a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended.
6.14 Solvency. After giving effect to the equity contributions
required under the provisions of Section 5.1(k), none of Borrower, any Obligor,
or Borrower and its Subsidiaries, on a consolidated basis, is "insolvent," as
such term is used and defined in (i) the Bankruptcy Code and (ii) the
fraudulent conveyance statutes of the State of Texas or of any jurisdiction in
which any of the Collateral may be located.
6.15 Fiscal Year. The fiscal year of each Obligor ends on March 31.
6.16 Compliance. Each Obligor is in compliance with all Legal
Requirements applicable to it, except to the extent that the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.17 Environmental Matters. Each Obligor has, to the best
knowledge of their respective executive officers, obtained and maintained in
effect all Environmental Permits (or the applicable Person has initiated the
necessary steps to transfer the Environmental Permits into its name or obtain
such permits), the failure to obtain which could reasonably be expected to have
a Material Adverse Effect. Each Obligor and its Properties, business and
operations have been and are, to the best knowledge of their respective
executive officers, in compliance with all applicable Requirements of
Environmental Law and Environmental Permits the failure to comply with which
could reasonably be expected to have a Material Adverse Effect. Each Obligor
and its Properties, business and operations are not subject to any (A)
Environmental Claims or (B), to the best knowledge of their respective
executive officers (after making reasonable inquiry of the personnel and
records of their respective Corporations), Environmental Liabilities, in either
case direct or contingent, arising from or based upon any act, omission, event,
condition or circumstance occurring or existing on or prior to the date hereof
which could reasonably be expected to have a Material Adverse Effect. None of
the officers of any Obligor has received any notice of any violation or alleged
violation of any
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Requirements of Environmental Law or Environmental Permit or any Environmental
Claim in connection with its Properties, liabilities, condition (financial or
otherwise), business or operations which could reasonably be expected to have a
Material Adverse Effect. Borrower does not know of any event or condition with
respect to currently enacted Requirements of Environmental Laws presently
scheduled to become effective in the future with respect to any of the
Properties of any Obligor which could reasonably be expected to have a Material
Adverse Effect, for which the applicable Obligor has not made good faith
provisions in its business plan and projections of financial performance.
6.18 Collateral Covered. As of the Effective Date, the Collateral
covered by the Security Documents constitutes substantially all material
personal Property owned by the Borrower and its Subsidiaries (other than
Foreign Subsidiaries).
7. Affirmative Covenants.
Borrower covenants and agrees with Agent and the Lenders that prior to
the termination of this Agreement it will do or cause to be done, and cause
each other Obligor (unless limited by the language of the applicable provision
to less than all of the Obligors) to do or cause to be done, each and all of
the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times,
except where failure or noncompliance could not reasonably be expected to have
a Material Adverse Effect: (a) pay when due all taxes and governmental charges
of every kind upon it or against its income, profits or Property, unless and
only to the extent that the same shall be contested diligently in good faith
and adequate reserves in accordance with GAAP have been established therefor;
(b) do all things necessary to preserve its existence, qualifications, rights
and franchises; (c) comply with all applicable Legal Requirements (including
without limitation Requirements of Environmental Law) in respect of the conduct
of its business and the ownership of its Property, and (d) cause its Property
to be protected, maintained and kept in good repair and make all replacements
and additions to such Property as may be reasonably necessary to conduct its
business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agent and
each Lender each of the following: (a) as soon as available and in any event
within 120 days after the end of each applicable fiscal year, beginning with
the fiscal year ending on March 31, 1998, Annual Financial Statements of
Borrower, NATCO Canada, Holdings and Xxxxxxxx; (b) as soon as available and in
any event within 45 days after the end of each fiscal quarter (other than the
last fiscal quarter) of each applicable fiscal year, Quarterly Financial
Statements of Borrower, NATCO Canada, Holdings and Xxxxxxxx; (c) concurrently
with the financial statements provided for in Subsections 7.2(a) and (b)
hereof, such schedules, computations and other information, in reasonable
detail, as may be reasonably required by Agent to demonstrate compliance with
the covenants set forth herein or reflecting any non-compliance therewith as of
the applicable date, all certified and signed by a duly authorized officer of
Borrower as true and correct in all material respects to the best knowledge of
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such officer and, commencing with the quarterly financial statement prepared as
of June 30, 1997, a compliance certificate ("Compliance Certificate")
substantially in the form of Exhibit F hereto, duly executed by such authorized
officer; (d) by June 30 of each fiscal year, Borrower's annual business plan
for the next fiscal year (including its proforma balance sheet and income and
cash flow projections for such fiscal year); (e) promptly upon their becoming
publicly available, each financial statement, report, notice or definitive
proxy statements sent by any Obligor to shareholders generally and each regular
or periodic report and each registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed by any
Obligor with, or received by any Obligor in connection therewith from, any
securities exchange or the Securities and Exchange Commission or any successor
agency; (f) (1) as of the Effective Date and (2) within 10 days after (i) the
end of each calendar month or (ii) receipt of a request therefor (which may be
given from time to time) from Agent, a Borrowing Base Certificate as at the
Effective Date or the last day of such calendar month or the date of such
receipt, as the case may be, together with such supporting information as Agent
may reasonably request; (g) within 20 days after (i) the end of each calendar
quarter or (ii) receipt of a request therefor (which may be given from time to
time) from Agent, (1) a listing and aging of the Accounts of Borrower and its
Subsidiaries (other than NATCO Canada) as of the end of the most recently ended
calendar month, prepared in reasonable detail and containing such other
information as Agent may reasonably request and (2) a summary of the Inventory
of Borrower and its Subsidiaries (other than NATCO Canada) as of the end of the
most recently ended calendar month, prepared in reasonable detail and
containing such other information as Agent may reasonably request; (h) from
time to time, at any time upon the request of Agent, but at the cost of
Borrower, a report of an independent collateral field examiner approved by
Agent in writing and reasonably acceptable to Borrower (which may be, or be
affiliated with, Agent or one of the Banks) with respect to the Accounts and
Inventory components included in the Borrowing Base (provided, however, that so
long as no Event of Default has occurred and is continuing, Agent shall not
require such a report more than once per calendar year and during the
continuance of an Event of Default, Agent shall not require such a report more
than once per calendar quarter), and (i) such other information relating to the
condition (financial or otherwise), operations, prospects or business of any
Obligor as from time to time may be reasonably requested by Agent. Each
delivery of a financial statement pursuant to this Section 7.2 shall constitute
a restatement of the representations contained in the last two sentences of
Section 6.2.
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7.3 Financial Tests. Have and maintain:
(a) Tangible Net Worth - Tangible Net Worth of not less
than (1) at all times during the period commencing on the Effective
Date through and including June 30, 1997, an amount equal to
$9,400,000 and (2) at all times during each fiscal quarter
thereafter, the minimum Tangible Net Worth required as of the end of
the immediately preceding fiscal quarter plus 50% of the net income of
Borrower and its Subsidiaries, on a consolidated basis (if positive),
for the period from March 31, 1997 through the last day of the fiscal
quarter ending immediately prior to the date of such calculation plus
100% of the net proceeds realized from the issuance of any equity
securities by Borrower or its Subsidiaries during that period.
(b) Debt to Capitalization Ratio - a Debt to
Capitalization Ratio of not greater than (1) 60% at all times during
the period commencing on the Effective Date through and including June
30, 1998; (2) 50% at all times during the period commencing on July 1,
1998 through and including June 30, 1999, and (3) 45% at all times
thereafter.
(c) Fixed Charge Coverage Ratio - a Fixed Charge Coverage
Ratio of not less than 1.25 to 1.00 at all times.
7.4 Inspection. Permit Agent and each Lender upon 3 days' prior
notice (unless a Default or an Event of Default has occurred which is
continuing, in which case no prior notice is required) to inspect its Property
in a manner consistent with applicable safety requirements and policies of
insurance, to examine its files, books and records, except classified
governmental material, and make and take away copies thereof, and to discuss
its affairs with its officers and accountants, all during normal business hours
and at such intervals and to such extent as Agent may reasonably desire.
7.5 Further Assurances. Promptly execute and deliver, at
Borrower's expense, any and all other and further instruments which may be
reasonably requested by Agent to cure any defect in the execution and delivery
of any Loan Document in order to effectuate the transactions contemplated by
the Loan Documents, and in order to grant, preserve protect and perfect the
validity and priority of the Liens created by the Security Documents.
7.6 Books and Records. Maintain books of record and account which
permit financial statements to be prepared in accordance with GAAP.
7.7 Insurance. Maintain insurance on its Property with
responsible companies in such amounts, with such deductibles and against such
risks as are usually carried by owners of similar businesses and Properties in
the same general areas in which Borrower or such Subsidiary operates or as
Agent may otherwise reasonably require, and furnish Agent satisfactory evidence
thereof promptly upon request. These insurance provisions are cumulative of
the insurance provisions of the Security Documents. Agent shall be provided
with a certificate showing coverages provided under the policies of insurance
and such policies shall be endorsed to the effect that they will not be
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canceled for nonpayment of premium, reduced or affected in any material manner
without thirty (30) days' prior written notice to Agent.
7.8 Notice of Certain Matters. Give Agent written notice of the
following promptly after any executive officer of Borrower shall become aware
of the same:
(a) the issuance by any court or governmental agency or authority
of any injunction, order or other restraint prohibiting, or having the effect
of prohibiting, the performance of this Agreement, any other Loan Document, or
the making of the Loans or the initiation of any litigation, or any claim or
controversy which would reasonably be expected to result in the initiation of
any litigation, seeking any such injunction, order or other restraint;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Governmental
Authority involving claims in excess of $250,000 or which could reasonably be
expected to result in a Default hereunder; and
(c) any Event of Default or Default, specifying the nature and
extent thereof and the action (if any) which is proposed to be taken with the
respect thereto.
Borrower will also notify Agent in writing at least 30 days prior to the date
that it or any of its Subsidiaries changes its name or the location of its
chief executive office or principal place of business or the place where it
keeps its books and records. After the Effective Date, Borrower will notify
Agent in writing at least 45 days prior to Borrower's or any of its
Subsidiaries' (other than Foreign Subsidiaries) acquisition of any real
Property or any material personal Property having aggregate fair market value
in excess of $1,000,000, wherever located, other than the Collateral covered by
the Security Documents (such acquisition or ownership being herein called an
"Additional Collateral Event" and the Property so acquired or owned being
herein called "Additional Collateral").
7.9 Capital Adequacy. If any Lender shall have determined that
the adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation
or treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section, after demand by such Lender
(with a copy to Agent) as provided below, pay (subject to
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Sections 11.7 and 11.15 hereof) to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. The certificate of
any Lender setting forth such amount or amounts as shall be necessary to
compensate it and the basis thereof and reasons therefor shall be delivered as
soon as practicable to Borrower and shall be conclusive and binding, absent
manifest error. Borrower shall pay the amount shown as due on any such
certificate within fifteen (15) Business Days after the delivery of such
certificate. In preparing such certificate, a Lender may employ such
assumptions and allocations of costs and expenses as it shall in good xxxxx
xxxx reasonable and may use any reasonable averaging and attribution method.
7.10 ERISA Information and Compliance. Promptly furnish to Agent
(i) immediately upon receipt, a copy of any notice of complete or partial
withdrawal liability under Title IV of ERISA and any notice from the PBGC under
Title IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, (ii) if requested by Agent, promptly after the filing thereof with
the United States Secretary of Labor or the PBGC or the Internal Revenue
Service, copies of each annual and other report with respect to each Plan or
any trust created thereunder, (iii) immediately upon becoming aware of the
occurrence of any "reportable event," as such term is defined in Section 4043
of ERISA, for which the disclosure requirements of Regulation Section 2615.3
promulgated by the PBGC have not been waived, or of any "prohibited
transaction," as such term is defined in Section 4975 of the Code, in
connection with any Plan or any trust created thereunder, a written notice
signed by an authorized officer of Borrower or the applicable member of the
Controlled Group specifying the nature thereof, what action Borrower or the
applicable member of the Controlled Group is taking or proposes to take with
respect thereto, and, when known, any action taken by the PBGC, the Internal
Revenue Service or the Department of Labor with respect thereto, (iv) promptly
after the filing or receiving thereof by Borrower or any member of the
Controlled Group of any notice of the institution of any proceedings or other
actions which may result in the termination of any Plan, and (v) each request
for waiver of the funding standards or extension of the amortization periods
required by Sections 303 and 304 of ERISA or Section 412 of the Code promptly
after the request is submitted by Borrower or any member of the Controlled
Group to the Secretary of the Treasury, the Department of Labor or the Internal
Revenue Service, as the case may be. To the extent required under applicable
statutory funding requirements, Borrower will fund, or will cause the
applicable member of the Controlled Group to fund, all current service pension
liabilities as they are incurred under the provisions of all Plans from time to
time in effect, and comply with all applicable provisions of ERISA, in each
case, except to the extent that failure to do the same could not reasonably be
expected to have a Material Adverse Effect. Borrower covenants that it shall
and shall cause each member of the Controlled Group to (1) make contributions
to each Plan in a timely manner and in an amount sufficient to comply with the
contribution obligations under such Plan and the minimum funding standards
requirements of ERISA; (2) prepare and file in a timely manner all notices and
reports required under the terms of ERISA including but not limited to annual
reports; and (3) pay in a timely manner all required PBGC premiums, in each
case, except to the extent that failure to do the same could not reasonably be
expected to have a Material Adverse Effect.
7.11 Additional Security Documents. As soon as practicable and in
any event within 30 days after an Additional Collateral Event, Borrower shall
(a) execute and deliver or cause to be
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executed and delivered Security Documents, in Proper Form, in favor of Agent
and duly executed by the applicable Obligor, granting a first-priority Lien
(except for Permitted Liens and except for Liens securing the EXIM Facility
covering the "International Collateral", as such term is defined in the
Security Agreements) upon the applicable Additional Collateral securing all of
the Obligations (except as Agent may otherwise agree in order to limit
recording taxes or similar charges based upon the amount secured), and such
other documents (including, without limitation, all items reasonably required
by Agent in connection with the applicable Security Documents previously
executed hereunder, all in Proper Form) as may be reasonably required by Agent
in connection with the execution and delivery of such Security Documents; (b)
deliver or cause to be delivered such other documents or certificates
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agent may reasonably request, and (c) pay in full all
documentary stamps, filing and recording fees, taxes and other fees and charges
payable in connection with the filing and recording of any such Security
Document.
8. Negative Covenants.
Borrower covenants and agrees with Agent and the Lenders that prior to
the termination of this Agreement it will not, and will not suffer or permit
any of its Subsidiaries to, do any of the following:
8.1 Borrowed Money Indebtedness. Create, incur, suffer or permit
to exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a)
Indebtedness under this Agreement and the other Loan Documents and Indebtedness
secured by Liens permitted by Section 8.2 hereof; (b) the liabilities existing
on the date of this Agreement and disclosed in the financial statements
delivered on or prior to the Effective Date pursuant to Section 6.2 hereof, and
subject to Section 8.10 hereof, all renewals, extensions and replacements (but
not increases) of any of the foregoing; (c) the Interest Rate Risk
Indebtedness; (d) purchase money Indebtedness to acquire Equipment obtained by
Borrower or any of its Subsidiaries in the ordinary course of business not
exceeding $2,000,000 at any one time outstanding, in the aggregate for all such
Indebtedness; (e) Indebtedness of NATCO Canada and its Subsidiaries under the
NATCO Canada Credit Facility; (f) Subordinated Indebtedness; (g) Indebtedness
of Borrower and its Subsidiaries under the EXIM Facility; (h) Indebtedness
created under leases which, in accordance with GAAP have been recorded or
should be recorded as capital leases, in an aggregate amount not to exceed
$500,000 at any one time outstanding, and (i) without limitation of any other
part of this Section, Indebtedness of Borrower or any of its Subsidiaries
created, incurred or assumed after the Effective Date, in an aggregate amount
not to exceed $500,000 at any one time outstanding.
8.2 Liens. Create or suffer to exist any Lien upon any of its
Property now owned or hereafter acquired, or acquire any Property upon any
conditional sale or other title retention device or arrangement or any purchase
money security agreement; or in any manner directly or indirectly sell, assign,
pledge or otherwise transfer any of its Accounts or General Intangibles;
except: (a) Liens created pursuant to any Loan Document; (b) Permitted Liens;
(c) Liens upon Property of NATCO
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Canada or its Subsidiaries securing the NATCO Canada Credit Facility; (d) Liens
upon "International Collateral" (as defined in the EXIM Facility) securing the
EXIM Facility, (e) other Liens securing the EXIM Facility which are subordinate
and inferior to the Liens created pursuant to the Loan Documents and (f) Liens
evidenced by capital leases permitted hereunder.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed to Agent in the financial statements delivered on or
prior to the Effective Date pursuant to Section 6.2 hereof (and all renewals,
extensions and replacements--but not increases--of such obligations after the
Effective Date), (c) those liabilities permitted under Sections 8.1 or 8.2
hereof, (d) accounts payable incurred in the ordinary course of business and
(e) other contingent liabilities not exceeding $500,000 at any one time
outstanding.
8.4 Mergers, Consolidations and Acquisitions and Dispositions of
Assets. In any single transaction or series of transactions, directly or
indirectly: (a) liquidate or dissolve provided that any Subsidiary of Borrower
may liquidate, dissolve or take action to wind-up its operations if (i)
Borrower determines such action to be in the best interests of Borrower and its
Subsidiaries (other than NATCO Canada), (ii) liquidating dividends are paid to
Borrower, and (iii) Borrower gives Agent written notice of such action at least
thirty (30) days prior to taking such action, and (iv) with respect to the
liquidation, dissolution or taking of action to wind-up the operations of any
Subsidiary other than NATCO Canada, the aggregate amounts realized therefrom in
any fiscal year in excess of $1,000,000 shall be used to make a prepayment on
the Term Loans pro rata based on their outstanding principal balances (with
such payments to be credited to installments in inverse order of their
maturity); (b) be a party to any merger or consolidation unless and so long as
(i) no Default or Event of Default has occurred that is then continuing, (ii)
immediately thereafter and giving effect thereto, no event will occur and be
continuing which constitutes a Default or an Event of Default, (iii) an Obligor
is the surviving Person; (iv) the surviving Person ratifies and assumes each
Loan Document to which any party to such merger was a party, and (v) Agent is
given at least 30 days' prior notice of such merger or consolidation; (c) sell,
convey or lease all or any part of its assets, except for (i) sales of
Inventory in the ordinary course of business, (ii) sales of other Property in
the ordinary course of business, (iii) sales or reassignments of bad Accounts
to Xxxxxxxxxxx Enterra pursuant to the terms of the Purchase Agreement, (iv)
sales or other dispositions of Property not constituting Inventory or other
Collateral in the ordinary course of business; (v) sales or other dispositions
of Property not constituting Collateral outside the ordinary course of
business; provided the fair market value of all such Property does not exceed
$500,000 during any fiscal year; (vi) sales or other dispositions of Property
(whether or not Collateral) expressly permitted by the other terms of this
Agreement or any Loan Document, (vii) the sale or other disposition of the
Property described on Exhibit I hereto and (viii) subject to the Borrower'
compliance with Section 3.2(b), dispositions occurring as the result of a
casualty event or condemnation; provided, however, that, unless the Majority
Lenders shall have otherwise consented in writing, the net proceeds realized
from such sales or dispositions permitted under subclauses (iii), (iv), (v),
(vi) and (vii) of this clause (c) must,
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within ninety (90) days after the applicable sale or disposition, either (I) be
used to make a prepayment on the Term Loans pro rata based on their outstanding
principal balances (with such payments to be credited to installments in
inverse order of their maturity) or (II) be reinvested in assets that may be
productively used in the business of the Borrower or the applicable Subsidiary
of Borrower, or (d) except for Liens in favor of Agent, pledge, transfer or
otherwise dispose of any equity interest in any of Borrower's Subsidiaries or
any Indebtedness of any of Borrower's Subsidiaries or issue or permit any
Subsidiary of Borrower to issue any additional equity interest other than stock
dividends subject to a Lien in favor of Agent.
8.5 Redemption, Dividends and Distributions. At any time: (a)
redeem, retire or otherwise acquire, directly or indirectly, any equity
interest in any Obligor or (b) make any distributions of any Property or cash
to the owner of any of the equity interests in any Obligor other than Permitted
Dividends.
8.6 Nature of Business. Change the nature of its business or
enter into any business which is substantially different from the business in
which it is presently engaged.
8.7 Transactions with Related Parties. Enter into any transaction
or agreement with any officer, director or holder of any equity interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources (to the
best knowledge of Borrower, after making reasonable inquiry).
8.8 Loans and Investments. Make any loan, advance, extension of
credit or capital contribution to, or make or have any Investment in, any
Person, or make any commitment to make any such extension of credit or
Investment, except (a) Permitted Investments; (b) normal and reasonable
advances in the ordinary course of business to officers and employees; (c)
accounts receivable and accounts payable arising in the ordinary course of
business; (d) deposits in money market funds investing exclusively in Permitted
Investments; (e) Investments disclosed in the financial statements delivered
pursuant to Section 6.1; (f) routine advances by any Obligor to another Obligor
(or any Subsidiary of an Obligor) in the ordinary course of business other than
Investments, not to exceed $500,000 in the aggregate at any time; and (g) other
Investments not to exceed $500,000 in the aggregate at any time.
8.9 Subsidiaries. Form, create or acquire any Subsidiary, except
that Borrower may form, create or acquire a wholly-owned Subsidiary so long as
(a) immediately thereafter and giving effect thereto, no event will occur and
be continuing which constitutes a Default; (c) if such Subsidiary is not a
Foreign Subsidiary, such Subsidiary (and, where applicable, Borrower) shall
execute and deliver a Guaranty and such Security Documents as the Majority
Lenders may reasonably require, and (b) Agent is given at least 30 days' prior
notice of such formation, creation or acquisition.
