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EXHIBIT 10.3
AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT ("Amendment") dated as of December
31, 1998 (the "Amendment Effective Date") is made and entered into by and among
XXXXX INTERNATIONAL, INC. (the "Borrower"), a Delaware corporation, the banking
institutions (each, together with its successors and assigns, a "Bank" and
collectively, the "Banks") from time to time a party to the Loan Agreement (as
hereinafter defined), as amended by this Amendment, ABN AMRO BANK N.V., HOUSTON
AGENCY and DEN NORSKE BANK AS, as Co-Agents (in such capacity, together with
their successors in such capacity, collectively called the "Co-Agents") and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (formerly known as Texas Commerce
Bank National Association), a national banking association, as agent for the
Banks (in such capacity, together with its successors in such capacity, the
"Agent").
RECITALS:
WHEREAS, the Borrower, the Banks, the Co-Agents, and the Agent are
parties to a Loan Agreement dated as of April 4, 1996, as heretofore amended
(the "Loan Agreement"); and
WHEREAS, the Borrower, the Banks, the Co-Agents, and the Agent have
agreed, on the terms and conditions herein set forth, that the Loan Agreement
be amended in certain respects;
NOW, THEREFORE, IT IS AGREED:
Section 1. Definitions. Terms used herein which are defined in the
Loan Agreement shall have the same meanings when used herein unless otherwise
provided herein.
Section 2. Amendments to the Loan Agreement. On and after the
Amendment Effective Date, the Loan Agreement shall be amended as follows:
(a) Exhibit H to the Loan Agreement is hereby amended to be identical
to Exhibit A attached hereto.
(b) The definition of "EBITDA" set forth in Section 1.1 of the Loan
Agreement is hereby amended to read in its entirety as follows:
EBITDA shall mean, without duplication, for any period the
sum of (a) Net Income after taxes and (b) the sum of (i) Interest
Expense for such period, (ii) income taxes deducted in determining
such Net Income, (iii) amortization of goodwill and other non-cash
expenses and intangibles (including, without limitation, deferred
financing costs and debt discount) deducted in determining such Net
Income, (iv) depreciation, depletion and obsolescence of
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Property, in each case, determined in accordance with GAAP and (v) the
following items, to the extent they were charged during the applicable
period for which EBITDA is calculated hereunder:
Inventory Writedown $ 14,900,000
Asset Impairment $ 9,800,000
Fixed and Other Asset
Writedown $ 9,200,000
(c) The definition of "Investment" set forth in Section 1.1 of the
Loan Agreement is hereby amended to read in its entirety as follows:
Investment shall mean the purchase or other acquisition of any
securities or Indebtedness of, or the making of any loan, advance,
transfer of Property or capital contribution to, or the incurring of
any liability, contingently or otherwise, in respect of the
Indebtedness of, any Person. "Investments" shall not include (i)
deposits with financial institutions available for withdrawal on
demand or (ii) the creation of Accounts in the ordinary course of
business or (iii) investments in the equity interests of Subsidiaries
(other than CE Franklin, a Canadian public company).
(d) Section 7.3(a) of the Loan Agreement is hereby amended to read in
its entirety as follows:
(a) Debt to Total Capitalization Ratio - a Debt to Total
Capitalization Ratio of not greater than (i) 55% as of Xxxxxxxx 00,
0000, (xx) 52.5% for the period from January 1, 1999 through Xxxxx 00,
0000, (xxx) 50% for the period from April 1, 1999 through June 30,
1999, (iv) 47.5% for the period from July 1, 1999 through September
30, 1999 and (iv) 45% at all times thereafter; provided, however that
if the Borrower shall cease to own all of the equity interests in and
to M-I, then the Debt to Total Capitalization Ratio required hereby
shall automatically be revised to be 40% at all times thereafter.
(e) Section 8.1 of the Loan Agreement is hereby amended to read in its
entirety as follows:
8.1 Indebtedness. Create, incur, suffer or permit to exist, or
assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Indebtedness which constitutes Borrowed
Money Indebtedness, whether direct, indirect, absolute, contingent or
otherwise, except (subject to Section 7.3 hereof) the following:
(a) Borrowed Money Indebtedness of the Borrower and its
Subsidiaries outstanding on December 31, 1998 and described on
Exhibit H hereto or disclosed to the Agent in the financial
statements delivered on or prior to such date pursuant to Section
7.2 hereof;
(b) Borrowed Money Indebtedness evidenced by the Notes
(including contingent liabilities under the Guaranty);
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(c) Borrowed Money Indebtedness evidenced by the M-I Drilling
Facility (including contingent liabilities of the Borrower with
respect thereto);
(d) Borrowed Money Indebtedness of any Subsidiary owing to the
Borrower or another wholly-owned Subsidiary and Borrowed Money
Indebtedness of Borrower owing to any Subsidiary, provided such
Borrowed Money Indebtedness is expressly subordinated, in a manner
reasonably acceptable to the Agent, to the payment in full of all
Obligations of Borrower under the Loan Documents;
(e) contingent liabilities incurred by M-I by with respect to
performance letters of credit and bid and performance bonds
required by M-I in support of contracts entered into by M-I in the
ordinary course of its business (or guaranties of such contingent
liabilities by the Borrower);
(f) Borrowed Money Indebtedness of Xxxxxx Industries, Inc.