8.10 Key Agreements. Terminate or agree to the termination of any
Key Agreement or amend, modify or obtain or grant a waiver of any provision of
any of the Key Agreements if such action could reasonably be expected to have a
Material Adverse Effect; provided, however, that the
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EXIM Facility may, with contemporaneous notice to the Agent but without any
necessity for consent by Agent or any Lender, be amended to increase the
aggregate loans thereunder to a maximum amount of $5,000,000 at any one time
outstanding.
8.11 Organizational Documents. Amend, modify, restate or
supplement any of its Organizational Documents if such action could reasonably
be expected to have a Material Adverse Effect.
8.12 Unfunded Liabilities. Incur any Unfunded Liabilities after
the Effective Date or allow any Unfunded Liabilities in excess of $500,000, in
the aggregate, to arise or exist.
8.13 Operating Lease Expenses. Aggregate operating lease expenses
(excluding lease payments under capital leases) shall not exceed, for Borrower
and its Subsidiaries (other than NATCO Canada) in the aggregate in any fiscal
year, $2,500,000.
8.14 Sale/Leasebacks. Borrower will not (and will not permit any
of its Subsidiaries, other than NATCO Canada, to) enter into any sale/leaseback
transactions without the prior written consent of the Majority Lenders.
Without limiting the foregoing, any leasehold estate acquired pursuant to a
permitted sale/leaseback shall constitute Additional Collateral, and the
closing of such sale/leaseback transaction shall constitute an Additional
Collateral Event, for all purposes hereunder.
8.15 Subordinated Indebtedness. Except as expressly permitted in
writing by the Majority Lenders, Borrower will not (a) amend, modify or obtain
or grant a waiver of any provision of any document or instrument evidencing any
Subordinated Indebtedness or (b) purchase, redeem, retire or otherwise acquire
for value, deposit any monies with any Person with respect to or make any
payment or prepayment of the principal of or any other amount owing in respect
of, any Subordinated Indebtedness.
8.16 Negative Pledges. Except for (a) any of the Loan Documents,
(b) the NATCO Canada Credit Facility, (c) the EXIM Facility, (d) agreements
permitted by Section 8.1(h) but only with respect to the Property subject to
the Lien permitted thereby; (e) customary provisions in leases, licenses, asset
sale agreements and other customary agreements not related to the Borrowed
Money Indebtedness and entered into in the ordinary course of business, and (f)
restrictions imposed by agreements governing Permitted Liens, enter into any
agreement or contract which limits or restricts in any way the granting of
Liens by Borrower or any of its Subsidiaries securing any of the Obligations.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then Agent may (and at the
direction of the Majority Lenders, shall) do any or all of the following: (1)
without notice to Borrower or any other Person, declare the Revolving Loan
Commitments terminated (whereupon the Revolving Loan Commitments shall be
terminated)
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and/or accelerate the Revolving Loan Termination Date to a date as early as the
date of termination of the Revolving Loan Commitments; (2) terminate any Letter
of Credit allowing for such termination, by sending a notice of termination as
provided therein and require Borrower to provide Cover for outstanding Letters
of Credit; (3) declare the principal amount then outstanding of and the unpaid
accrued interest on the Loans and Reimbursement Obligations and all fees and
all other amounts payable hereunder, under the Notes and under the other Loan
Documents to be forthwith due and payable, whereupon such amounts shall be and
become immediately due and payable, without notice (including, without
limitation, notice of acceleration and notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrower; provided that in the case of the
occurrence of an Event of Default with respect to any Obligor referred to in
clause (f), (g) or (h) of this Section 9.1, the Revolving Loan Commitments
shall be automatically terminated and the principal amount then outstanding of
and unpaid accrued interest on the Loans and the Reimbursement Obligations and
all fees and all other amounts payable hereunder, under the Notes and under the
other Loan Documents shall be and become automatically and immediately due and
payable, without notice (including, without limitation, notice of acceleration
and notice of intent to accelerate), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by Borrower,
and (4) exercise any or all other rights and remedies available to Agent or any
of the Lenders under the Loan Documents, at law or in equity:
(a) Payments - (i) any Obligor shall fail to make any
payment or required prepayment of any installment of principal on the
Loans or any Reimbursement Obligation payable under the Notes, this
Agreement or the other Loan Documents when due or (ii) any Obligor
fails to make any payment or required payment of interest with respect
to the Loans, any Reimbursement Obligation or any other fee or amount
under the Notes, this Agreement or the other Loan Documents when due
and such failure to pay continues unremedied for a period of five
days; or
(b) Other Obligations - any Obligor shall default in the
payment when due of any principal of or interest on any Indebtedness
having an outstanding principal amount of at least $3,000,000 (other
than the Loans and Reimbursement Obligations) and such default shall
continue beyond any applicable period of grace and shall give rise to
a right on the part of the holder of such Indebtedness to accelerate
such Indebtedness; or any event or condition shall occur which results
in the acceleration of the maturity of any such Indebtedness or
enables (or, with the giving of notice or lapse of time or both, would
enable) the holder of any such Indebtedness or any Person acting on
such holder's behalf to accelerate the maturity thereof and such event
or condition shall not be cured within any applicable period of grace;
or
(c) Representations and Warranties - any representation
or warranty made or deemed made by or on behalf of any Obligor in this
Agreement or any other Loan Document or in any certificate furnished
or made by any Obligor to Agent or the Lenders in connection herewith
or therewith shall prove to have been incorrect, false or misleading
in any material
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respect as of the date thereof or as of the date as of which the facts
therein set forth were stated or certified or deemed stated or
certified; or
(d) Affirmative Covenants - (i) default shall be made in
the due observance or performance of any of the covenants or
agreements contained in Section 7.3 hereof or (ii) default is made in
the due observance or performance of any of the other covenants and
agreements contained in Section 7 hereof or any other affirmative
covenant of any Obligor contained in this Agreement or any other Loan
Document and such default continues unremedied for a period of 30 days
after (x) notice thereof is given by Agent to Borrower or (y) such
default otherwise becomes known to any executive officer of Borrower,
whichever is earlier; or
(e) Negative Covenants - default is made in the due
observance or performance by Borrower of any of the other covenants or
agreements contained in Section 8 of this Agreement or of any other
negative covenant of any Obligor contained in this Agreement or any
other Loan Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings -
a receiver, conservator, liquidator or trustee of any Obligor or of
any of its Property is appointed by the order or decree of any court
or agency or supervisory authority having jurisdiction, and such
decree or order remains in effect for more than 90 days; or any
Obligor is adjudicated bankrupt or insolvent; or any of such Person's
Property is sequestered by court order and such order remains in
effect for more than 90 days; or a petition is filed against any
Obligor under any state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment or debt, dissolution,
liquidation or receivership law or any jurisdiction, whether now or
hereafter in effect, and is not dismissed within 90 days after such
filing; or
(g) Voluntary Petitions or Consents - any Obligor
commences a voluntary case or other proceeding or order seeking
liquidation, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or other relief with respect to itself
or its debts or other liabilities under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its Property, or
consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or fails generally to, or cannot, pay
its debts generally as they become due or takes any corporate action
to authorize or effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of
Insolvency - any Obligor makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its debts
generally as they become due, or consents to the appointment of a
receiver, trustee, or liquidator of such Obligor or of all or any
substantial part of its Property; or
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(i) Undischarged Judgments - a final non-appealable
judgment or judgments for the payment of money exceeding, in the
aggregate, $1,000,000 (exclusive of amounts covered by insurance) is
rendered by any court or other governmental body against any Obligor
and such Obligor does not discharge the same or provide for its
discharge in accordance with its terms, or procure a stay of execution
thereof within 30 days from the date of entry thereof; or
(j) Security Documents - any Security Document after
delivery thereof, shall for any reason, except to the extent permitted
by the terms of this Agreement or such Security Document, ceases to
create a valid and perfected Lien of the first priority (subject to
the Permitted Liens), required thereby on any of the Collateral
individually or in the aggregate having a fair market value in excess
of $750,000 purported to be covered thereby and securing that portion
of the Obligations which is therein designated as being secured, or
any Obligor (or any other Person who may have granted or purported to
grant such Lien) will so state in writing or, after the creation
thereof as herein provided, Agent shall cease to have a first priority
Lien (subject to Permitted Liens) upon 65% of the equity interests in
and to Foreign Subsidiaries of Borrower securing the Obligations; or
(k) Ownership Change or Encumbrance - (i) any Person
other than Borrower shall own any equity interest in any Subsidiary of
Borrower (other than a 15% equity interest in NATCO Japan Co., Inc.
currently owned by Persons other than Borrower) or any Person other
than Agent shall acquire any Lien on Borrower's interest in and to
the equity interest in any Subsidiary of Borrower (other than a
subordinate Lien in favor of the holder(s) of the EXIM Facility); or
(ii) Holdings shall cease to be the beneficial owner, directly or
indirectly, of all of the equity interests in Borrower; or (iii)
Xxxxxxxx shall cease to be the beneficial owner, directly or
indirectly, of all of the equity interests in Holdings, or (iv) The
Capricorn Group (Cap I, II and Affiliates) shall cease to be the
beneficial owners, directly or indirectly, of at least 20% of the
equity interests in Xxxxxxxx or any Person other than The Capricorn
Group (Cap I, II and Affiliates) shall own, directly or indirectly,
more than 20% of the equity interests in Xxxxxxxx.
(l) Uninsured Loss - any Obligor shall be the subject of
any uninsured or unindemnified casualty losses exceeding, in the
aggregate, $750,000 in any fiscal year.
9.2 Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, without notice to any Obligor (any such notice
being expressly waived by Borrower and the other Obligors), to setoff and apply
any and all deposits, whether general or special, time or demand, provisional
or final (but excluding the funds held in accounts clearly designated as escrow
or trust accounts held by Borrower or any other Obligor for the benefit of
Persons which are not Affiliates of any Obligor), whether or not such setoff
results in any loss of interest or other penalty, and including without
limitation all certificates of deposit, at any time held, and any other funds
or Property at any time held, and other Indebtedness at any time owing by such
Lender to or for the credit or the account of Borrower or any
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other Obligor against any and all of the Obligations irrespective of whether or
not such Lender or Agent will have made any demand under this Agreement, the
Notes or any other Loan Document. Should the right of any Lender to realize
funds in any manner set forth hereinabove be challenged and any application of
such funds be reversed, whether by court order or otherwise, the Lenders shall
make restitution or refund to Borrower pro rata in accordance with their
Revolving Loan Commitments. Each Lender agrees to promptly notify Borrower and
Agent after any such setoff and application, provided that the failure to give
such notice will not affect the validity of such setoff and application. The
rights of Agent and the Lenders under this Section are in addition to other
rights and remedies (including without limitation other rights of setoff) which
Agent or the Lenders may have. This Section is subject to the terms and
provisions of Sections 4.5 and 11.7 hereof.
9.3 Collateral Account. Borrower hereby agrees, in addition to
the provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by Agent or the
Majority Lenders (through Agent), pay to Agent an amount in immediately
available funds equal to the then aggregate amount available for drawings under
all Letters of Credit issued for the account of Borrower, which funds shall be
held by Agent as Cover.
9.4 Preservation of Security for Letter of Credit Liabilities. In
the event that, following (i) the occurrence of an Event of Default and the
exercise of any rights available to Agent or any Lender under the Loan
Documents, and (ii) payment in full of the principal amount then outstanding of
and the accrued interest on the Loans and Reimbursement Obligations and fees
and all other amounts payable hereunder and under the Notes and all other
amounts secured by the Security Documents, any Letter of Credit Liabilities
shall remain outstanding, Agent shall be entitled to hold (and Borrower and
each other Obligor hereby grants and conveys to Agent a security interest in
and to) all cash or other Property ("Proceeds of Remedies") realized or arising
out of the exercise of any rights available under the Loan Documents, at law or
in equity, including, without limitation, the proceeds of any foreclosure, as
collateral for the payment of such Letter of Credit Liabilities. Such Proceeds
of Remedies shall be held for the ratable benefit of the Lenders. The rights,
titles, benefits, privileges, duties and obligations of Agent with respect
thereto shall be governed by the terms and provisions of this Agreement and, to
the extent not inconsistent with this Agreement, the applicable Security
Documents. Agent may, but shall have no obligation to, invest any such
Proceeds of Remedies in such manner as Agent, in the exercise of its sole
discretion, deems appropriate. Such Proceeds of Remedies shall be applied to
Reimbursement Obligations arising in respect of any such Letters of Credit
and/or the payment of any Lender's obligations under any such Letter of Credit
when such Letter of Credit is drawn upon. Nothing in this Section shall cause
or permit an increase in the maximum amount of the Revolving Loan Obligations
permitted to be outstanding from time to time under this Agreement.
9.5 Remedies Cumulative. No remedy, right or power conferred upon
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
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10. Agent.
10.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent hereunder, under
the Letters of Credit and under the other Loan Documents with such powers as
are specifically delegated to Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. Any Loan
Documents executed in favor of Agent shall be held by Agent for the ratable
benefit of the Lenders. Agent ("Agent" as used in this Section 10 shall include
reference to its Affiliates and its own and its Affiliates' respective
officers, shareholders, directors, employees and agents) (a) shall not have any
duties or responsibilities except those expressly set forth in this Agreement,
the Letters of Credit, and the other Loan Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee or fiduciary for any
Lender; (b) shall not be responsible to any Lender for any recitals,
statements, representations or warranties contained in this Agreement, the
Letters of Credit or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement, the Letters of Credit or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or sufficiency
of this Agreement, the Letters of Credit, or any other Loan Document or any
other document referred to or provided for herein or therein or any Property
covered thereby or for any failure by any Obligor or any other Person to
perform any of its obligations hereunder or thereunder, and shall not have any
duty to inquire into or pass upon any of the foregoing matters; (c) shall not
be required to initiate or conduct any litigation or collection proceedings
hereunder or under the Letters of Credit or any other Loan Document except to
the extent requested by the Majority Lenders; (d) shall not be responsible for
any mistake of law or fact or any action taken or omitted to be taken by it
hereunder or under the Letters or Credit or any other Loan Document or any
other document or instrument referred to or provided for herein or therein or
in connection herewith or therewith, INCLUDING, WITHOUT LIMITATION, PURSUANT TO
ITS OWN NEGLIGENCE, except for its own gross negligence or willful misconduct;
(e) shall not be bound by or obliged to recognize any agreement among or
between Borrower and any Lender to which Agent is not a party, regardless of
whether Agent has knowledge of the existence of any such agreement or the terms
and provisions thereof; (f) shall not be charged with notice or knowledge of
any fact or information not herein set out or provided to Agent in accordance
with the terms of this Agreement or any other Loan Document; (g) shall not be
responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator, and (h) shall not be responsible for the
acts or edicts of any Governmental Authority. Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Without in any way limiting any of the foregoing, each Lender acknowledges that
each Issuer shall have no greater responsibility in the operation of the
Letters of Credit than is specified in the Uniform Customs and Practice for
Documentary Credits (1993 Revision, International Chamber of Commerce
Publication No. 500). In any foreclosure proceeding concerning any Collateral,
each holder of an Obligation if bidding for its own account or for its own
account and the accounts of other Lenders is prohibited from including in the
amount of its bid an amount to be applied as a credit against the Obligations
held by it or the Obligations held by the
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other Lenders; instead, such holder must bid in cash only. However, in any
such foreclosure proceeding, Agent may (but shall not be obligated to) submit a
bid for all Lenders (including itself) in the form of a credit against the
Obligations, and Agent or its designee may (but shall not be obligated to)
accept title to such Collateral for and on behalf of all Lenders.
10.2 Reliance. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for
Borrower), independent accountants and other experts selected by Agent. Agent
shall not be required in any way to determine the identity or authority of any
Person delivering or executing the same. As to any matters not expressly
provided for by this Agreement, the Letters of Credit, or any other Loan
Document, Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with
instructions of the Majority Lenders, and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. Pursuant to
instructions of the Majority Lenders, Agent shall have the authority to execute
releases of the Security Documents on behalf of the Lenders without the joinder
of any Lender. If any order, writ, judgment or decree shall be made or entered
by any court affecting the rights, duties and obligations of Agent under this
Agreement or any other Loan Document, then and in any of such events Agent is
authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it under the terms of this Agreement, the relevant
Loan Document or otherwise; and if Agent complies with any such order, writ,
judgment or decree, then it shall not be liable to any Lender or to any other
Person by reason of such compliance even though such order, writ, judgment or
decree may be subsequently reversed, modified, annulled, set aside or vacated.
10.3 Defaults. Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on Loans or Reimbursement Obligations) unless Agent
has received notice from a Lender or Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default." In the event
that Agent receives such a Notice of Default, Agent shall give prompt notice
thereof to the Lenders (and shall give each Lender prompt notice of each such
non-payment). Agent shall (subject to Section 10.7 hereof) take such action
with respect to such Notice of Default as shall be directed by the Majority
Lenders and within its rights under the Loan Documents and at law or in equity,
provided that, unless and until Agent shall have received such directions,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, permitted hereby with respect to such Notice of Default as
it shall deem advisable in the best interests of the Lenders and within its
rights under the Loan Documents, at law or in equity.
10.4 Material Written Notices. In the event that Agent receives
any written notice of a material nature from the Borrower or any Obligor under
the Loan Documents, Agent shall promptly inform each of the Lenders thereof.
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10.5 Rights as a Lender. With respect to its Revolving Loan
Commitments and the Loans made by it and Letter of Credit Liabilities, TCB in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting in its agency capacity, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include Agent in its individual capacity.
Agent may (without having to account therefor to any Lender) accept deposits
from, lend money to and generally engage in any kind of banking, trust, letter
of credit, agency or other business with Borrower (and any of its Affiliates)
as if it were not acting as Agent; and Agent may accept fees and other
consideration from Borrower (in addition to the fees heretofore agreed to
between Borrower and Agent) for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
10.6 Indemnification. The Lenders agree to indemnify Agent (to the
extent not reimbursed under Section 2.2(c), Section 11.3 or Section 11.4
hereof, but without limiting the obligations of Borrower under said Sections
2.2(c), 11.3 and 11.4), ratably in accordance with the sum of the Lenders'
respective Revolving Loan Commitments and Term Loans, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever,
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, which may be imposed on, incurred by or asserted against
Agent in any way relating to or arising out of this Agreement, the Letters of
Credit or any other Loan Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower
is obligated to pay under Sections 2.2(c), 11.3 and 11.4 hereof, interest,
penalties, attorneys' fees and amounts paid in settlement, but excluding,
unless a Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified. The obligations of the Lenders under this Section
10.6 shall survive the termination of this Agreement and the repayment of the
Obligations.
10.7 Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has received current financial information with respect to Borrower and
each other Obligor that it has, independently and without reliance on Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and each other Obligor
and decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any of the other Loan Documents. Agent shall not be required to keep itself
informed as to the performance or observance by any Obligor of this Agreement,
the Letters of Credit or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the Properties or
books of any Obligor. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by Agent
hereunder,
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under the Letters of Credit or the other Loan Documents, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of any
Obligor (or any of their affiliates) which may come into the possession of
Agent.
10.8 Failure to Act. Except for action expressly required of Agent
hereunder, under the Letters of Credit or under the other Loan Documents, Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction
by the Lenders of their indemnification obligations under Section 10.6 hereof
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the appointment
and acceptance of a successor Agent as provided below, Agent may resign at any
time by giving notice thereof to the Lenders and Borrower, and Agent may be
removed at any time with or without cause by the Majority Lenders; provided,
that Agent shall continue as Agent until such time as any successor shall have
accepted appointment as Agent hereunder. Upon any such resignation or removal,
(i) the Majority Lenders without the consent of Borrower shall have the right
to appoint a successor Agent so long as such successor Agent is also a Lender
at the time of such appointment and (ii) the Majority Lenders shall have the
right to appoint a successor Agent that is not a Lender at the time of such
appointment so long as Borrower consents to such appointment (which consent
shall not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent. Any successor Agent shall be a bank
which has an office in the United States and a combined capital and surplus of
at least $250,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder and under any other Loan Documents. Such successor Agent
shall promptly specify by notice to Borrower its Principal Office referred to
in Section 3.1 and Section 4 hereof. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 10 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent.
10.10 No Partnership. Neither the execution and delivery of this
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agent or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
Agent. The relationship between the Lenders, on the one hand, and Agent, on
the other, is and shall be that of principals and agent only, and nothing in
this Agreement or any of the other Loan Documents shall
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be construed to constitute Agent as trustee or other fiduciary for any Lender
or to impose on Agent any duty, responsibility or obligation other than those
expressly provided for herein and therein.
10.11 Authority of Agent. Each Lender acknowledges that the rights
and responsibilities of Agent under this Agreement and the Loan Documents with
respect to any action taken by Agent or the exercise or non-exercise by Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement and/or the other Loan
Documents shall, as between Agent and the Lenders, be governed by this
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between Agent and the Obligors, Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting; and each Obligor shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.
11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default shall be
a waiver of any other Default or Event of Default. No failure on the part of
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
11.2 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telegraph, telecopy
(confirmed by mail), cable or other writing and telecopied, telegraphed,
cabled, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof (or provided
for in an Assignment and Acceptance); or, as to any party hereto, at such other
address as shall be designated by such party in a notice (given in accordance
with this Section) (i) as to Borrower, to Agent, (ii) as to Agent, to Borrower
and to each Lender, and (iii) as to any Lender, to Borrower and Agent. Except
as otherwise provided in this Agreement, all such notices or communications
shall be deemed to have been duly given when (i) transmitted by telecopier or
delivered to the telegraph or cable office, (ii) personally delivered (iii) one
Business Day after deposit with an overnight mail or delivery service, postage
prepaid or (iv) three Business Days' after deposit in a receptacle maintained
by the United States Postal Service, postage prepaid, registered or certified
mail, return receipt requested, in each case given or addressed as aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any
Letter of Credit ever issued, Borrower shall pay or reimburse within 10
Business Days after written demand (a) Agent for paying the reasonable fees and
expenses of legal counsel to Agent, together with the reasonable fees and
expenses of each local counsel to Agent, in connection with the preparation,
negotiation, execution and delivery of this Agreement (including the exhibits
and schedules hereto), the Security
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Documents and the other Loan Documents and the making of the Loans and the
issuance of Letters of Credit hereunder, and any modification, supplement or
waiver of any of the terms of this Agreement, the Letters of Credit or any
other Loan Document; (b) Agent for any reasonable and customary lien search
fees, collateral audit fees, appraisal fees, survey fees, environmental study
fees, and title insurance costs and premiums; (c) Agent for reasonable
out-of-pocket expenses incurred in connection with the preparation,
documentation, administration and syndication of the Loans or any of the Loan
Documents (including, without limitation, the advertising, marketing, printing,
publicity, duplicating, mailing and similar expenses) of the Loans and Letter
of Credit Liabilities; (d) Agent for paying all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement, any Letter of Credit or any
other Loan Document or any other document referred to herein or therein; (e)
Agent for paying all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any Lien contemplated by this Agreement, any Security Document or any
document referred to herein or therein, and (f) following the occurrence and
during the continuation of an Event of Default, any Lender or Agent for paying
all amounts reasonably expended, advanced or incurred by such Lender or Agent
to satisfy any obligation of any Obligor under this Agreement or any other Loan
Document, to protect the Collateral, to collect the Obligations or to enforce,
protect, preserve or defend the rights of the Lenders or Agent under this
Agreement or any other Loan Document, including, without limitation, fees and
expenses incurred in connection with such Lender's or Agent's participation as
a member of a creditor's committee in a case commenced under the Bankruptcy
Code or other similar law, fees and expenses incurred in connection with
lifting the automatic stay prescribed in Section 362 of the Bankruptcy Code
and fees and expenses incurred in connection with any action pursuant to
Section 1129 of the Bankruptcy Code and all other reasonable and customary
out-of-pocket expenses incurred by such Lender or Agent in connection with such
matters, together with interest thereon at the Past Due Rate on each such
amount from the due date until the date of reimbursement to such Lender or
Agent.
11.4 Indemnification. Borrower shall indemnify each of Agent, the
Lenders, and each affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, insofar as such losses, liabilities, claims or damages
arise out of or result from any (i) actual or proposed use by Borrower of the
proceeds of any extension of credit (whether a Loan or a Letter of Credit) by
any Lender hereunder; (ii) breach by any Obligor of this Agreement or any other
Loan Document; (iii) violation by any Obligor of any Legal Requirement, or (iv)
investigation, litigation or other proceeding relating to any of the foregoing,
and Borrower shall reimburse Agent, each Lender, and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand for any
reasonable and customary expenses (including reasonable and customary legal
fees) incurred in connection with any such investigation or proceeding;
provided, however, that Borrower shall not have any obligations pursuant to
this Section with respect to any losses, liabilities, claims, damages or
expenses incurred by the Person seeking indemnification by reason of the gross
negligence or willful misconduct of that Person or with respect to any disputes
between or among any of Agent, Lenders and Issuers.
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Nothing in this Section is intended to limit the obligations of Borrower under
any other provision of this Agreement. Agent and each Lender, respectively,
shall indemnify Borrower and hold Borrower harmless from and against the gross
negligence or willful misconduct of Agent or such Lender, as the case may be.
In the case of any indemnification hereunder, Agent or the respective Lender,
as appropriate, shall give written notice to Borrower of any such claim or
demand being made against an indemnified person and Borrower shall have the
non-exclusive right to join in the defense against any such claim or demand,
provided that if Borrower provides a defense, the indemnified person shall bear
its own cost of defense unless there is a conflict of interests between
Borrower and such indemnified person. No Indemnified Person may settle any
claim to be indemnified without the consent of the Borrower, such consent not
to be unreasonably withheld or delayed.
11.5 Amendments, Etc. No amendment or modification of this
Agreement, the Notes or any other Loan Document shall in any event be effective
against Borrower or any Obligor party thereto unless the same shall be agreed
or consented to in writing by such Person. No amendment, modification or
waiver of any provision of this Agreement, the Notes or any other Loan
Document, nor any consent to any departure by any Obligor therefrom, shall in
any event be effective against the Lenders unless the same shall be agreed or
consented to in writing by the Majority Lenders, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, that no amendment, modification, waiver or
consent shall, unless in writing and signed by each Lender affected thereby, do
any of the following: (a) increase any Revolving Loan Commitment of any of the
Lenders (or reinstate any termination or reduction of the Revolving Loan
Commitments) or subject any of the Lenders to any additional obligations; (b)
reduce the principal of, or interest on, any Loan, Reimbursement Obligation or
fee hereunder; (c) postpone or extend the Revolving Loan Maturity Date, the
Term Loan Maturity Date, the Revolving Loan Termination Date, the Revolving
Loan Availability Period or any scheduled date fixed for any payment of
principal of, or interest on, any Loan, Reimbursement Obligation, fee or other
sum to be paid hereunder or waive any Event of Default described in Section
9.1(a) hereof; (d) change the percentage of any of the Revolving Loan
Commitments or of the aggregate unpaid principal amount of any of the Loans and
Letter of Credit Liabilities, or the percentage of Lenders, which shall be
required for the Lenders or any of them to take any action under this
Agreement; (e) change any provision contained in Sections 2.2(c), 7.9, 11.3 or
11.4 hereof or this Section 11.5; (f) release any Person from liability under a
Guaranty or release all or substantially all of the security for the
Obligations or release Collateral (exclusive of Collateral with respect to
which Agent is obligated to provide a release pursuant to this Agreement or any
of the other Loan Documents or by law) in any one (1) calendar year ascribed an
aggregate value on the most recent financial statements of Borrower delivered
to Agent in excess of $1,000,000; (g) increase any of the fixed percentages to
be multiplied by the aggregate amounts of the components comprising the
Borrowing Base that are described in (i) and (ii) of the definition of
Borrowing Base herein, or (h) modify the provisions of Sections 4.1(b) or 4.2
hereof regarding pro rata application of amounts after an Event of Default
shall have occurred and be continuing. Notwithstanding anything in this
Section 11.5 to the contrary, no amendment, modification, waiver or consent
shall be made with respect to Section 10 without the consent of Agent to the
extent it affects Agent, as Agent.
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11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit
of Borrower, Agent and the Lenders and their respective successors and assigns;
provided, however, that, except as permitted by Section 8.4 hereof, Borrower
may not assign or transfer any of its rights or obligations hereunder without
the prior written consent of all of the Lenders, and any such assignment or
transfer without such consent shall be null and void. Each Lender may sell
participations to any Person in all or part of any Loan, or all or part of its
Notes, Revolving Loan Commitments or interests in Letters of Credit, in which
event, without limiting the foregoing, the provisions of the Loan Documents
shall inure to the benefit of each purchaser of a participation; provided,
however, the pro rata treatment of payments, as described in Section 4.2 hereof
and rights to compensation under Section 3.3 hereof, shall be determined as if
such Lender had not sold such participation. Any Lender that sells one or more
participations to any Person shall not be relieved by virtue of such
participation from any of its obligations to Borrower under this Agreement
relating to the Loans. In the event any Lender shall sell any participation,
such Lender shall retain the sole right and responsibility to enforce the
obligations of Borrower relating to the Loans, including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement other than amendments, modifications or waivers with respect to
(i) any fees payable hereunder to the Lenders, (ii) the amount of principal or
the rate of interest payable on, or the dates fixed for the scheduled repayment
of principal of, the Loans and (iii) the release of the Liens on all or
substantially all of the Collateral.
(b) Each Lender may assign to one or more Lenders or any other
Person all or a portion of its interests, rights and obligations under this
Agreement; provided, however, that (i) the aggregate amount of the Revolving
Loan Commitments and the Term Loans of the assigning Lender subject to each
such assignment shall in no event be less than $5,000,000; (ii) other than in
the case of an assignment to another Lender (that is, at the time of the
assignment, a party hereto) or to an Affiliate of such Lender or to a Federal
Reserve Bank, Agent and, so long as no Event of Default shall have occurred and
be continuing, Borrower must each give its prior written consent, which
consents shall not be unreasonably withheld, and (iii) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance an Assignment
and Acceptance in substantially the form of Exhibit E hereto (each an
"Assignment and Acceptance") with blanks appropriately completed, together with
any Note or Notes subject to such assignment and a processing and recording fee
of $3,000 paid by the assignee (for which Borrower will have no liability).
Upon such execution, delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (B) the
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
an assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto except in respect of provisions of this
Agreement which survive payment of the Obligations and termination of the
Commitments). Notwithstanding anything contained in this Agreement to the
contrary, any Lender may at any time assign all or any portion of
66
72
its rights under this Agreement and the Notes issued to it as collateral to a
Federal Reserve Bank; provided that no such assignment shall release such
Lender from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any of the other Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant thereto; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of Borrower or any Obligor or the performance or
observance by Borrower or any Obligor of any of its obligations under this
Agreement or any of the other Loan Documents to which it is a party or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements most recently delivered under either Section 6.2 or
Section 7.2 hereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon Agent, such Lender assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents; (v) such assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all obligations that by the terms of this Agreement
and the other Loan Documents are required to be performed by it as a Lender.
(d) The entries in the records of Agent as to each Assignment and
Acceptance delivered to it and the names and addresses of the Lenders and the
Revolving Loan Commitments of, and principal amount of the Loans owing to, each
Lender from time to time shall be conclusive, in the absence of manifest error,
and Borrower, Agent and the Lenders may treat each Person the name of which is
recorded in the books and records of Agent as a Lender hereunder for all
purposes of this Agreement and the other Loan Documents.
(e) Upon Agent's receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee thereunder, together with any Note or
Notes subject to such assignment and the written consent to such assignment (to
the extent consent is required), Agent shall, if such Assignment and Acceptance
has been completed with blanks appropriately filled, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in its records
and (iii) give prompt notice thereof to Borrower. Within five Business Days
after receipt of notice, Borrower, at its own expense, shall execute and
deliver to Agent in exchange for the surrendered Notes new Notes
67
73
to the order of such assignee in an amount equal to the Revolving Loan
Commitments and the Term Loans (or any of them) assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained Revolving
Loan Commitments and Term Loans (or any of them) hereunder, new Notes to the
order of the assigning Lender in an amount equal to the Revolving Loan
Commitment and the Term Loans (or any of them) retained by it hereunder. Such
new Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Notes, shall be dated the effective date
of such Assignment and Acceptance and shall otherwise be in substantially the
form of the respective Note. Thereafter, such surrendered Notes shall be
marked renewed and substituted and the originals thereof delivered to Borrower
(with copies to be retained by Agent).
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to Borrower furnished to such Lender by
or on behalf of Borrower; provided such Person agrees to maintain the
confidentiality of such information in accordance with Section 11.16.
11.7 Limitation of Interest. The parties hereto intend to strictly
comply with all applicable federal and Texas laws, including applicable usury
laws (or the usury laws of any jurisdiction whose usury laws are deemed to
apply to the Notes or any other Loan Documents despite the intention and desire
of the parties to apply the usury laws of the State of Texas). Accordingly,
the provisions of this Section 11.7 shall govern and control over every other
provision of this Agreement or any other Loan Document which conflicts or is
inconsistent with this Section, even if such provision declares that it
controls. As used in this Section, the term "interest" includes the aggregate
of all charges, fees, benefits or other compensation which constitute interest
under applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest, and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, in equal parts during the full term of the Obligations.
In no event shall Borrower or any other Person be obligated to pay, or Agent,
any Issuer or any Lender have any right or privilege to reserve, receive or
retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the State of Texas or the applicable laws
(if any) of the United States or of any other jurisdiction, or (b) total
interest in excess of the amount which such Person could lawfully have
contracted for, reserved, received, retained or charged had the interest been
calculated for the full term of the Obligations at the Ceiling Rate. The daily
interest rates to be used in calculating interest at the Ceiling Rate shall be
determined by dividing the applicable Ceiling Rate per annum by the number of
days in the calendar year for which such calculation is being made. None of
the terms and provisions contained in this Agreement or in any other Loan
Document (including, without limitation, Section 9.1 hereof) which directly or
indirectly relate to interest shall ever be construed without reference to this
Section 11.7, or be construed to create a contract to pay for the use,
forbearance or detention of money at an interest rate in excess of the Ceiling
Rate. If the term of any Obligation is shortened by reason of acceleration of
maturity as a result of any Default or by any other cause, or by reason of any
required
68
74
or permitted prepayment, and if for that (or any other) reason Agent, any
Issuer or any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Ceiling Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to such Person, it shall be credited pro tanto
against the then-outstanding principal balance of Borrower's obligations to
such Person, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.
11.8 Survival. The obligations of Borrower under Sections 2.2(c),
2.2(d), 7.9, 11.3 and 11.4 hereof and all other obligations of Borrower in any
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of
the Lenders under Sections 4.1(d), 10.6, 11.7, 11.13 and 11.16 hereof, shall,
notwithstanding anything herein to the contrary, survive the repayment of the
Loans and Reimbursement Obligations and the termination of the Revolving Loan
Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN
PROVIDED) THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES
OF AMERICA FROM TIME TO TIME IN EFFECT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid
under applicable law. If any provision of any Loan Document shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions of such Loan Document
shall not be affected or impaired thereby.
11.13 Tax Forms. Each Lender which is organized under the laws of a
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such Lender hereunder and from time to time thereafter if
requested by Borrower or Agent, provide Agent and Borrower with the forms
prescribed by the Internal Revenue Service of the United States certifying as
to such Lender's status for purposes of determining exemption from United
States withholding taxes with
69
75
respect to all payments to be made to such Lender hereunder or other documents
satisfactory to such Lender, Borrower and Agent indicating that all payments to
be made to such Lender hereunder are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an applicable tax treaty.
If a Lender determines, as a result of any change in either (i) applicable law,
regulation or treaty, or in any official application thereof or (ii) its
circumstances, that it is unable to submit any form or certificate that it is
obligated to submit pursuant to this Section, or that it is required to
withdraw or cancel any such form or certificate previously submitted, it shall
promptly notify Borrower and Agent of such fact. Unless Borrower and Agent
shall have received such forms or such documents indicating that payments
hereunder are not subject to United States withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, Borrower or Agent shall
withhold taxes from such payments at the applicable statutory rate. Each
Lender agrees to indemnify and hold harmless from any United States taxes,
penalties, interest and other expenses, costs and losses incurred or payable by
(i) Agent as a result of such Lender's failure to submit any form or
certificate that it required to provide pursuant to this Section or (ii)
Borrower or Agent as a result of their reliance on any representation, form or
certificate which such Lender has provided to them pursuant to this Section.
11.14 Conflicts Between This Agreement and the Other Loan Documents.
In the event of any conflict between the terms of this Agreement and the terms
of any of the other Loan Documents, the terms of this Agreement shall control.
11.15 Limitation on Charges; Substitute Lenders; Non-Discrimination.
Anything in Sections 2.2(d), 3.3(c) or 7.9 notwithstanding:
(1) Borrower shall not be required to pay to any Lender
reimbursement or indemnification with regard to any costs or expenses
described in such Sections, unless such Lender notifies Borrower of
such costs or expenses within 90 days after the date paid or incurred;
(2) none of the Lenders shall be permitted to pass
through to Borrower charges and costs under such Sections on a
discriminatory basis (i.e., which are not also passed through by such
Lender to other customers of such Lender similarly situated where such
customer is subject to documents providing for such pass through); and
(3) if any Lender elects to pass through to Borrower any
material charge or cost under such Sections or elects to terminate the
availability of LIBOR Borrowings for any material period of time,
Borrower may, within 60 days after the date of such event and so long
as no Default shall have occurred and be continuing, elect to
terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination Borrower shall (i) if Agent and
each of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such Lender
through such date of termination or (ii) have arranged for another
financial institution approved by Agent (such approval not to be
unreasonably withheld or delayed) as of such date, to become a
substitute Lender for all
70
76
purposes under this Agreement in the manner provided in Section 11.6;
provided further that, prior to substitution for any Lender, Borrower
shall have given written notice to Agent of such intention and the
Lenders shall have the option, but no obligation, for a period of 60
days after receipt of such notice, to increase their Revolving Loan
Commitments in order to replace the affected Lender in lieu of such
substitution.
11.16 Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by any Obligor
which is clearly indicated to be confidential information, confidential from
anyone other than Persons employed or retained by such Lender or any of its
Affiliates who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
prevent any Lender from disclosing such information (a) to any other Lender;
(b) pursuant to subpoena or upon the order of any court or administrative
agency; (c) upon the request or demand of any regulatory agency or authority
having jurisdiction over such Lender; (d) which has been publicly disclosed;
(e) to the extent reasonably required in connection with any litigation to
which Agent, any Lender, any Obligor or their respective Affiliates may be a
party; (f) to the extent reasonably required in connection with the exercise of
any remedy hereunder; (g) to such Lender's bank counsel and independent
auditors; and (h) to any actual or proposed participant or assignee of all or
part of its rights hereunder which has agreed in writing to be bound by the
provisions of this Section.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
NATIONAL TANK COMPANY,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX, III
------------------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
Address for Notices:
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, III
Telecopy No.: (000) 000-0000
71
77
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent, Issuer and as a
Lender
By: /s/ XXXX X. XXXX
-----------------------------------
Xxxx X. Xxxx, Vice President
Address for Notices:
Revolving Loan Commitment: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
$9,642,857.14 Attention: Manager, Structured
Finance - Oil Service
Telecopy No.: (000) 000-0000
Term Loans:
$5,357,142.86
72
78
FIRST NATIONAL BANK OF COMMERCE
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Assistant Vice President
---------------------------------
First National Bank of Commerce
---------------------------------
Address for Notices:
Revolving Loan Commitment: 000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
$8,357,142.86 Attention: Xx. Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
Term Loans:
$4,642,857.14
73
00
Xxxxxxxx Xxxxx Industries, Inc. and NATCO Holdings, Inc. join in the
execution hereof for the purpose of (i) acknowledging the representations,
warranties, covenants and agreements set forth herein which relate to them,
respectively, (ii) agreeing to be bound by the covenants and agreements set
forth herein which relate to them, respectively, and (iii) confirming the
accuracy of the representations and warranties set forth herein which relate to
them, respectively.
XXXXXXXX POINT INDUSTRIES, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX, III
-----------------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
NATCO HOLDINGS, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX, III
-----------------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
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80
[LETTERHEAD OF THE BORROWER]
REQUEST FOR EXTENSION OF CREDIT
________________, 199____
Texas Commerce Bank National
Association, as Agent
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Manager, Structured Finance - Oil Service
Gentlemen:
The undersigned hereby certifies that he is the
_________________________________ of NATIONAL TANK COMPANY, a Delaware
corporation (the "Borrower"), and that as such he is authorized to execute
this Request for Extension of Credit (the "Request") on behalf of the Borrower
pursuant to the Loan Agreement (as it may be amended, supplemented or restated
from time to time, the "Agreement") dated as of June 30, 1997, by and among the
Borrower, Texas Commerce Bank National Association, as Agent, and the Lenders
therein named. The (check one) [___] Loan [___] Letter of Credit being
requested hereby is to be in the amount set forth in (b) below and is requested
to be made on __________________, which is a Business Day. The undersigned
further certifies, represents and warrants that to his knowledge, after due
inquiry (each capitalized term used herein having the same meaning given to it
in the Agreement unless otherwise specified herein):
(a) As of the date hereof:
(1) The Borrowing Base is: $
===================
(2) The aggregate Revolving Loan Commitments are: $
===================
(3) The Maximum Revolving Loan Available Amount
(Lesser of (a)(1) and (a)(2)) is: $
-------------------
EXHIBIT A
to Loan Agreement
1
81
(4) The aggregate outstanding principal of Revolving
Notes, before giving effect to the Loan, if any,
requested hereby, is: ( )
-------------------
(5) The amount of Letter of Credit Liabilities as of
the date hereof, before giving effect to the Letter of
Credit, if any, requested hereby, is: ( )
-------------------
(6) The aggregate unused Revolving Loan
Commitments of all Lenders [A(3) minus sum of
A(4) and A(5)], if positive, is: $
===================
(b) If and only if the aggregate unused Revolving Loan Commitments
of all Lenders [A(6)] is positive, the Borrower hereby
requests under this Request a Loan or Letter of Credit (as
indicated above) in the amount of $____________ (which is no
more than the aggregate unused Revolving Loan Commitments of
all Lenders).
(c) If a Letter of Credit is requested hereby, it should be issued
for the benefit of ___________________________________ and
should have an expiration date of ____________________ and any
special language to be incorporated into such Letter of Credit
is attached hereto. The sum of the face amount of the
requested Letter of Credit plus the Letter of Credit
Liabilities as the date hereof as specified in item (a)(5)
above does not exceed $5,000,000.
(d) The representations and warranties made in each Loan Document
are true and correct in all material respects on and as of the
time of delivery hereof, with the same force and effect as if
made on and as of the time of delivery hereof unless otherwise
limited to an earlier date.
(e) No event which could reasonably be expected to have a Material
Adverse Effect has occurred.
(g) No Default or Event of Default has occurred and is continuing.
Thank you for your attention to this matter.
Very truly yours,
[SIGNATURE OF AUTHORIZED OFFICER]
Page 2
EXHIBIT A
82
RATE DESIGNATION NOTICE
NATIONAL TANK COMPANY, Texas Commerce Bank National Association, as
Agent, and certain financial institutions executed and delivered that certain
Loan Agreement (as amended, supplemented and restated, the "Loan Agreement")
dated as of June 30, 1997. Any term used herein and not otherwise defined
herein shall have the meaning herein ascribed to it in the Loan Agreement. In
accordance with the Loan Agreement, Borrower hereby notifies Agent of the
exercise of an Interest Option.
A. Current borrowings
1. Interest Options now in effect:
-----------------------
2. Amounts: $
---------------------
3. Expiration of current Interest Periods, if applicable:
-------------------------
B. Proposed election
1. Total Amount: $
----------------------
2. Date Interest Option is to be effective:
--------------------------
3. Interest Option to be applicable (check one):
[ ] Base Rate
----
[ ] Eurodollar Rate
----
4. Interest Period: months (if available and if applicable)
------
EXHIBIT B
1
83
Borrower represents and warrants that the Interest Option and Interest
Period selected above comply with all provisions of the Loan Agreement and that
there exists no Event of Default or any event which, with the passage of time,
the giving of notice or both, would be an Event of Default.
Date:
--------------------
NATIONAL TANK COMPANY,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXHIBIT B
2
00
XXXX XXXX
Xxxxxxx, Xxxxx
$__________________ ______________, 199___
FOR VALUE RECEIVED, NATIONAL TANK COMPANY, a Delaware corporation
("Maker"), promises to pay to the order of _______________________ ("Payee"),
at the principal office of Texas Commerce Bank National Association, a national
banking association, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, in
immediately available funds and in lawful money of the United States of
America, the principal sum of ________________________________ Dollars
($_____________) (or the unpaid balance of all principal advanced against this
note, if that amount is less), together with interest on the unpaid principal
balance of this note from time to time outstanding at the rate or rates
provided in that certain Loan Agreement (as amended, supplemented, restated or
replaced from time to time, the "Loan Agreement") dated as of June 30, 1997
among Maker, certain signatory banks named therein, and Texas Commerce Bank
National Association, as Agent; provided, that for the full term of this note
the interest rate produced by the aggregate of all sums paid or agreed to be
paid to the holder of this note for the use, forbearance or detention of the
debt evidenced hereby (including, but not limited to, all interest on this note
at the Stated Rate plus the Additional Interest) shall not exceed the Ceiling
Rate. Any term defined in the Loan Agreement which is used in this note and
which is not otherwise defined in this note shall have the meaning ascribed to
it in the Loan Agreement.
1. Loan Agreement; Advances; Security. This note has been issued
pursuant to the terms of the Loan Agreement, and is one of the Term Notes
referred to in the Loan Agreement. Advances against this note by Payee or
other holder hereof shall be governed by the terms and provisions of the Loan
Agreement. Reference is hereby made to the Loan Agreement for all purposes.
Payee is entitled to the benefits of and security provided for in the Loan
Agreement. The unpaid principal balance of this note at any time shall be the
total of all amounts lent or advanced against this note less the amount of all
payments or prepayments made on this note and by or for the account of Maker.
All Term Loans and advances and all payments and prepayments made hereon may be
endorsed by the holder of this note on a schedule which may be attached hereto
(and thereby made a part hereof for all purposes) or otherwise recorded in the
holder's records; provided, that any failure to make notation of (a) any Loan
or advance shall not cancel, limit or otherwise affect Maker's obligations or
any holder's rights with respect to that Loan or advance, or (b) any payment or
prepayment of principal shall not cancel, limit or otherwise affect Maker's
entitlement to credit for that payment as of the date received by the holder.
EXHIBIT C
to Loan Agreement
-1-
85
2. Mandatory Payments of Principal and Interest.
(a) Accrued and unpaid interest on the unpaid principal balance of
this note shall be due and payable on the Interest Payment Dates.
(b) The principal of this note shall be due and payable as
provided in Section 3.2(c) of the Loan Agreement. On the Term Loan Maturity
Date, the entire unpaid principal balance of this note and all accrued and
unpaid interest on the unpaid principal balance of this note shall be finally
due and payable.
(c) All payments hereon made pursuant to this Paragraph shall be
applied first to accrued interest, the balance to principal.
(d) The Loan Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision
to the contrary contained in this note or any of the other Loan Documents, it
is expressly provided that in no case or event shall the aggregate of (a) all
interest on the unpaid balance of this note, accrued or paid from the date
hereof and (b) the aggregate of any Additional Interest, ever exceed the
Ceiling Rate. In this connection, Maker and Payee stipulate and agree that it
is their common and overriding intent to contract in strict compliance with
applicable federal and Texas usury laws (and the usury laws of any other
jurisdiction whose usury laws are deemed to apply to this note or any of the
other Loan Documents despite the intention and desire of the parties to apply
the usury laws of the State of Texas). In furtherance thereof, none of the
terms of this note or any of the other Loan Documents shall ever be construed
to create a contract to pay, as consideration for the use, forbearance or
detention of money, interest at a rate in excess of the Ceiling Rate. Maker or
other parties now or hereafter becoming liable for payment of the indebtedness
evidenced by this note shall never be liable for interest in excess of the
Ceiling Rate. If, for any reason whatever, the interest paid or received on
this note during its full term produces a rate which exceeds the Ceiling Rate,
the holder of this note shall credit against the principal of this note (or, if
such indebtedness shall have been paid in full, shall refund to the payor of
such interest) such portion of said interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling Rate. All
sums paid or agreed to be paid to the holder of this note for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of this note, so that the
interest rate is uniform throughout the full term of this note. The provisions
of this Paragraph shall control all agreements, whether now or hereafter
existing and whether written or oral, between Maker and Payee.
EXHIBIT C
to Loan Agreement
-2-
86
4. Default. The Loan Agreement provides for the acceleration of
the maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
5. Waivers by Maker and Others. Except to the extent, if any,
that notice of default is expressly required herein or in any of the other Loan
Documents, Maker and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including, but not limited to, notice of intent to
accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting
and the filing of suit for the purpose of fixing liability and consent that the
time of payment hereof may be extended and re-extended from time to time
without notice to any of them. Each such Person agrees that its liability on
or with respect to this note shall not be affected by any release of or change
in any guaranty or security at any time existing or by any failure to perfect
or to maintain perfection of any lien against or security interest in any such
security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
6. Paragraph Headings. Paragraph headings appearing in this note
are for convenient reference only and shall not be used to interpret or limit
the meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED
STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
8. Successors and Assigns. This note and all the covenants and
agreements contained herein shall be binding upon, and shall inure to the
benefit of, the respective legal representatives, heirs, successors and assigns
of Maker and Payee.
9. Records of Payments. The records of Payee shall be prima
facie evidence of the amounts owing on this note.
10. Severability. If any provision of this note is held to be
illegal, invalid or unenforceable under present or future laws, the legality,
validity and enforceability of the remaining provisions of this note shall not
be affected thereby, and this note shall be liberally construed so as to carry
out the intent of the parties to it.
EXHIBIT C
to Loan Agreement
-3-
87
11. Business Loans. Maker warrants and represents to Payee and
all other holders of this note that all loans evidenced by this note are and
will be for business, commercial, investment or other similar purpose and not
primarily for personal, family, household or agricultural use, as such terms
are used in Chapter One.
NATIONAL TANK COMPANY,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXHIBIT C
to Loan Agreement
-4-
00
XXXXXXXXX XXXX
Xxxxxxx, Xxxxx
$__________________ ______________, 199___
FOR VALUE RECEIVED, NATIONAL TANK COMPANY, a Delaware corporation
("Maker"), promises to pay to the order of _______________________ ("Payee"),
at the principal office of Texas Commerce Bank National Association, a national
banking association, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, in
immediately available funds and in lawful money of the United States of
America, the principal sum of ________________________________ Dollars
($_____________) (or the unpaid balance of all principal advanced against this
note, if that amount is less), together with interest on the unpaid principal
balance of this note from time to time outstanding at the rate or rates
provided in that certain Loan Agreement (as amended, supplemented, restated or
replaced from time to time, the "Loan Agreement") dated as of June 30, 1997
among Maker, certain signatory banks named therein, and Texas Commerce Bank
National Association, as Agent; provided, that for the full term of this note
the interest rate produced by the aggregate of all sums paid or agreed to be
paid to the holder of this note for the use, forbearance or detention of the
debt evidenced hereby (including, but not limited to, all interest on this note
at the Stated Rate plus the Additional Interest) shall not exceed the Ceiling
Rate. Any term defined in the Loan Agreement which is used in this note and
which is not otherwise defined in this note shall have the meaning ascribed to
it in the Loan Agreement.
1. Loan Agreement; Advances; Security. This note has been issued
pursuant to the terms of the Loan Agreement, and is one of the Revolving Notes
referred to in the Loan Agreement. Advances against this note by Payee or
other holder hereof shall be governed by the terms and provisions of the Loan
Agreement. Reference is hereby made to the Loan Agreement for all purposes.
Payee is entitled to the benefits of and security provided for in the Loan
Agreement. The unpaid principal balance of this note at any time shall be the
total of all amounts lent or advanced against this note less the amount of all
payments or prepayments made on this note and by or for the account of Maker.
All Revolving Loans and advances and all payments and prepayments made hereon
may be endorsed by the holder of this note on a schedule which may be attached
hereto (and thereby made a part hereof for all purposes) or otherwise recorded
in the holder's records; provided, that any failure to make notation of (a) any
Loan or advance shall not cancel, limit or otherwise affect Maker's obligations
or any holder's rights with respect to that Loan or advance, or (b) any payment
or prepayment of principal shall not cancel, limit or otherwise affect Maker's
entitlement to credit for that payment as of the date received by the holder.
EXHIBIT D
to Loan Agreement
-1-
89
2. Mandatory Payments of Principal and Interest.
(a) Accrued and unpaid interest on the unpaid principal balance of
this note shall be due and payable on the Interest Payment Dates.
(b) On the Revolving Loan Maturity Date, the entire unpaid
principal balance of this note and all accrued and unpaid interest on the
unpaid principal balance of this note shall be finally due and payable.
(c) All payments hereon made pursuant to this Paragraph shall be
applied first to accrued interest, the balance to principal.
(d) The Loan Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision
to the contrary contained in this note or any of the other Loan Documents, it
is expressly provided that in no case or event shall the aggregate of (a) all
interest on the unpaid balance of this note, accrued or paid from the date
hereof and (b) the aggregate of any Additional Interest, ever exceed the
Ceiling Rate. In this connection, Maker and Payee stipulate and agree that it
is their common and overriding intent to contract in strict compliance with
applicable federal and Texas usury laws (and the usury laws of any other
jurisdiction whose usury laws are deemed to apply to this note or any of the
other Loan Documents despite the intention and desire of the parties to apply
the usury laws of the State of Texas). In furtherance thereof, none of the
terms of this note or any of the other Loan Documents shall ever be construed
to create a contract to pay, as consideration for the use, forbearance or
detention of money, interest at a rate in excess of the Ceiling Rate. Maker or
other parties now or hereafter becoming liable for payment of the indebtedness
evidenced by this note shall never be liable for interest in excess of the
Ceiling Rate. If, for any reason whatever, the interest paid or received on
this note during its full term produces a rate which exceeds the Ceiling Rate,
the holder of this note shall credit against the principal of this note (or, if
such indebtedness shall have been paid in full, shall refund to the payor of
such interest) such portion of said interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling Rate. All
sums paid or agreed to be paid to the holder of this note for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of this note, so that the
interest rate is uniform throughout the full term of this note. The provisions
of this Paragraph shall control all agreements, whether now or hereafter
existing and whether written or oral, between Maker and Payee.
4. Default. The Loan Agreement provides for the acceleration of
the maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
EXHIBIT D
to Loan Agreement
-2-
90
5. Waivers by Maker and Others. Except to the extent, if any,
that notice of default is expressly required herein or in any of the other Loan
Documents, Maker and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including, but not limited to, notice of intent to
accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting
and the filing of suit for the purpose of fixing liability and consent that the
time of payment hereof may be extended and re-extended from time to time
without notice to any of them. Each such Person agrees that its liability on
or with respect to this note shall not be affected by any release of or change
in any guaranty or security at any time existing or by any failure to perfect
or to maintain perfection of any lien against or security interest in any such
security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and
before or after maturity.
6. Paragraph Headings. Paragraph headings appearing in this note
are for convenient reference only and shall not be used to interpret or limit
the meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED
STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
8. Successors and Assigns. This note and all the covenants and
agreements contained herein shall be binding upon, and shall inure to the
benefit of, the respective legal representatives, heirs, successors and assigns
of Maker and Payee.
9. Records of Payments. The records of Payee shall be prima
facie evidence of the amounts owing on this note.
10. Severability. If any provision of this note is held to be
illegal, invalid or unenforceable under present or future laws, the legality,
validity and enforceability of the remaining provisions of this note shall not
be affected thereby, and this note shall be liberally construed so as to carry
out the intent of the parties to it.
11. Revolving Loan. Subject to the terms and provisions of the
Loan Agreement, Maker may use all or any part of the credit provided to be
evidenced by this note at any time before the Revolving Loan Maturity Date.
Maker may borrow, repay and reborrow hereunder; and except as set forth in the
Loan Agreement there is no limitation on the number of advances made hereunder.
Pursuant to Article 15.10(b) of Chapter 15 ("Chapter 15") of Title 79, Texas
Revised Civil Statutes, 1925, as amended, Maker and Payee expressly agree that
Chapter 15 shall not apply to this note or to any Loan evidenced by this note
and that neither this note nor any such Loan shall be governed by or subject to
the provisions of Chapter 15 in any manner whatsoever.
EXHIBIT D
to Loan Agreement
-3-
91
12. Business Loans. Maker warrants and represents to Payee and
all other holders of this note that all loans evidenced by this note are and
will be for business, commercial, investment or other similar purpose and not
primarily for personal, family, household or agricultural use, as such terms
are used in Chapter One.
NATIONAL TANK COMPANY,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXHIBIT D
to Loan Agreement
-4-
92
ASSIGNMENT AND ACCEPTANCE
Dated: ___________________
Reference is made to the Loan Agreement dated as of June 30, 1997 (as
restated, amended, modified, supplemented and in effect from time to time, the
"Loan Agreement"), among NATIONAL TANK COMPANY, a Delaware corporation (the
"Borrower"), the Lenders named therein, and Texas Commerce Bank National
Association, as Agent (the "Agent"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Loan
Agreement. This Assignment and Acceptance, between the Assignor (as defined
and set forth on Schedule I hereto and made a part hereof) and the Assignee (as
defined and set forth on Schedule I hereto and made a part hereof) is dated as
of the Effective Date of Assignment (as set forth on Schedule I hereto and made
a part hereof).
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date, an undivided interest (the "Assigned Interest") in and to
all the Assignor's rights and obligations under the Loan Agreement respecting
those, and only those, credit facilities contained in the Loan Agreement as are
set forth on Schedule I (collectively, the "Assigned Facilities," individually,
an "Assigned Facility"), in a principal amount for each Assigned Facility as
set forth on Schedule I.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or any other
Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Agreement, any other Loan
Document or any other instrument or document furnished pursuant thereto, other
than that it is the legal and beneficial owner of the Assigned Interest and
that the Assigned Interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of Xxxxxxxx, Holdings, the Borrower or its Subsidiaries or
the performance or observance by the Borrower or its Subsidiaries of any of its
respective obligations under the Loan Agreement, any other Loan Document or any
other instrument or document furnished pursuant thereto; and (iii) attaches the
Note(s) held by it evidencing the Assigned Facility or Facilities, as the case
may be, and requests that the Agent exchange such Note(s) for a new Note or
Notes payable to the Assignor (if the Assignor has retained any interest in the
Assigned Facility or Facilities) and a new Note or Notes payable to the
Assignee in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date of Assignment).
EXHIBIT E
to
Loan Agreement
-1-
93
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Loan Agreement, together with copies of the
financial statements referred to in Section 6.2 thereof, or if later, the most
recent financial statements delivered pursuant to Section 7.2 thereof, and such
other documents and information as it has deemed appropriate to make its own
credit analysis; (iii) agrees that it will, independently and without reliance
upon the Agent, the Assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Agreement;
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Agreement as are delegated to
the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (v) agrees that it will be bound by the provisions of the
Loan Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender; (vi) if the Assignee is organized under the laws
of a jurisdiction outside the United States, attaches the forms prescribed by
the Internal Revenue Service of the United States certifying as to the
Assignee's exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Loan Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty, and (vii) has supplied
the information requested on the administrative questionnaire provided by
Agent.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance by it and the Borrower and recording
by the Agent pursuant to Section 11.6 of the Loan Agreement, effective as of
the Effective Date of Assignment (which Effective Date of Assignment shall,
unless otherwise agreed to by the Agent, be at least five Business Days after
the execution of this Assignment and Acceptance).
5. Upon such acceptance and recording, from and after the
Effective Date of Assignment, the Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee, whether such amounts have accrued prior to the
Effective Date of Assignment or accrue subsequent to the Effective Date of
Assignment. The Assignor and Assignee shall make all appropriate adjustments
in payments for periods prior to the Effective Date of Assignment by the Agent
or with respect to the making of this assignment directly between themselves.
EXHIBIT E
to
Loan Agreement
-2-
94
6. From and after the Effective Date of Assignment, (i) the
Assignee shall be a party to the Loan Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder, and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective duly authorized
officers on Schedule I hereto.
EXHIBIT E
to
Loan Agreement
-3-
95
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
Legal Name of Assignor:
----------------------------------
Legal Name of Assignee:
----------------------------------------------
Effective Date of Assignment:
----------------------------
Percentage Assigned of Each
Facility (to at least 8
decimals) (Shown as a
percentage of aggregate
original principal amount
Principal [or, with respect to Letters
Assigned Amount of Credit, face amount]
Facilities Assigned Interest of all Lenders)
---------- ----------------- -----------------------------
Term Loans $______________ ______%
Revolving Loans $______________ ______%
Letter of Credit
participation interests $______________ ______%
Total $______________
EXHIBIT E
to
Loan Agreement
-1-
96
,
-------------------------------------------
as Assignor
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
,
---------------------------------------------------
as Assignee
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
NATIONAL TANK COMPANY,
a Delaware corporation
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
Accepted:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
EXHIBIT E
to
Loan Agreement
-2-
97
COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the ______________________
______________________________ of NATIONAL TANK COMPANY, a Delaware corporation
(the "Borrower"), and that as such he is authorized to execute this certificate
on behalf of the Borrower pursuant to the Loan Agreement (the "Agreement")
dated as of June 30, 1997, by and among the Borrower, TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, as Agent, and the lenders therein named; and that a
review of the Borrower and the other Obligors has been made under his
supervision with a view to determining whether the Borrower and the other
Obligors have fulfilled all of their respective obligations under the
Agreement, the Notes and the other Loan Documents; and on behalf of the
Borrower further certifies, represents and warrants that to the best knowledge
of the officer executing this certificate, after due inquiry (each capitalized
term used herein having the same meaning given to it in the Agreement unless
otherwise specified):
(a) The Borrower and the other Obligors have fulfilled,
in all material respects, their respective obligations under the
Agreement, the Notes and the other Loan Documents to which each is a
party.
(b) The representations and warranties made in each Loan
Document are true and correct in all material respects on and as of the
time of delivery hereof, with the same force and effect as if made on
and as of the time of delivery hereof except to the extent limited to
an earlier date.
(c) The financial statements delivered to the Agent
concurrently with this Compliance Certificate have been prepared in
accordance with GAAP consistently followed throughout the period
indicated and fairly present in all material respects the financial
condition and results of operations of the applicable Persons as at the
end of, and for, the period indicated (subject, in the case of
Quarterly Financial Statements, to normal changes resulting from
year-end adjustments).
(d) No Default or Event of Default has occurred and is
continuing. In this regard, the compliance with the provisions of
Section 7.3 is as follows:
(i) SECTION 7.3(A) -- TANGIBLE NET WORTH
Actual Required
------ --------
$___________ $___________
EXHIBIT F
1
98
(ii) SECTION 7.3(B) -- DEBT TO CAPITALIZATION RATIO
Actual Required
------ --------
______% ______%
(iii) SECTION 7.3(C) -- FIXED CHARGE COVERAGE RATIO
Actual Required
------ --------
______ to 1.00 1.25 to 1.00
(e) No event which could reasonably be expected to have a
Material Adverse Effect has occurred.
DATED as of ____________________.
NATIONAL TANK COMPANY,
a Delaware corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT F
2
99
BORROWING BASE CERTIFICATE
The undersigned hereby certifies that he is the _______________________
of NATIONAL TANK COMPANY, a Delaware corporation (the "Borrower"), and that as
such he is authorized to execute this Borrowing Base Certificate on behalf of
the Borrower pursuant to the Loan Agreement (as it may be amended, supplemented
or restated from time to time, the "Agreement") dated as of June 30, 1997, by
and among the Borrower, Texas Commerce Bank National Association, as Agent, and
the Lenders therein named. The undersigned further certifies, represents and
warrants that to his knowledge, after due inquiry, that Schedule 1 attached
hereto has been duly completed and is true and correct in all material
respects.
Dated ________________, 199____.
---------------------------------
[SIGNATURE OF AUTHORIZED OFFICER]
EXHIBIT G
to
Loan Agreement
-1-
100
-----------------------------------------------------------------------------------------------------------------
NUMBER VALUE EXPIRY AMOUNT BENEFICIARY ON BEHALF OF
DATE DATE
-----------------------------------------------------------------------------------------------------------------
I-458646 01/04/96 07/01/98 $15,700.00 Bohai Oil Total Engineering
Corporation Services Team, Inc.
-----------------------------------------------------------------------------------------------------------------
I-459631 02/13/96 03/28/98 15,846.40 The British Abduljalil Industrial
Bank of the Development/
Middle East Total Engineering
Services Team, Inc.
-----------------------------------------------------------------------------------------------------------------
I-459632 02/13/96 01/15/98 4,828.80 The British Total Engineering
Bank of the Services Team, Inc.
Middle East
-----------------------------------------------------------------------------------------------------------------
I-465101 10/02/96 06/20/98 9,480.00 Bohai Oil Total Engineering
Corporation Services Team, Inc.
-----------------------------------------------------------------------------------------------------------------
I-465102 10/02/96 07/10/98 12,269.90 Bohai Oil Total Engineering
Corporation Services Team, Inc.
-----------------------------------------------------------------------------------------------------------------
I-469128 03/24/97 12/31/97 63,523.05 Chevron Total Engineering
Nigeria Services Team, Inc.
Limited
-----------------------------------------------------------------------------------------------------------------
I-469618 04/17/97 08/01/99 31,532.80 Hundai Test, Inc.
Heavy
Industries
Co., Ltd.
-----------------------------------------------------------------------------------------------------------------
EXHIBIT H
101
National Tank Company
1. Sale of certain property in Bakersfield, California
2. Sale of certain property in Williston, North Dakota
3. Sale of certain property in Oklahoma City, Oklahoma
4. Sale of certain property in Bossier City, Louisiana
5. NATCO's interest in the Technical Assistance Agreement between C-E
Turbo, a Division of Combustion Engineering, Inc. and Mitsubishi
Heavy Industries, Ltd. dated as October 11, 1972
Total Engineering Systems Team, Inc.
1. Sale of certain property located at 0000 Xxxxxxxxxx Xxxx., Xxxxxx,
Xxxxxxxxx
EXHIBIT I
102
GUARANTY
THIS GUARANTY ("Guaranty") dated as of June 30, 1997 is executed and
delivered by XXXXXXXX POINT INDUSTRIES, INC., a Delaware corporation
("Guarantor"), to TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent (in such
capacity herein called "Agent") under the Loan Agreement (hereinafter defined).
ARTICLE 1
Section 1.1 Definitions. As used in this Guaranty, these terms shall
have these respective meanings:
Borrower means NATIONAL TANK COMPANY, a Delaware corporation.
Debtmeans the sum of (a) all debt (principal, interest or other)
evidenced by the Notes and all debt (principal, interest or other) incurred
under or evidenced by the other Loan Documents, (b) the Letter of Credit
Liabilities and (c) the Interest Rate Risk Indebtedness. The Debt includes
interest and other obligations accruing or arising after (i) commencement of
any case under any bankruptcy or similar laws by or against any Obligor or (ii)
the obligations of any Obligor shall cease to exist by operation of law or for
any other reason. The Debt also includes all reasonable and customary
attorneys' fees and any other expenses incurred by Agent in enforcing any of
the Loan Documents.
Loan Agreement means that certain Loan Agreement dated concurrently
herewith executed by and among the Borrower, Agent and the Lenders party
thereto and all amendments, supplements, restatements or replacements to any of
the foregoing from time to time.
TERMS USED HEREIN WITH THEIR INITIAL LETTERS CAPITALIZED AND WHICH ARE
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN
THE LOAN AGREEMENT.
ARTICLE 2
Section 2.1 Execution of Loan Documents. Borrower has executed and
delivered the Loan Documents, and the Debt is secured by various Liens created
or evidenced by the Loan Documents.
Section 2.2 Consideration. In consideration of the credit and
financial accommodations contemplated to be extended to Borrower pursuant to
the Loan Documents or otherwise, which Guarantor has determined will
substantially benefit Guarantor directly or indirectly, and for other good and
valuable consideration, the receipt and sufficiency of which Guarantor hereby
acknowledges, Guarantor executes and delivers this Guaranty to Agent with the
intention of being presently and legally bound by its terms.
103
ARTICLE 3
Section 3.1 Payment Guaranty. Guarantor, as primary obligor and not
as a surety, unconditionally guarantees to Agent for the ratable benefit of
Lenders the full, prompt and punctual payment of the Debt when due (whether at
its stated maturity, by acceleration or otherwise) in accordance with the Loan
Documents. This Guaranty is irrevocable, unconditional and absolute, and if
for any reason all or any portion of the Debt shall not be paid when due,
Guarantor will, upon written demand, immediately pay to Agent the amount
demanded, in Dollars, regardless of (a) any defense, right of set-off or
counterclaim which any Obligor may have or assert and (b) whether Agent or any
other Person shall have taken any steps to enforce any rights against any
Obligor or any other Person to collect any of the Debt.
Section 3.2 Obligations Not Affected. Guarantor's covenants,
agreements and obligations under this Guaranty shall in no way be released,
diminished, reduced, impaired or otherwise affected by reason of the happening
from time to time of any of the following things, for any reason, whether by
voluntary act, operation of law or order of any Governmental Authority and
whether or not Guarantor is given any notice or is asked for or gives any
further consent (all requirements for which, however arising, Guarantor hereby
WAIVES):
(a) release or waiver of any obligation or duty to
perform or observe any express or implied agreement, covenant, term or
condition imposed in any of the Loan Documents or by applicable law on any
Obligor or any party to the Loan Documents (other than Guarantor).
(b) extension of the time for payment of any part of the
Debt or any other sums payable under the Loan Documents, extension of the time
for performance of any other obligation under or arising out of or in
connection with the Loan Documents or change in the manner, place or other
terms of such payment or performance.
(c) settlement or compromise of any of the Debt.
(d) renewal, supplementing, modification, rearrangement,
amendment, restatement, replacement, cancellation, rescission, revocation or
reinstatement (whether or not material) of any part of any of the Loan
Documents or any obligations under the Loan Documents of any Obligor or any
other party to the Loan Documents (without limiting the number of times any of
the foregoing may occur).
(e) acceleration of the time for payment or performance
of any Debt or other obligation under any of the Loan Documents or exercise of
any other right, privilege or remedy under or in regard to any of the Loan
Documents.
(f) failure, omission, delay, neglect, refusal or lack of
diligence by Agent or any other Person to assert, enforce, give notice of
intent to exercise--or any other notice with respect to--or exercise any right,
privilege, power or remedy conferred on Agent or any other Person in any of
2
104
the Loan Documents or by law; or any action on the part of Agent or any other
Person granting indulgence, grace, adjustment, forbearance or extension of any
kind to any Obligor.
(g) release, surrender, exchange, subordination or loss
of any Lien priority under any of the Loan Documents or in connection with the
Debt.
(h) release, modification or waiver of, or failure,
omission, delay, neglect, refusal or lack of diligence to enforce, any
guaranty, pledge, mortgage, deed of trust, security agreement, lien, charge,
insurance agreement, bond, letter of credit or other security device, guaranty,
surety or indemnity agreement whatsoever.
(i) taking or acceptance of any other security or
guaranty for the payment or performance of any or all of the Debt or the
obligations of any Obligor.
(j) release, modification or waiver of, or failure,
omission, delay, neglect, refusal or lack of diligence to enforce, any right,
benefit, privilege or interest under any contract or agreement, under which the
rights of any Obligor have been collaterally or absolutely assigned, or in
which a security interest has been granted, as direct or indirect security for
payment of the Debt or performance of any other obligations to--or at any time
held by--Agent or any Lender.
(k) death, legal incapacity, disability, voluntary or
involuntary liquidation, dissolution, sale of any Collateral, marshaling of
assets and liabilities, change in corporate or organizational status,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt or other
similar proceedings of or affecting any Obligor or any of the assets of any
Obligor, even if any of the Debt is thereby rendered void, unenforceable or
uncollectible against any other Person.
(l) occurrence or discovery of any irregularity,
invalidity or unenforceability of any of the Debt or Loan Documents or any
defect or deficiency in any of the Debt or Loan Documents, including the
unenforceability of any provisions of any of the Loan Documents because
entering into any such Loan Document was ultra xxxxx or because anyone who
executed them exceeded their authority.
(m) failure to acquire, protect or perfect any Lien in
any Collateral intended to secure any part of the Debt or any other obligations
under the Loan Documents or failure to maintain perfection.
(n) failure by Agent or any other Person to notify--or
timely notify--Guarantor of any Default or Event of Default under any of the
Loan Documents, any renewal, extension, supplementing, modification,
rearrangement, amendment, restatement, replacement, cancellation, rescission,
revocation or reinstatement (whether or not material) or assignment of any part
of the Debt, release or exchange of any security, any other action taken or not
taken by Agent against any Obligor or any other Person or any direct or
indirect security for any part of the Debt or other
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obligation of Borrower, any new agreement between Agent and/or any Lender and
any Obligor or any other Person or any other event or circumstance. Neither
Agent nor any Lender has any duty or obligation to give Guarantor any notice of
any kind under any circumstances whatsoever with respect to or in connection
with the Debt or the Loan Documents.
(o) occurrence of any event or circumstances which might
otherwise constitute a defense available to, or a discharge of, any Obligor,
including failure of consideration, usury, forgery, breach of warranty, failure
to satisfy any requirement of the statute of frauds, running of any statute of
limitation, accord and satisfaction and any defense based on election of
remedies of any type.
(p) receipt and/or application of any proceeds, credits
or recoveries from any source, including any proceeds, credits, or amounts
realized from exercise of any rights, remedies, powers or privileges under the
Loan Documents, by law or otherwise available to Agent or any Lender.
(q) occurrence of any act, error or omission, except
behavior which is proven to be in bad faith to the extent (but no further),
that Guarantor cannot effectively waive the right to complain.
Section 3.3 Waiver of Certain Rights and Notices. Guarantor hereby
WAIVES and RELEASES all right to require marshaling of assets and liabilities,
sale in inverse order of alienation, notice of acceptance of this Guaranty and
of any liability to which it applies or may apply, notice of the creation,
accrual, renewal, increase, extension, modification, amendment or rearrangement
of any part of the Debt, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of intent to accelerate, notice of
acceleration and, except as expressly provided herein, all other notices and
demands, collection, suit and the taking of any other action by Agent or any
Lender.
Section 3.4 Not a Collection Guaranty. This is an absolute guaranty
of payment, and not of collection, and Guarantor WAIVES any right to require
that any action be brought against any Obligor or any other Person, or that
Agent or any Lender be required to enforce, attempt to enforce or exhaust any
of its rights, benefits or privileges under any of the Loan Documents, by law
or otherwise; provided that nothing herein shall be construed to prevent Agent
or any Lender from exercising and enforcing at any time any right, benefit or
privilege which it may have under any Loan Document or by law from time to
time, and at any time, and Guarantor agrees that Guarantor's obligations
hereunder are-- and shall be--absolute, independent and unconditional under any
and all circumstances. Should Agent or any Lender seek to enforce Guarantor's
obligations by action in any court, Guarantor WAIVES any requirement,
substantive or procedural, that (a) Agent or such Lender pursue any foreclosure
action, realize or attempt to realize on any security or preserve or enforce
any deficiency claim against any Obligor or any other Person after any such
realization, (b) a judgment first be sought or rendered against any Obligor or
any other Person, (c) any Obligor or any other Person be joined in such action
or (d) a separate action be brought against any Obligor or any other
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Person. Guarantor's obligations under this Guaranty are several from those of
any other Obligor or any other Person, and are primary obligations concerning
which Guarantor is the principal obligor. All waivers in this Guaranty or any
of the Loan Documents shall be without prejudice to Agent or any Lender at its
option to proceed against any Obligor or any other Person, whether by separate
action or by joinder. Guarantor agrees that this Guaranty shall not be
discharged except by payment of the Debt in full, complete performance of all
obligations of the Obligors under the Loan Documents and termination of the
obligation--if any--to make any further advances under the Notes or extend
other financial accommodations to any Obligor.
Section 3.5 Subrogation. Guarantor agrees that it shall never be
entitled to be subrogated to any of Agent's or any Lender's rights against any
Obligor or any other Person or any Collateral or offset rights held by Agent or
any Lender for payment of the Debt until final termination of this Guaranty.
Section 3.6 Reliance on Guaranty. All extensions of credit and
financial accommodations heretofore or hereafter made by Agent or any Lender
under or in respect of the Notes or any of the other Loan Documents shall be
conclusively presumed to have been made in acceptance of this Guaranty.
Section 3.7 Demands are Conclusive. Any demand by Agent under this
Guaranty shall be conclusive, absent manifest error, as to the matters therein
stated, including the amount due.
Section 3.8 Joint and Several. If any Person makes any guaranty of
any of the obligations guaranteed hereby or gives any security for them,
Guarantor's obligations hereunder shall be joint and several with the
obligations of such other Person pursuant to such agreement or other papers
making the guaranty or giving the security.
Section 3.9 Payments Returned. Guarantor agrees that, if at any time
all or any part of any payment previously applied by Agent or any Lender to the
Debt is or must be returned by Agent or any Lender--or recovered from Agent or
any Lender--for any reason (including the order of any bankruptcy court), this
Guaranty shall automatically be reinstated to the same effect as if the prior
application had not been made, and, in addition, Guarantor hereby agrees to
indemnify Agent and each Lender against, and to save and hold Agent and each
Lender harmless from any required return by Agent or any Lender--or recovery
from Agent or any Lender--of any such payment because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.
ARTICLE 4
Section 4.1 Term. Subject to the automatic reinstatement provisions
of Article 3 above, this Guaranty shall terminate and be of no further force or
effect upon full payment of the Debt and final termination of the Revolving
Loan Commitments of the Lenders.
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ARTICLE 5
Section 5.1 Default. If any Default or Event of Default occurs under
the Loan Agreement, then that shall automatically constitute default under this
Guaranty.
ARTICLE 6
Section 6.1 Binding on Successors; No Assignment by Guarantor. All
guaranties, warranties, representations, covenants and agreements in this
Guaranty shall bind the heirs, devisees, executors, administrators, personal
representatives, trustees, beneficiaries, conservators, receivers, successors
and assigns of Guarantor and shall benefit Agent, Lenders, their successors and
assigns, and any holder of any part of the Debt. Guarantor shall not assign or
delegate any of its obligations under this Guaranty or any of the Loan
Documents to which it is a party without the express prior written consent of
the Majority Lenders.
Section 6.2 Subordination of Borrower's Obligations to Guarantor.
Guarantor agrees that if, for any reason whatsoever, Borrower now is or
hereafter becomes liable, obligated or indebted to Guarantor, all such
liabilities, obligations and indebtedness, together with all interest thereon
and fees and other charges in connection therewith, and all Liens securing any
of the foregoing shall at all times be second, subordinate and inferior in
right of payment, in lien priority and in all other respects to the Debt and
all Liens created pursuant to the Security Documents.
Section 6.3 Waiver of Suretyship Rights. By signing this Guaranty,
Guarantor WAIVES each and every right to which it may be entitled by virtue of
any suretyship law, including any rights it may have pursuant to Rule 31 of
the Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice
and Remedies Code and Chapter 34 of the Texas Business and Commerce Code, as
the same may be amended from time to time.
Section 6.4 Amendments in Writing. This Guaranty shall not be
changed orally but shall be changed only by agreement in writing signed by the
party against whom such amendment is sought to be enforced. Any waiver or
consent with respect to this Guaranty shall be effective only in the specific
instance and for the specific purpose for which given. No course of dealing
between the parties, no usage of trade and no parole or extrinsic evidence of
any nature shall be used to supplement or modify any of the terms or provisions
of this Guaranty.
Section 6.5 Notices. Any notice, request or other communication
required or permitted to be given hereunder to Agent or any Lender shall be
given as provided in the Loan Agreement. Any notice, request or other
communication required or permitted to be given hereunder to Guarantor shall be
given in writing by delivering it against receipt for it, by depositing it with
an overnight delivery service or by depositing it in a receptacle maintained by
the United States Postal Service, postage prepaid, registered or certified
mail, return receipt requested, addressed as follows (and if so given, shall be
deemed given when mailed):
6
000
Xxxxxxxx Xxxxx Industries, Inc.
c/o National Tank Company
0000 X. Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, III
Facsimile: (000) 000-0000
Guarantor's address for notice may be changed at any time and from time to
time, but only after thirty (30) days' advance written notice to Agent and
Lenders and shall be the most recent such address furnished in writing by
Guarantor to Agent and Lenders. Actual notice, however and from whomever given
or received, shall always be effective when received.
Section 6.6 Gender; "Including" is Not Limiting; Section Headings.
The masculine and neuter genders used in this Guaranty each includes the
masculine, feminine and neuter genders, and the singular number includes the
plural where appropriate, and vice versa. Wherever the term "including" or a
similar term is used in this Guaranty, it shall be read as if it were written
"including by way of example only and without in any way limiting the
generality of the clause or concept referred to." The headings used in this
Guaranty are included for reference only and shall not be considered in
interpreting, applying or enforcing this Guaranty.
Section 6.7 Offset Rights. Each Lender is hereby authorized, during
the continuation of an Event of Default, without notice to any Person (and
Guarantor hereby WAIVES any such notice) to the fullest extent permitted by
law, to set-off and apply any and all monies, securities and other Properties
of Guarantor now or in the future in the possession, custody or control of such
Lender, or on deposit with or otherwise owed to Guarantor by such Lender--
including all such monies, securities and other Properties held in general,
special, time, demand, provisional or final accounts or for safekeeping or as
Collateral or otherwise but excluding those accounts clearly designated as
escrow or trust accounts held by Guarantor for others unaffiliated with
Guarantor--against any and all of Guarantor's obligations to Agent or any of
the Lenders now or hereafter existing under this Guaranty, irrespective of
whether any demand under this Guaranty shall have been made. Each Lender
agrees to use reasonable efforts to promptly notify Guarantor after any such
set-off and application, provided that failure to give--or delay in giving--any
such notice shall not affect the validity of such set-off and application or
impose any liability on such Lender. Each Lender's rights under this Section
are in addition to other rights and remedies (including other rights of
set-off) which such Lender may have.
Section 6.8 Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
Section 6.9 Survival. The representations, covenants and agreements
set forth in this Guaranty shall continue and survive until final termination
of this Guaranty.
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Section 6.10 Rights Cumulative; Delay Not Waiver. Agent's or any
Lender's exercise of any right, benefit or privilege under any of the Loan
Documents or at law or in equity shall not preclude the concurrent or
subsequent exercise of any of Agent's or any Lender's other present or future
rights, benefits or privileges. The remedies provided in this Guaranty are
cumulative and not exclusive of any remedies provided by law or the Loan
Documents. No failure by Agent or any Lender to exercise, and no delay in
exercising, any right under any Loan Document shall operate as a waiver
thereof.
Section 6.11 Severability. If any provision of this Guaranty is held
to be illegal, invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of this
Guaranty shall not be affected thereby, and this Guaranty shall be liberally
construed so as to carry out the intent of the parties to it. Each waiver in
this Guaranty is subject to the overriding and controlling rule that it shall
be effective only if and to the extent that (a) it is not prohibited by
applicable law and (b) applicable law neither provides for nor allows any
material sanctions to be imposed against Agent or any Lender for having
bargained for and obtained it.
Section 6.12 Entire Agreement. This Guaranty embodies the entire
agreement and understanding among Guarantor, Agent and Lenders with respect to
its subject matter and supersedes all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter.
Guarantor acknowledges and agrees that there is no oral agreement between
Guarantor and Agent or any Lender which has not been incorporated in this
Guaranty.
Section 6.13 Relationship to Borrower. The value of the consideration
received and to be received by Guarantor in respect of the Debt is reasonably
worth at least as much as the liability and obligation of Guarantor incurred or
arising under this Guaranty and the Loan Documents. Guarantor has determined
that such liability and obligation may reasonably be expected to substantially
benefit Guarantor directly or indirectly (or if Guarantor is not a natural
person, Guarantor's board of directors, general partners or other governors
have made that determination). Guarantor has had full and complete access to
the underlying papers relating to the Debt and all other papers executed by any
Obligor or any other Person in connection with the Debt, has reviewed them and
is fully aware of the meaning and effect of their contents. Guarantor is fully
informed of all circumstances which bear upon the risks of executing this
Guaranty and which a diligent inquiry would reveal. Guarantor has adequate
means to obtain from Borrower on a continuing basis information concerning
Borrower's financial condition, and is not depending on Agent or any Lender to
provide such information, now or in the future. Guarantor agrees that neither
Agent nor any Lender shall have any obligation to advise or notify Guarantor or
to provide Guarantor with any data or information. The execution and delivery
of this Guaranty is not a condition precedent (and neither Agent nor any Lender
has in any way implied that the execution of this Guaranty is a condition
precedent) to Agent's or any Lender's making, extending or modifying any loan
to Guarantor or to any other financial accommodation to or for Guarantor.
Borrower is a wholly-owned Subsidiary of Guarantor; and Guarantor's guaranty
pursuant to this Guaranty reasonably may be expected to benefit, directly or
indirectly, Guarantor; and Guarantor has determined that this Guaranty is
necessary and convenient to the conduct, promotion and attainment of the
business of Guarantor and Borrower.
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THIS GUARANTY is executed as of the date first above written.
XXXXXXXX POINT INDUSTRIES, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXX, III
----------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
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GUARANTY
THIS GUARANTY ("Guaranty") dated as of June 30, 1997 is executed and
delivered by NATCO HOLDINGS, INC., a Delaware corporation ("Guarantor"), to
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent (in such capacity herein
called "Agent") under the Loan Agreement (hereinafter defined).
ARTICLE 1
Section 1.1 Definitions. As used in this Guaranty, these terms shall
have these respective meanings:
Borrower means NATIONAL TANK COMPANY, a Delaware corporation.
Debt means the sum of (a) all debt (principal, interest or other)
evidenced by the Notes and all debt (principal, interest or other) incurred
under or evidenced by the other Loan Documents, (b) the Letter of Credit
Liabilities and (c) the Interest Rate Risk Indebtedness. The Debt includes
interest and other obligations accruing or arising after (i) commencement of
any case under any bankruptcy or similar laws by or against any Obligor or (ii)
the obligations of any Obligor shall cease to exist by operation of law or for
any other reason. The Debt also includes all reasonable and customary
attorneys' fees and any other expenses incurred by Agent in enforcing any of
the Loan Documents.
Loan Agreement means that certain Loan Agreement dated concurrently
herewith executed by and among the Borrower, Agent and the Lenders party
thereto and all amendments, supplements, restatements or replacements to any of
the foregoing from time to time.
TERMS USED HEREIN WITH THEIR INITIAL LETTERS CAPITALIZED AND WHICH ARE
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN
THE LOAN AGREEMENT.
ARTICLE 2
Section 2.1 Execution of Loan Documents. Borrower has executed and
delivered the Loan Documents, and the Debt is secured by various Liens created
or evidenced by the Loan Documents.
Section 2.2 Consideration. In consideration of the credit and
financial accommodations contemplated to be extended to Borrower pursuant to
the Loan Documents or otherwise, which Guarantor has determined will
substantially benefit Guarantor directly or indirectly, and for other good and
valuable consideration, the receipt and sufficiency of which Guarantor hereby
acknowledges, Guarantor executes and delivers this Guaranty to Agent with the
intention of being presently and legally bound by its terms.
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ARTICLE 3
Section 3.1 Payment Guaranty. Guarantor, as primary obligor and not
as a surety, unconditionally guarantees to Agent for the ratable benefit of
Lenders the full, prompt and punctual payment of the Debt when due (whether at
its stated maturity, by acceleration or otherwise) in accordance with the Loan
Documents. This Guaranty is irrevocable, unconditional and absolute, and if
for any reason all or any portion of the Debt shall not be paid when due,
Guarantor will, upon written demand, immediately pay to Agent the amount
demanded, in Dollars, regardless of (a) any defense, right of set-off or
counterclaim which any Obligor may have or assert and (b) whether Agent or any
other Person shall have taken any steps to enforce any rights against any
Obligor or any other Person to collect any of the Debt.
Section 3.2 Obligations Not Affected. Guarantor's covenants,
agreements and obligations under this Guaranty shall in no way be released,
diminished, reduced, impaired or otherwise affected by reason of the happening
from time to time of any of the following things, for any reason, whether by
voluntary act, operation of law or order of any Governmental Authority and
whether or not Guarantor is given any notice or is asked for or gives any
further consent (all requirements for which, however arising, Guarantor hereby
WAIVES):
(a) release or waiver of any obligation or duty to
perform or observe any express or implied agreement, covenant, term or
condition imposed in any of the Loan Documents or by applicable law on any
Obligor or any party to the Loan Documents (other than Guarantor).
(b) extension of the time for payment of any part of the
Debt or any other sums payable under the Loan Documents, extension of the time
for performance of any other obligation under or arising out of or in
connection with the Loan Documents or change in the manner, place or other
terms of such payment or performance.
(c) settlement or compromise of any of the Debt.
(d) renewal, supplementing, modification, rearrangement,
amendment, restatement, replacement, cancellation, rescission, revocation or
reinstatement (whether or not material) of any part of any of the Loan
Documents or any obligations under the Loan Documents of any Obligor or any
other party to the Loan Documents (without limiting the number of times any of
the foregoing may occur).
(e) acceleration of the time for payment or performance
of any Debt or other obligation under any of the Loan Documents or exercise of
any other right, privilege or remedy under or in regard to any of the Loan
Documents.
(f) failure, omission, delay, neglect, refusal or lack of
diligence by Agent or any other Person to assert, enforce, give notice of
intent to exercise--or any other notice with respect to--or exercise any right,
privilege, power or remedy conferred on Agent or any other Person in any of
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the Loan Documents or by law; or any action on the part of Agent or any other
Person granting indulgence, grace, adjustment, forbearance or extension of any
kind to any Obligor.
(g) release, surrender, exchange, subordination or loss
of any Lien priority under any of the Loan Documents or in connection with the
Debt.
(h) release, modification or waiver of, or failure,
omission, delay, neglect, refusal or lack of diligence to enforce, any
guaranty, pledge, mortgage, deed of trust, security agreement, lien, charge,
insurance agreement, bond, letter of credit or other security device, guaranty,
surety or indemnity agreement whatsoever.
(i) taking or acceptance of any other security or
guaranty for the payment or performance of any or all of the Debt or the
obligations of any Obligor.
(j) release, modification or waiver of, or failure,
omission, delay, neglect, refusal or lack of diligence to enforce, any right,
benefit, privilege or interest under any contract or agreement, under which the
rights of any Obligor have been collaterally or absolutely assigned, or in
which a security interest has been granted, as direct or indirect security for
payment of the Debt or performance of any other obligations to--or at any time
held by--Agent or any Lender.
(k) death, legal incapacity, disability, voluntary or
involuntary liquidation, dissolution, sale of any Collateral, marshaling of
assets and liabilities, change in corporate or organizational status,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt or other
similar proceedings of or affecting any Obligor or any of the assets of any
Obligor, even if any of the Debt is thereby rendered void, unenforceable or
uncollectible against any other Person.
(l) occurrence or discovery of any irregularity,
invalidity or unenforceability of any of the Debt or Loan Documents or any
defect or deficiency in any of the Debt or Loan Documents, including the
unenforceability of any provisions of any of the Loan Documents because
entering into any such Loan Document was ultra xxxxx or because anyone who
executed them exceeded their authority.
(m) failure to acquire, protect or perfect any Lien in
any Collateral intended to secure any part of the Debt or any other obligations
under the Loan Documents or failure to maintain perfection.
(n) failure by Agent or any other Person to notify--or
timely notify--Guarantor of any Default or Event of Default under any of the
Loan Documents, any renewal, extension, supplementing, modification,
rearrangement, amendment, restatement, replacement, cancellation, rescission,
revocation or reinstatement (whether or not material) or assignment of any part
of the Debt, release or exchange of any security, any other action taken or not
taken by Agent against any Obligor or any other Person or any direct or
indirect security for any part of the Debt or other
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obligation of Borrower, any new agreement between Agent and/or any Lender and
any Obligor or any other Person or any other event or circumstance. Neither
Agent nor any Lender has any duty or obligation to give Guarantor any notice of
any kind under any circumstances whatsoever with respect to or in connection
with the Debt or the Loan Documents.
(o) occurrence of any event or circumstances which might
otherwise constitute a defense available to, or a discharge of, any Obligor,
including failure of consideration, usury, forgery, breach of warranty, failure
to satisfy any requirement of the statute of frauds, running of any statute of
limitation, accord and satisfaction and any defense based on election of
remedies of any type.
(p) receipt and/or application of any proceeds, credits
or recoveries from any source, including any proceeds, credits, or amounts
realized from exercise of any rights, remedies, powers or privileges under the
Loan Documents, by law or otherwise available to Agent or any Lender.
(q) occurrence of any act, error or omission, except
behavior which is proven to be in bad faith to the extent (but no further),
that Guarantor cannot effectively waive the right to complain.
Section 3.3 Waiver of Certain Rights and Notices. Guarantor hereby
WAIVES and RELEASES all right to require marshaling of assets and liabilities,
sale in inverse order of alienation, notice of acceptance of this Guaranty and
of any liability to which it applies or may apply, notice of the creation,
accrual, renewal, increase, extension, modification, amendment or rearrangement
of any part of the Debt, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of intent to accelerate, notice of
acceleration and, except as expressly provided herein, all other notices and
demands, collection, suit and the taking of any other action by Agent or any
Lender.
Section 3.4 Not a Collection Guaranty. This is an absolute guaranty
of payment, and not of collection, and Guarantor WAIVES any right to require
that any action be brought against any Obligor or any other Person, or that
Agent or any Lender be required to enforce, attempt to enforce or exhaust any
of its rights, benefits or privileges under any of the Loan Documents, by law
or otherwise; provided that nothing herein shall be construed to prevent Agent
or any Lender from exercising and enforcing at any time any right, benefit or
privilege which it may have under any Loan Document or by law from time to
time, and at any time, and Guarantor agrees that Guarantor's obligations
hereunder are-- and shall be--absolute, independent and unconditional under any
and all circumstances. Should Agent or any Lender seek to enforce Guarantor's
obligations by action in any court, Guarantor WAIVES any requirement,
substantive or procedural, that (a) Agent or such Lender pursue any foreclosure
action, realize or attempt to realize on any security or preserve or enforce
any deficiency claim against any Obligor or any other Person after any such
realization, (b) a judgment first be sought or rendered against any Obligor or
any other Person, (c) any Obligor or any other Person be joined in such action
or (d) a separate action be brought against any Obligor or any other
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Person. Guarantor's obligations under this Guaranty are several from those of
any other Obligor or any other Person, and are primary obligations concerning
which Guarantor is the principal obligor. All waivers in this Guaranty or any
of the Loan Documents shall be without prejudice to Agent or any Lender at its
option to proceed against any Obligor or any other Person, whether by separate
action or by joinder. Guarantor agrees that this Guaranty shall not be
discharged except by payment of the Debt in full, complete performance of all
obligations of the Obligors under the Loan Documents and termination of the
obligation--if any--to make any further advances under the Notes or extend
other financial accommodations to any Obligor.
Section 3.5 Subrogation. Guarantor agrees that it shall never be
entitled to be subrogated to any of Agent's or any Lender's rights against any
Obligor or any other Person or any Collateral or offset rights held by Agent or
any Lender for payment of the Debt until final termination of this Guaranty.
Section 3.6 Reliance on Guaranty. All extensions of credit and
financial accommodations heretofore or hereafter made by Agent or any Lender
under or in respect of the Notes or any of the other Loan Documents shall be
conclusively presumed to have been made in acceptance of this Guaranty.
Section 3.7 Demands are Conclusive. Any demand by Agent under this
Guaranty shall be conclusive, absent manifest error, as to the matters therein
stated, including the amount due.
Section 3.8 Joint and Several. If any Person makes any guaranty of
any of the obligations guaranteed hereby or gives any security for them,
Guarantor's obligations hereunder shall be joint and several with the
obligations of such other Person pursuant to such agreement or other papers
making the guaranty or giving the security.
Section 3.9 Payments Returned. Guarantor agrees that, if at any time
all or any part of any payment previously applied by Agent or any Lender to the
Debt is or must be returned by Agent or any Lender--or recovered from Agent or
any Lender--for any reason (including the order of any bankruptcy court), this
Guaranty shall automatically be reinstated to the same effect as if the prior
application had not been made, and, in addition, Guarantor hereby agrees to
indemnify Agent and each Lender against, and to save and hold Agent and each
Lender harmless from any required return by Agent or any Lender--or recovery
from Agent or any Lender--of any such payment because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.
ARTICLE 4
Section 4.1 Term. Subject to the automatic reinstatement provisions
of Article 3 above, this Guaranty shall terminate and be of no further force or
effect upon full payment of the Debt and final termination of the Revolving
Loan Commitments of the Lenders.
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ARTICLE 5
Section 5.1 Default. If any Default or Event of Default occurs under
the Loan Agreement, then that shall automatically constitute default under this
Guaranty.
ARTICLE 6
Section 6.1 Binding on Successors; No Assignment by Guarantor. All
guaranties, warranties, representations, covenants and agreements in this
Guaranty shall bind the heirs, devisees, executors, administrators, personal
representatives, trustees, beneficiaries, conservators, receivers, successors
and assigns of Guarantor and shall benefit Agent, Lenders, their successors and
assigns, and any holder of any part of the Debt. Guarantor shall not assign or
delegate any of its obligations under this Guaranty or any of the Loan
Documents to which it is a party without the express prior written consent of
the Majority Lenders.
Section 6.2 Subordination of Borrower's Obligations to Guarantor.
Guarantor agrees that if, for any reason whatsoever, Borrower now is or
hereafter becomes liable, obligated or indebted to Guarantor, all such
liabilities, obligations and indebtedness, together with all interest thereon
and fees and other charges in connection therewith, and all Liens securing any
of the foregoing shall at all times be second, subordinate and inferior in
right of payment, in lien priority and in all other respects to the Debt and
all Liens created pursuant to the Security Documents.
Section 6.3 Waiver of Suretyship Rights. By signing this Guaranty,
Guarantor WAIVES each and every right to which it may be entitled by virtue of
any suretyship law, including any rights it may have pursuant to Rule 31 of
the Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice
and Remedies Code and Chapter 34 of the Texas Business and Commerce Code, as
the same may be amended from time to time.
Section 6.4 Amendments in Writing. This Guaranty shall not be
changed orally but shall be changed only by agreement in writing signed by the
party against whom such amendment is sought to be enforced. Any waiver or
consent with respect to this Guaranty shall be effective only in the specific
instance and for the specific purpose for which given. No course of dealing
between the parties, no usage of trade and no parole or extrinsic evidence of
any nature shall be used to supplement or modify any of the terms or provisions
of this Guaranty.
Section 6.5 Notices. Any notice, request or other communication
required or permitted to be given hereunder to Agent or any Lender shall be
given as provided in the Loan Agreement. Any notice, request or other
communication required or permitted to be given hereunder to Guarantor shall be
given in writing by delivering it against receipt for it, by depositing it with
an overnight delivery service or by depositing it in a receptacle maintained by
the United States Postal Service, postage prepaid, registered or certified
mail, return receipt requested, addressed as follows (and if so given, shall be
deemed given when mailed):
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NATCO Holdings, Inc.
c/o National Tank Company
0000 X. Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, III
Facsimile: (000) 000-0000
Guarantor's address for notice may be changed at any time and from time to
time, but only after thirty (30) days' advance written notice to Agent and
Lenders and shall be the most recent such address furnished in writing by
Guarantor to Agent and Lenders. Actual notice, however and from whomever given
or received, shall always be effective when received.
Section 6.6 Gender; "Including" is Not Limiting; Section Headings.
The masculine and neuter genders used in this Guaranty each includes the
masculine, feminine and neuter genders, and the singular number includes the
plural where appropriate, and vice versa. Wherever the term "including" or a
similar term is used in this Guaranty, it shall be read as if it were written
"including by way of example only and without in any way limiting the
generality of the clause or concept referred to." The headings used in this
Guaranty are included for reference only and shall not be considered in
interpreting, applying or enforcing this Guaranty.
Section 6.7 Offset Rights. Each Lender is hereby authorized, during
the continuation of an Event of Default, without notice to any Person (and
Guarantor hereby WAIVES any such notice) to the fullest extent permitted by
law, to set-off and apply any and all monies, securities and other Properties
of Guarantor now or in the future in the possession, custody or control of such
Lender, or on deposit with or otherwise owed to Guarantor by such Lender--
including all such monies, securities and other Properties held in general,
special, time, demand, provisional or final accounts or for safekeeping or as
Collateral or otherwise but excluding those accounts clearly designated as
escrow or trust accounts held by Guarantor for others unaffiliated with
Guarantor--against any and all of Guarantor's obligations to Agent or any of
the Lenders now or hereafter existing under this Guaranty, irrespective of
whether any demand under this Guaranty shall have been made. Each Lender
agrees to use reasonable efforts to promptly notify Guarantor after any such
set-off and application, provided that failure to give--or delay in giving--any
such notice shall not affect the validity of such set-off and application or
impose any liability on such Lender. Each Lender's rights under this Section
are in addition to other rights and remedies (including other rights of
set-off) which such Lender may have.
Section 6.8 Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
Section 6.9 Survival. The representations, covenants and agreements
set forth in this Guaranty shall continue and survive until final termination
of this Guaranty.
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Section 6.10 Rights Cumulative; Delay Not Waiver. Agent's or any
Lender's exercise of any right, benefit or privilege under any of the Loan
Documents or at law or in equity shall not preclude the concurrent or
subsequent exercise of any of Agent's or any Lender's other present or future
rights, benefits or privileges. The remedies provided in this Guaranty are
cumulative and not exclusive of any remedies provided by law or the Loan
Documents. No failure by Agent or any Lender to exercise, and no delay in
exercising, any right under any Loan Document shall operate as a waiver
thereof.
Section 6.11 Severability. If any provision of this Guaranty is held
to be illegal, invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of this
Guaranty shall not be affected thereby, and this Guaranty shall be liberally
construed so as to carry out the intent of the parties to it. Each waiver in
this Guaranty is subject to the overriding and controlling rule that it shall
be effective only if and to the extent that (a) it is not prohibited by
applicable law and (b) applicable law neither provides for nor allows any
material sanctions to be imposed against Agent or any Lender for having
bargained for and obtained it.
Section 6.12 Entire Agreement. This Guaranty embodies the entire
agreement and understanding among Guarantor, Agent and Lenders with respect to
its subject matter and supersedes all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter.
Guarantor acknowledges and agrees that there is no oral agreement between
Guarantor and Agent or any Lender which has not been incorporated in this
Guaranty.
Section 6.13 Relationship to Borrower. The value of the consideration
received and to be received by Guarantor in respect of the Debt is reasonably
worth at least as much as the liability and obligation of Guarantor incurred or
arising under this Guaranty and the Loan Documents. Guarantor has determined
that such liability and obligation may reasonably be expected to substantially
benefit Guarantor directly or indirectly (or if Guarantor is not a natural
person, Guarantor's board of directors, general partners or other governors
have made that determination). Guarantor has had full and complete access to
the underlying papers relating to the Debt and all other papers executed by any
Obligor or any other Person in connection with the Debt, has reviewed them and
is fully aware of the meaning and effect of their contents. Guarantor is fully
informed of all circumstances which bear upon the risks of executing this
Guaranty and which a diligent inquiry would reveal. Guarantor has adequate
means to obtain from Borrower on a continuing basis information concerning
Borrower's financial condition, and is not depending on Agent or any Lender to
provide such information, now or in the future. Guarantor agrees that neither
Agent nor any Lender shall have any obligation to advise or notify Guarantor or
to provide Guarantor with any data or information. The execution and delivery
of this Guaranty is not a condition precedent (and neither Agent nor any Lender
has in any way implied that the execution of this Guaranty is a condition
precedent) to Agent's or any Lender's making, extending or modifying any loan
to Guarantor or to any other financial accommodation to or for Guarantor.
Borrower is a wholly-owned Subsidiary of Guarantor; and Guarantor's guaranty
pursuant to this Guaranty reasonably may be expected to benefit, directly or
indirectly, Guarantor; and Guarantor has determined that this Guaranty is
necessary and convenient to the conduct, promotion and attainment of the
business of Guarantor and Borrower.
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THIS GUARANTY is executed as of the date first above written.
NATCO HOLDINGS, INC.,
a Delaware corporation
By:/s/ XXXXXXX X. XXXXXX, III
---------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
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GUARANTY
(TEAM)
THIS GUARANTY ("Guaranty") dated as of June 30, 1997 is executed and
delivered by TOTAL ENGINEERING SERVICES TEAM, INC., a Louisiana corporation
("Guarantor"), to TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent (in such
capacity herein called "Agent") under the Loan Agreement (hereinafter defined).
ARTICLE 1
Section 1.1 Definitions. As used in this Guaranty, these terms shall
have these respective meanings:
Borrower means NATIONAL TANK COMPANY, a Delaware corporation.
Debt means the sum of (a) all debt (principal, interest or other)
evidenced by the Notes and all debt (principal, interest or other) incurred
under or evidenced by the other Loan Documents, (b) the Letter of Credit
Liabilities and (c) the Interest Rate Risk Indebtedness. The Debt includes
interest and other obligations accruing or arising after (i) commencement of
any case under any bankruptcy or similar laws by or against any Obligor or (ii)
the obligations of any Obligor shall cease to exist by operation of law or for
any other reason. The Debt also includes all reasonable and customary
attorneys' fees and any other expenses incurred by Agent in enforcing any of
the Loan Documents.
Guaranteed Debt means the Maximum Amount less the amounts, if any, of
payments of the Guaranteed Debt made by Guarantor and clearly identified as
such in a notice accepted in writing by Agent confirming the payment and
reduction of the Guaranteed Debt for Guarantor.
Guarantor's Net Worth means (a) the fair value of the Property of
Guarantor from time to time (taking into consideration the value, if any, of
rights of subrogation, contribution and indemnity), minus (b) the total
liabilities of Guarantor (including contingent liabilities [discounted in
appropriate instances], but excluding liabilities of Guarantor under this
Guaranty and the other Loan Documents executed by Guarantor) from time to time.
It is agreed that Guarantor's Net Worth may fluctuate from time to time after
the date hereof as it is determined on each Determination Date (as defined in
the definition of "Maximum Amount").
Loan Agreement means that certain Loan Agreement dated concurrently
herewith executed by and among the Borrower, Agent and the Lenders party
thereto and all amendments, supplements, restatements or replacements to any of
the foregoing from time to time.
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Maximum Amount means the greater of (i) all proceeds (without
duplication) of the Debt directly or indirectly (by intercompany loan, advance,
Guarantor's ownership interest in any Person receiving the proceeds of the
Debt, capital contribution or otherwise) advanced to or for the account of, or
used by or for the benefit of, Guarantor; (ii) ninety-five percent (95%) of
Guarantor's Net Worth from time to time; or (iii) the amount that in a legal
proceeding brought within the applicable limitations period is determined by
the final, non-appealable order of a court having jurisdiction over the issue
and the applicable parties to be the amount of value given by Agent and
Lenders, or received by Guarantor, in exchange for the obligations of Guarantor
under this Guaranty. If on the date of any Loan (as defined in the Loan
Agreement) made after the date hereof (any such date being herein called a
"Determination Date"), ninety-five percent (95%) of Guarantor's Net Worth is
greater than either of the amounts described in clauses (i) and (iii) above,
the Maximum Amount for Guarantor shall be deemed to have increased through and
as of such Determination Date to ninety-five percent (95%) of Guarantor's Net
Worth as determined on such Determination Date (and the Guaranteed Debt for
Guarantor shall have correspondingly increased), without further action or
agreement between Agent and Guarantor, and any subsequent reduction or
diminution of Guarantor's Net Worth after such Determination Date will not
reduce the Guaranteed Debt for Guarantor. Notwithstanding anything to the
contrary contained in this definition of "Maximum Amount" or in any other
provision of this Guaranty, "Maximum Amount" for Guarantor shall never be less
than the amount referred to in clause (i) above.
TERMS USED HEREIN WITH THEIR INITIAL LETTERS CAPITALIZED AND WHICH ARE
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN
THE LOAN AGREEMENT.
ARTICLE 2
Section 2.1 Execution of Loan Documents. Borrower has executed and
delivered the Loan Documents, and the Debt is secured by various Liens created
or evidenced by the Loan Documents.
Section 2.2 Consideration. In consideration of the credit and
financial accommodations contemplated to be extended to Borrower pursuant to
the Loan Documents or otherwise, which Guarantor has determined will
substantially benefit Guarantor directly or indirectly, and for other good and
valuable consideration, the receipt and sufficiency of which Guarantor hereby
acknowledges, Guarantor executes and delivers this Guaranty to Agent with the
intention of being presently and legally bound by its terms.
ARTICLE 3
Section 3.1 Payment Guaranty. Guarantor, as primary obligor and not
as a surety, unconditionally guarantees to Agent for the ratable benefit of
Lenders the full, prompt and punctual payment of the Debt when due (whether at
its stated maturity, by acceleration or otherwise) in accordance with the Loan
Documents. This Guaranty is irrevocable, unconditional and absolute, and if
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for any reason all or any portion of the Debt shall not be paid when due,
Guarantor will, upon written demand, immediately pay to Agent the amount
demanded, in Dollars, regardless of (a) any defense, right of set-off or
counterclaim which any Obligor may have or assert and (b) whether Agent or any
other Person shall have taken any steps to enforce any rights against any
Obligor or any other Person to collect any of the Debt. Notwithstanding the
foregoing, to the extent that in a legal proceeding brought within the
applicable limitations period it is determined by the final, non-appealable
order of a court having jurisdiction over the issue and the applicable parties
that Guarantor received less than a reasonably equivalent value in exchange for
its incurrence of its obligations under this Guaranty, then and only then the
liability of Guarantor under this Guaranty shall be limited to the Guaranteed
Debt for Guarantor. Agent shall have the right to determine and designate from
time to time, without notice or assent of Guarantor, which portions of the Debt
shall be deemed included in the Guaranteed Debt for Guarantor. Guarantor
acknowledges that such determination and designation shall be conclusive,
absent manifest error. This Guaranty shall not fail or be ineffective or
invalid or be considered too indefinite or contingent because the Guaranteed
Debt for Guarantor may fluctuate from time to time or for any other reason.
Section 3.2 Application of Payments or Prepayments. The parties
hereto agree that any payment or prepayment by Borrower or any other person or
entity against the Debt (other than payments made by Guarantor in accordance
with the procedures described in the definition of "Guaranteed Debt" herein)
shall be deemed paid first against that portion of the Debt not included in
"Guaranteed Debt" for Guarantor or determined for any reason not to be a part
of "Guaranteed Debt" for Guarantor and then shall be paid against any portion
of the Debt that is Guaranteed Debt for Guarantor, in such order and manner as
Agent shall determine in its sole discretion.
Section 3.3 Obligations Not Affected. Guarantor's covenants,
agreements and obligations under this Guaranty shall in no way be released,
diminished, reduced, impaired or otherwise affected by reason of the happening
from time to time of any of the following things, for any reason, whether by
voluntary act, operation of law or order of any Governmental Authority and
whether or not Guarantor is given any notice or is asked for or gives any
further consent (all requirements for which, however arising, Guarantor hereby
WAIVES):
(a) release or waiver of any obligation or duty to
perform or observe any express or implied agreement, covenant, term or
condition imposed in any of the Loan Documents or by applicable law on any
Obligor or any party to the Loan Documents (other than Guarantor).
(b) extension of the time for payment of any part of the
Debt or any other sums payable under the Loan Documents, extension of the time
for performance of any other obligation under or arising out of or in
connection with the Loan Documents or change in the manner, place or other
terms of such payment or performance.
(c) settlement or compromise of any of the Debt.
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(d) renewal, supplementing, modification, rearrangement,
amendment, restatement, replacement, cancellation, rescission, revocation or
reinstatement (whether or not material) of any part of any of the Loan
Documents or any obligations under the Loan Documents of any Obligor or any
other party to the Loan Documents (without limiting the number of times any of
the foregoing may occur).
(e) acceleration of the time for payment or performance
of any Debt or other obligation under any of the Loan Documents or exercise of
any other right, privilege or remedy under or in regard to any of the Loan
Documents.
(f) failure, omission, delay, neglect, refusal or lack of
diligence by Agent or any other Person to assert, enforce, give notice of
intent to exercise--or any other notice with respect to--or exercise any right,
privilege, power or remedy conferred on Agent or any other Person in any of the
Loan Documents or by law; or any action on the part of Agent or any other
Person granting indulgence, grace, adjustment, forbearance or extension of any
kind to any Obligor.
(g) release, surrender, exchange, subordination or loss
of any Lien priority under any of the Loan Documents or in connection with the
Debt.
(h) release, modification or waiver of, or failure,
omission, delay, neglect, refusal or lack of diligence to enforce, any
guaranty, pledge, mortgage, deed of trust, security agreement, lien, charge,
insurance agreement, bond, letter of credit or other security device, guaranty,
surety or indemnity agreement whatsoever.
(i) taking or acceptance of any other security or
guaranty for the payment or performance of any or all of the Debt or the
obligations of any Obligor.
(j) release, modification or waiver of, or failure,
omission, delay, neglect, refusal or lack of diligence to enforce, any right,
benefit, privilege or interest under any contract or agreement, under which the
rights of any Obligor have been collaterally or absolutely assigned, or in
which a security interest has been granted, as direct or indirect security for
payment of the Debt or performance of any other obligations to--or at any time
held by--Agent or any Lender.
(k) death, legal incapacity, disability, voluntary or
involuntary liquidation, dissolution, sale of any Collateral, marshaling of
assets and liabilities, change in corporate or organizational status,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt or other
similar proceedings of or affecting any Obligor or any of the assets of any
Obligor, even if any of the Debt is thereby rendered void, unenforceable or
uncollectible against any other Person.
(l) occurrence or discovery of any irregularity,
invalidity or unenforceability of any of the Debt or Loan Documents or any
defect or deficiency in any of the Debt or Loan
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Documents, including the unenforceability of any provisions of any of the Loan
Documents because entering into any such Loan Document was ultra xxxxx or
because anyone who executed them exceeded their authority.
(m) failure to acquire, protect or perfect any Lien in
any Collateral intended to secure any part of the Debt or any other obligations
under the Loan Documents or failure to maintain perfection.
(n) failure by Agent or any other Person to notify--or
timely notify--Guarantor of any Default or Event of Default under any of the
Loan Documents, any renewal, extension, supplementing, modification,
rearrangement, amendment, restatement, replacement, cancellation, rescission,
revocation or reinstatement (whether or not material) or assignment of any part
of the Debt, release or exchange of any security, any other action taken or not
taken by Agent against any Obligor or any other Person or any direct or
indirect security for any part of the Debt or other obligation of Borrower, any
new agreement between Agent and/or any Lender and any Obligor or any other
Person or any other event or circumstance. Neither Agent nor any Lender has
any duty or obligation to give Guarantor any notice of any kind under any
circumstances whatsoever with respect to or in connection with the Debt or the
Loan Documents.
(o) occurrence of any event or circumstances which might
otherwise constitute a defense available to, or a discharge of, any Obligor,
including failure of consideration, usury, forgery, breach of warranty, failure
to satisfy any requirement of the statute of frauds, running of any statute of
limitation, accord and satisfaction and any defense based on election of
remedies of any type.
(p) receipt and/or application of any proceeds, credits
or recoveries from any source, including any proceeds, credits, or amounts
realized from exercise of any rights, remedies, powers or privileges under the
Loan Documents, by law or otherwise available to Agent or any Lender.
(q) occurrence of any act, error or omission, except
behavior which is proven to be in bad faith to the extent (but no further),
that Guarantor cannot effectively waive the right to complain.
Section 3.4 Waiver of Certain Rights and Notices. Guarantor hereby
WAIVES and RELEASES all right to require marshaling of assets and liabilities,
sale in inverse order of alienation, notice of acceptance of this Guaranty and
of any liability to which it applies or may apply, notice of the creation,
accrual, renewal, increase, extension, modification, amendment or rearrangement
of any part of the Debt, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of intent to accelerate, notice of
acceleration and, except as expressly provided herein, all other notices and
demands, collection, suit and the taking of any other action by Agent or any
Lender.
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Section 3.5 Not a Collection Guaranty. This is an absolute guaranty
of payment, and not of collection, and Guarantor WAIVES any right to require
that any action be brought against any Obligor or any other Person, or that
Agent or any Lender be required to enforce, attempt to enforce or exhaust any
of its rights, benefits or privileges under any of the Loan Documents, by law
or otherwise; provided that nothing herein shall be construed to prevent Agent
or any Lender from exercising and enforcing at any time any right, benefit or
privilege which it may have under any Loan Document or by law from time to
time, and at any time, and Guarantor agrees that Guarantor's obligations
hereunder are--and shall be--absolute, independent and unconditional under any
and all circumstances. Should Agent or any Lender seek to enforce Guarantor's
obligations by action in any court, Guarantor WAIVES any requirement,
substantive or procedural, that (a) Agent or such Lender pursue any foreclosure
action, realize or attempt to realize on any security or preserve or enforce
any deficiency claim against any Obligor or any other Person after any such
realization, (b) a judgment first be sought or rendered against any Obligor or
any other Person, (c) any Obligor or any other Person be joined in such action
or (d) a separate action be brought against any Obligor or any other Person.
Guarantor's obligations under this Guaranty are several from those of any other
Obligor or any other Person, and are primary obligations concerning which
Guarantor is the principal obligor. All waivers in this Guaranty or any of
the Loan Documents shall be without prejudice to Agent or any Lender at its
option to proceed against any Obligor or any other Person, whether by separate
action or by joinder. Guarantor agrees that this Guaranty shall not be
discharged except by payment of the Debt in full, complete performance of all
obligations of the Obligors under the Loan Documents and termination of the
obligation--if any--to make any further advances under the Notes or extend
other financial accommodations to any Obligor.
Section 3.6 Subrogation. Guarantor agrees that it shall never be
entitled to be subrogated to any of Agent's or any Lender's rights against any
Obligor or any other Person or any Collateral or offset rights held by Agent or
any Lender for payment of the Debt until final termination of this Guaranty.
Section 3.7 Reliance on Guaranty. All extensions of credit and
financial accommodations heretofore or hereafter made by Agent or any Lender
under or in respect of the Notes or any of the other Loan Documents shall be
conclusively presumed to have been made in acceptance of this Guaranty.
Section 3.8 Demands are Conclusive. Any demand by Agent under this
Guaranty shall be conclusive, absent manifest error, as to the matters therein
stated, including the amount due.
Section 3.9 Joint and Several. If any Person makes any guaranty of
any of the obligations guaranteed hereby or gives any security for them,
Guarantor's obligations hereunder shall be joint and several with the
obligations of such other Person pursuant to such agreement or other papers
making the guaranty or giving the security.
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Section 3.10 Payments Returned. Guarantor agrees that, if at any time
all or any part of any payment previously applied by Agent or any Lender to the
Debt is or must be returned by Agent or any Lender--or recovered from Agent or
any Lender--for any reason (including the order of any bankruptcy court), this
Guaranty shall automatically be reinstated to the same effect as if the prior
application had not been made, and, in addition, Guarantor hereby agrees to
indemnify Agent and each Lender against, and to save and hold Agent and each
Lender harmless from any required return by Agent or any Lender--or recovery
from Agent or any Lender--of any such payment because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.
ARTICLE 4
Section 4.1 Term. Subject to the automatic reinstatement provisions
of Article 3 above, this Guaranty shall terminate and be of no further force or
effect upon full payment of the Debt and final termination of the Revolving
Loan Commitments of the Lenders.
ARTICLE 5
Section 5.1 Default. If any Default or Event of Default occurs under
the Loan Agreement, then that shall automatically constitute default under this
Guaranty.
ARTICLE 6
Section 6.1 Binding on Successors; No Assignment by Guarantor. All
guaranties, warranties, representations, covenants and agreements in this
Guaranty shall bind the heirs, devisees, executors, administrators, personal
representatives, trustees, beneficiaries, conservators, receivers, successors
and assigns of Guarantor and shall benefit Agent, Lenders, their successors and
assigns, and any holder of any part of the Debt. Guarantor shall not assign or
delegate any of its obligations under this Guaranty or any of the Loan
Documents to which it is a party without the express prior written consent of
the Majority Lenders.
Section 6.2 Subordination of Borrower's Obligations to Guarantor.
Guarantor agrees that if, for any reason whatsoever, Borrower now is or
hereafter becomes liable, obligated or indebted to Guarantor, all such
liabilities, obligations and indebtedness, together with all interest thereon
and fees and other charges in connection therewith, and all Liens securing any
of the foregoing shall at all times be second, subordinate and inferior in
right of payment, in lien priority and in all other respects to the Debt and
all Liens created pursuant to the Security Documents.
Section 6.3 Waiver of Suretyship Rights. By signing this Guaranty,
Guarantor WAIVES each and every right to which it may be entitled by virtue of
any suretyship law, including any rights it may have pursuant to Rule 31 of
the Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil
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Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce
Code, as the same may be amended from time to time.
Section 6.4 Amendments in Writing. This Guaranty shall not be
changed orally but shall be changed only by agreement in writing signed by the
party against whom such amendment is sought to be enforced. Any waiver or
consent with respect to this Guaranty shall be effective only in the specific
instance and for the specific purpose for which given. No course of dealing
between the parties, no usage of trade and no parole or extrinsic evidence of
any nature shall be used to supplement or modify any of the terms or provisions
of this Guaranty.
Section 6.5 Notices. Any notice, request or other communication
required or permitted to be given hereunder to Agent or any Lender shall be
given as provided in the Loan Agreement. Any notice, request or other
communication required or permitted to be given hereunder to Guarantor shall be
given in writing by delivering it against receipt for it, by depositing it with
an overnight delivery service or by depositing it in a receptacle maintained by
the United States Postal Service, postage prepaid, registered or certified
mail, return receipt requested, addressed as follows (and if so given, shall be
deemed given when mailed):
Total Engineering Services Team, Inc.
c/o National Tank Company
0000 X. Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, III
Facsimile: (000) 000-0000
Guarantor's address for notice may be changed at any time and from time to
time, but only after thirty (30) days' advance written notice to Agent and
Lenders and shall be the most recent such address furnished in writing by
Guarantor to Agent and Lenders. Actual notice, however and from whomever given
or received, shall always be effective when received.
Section 6.6 Gender; "Including" is Not Limiting; Section Headings.
The masculine and neuter genders used in this Guaranty each includes the
masculine, feminine and neuter genders, and the singular number includes the
plural where appropriate, and vice versa. Wherever the term "including" or a
similar term is used in this Guaranty, it shall be read as if it were written
"including by way of example only and without in any way limiting the
generality of the clause or concept referred to." The headings used in this
Guaranty are included for reference only and shall not be considered in
interpreting, applying or enforcing this Guaranty.
Section 6.7 Offset Rights. Each Lender is hereby authorized, during
the continuation of an Event of Default, without notice to any Person (and
Guarantor hereby WAIVES any such notice) to the fullest extent permitted by
law, to set-off and apply any and all monies, securities and other Properties
of Guarantor now or in the future in the possession, custody or control of such
Lender,
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or on deposit with or otherwise owed to Guarantor by such Lender--including all
such monies, securities and other Properties held in general, special, time,
demand, provisional or final accounts or for safekeeping or as Collateral or
otherwise but excluding those accounts clearly designated as escrow or trust
accounts held by Guarantor for others unaffiliated with Guarantor--against any
and all of Guarantor's obligations to Agent or any of the Lenders now or
hereafter existing under this Guaranty, irrespective of whether any demand
under this Guaranty shall have been made. Each Lender agrees to use reasonable
efforts to promptly notify Guarantor after any such set-off and application,
provided that failure to give--or delay in giving--any such notice shall not
affect the validity of such set-off and application or impose any liability on
such Lender. Each Lender's rights under this Section are in addition to other
rights and remedies (including other rights of set-off) which such Lender may
have.
Section 6.8 Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
Section 6.9 Survival. The representations, covenants and agreements
set forth in this Guaranty shall continue and survive until final termination
of this Guaranty.
Section 6.10 Rights Cumulative; Delay Not Waiver. Agent's or any
Lender's exercise of any right, benefit or privilege under any of the Loan
Documents or at law or in equity shall not preclude the concurrent or
subsequent exercise of any of Agent's or any Lender's other present or future
rights, benefits or privileges. The remedies provided in this Guaranty are
cumulative and not exclusive of any remedies provided by law or the Loan
Documents. No failure by Agent or any Lender to exercise, and no delay in
exercising, any right under any Loan Document shall operate as a waiver
thereof.
Section 6.11 Severability. If any provision of this Guaranty is held
to be illegal, invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of this
Guaranty shall not be affected thereby, and this Guaranty shall be liberally
construed so as to carry out the intent of the parties to it. Each waiver in
this Guaranty is subject to the overriding and controlling rule that it shall
be effective only if and to the extent that (a) it is not prohibited by
applicable law and (b) applicable law neither provides for nor allows any
material sanctions to be imposed against Agent or any Lender for having
bargained for and obtained it.
Section 6.12 Entire Agreement. This Guaranty embodies the entire
agreement and understanding among Guarantor, Agent and Lenders with respect to
its subject matter and supersedes all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter.
Guarantor acknowledges and agrees that there is no oral agreement between
Guarantor and Agent or any Lender which has not been incorporated in this
Guaranty.
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Section 6.13 Relationship to Borrower. The value of the consideration
received and to be received by Guarantor in respect of the Debt is reasonably
worth at least as much as the liability and obligation of Guarantor incurred or
arising under this Guaranty and the Loan Documents. Guarantor has determined
that such liability and obligation may reasonably be expected to substantially
benefit Guarantor directly or indirectly (or if Guarantor is not a natural
person, Guarantor's board of directors, general partners or other governors
have made that determination). Guarantor has had full and complete access to
the underlying papers relating to the Debt and all other papers executed by any
Obligor or any other Person in connection with the Debt, has reviewed them and
is fully aware of the meaning and effect of their contents. Guarantor is fully
informed of all circumstances which bear upon the risks of executing this
Guaranty and which a diligent inquiry would reveal. Guarantor has adequate
means to obtain from Borrower on a continuing basis information concerning
Borrower's financial condition, and is not depending on Agent or any Lender to
provide such information, now or in the future. Guarantor agrees that neither
Agent nor any Lender shall have any obligation to advise or notify Guarantor or
to provide Guarantor with any data or information. The execution and delivery
of this Guaranty is not a condition precedent (and neither Agent nor any Lender
has in any way implied that the execution of this Guaranty is a condition
precedent) to Agent's or any Lender's making, extending or modifying any loan
to Guarantor or to any other financial accommodation to or for Guarantor.
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THIS GUARANTY is executed as of the date first above written.
TOTAL ENGINEERING SERVICES TEAM, INC.,
a Louisiana corporation
By: /s/ XXXXXXX X. XXXXXX, III
-----------------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
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GUARANTY
(TEST)
THIS GUARANTY ("Guaranty") dated as of June 30, 1997 is executed and
delivered by TEST, INC., a Louisiana corporation ("Guarantor"), to TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as Agent (in such capacity herein called
"Agent") under the Loan Agreement (hereinafter defined).
ARTICLE 1
Section 1.1 Definitions. As used in this Guaranty, these terms shall
have these respective meanings:
Borrower means NATIONAL TANK COMPANY, a Delaware corporation.
Debt means the sum of (a) all debt (principal, interest or other)
evidenced by the Notes and all debt (principal, interest or other) incurred
under or evidenced by the other Loan Documents, (b) the Letter of Credit
Liabilities and (c) the Interest Rate Risk Indebtedness. The Debt includes
interest and other obligations accruing or arising after (i) commencement of any
case under any bankruptcy or similar laws by or against any Obligor or (ii) the
obligations of any Obligor shall cease to exist by operation of law or for any
other reason. The Debt also includes all reasonable and customary attorneys'
fees and any other expenses incurred by Agent in enforcing any of the Loan
Documents.
Guaranteed Debt means the Maximum Amount less the amounts, if any, of
payments of the Guaranteed Debt made by Guarantor and clearly identified as such
in a notice accepted in writing by Agent confirming the payment and reduction of
the Guaranteed Debt for Guarantor.
Guarantor's Net Worth means (a) the fair value of the Property of
Guarantor from time to time (taking into consideration the value, if any, of
rights of subrogation, contribution and indemnity), minus (b) the total
liabilities of Guarantor (including contingent liabilities [discounted in
appropriate instances], but excluding liabilities of Guarantor under this
Guaranty and the other Loan Documents executed by Guarantor) from time to time.
It is agreed that Guarantor's Net Worth may fluctuate from time to time after
the date hereof as it is determined on each Determination Date (as defined in
the definition of "Maximum Amount").
Loan Agreement means that certain Loan Agreement dated concurrently
herewith executed by and among the Borrower, Agent and the Lenders party thereto
and all amendments, supplements, restatements or replacements to any of the
foregoing from time to time.
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Maximum Amount means the greater of (i) all proceeds (without
duplication) of the Debt directly or indirectly (by intercompany loan, advance,
Guarantor's ownership interest in any Person receiving the proceeds of the Debt,
capital contribution or otherwise) advanced to or for the account of, or used by
or for the benefit of, Guarantor; (ii) ninety-five percent (95%) of Guarantor's
Net Worth from time to time; or (iii) the amount that in a legal proceeding
brought within the applicable limitations period is determined by the final,
non-appealable order of a court having jurisdiction over the issue and the
applicable parties to be the amount of value given by Agent and Lenders, or
received by Guarantor, in exchange for the obligations of Guarantor under this
Guaranty. If on the date of any Loan (as defined in the Loan Agreement) made
after the date hereof (any such date being herein called a "Determination
Date"), ninety-five percent (95%) of Guarantor's Net Worth is greater than
either of the amounts described in clauses (i) and (iii) above, the Maximum
Amount for Guarantor shall be deemed to have increased through and as of such
Determination Date to ninety-five percent (95%) of Guarantor's Net Worth as
determined on such Determination Date (and the Guaranteed Debt for Guarantor
shall have correspondingly increased), without further action or agreement
between Agent and Guarantor, and any subsequent reduction or diminution of
Guarantor's Net Worth after such Determination Date will not reduce the
Guaranteed Debt for Guarantor. Notwithstanding anything to the contrary
contained in this definition of "Maximum Amount" or in any other provision of
this Guaranty, "Maximum Amount" for Guarantor shall never be less than the
amount referred to in clause (i) above.
TERMS USED HEREIN WITH THEIR INITIAL LETTERS CAPITALIZED AND WHICH ARE
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN
THE LOAN AGREEMENT.
ARTICLE 2
Section 2.1 Execution of Loan Documents. Borrower has executed and
delivered the Loan Documents, and the Debt is secured by various Liens created
or evidenced by the Loan Documents.
Section 2.2 Consideration. In consideration of the credit and financial
accommodations contemplated to be extended to Borrower pursuant to the Loan
Documents or otherwise, which Guarantor has determined will substantially
benefit Guarantor directly or indirectly, and for other good and valuable
consideration, the receipt and sufficiency of which Guarantor hereby
acknowledges, Guarantor executes and delivers this Guaranty to Agent with the
intention of being presently and legally bound by its terms.
ARTICLE 3
Section 3.1 Payment Guaranty. Guarantor, as primary obligor and not as
a surety, unconditionally guarantees to Agent for the ratable benefit of Lenders
the full, prompt and punctual payment of the Debt when due (whether at its
stated maturity, by acceleration or otherwise) in accordance with the Loan
Documents. This Guaranty is irrevocable, unconditional and absolute, and if
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for any reason all or any portion of the Debt shall not be paid when due,
Guarantor will, upon written demand, immediately pay to Agent the amount
demanded, in Dollars, regardless of (a) any defense, right of set-off or
counterclaim which any Obligor may have or assert and (b) whether Agent or any
other Person shall have taken any steps to enforce any rights against any
Obligor or any other Person to collect any of the Debt.. Notwithstanding the
foregoing, to the extent that in a legal proceeding brought within the
applicable limitations period it is determined by the final, non-appealable
order of a court having jurisdiction over the issue and the applicable parties
that Guarantor received less than a reasonably equivalent value in exchange for
its incurrence of its obligations under this Guaranty, then and only then the
liability of Guarantor under this Guaranty shall be limited to the Guaranteed
Debt for Guarantor. Agent shall have the right to determine and designate from
time to time, without notice or assent of Guarantor, which portions of the Debt
shall be deemed included in the Guaranteed Debt for Guarantor. Guarantor
acknowledges that such determination and designation shall be conclusive, absent
manifest error. This Guaranty shall not fail or be ineffective or invalid or be
considered too indefinite or contingent because the Guaranteed Debt for
Guarantor may fluctuate from time to time or for any other reason.
Section 3.2 Application of Payments or Prepayments. The parties hereto
agree that any payment or prepayment by Borrower or any other person or entity
against the Debt (other than payments made by Guarantor in accordance with the
procedures described in the definition of "Guaranteed Debt" herein) shall be
deemed paid first against that portion of the Debt not included in "Guaranteed
Debt" for Guarantor or determined for any reason not to be a part of "Guaranteed
Debt" for Guarantor and then shall be paid against any portion of the Debt that
is Guaranteed Debt for Guarantor, in such order and manner as Agent shall
determine in its sole discretion.
Section 3.3 Obligations Not Affected. Guarantor's covenants, agreements
and obligations under this Guaranty shall in no way be released, diminished,
reduced, impaired or otherwise affected by reason of the happening from time to
time of any of the following things, for any reason, whether by voluntary act,
operation of law or order of any Governmental Authority and whether or not
Guarantor is given any notice or is asked for or gives any further consent (all
requirements for which, however arising, Guarantor hereby WAIVES):
(a) release or waiver of any obligation or duty to perform or
observe any express or implied agreement, covenant, term or condition imposed in
any of the Loan Documents or by applicable law on any Obligor or any party to
the Loan Documents (other than Guarantor).
(b) extension of the time for payment of any part of the Debt
or any other sums payable under the Loan Documents, extension of the time for
performance of any other obligation under or arising out of or in connection
with the Loan Documents or change in the manner, place or other terms of such
payment or performance.
(c) settlement or compromise of any of the Debt.
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(d) renewal, supplementing, modification, rearrangement,
amendment, restatement, replacement, cancellation, rescission, revocation or
reinstatement (whether or not material) of any part of any of the Loan Documents
or any obligations under the Loan Documents of any Obligor or any other party to
the Loan Documents (without limiting the number of times any of the foregoing
may occur).
(e) acceleration of the time for payment or performance of any
Debt or other obligation under any of the Loan Documents or exercise of any
other right, privilege or remedy under or in regard to any of the Loan
Documents.
(f) failure, omission, delay, neglect, refusal or lack of
diligence by Agent or any other Person to assert, enforce, give notice of intent
to exercise--or any other notice with respect to--or exercise any right,
privilege, power or remedy conferred on Agent or any other Person in any of the
Loan Documents or by law; or any action on the part of Agent or any other Person
granting indulgence, grace, adjustment, forbearance or extension of any kind to
any Obligor.
(g) release, surrender, exchange, subordination or loss of any
Lien priority under any of the Loan Documents or in connection with the Debt.
(h) release, modification or waiver of, or failure, omission,
delay, neglect, refusal or lack of diligence to enforce, any guaranty, pledge,
mortgage, deed of trust, security agreement, lien, charge, insurance agreement,
bond, letter of credit or other security device, guaranty, surety or indemnity
agreement whatsoever.
(i) taking or acceptance of any other security or guaranty for
the payment or performance of any or all of the Debt or the obligations of any
Obligor.
(j) release, modification or waiver of, or failure, omission,
delay, neglect, refusal or lack of diligence to enforce, any right, benefit,
privilege or interest under any contract or agreement, under which the rights of
any Obligor have been collaterally or absolutely assigned, or in which a
security interest has been granted, as direct or indirect security for payment
of the Debt or performance of any other obligations to--or at any time held
by--Agent or any Lender.
(k) death, legal incapacity, disability, voluntary or
involuntary liquidation, dissolution, sale of any Collateral, marshaling of
assets and liabilities, change in corporate or organizational status,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt or other
similar proceedings of or affecting any Obligor or any of the assets of any
Obligor, even if any of the Debt is thereby rendered void, unenforceable or
uncollectible against any other Person.
(l) occurrence or discovery of any irregularity, invalidity or
unenforceability of any of the Debt or Loan Documents or any defect or
deficiency in any of the Debt or Loan
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Documents, including the unenforceability of any provisions of any of the Loan
Documents because entering into any such Loan Document was ultra xxxxx or
because anyone who executed them exceeded their authority.
(m) failure to acquire, protect or perfect any Lien in any
Collateral intended to secure any part of the Debt or any other obligations
under the Loan Documents or failure to maintain perfection.
(n) failure by Agent or any other Person to notify--or timely
notify--Guarantor of any Default or Event of Default under any of the Loan
Documents, any renewal, extension, supplementing, modification, rearrangement,
amendment, restatement, replacement, cancellation, rescission, revocation or
reinstatement (whether or not material) or assignment of any part of the Debt,
release or exchange of any security, any other action taken or not taken by
Agent against any Obligor or any other Person or any direct or indirect security
for any part of the Debt or other obligation of Borrower, any new agreement
between Agent and/or any Lender and any Obligor or any other Person or any other
event or circumstance. Neither Agent nor any Lender has any duty or obligation
to give Guarantor any notice of any kind under any circumstances whatsoever with
respect to or in connection with the Debt or the Loan Documents.
(o) occurrence of any event or circumstances which might
otherwise constitute a defense available to, or a discharge of, any Obligor,
including failure of consideration, usury, forgery, breach of warranty, failure
to satisfy any requirement of the statute of frauds, running of any statute of
limitation, accord and satisfaction and any defense based on election of
remedies of any type.
(p) receipt and/or application of any proceeds, credits or
recoveries from any source, including any proceeds, credits, or amounts realized
from exercise of any rights, remedies, powers or privileges under the Loan
Documents, by law or otherwise available to Agent or any Lender.
(q) occurrence of any act, error or omission, except behavior
which is proven to be in bad faith to the extent (but no further), that
Guarantor cannot effectively waive the right to complain.
Section 3.4 Waiver of Certain Rights and Notices. Guarantor hereby
WAIVES and RELEASES all right to require marshaling of assets and liabilities,
sale in inverse order of alienation, notice of acceptance of this Guaranty and
of any liability to which it applies or may apply, notice of the creation,
accrual, renewal, increase, extension, modification, amendment or rearrangement
of any part of the Debt, presentment, demand for payment, protest, notice of
nonpayment, notice of dishonor, notice of intent to accelerate, notice of
acceleration and, except as expressly provided herein, all other notices and
demands, collection, suit and the taking of any other action by Agent or any
Lender.
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Section 3.5 Not a Collection Guaranty. This is an absolute guaranty of
payment, and not of collection, and Guarantor WAIVES any right to require that
any action be brought against any Obligor or any other Person, or that Agent or
any Lender be required to enforce, attempt to enforce or exhaust any of its
rights, benefits or privileges under any of the Loan Documents, by law or
otherwise; provided that nothing herein shall be construed to prevent Agent or
any Lender from exercising and enforcing at any time any right, benefit or
privilege which it may have under any Loan Document or by law from time to time,
and at any time, and Guarantor agrees that Guarantor's obligations hereunder
are--and shall be--absolute, independent and unconditional under any and all
circumstances. Should Agent or any Lender seek to enforce Guarantor's
obligations by action in any court, Guarantor WAIVES any requirement,
substantive or procedural, that (a) Agent or such Lender pursue any foreclosure
action, realize or attempt to realize on any security or preserve or enforce any
deficiency claim against any Obligor or any other Person after any such
realization, (b) a judgment first be sought or rendered against any Obligor or
any other Person, (c) any Obligor or any other Person be joined in such action
or (d) a separate action be brought against any Obligor or any other Person.
Guarantor's obligations under this Guaranty are several from those of any other
Obligor or any other Person, and are primary obligations concerning which
Guarantor is the principal obligor. All waivers in this Guaranty or any of the
Loan Documents shall be without prejudice to Agent or any Lender at its option
to proceed against any Obligor or any other Person, whether by separate action
or by joinder. Guarantor agrees that this Guaranty shall not be discharged
except by payment of the Debt in full, complete performance of all obligations
of the Obligors under the Loan Documents and termination of the obligation--if
any--to make any further advances under the Notes or extend other financial
accommodations to any Obligor.
Section 3.6 Subrogation. Guarantor agrees that it shall never be
entitled to be subrogated to any of Agent's or any Lender's rights against any
Obligor or any other Person or any Collateral or offset rights held by Agent or
any Lender for payment of the Debt until final termination of this Guaranty.
Section 3.7 Reliance on Guaranty. All extensions of credit and
financial accommodations heretofore or hereafter made by Agent or any Lender
under or in respect of the Notes or any of the other Loan Documents shall be
conclusively presumed to have been made in acceptance of this Guaranty.
Section 3.8 Demands are Conclusive. Any demand by Agent under this
Guaranty shall be conclusive, absent manifest error, as to the matters therein
stated, including the amount due.
Section 3.9 Joint and Several. If any Person makes any guaranty of any
of the obligations guaranteed hereby or gives any security for them, Guarantor's
obligations hereunder shall be joint and several with the obligations of such
other Person pursuant to such agreement or other papers making the guaranty or
giving the security.
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Section 3.10 Payments Returned. Guarantor agrees that, if at any time
all or any part of any payment previously applied by Agent or any Lender to the
Debt is or must be returned by Agent or any Lender--or recovered from Agent or
any Lender--for any reason (including the order of any bankruptcy court), this
Guaranty shall automatically be reinstated to the same effect as if the prior
application had not been made, and, in addition, Guarantor hereby agrees to
indemnify Agent and each Lender against, and to save and hold Agent and each
Lender harmless from any required return by Agent or any Lender--or recovery
from Agent or any Lender--of any such payment because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.
ARTICLE 4
Section 4.1 Term. Subject to the automatic reinstatement provisions of
Article 3 above, this Guaranty shall terminate and be of no further force or
effect upon full payment of the Debt and final termination of the Revolving Loan
Commitments of the Lenders.
ARTICLE 5
Section 5.1 Default. If any Default or Event of Default occurs under
the Loan Agreement, then that shall automatically constitute default under this
Guaranty.
ARTICLE 6
Section 6.1 Binding on Successors; No Assignment by Guarantor. All
guaranties, warranties, representations, covenants and agreements in this
Guaranty shall bind the heirs, devisees, executors, administrators, personal
representatives, trustees, beneficiaries, conservators, receivers, successors
and assigns of Guarantor and shall benefit Agent, Lenders, their successors and
assigns, and any holder of any part of the Debt. Guarantor shall not assign or
delegate any of its obligations under this Guaranty or any of the Loan Documents
to which it is a party without the express prior written consent of the Majority
Lenders.
Section 6.2 Subordination of Borrower's Obligations to Guarantor.
Guarantor agrees that if, for any reason whatsoever, Borrower now is or
hereafter becomes liable, obligated or indebted to Guarantor, all such
liabilities, obligations and indebtedness, together with all interest thereon
and fees and other charges in connection therewith, and all Liens securing any
of the foregoing shall at all times be second, subordinate and inferior in right
of payment, in lien priority and in all other respects to the Debt and all Liens
created pursuant to the Security Documents.
Section 6.3 Waiver of Suretyship Rights. By signing this Guaranty,
Guarantor WAIVES each and every right to which it may be entitled by virtue of
any suretyship law, including any rights it may have pursuant to Rule 31 of the
Texas Rules of Civil Procedure, ss.17.001 of the Texas Civil
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Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce
Code, as the same may be amended from time to time.
Section 6.4 Amendments in Writing. This Guaranty shall not be changed
orally but shall be changed only by agreement in writing signed by the party
against whom such amendment is sought to be enforced. Any waiver or consent with
respect to this Guaranty shall be effective only in the specific instance and
for the specific purpose for which given. No course of dealing between the
parties, no usage of trade and no parole or extrinsic evidence of any nature
shall be used to supplement or modify any of the terms or provisions of this
Guaranty.
Section 6.5 Notices. Any notice, request or other communication
required or permitted to be given hereunder to Agent or any Lender shall be
given as provided in the Loan Agreement. Any notice, request or other
communication required or permitted to be given hereunder to Guarantor shall be
given in writing by delivering it against receipt for it, by depositing it with
an overnight delivery service or by depositing it in a receptacle maintained by
the United States Postal Service, postage prepaid, registered or certified mail,
return receipt requested, addressed as follows (and if so given, shall be deemed
given when mailed):
TEST, Inc.
c/o National Tank Company
0000 X. Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, III
Facsimile: (000) 000-0000
Guarantor's address for notice may be changed at any time and from time to time,
but only after thirty (30) days' advance written notice to Agent and Lenders and
shall be the most recent such address furnished in writing by Guarantor to Agent
and Lenders. Actual notice, however and from whomever given or received, shall
always be effective when received.
Section 6.6 Gender; "Including" is Not Limiting; Section Headings. The
masculine and neuter genders used in this Guaranty each includes the masculine,
feminine and neuter genders, and the singular number includes the plural where
appropriate, and vice versa. Wherever the term "including" or a similar term is
used in this Guaranty, it shall be read as if it were written "including by way
of example only and without in any way limiting the generality of the clause or
concept referred to." The headings used in this Guaranty are included for
reference only and shall not be considered in interpreting, applying or
enforcing this Guaranty.
Section 6.7 Offset Rights. Each Lender is hereby authorized, during the
continuation of an Event of Default, without notice to any Person (and Guarantor
hereby WAIVES any such notice) to the fullest extent permitted by law, to
set-off and apply any and all monies, securities and other Properties of
Guarantor now or in the future in the possession, custody or control of such
Lender,
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or on deposit with or otherwise owed to Guarantor by such Lender--including all
such monies, securities and other Properties held in general, special, time,
demand, provisional or final accounts or for safekeeping or as Collateral or
otherwise but excluding those accounts clearly designated as escrow or trust
accounts held by Guarantor for others unaffiliated with Guarantor--against any
and all of Guarantor's obligations to Agent or any of the Lenders now or
hereafter existing under this Guaranty, irrespective of whether any demand under
this Guaranty shall have been made. Each Lender agrees to use reasonable efforts
to promptly notify Guarantor after any such set-off and application, provided
that failure to give--or delay in giving--any such notice shall not affect the
validity of such set-off and application or impose any liability on such Lender.
Each Lender's rights under this Section are in addition to other rights and
remedies (including other rights of set-off) which such Lender may have.
Section 6.8 Governing Law. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
Section 6.9 Survival. The representations, covenants and agreements set
forth in this Guaranty shall continue and survive until final termination of
this Guaranty.
Section 6.10 Rights Cumulative; Delay Not Waiver. Agent's or any
Lender's exercise of any right, benefit or privilege under any of the Loan
Documents or at law or in equity shall not preclude the concurrent or subsequent
exercise of any of Agent's or any Lender's other present or future rights,
benefits or privileges. The remedies provided in this Guaranty are cumulative
and not exclusive of any remedies provided by law or the Loan Documents. No
failure by Agent or any Lender to exercise, and no delay in exercising, any
right under any Loan Document shall operate as a waiver thereof.
Section 6.11 Severability. If any provision of this Guaranty is held to
be illegal, invalid or unenforceable under present or future laws, the legality,
validity and enforceability of the remaining provisions of this Guaranty shall
not be affected thereby, and this Guaranty shall be liberally construed so as to
carry out the intent of the parties to it. Each waiver in this Guaranty is
subject to the overriding and controlling rule that it shall be effective only
if and to the extent that (a) it is not prohibited by applicable law and (b)
applicable law neither provides for nor allows any material sanctions to be
imposed against Agent or any Lender for having bargained for and obtained it.
Section 6.12 Entire Agreement. This Guaranty embodies the entire
agreement and under standing among Guarantor, Agent and Lenders with respect to
its subject matter and supersedes all prior conflicting or inconsistent
agreements, consents and understandings relating to such subject matter.
Guarantor acknowledges and agrees that there is no oral agreement between
Guarantor and Agent or any Lender which has not been incorporated in this
Guaranty.
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Section 6.13 Relationship to Borrower. The value of the consideration
received and to be received by Guarantor in respect of the Debt is reasonably
worth at least as much as the liability and obligation of Guarantor incurred or
arising under this Guaranty and the Loan Documents. Guarantor has determined
that such liability and obligation may reasonably be expected to substantially
benefit Guarantor directly or indirectly (or if Guarantor is not a natural
person, Guarantor's board of directors, general partners or other governors have
made that determination). Guarantor has had full and complete access to the
underlying papers relating to the Debt and all other papers executed by any
Obligor or any other Person in connection with the Debt, has reviewed them and
is fully aware of the meaning and effect of their contents. Guarantor is fully
informed of all circumstances which bear upon the risks of executing this
Guaranty and which a diligent inquiry would reveal. Guarantor has adequate means
to obtain from Borrower on a continuing basis information concerning Borrower's
financial condition, and is not depending on Agent or any Lender to provide such
information, now or in the future. Guarantor agrees that neither Agent nor any
Lender shall have any obligation to advise or notify Guarantor or to provide
Guarantor with any data or information. The execution and delivery of this
Guaranty is not a condition precedent (and neither Agent nor any Lender has in
any way implied that the execution of this Guaranty is a condition precedent) to
Agent's or any Lender's making, extending or modifying any loan to Guarantor or
to any other financial accommodation to or for Guarantor.
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THIS GUARANTY is executed as of the date first above written.
TEST, INC.,
a Louisiana corporation
By: /s/ XXXXXXX X. XXXXXX III
--------------------------------------
Xxxxxxx X. Xxxxxx, III,
Senior Vice President
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