(which may be assumed by the Borrower in connection with the
release of the security interests securing such Borrowed Money
Indebtedness, the Banks acknowledging that for a period of one (1)
Business Day after such assumption such Borrowed Money
Indebtedness shall continue to be secured) an aggregate amount not
to exceed $50,000,000 in the aggregate;
(g) other Borrowed Money Indebtedness of the Borrower or any
of its Subsidiaries in an aggregate principal amount at any one
time outstanding up to but not exceeding, at any one time
outstanding, fifteen percent (15%) of Tangible Net Worth of the
Borrower, and
(h) obligations under any interest rate swap agreement,
interest rate cap agreement or similar arrangement entered into
between the Borrower and any Bank for the purpose of reducing
Borrower's exposure to interest rate risk and not for speculative
purposes.
(f) Section 8.7 of the Loan Agreement is hereby amended to read in its
entirety as follows:
8.7. Investments. Make any Investment, or make any commitment to
make any such Investment, except Permitted Investments.
Notwithstanding the foregoing, the Borrower and its Subsidiaries may
make Investments, in addition to Permitted Investments, on or after
March 31, 1999 which do not exceed, in the aggregate, $40,000,000, in
the form of loans to XX Xxxxxx Company, a to-be-formed Subsidiary of
the Borrower (and XX Xxxxxx Company may, in turn, loan up to
$8,000,000, in the aggregate,to the owner of the minority interests in
and to XX Xxxxxx Company). To the extent loans to XX Xxxxxx Company
are funded by Loans hereunder, the Revolving Loan Commitments shall be
reduced (pro rata among the Banks) on a dollar-for-dollar basis.
(g) Section 8.9 of the Loan Agreement is hereby amended to read in its
entirety as follows:
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8.9. Subsidiaries. Form, create or acquire a Subsidiary without
giving written notice to the Agent promptly thereafter. The Borrower
has heretofore notified the Banks of its intention to form a new
Subsidiary under the laws of Delaware to be named XX Xxxxxx (of which
the Borrower will initially own 80% of the equity interests), and the
Borrower has also heretofore notified the Banks of the intention of
said XX Xxxxxx Company to acquire more than 50% of the equity
interests in and to CE Franklin, a Canadian public company. The Banks
agree that CE Franklin shall not be considered to be a "Subsidiary" of
the Borrower for purposes of Articles 7 or 8 of this Agreement so long
as the Borrower and its Subsidiaries do not make any further
investments in CE Franklin without the prior written consent of the
Majority Banks.
Section 3. Consent to Transfer of Equity Interest in M-I. The Banks
hereby consent to the transfer to Schlumberger, Inc. of a forty percent (40%)
equity interest in and to M-I so long as the lenders under the M-I Drilling
Facility shall have consented thereto.
Section 4. Limitations. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or condition of the Loan Agreement or any of
the other Loan Documents, or (b) except as expressly set forth herein,
prejudice any right or rights which the Banks may now have or may have in the
future under or in connection with the Loan Agreement, the Loan Documents or
any of the other documents referred to therein. Except as expressly modified
hereby or by express written amendments thereof, the terms and provisions of
the Loan Agreement, the Notes, and any other Loan Documents or any other
documents or instruments executed in connection with any of the foregoing are
and shall remain in full force and effect. In the event of a conflict between
this Amendment and any of the foregoing documents, the terms of this Amendment
shall be controlling.
Section 5. Payment of Expenses. The Borrower agrees, whether or not
the transactions hereby contemplated shall be consummated, to reimburse and
save the Co-Agents, the Agent and the Bank(s) harmless from and against
liability for the payment of all reasonable substantiated out-of-pocket costs
and expenses arising in connection with the preparation, execution, delivery
and enforcement of, or the preservation of any rights under this Amendment,
including, without limitation, the reasonable fees and expenses of any local or
other counsel for the Agent, and all stamp taxes (including interest and
penalties, if any), recording taxes and fees, filing taxes and fees, and other
similar charges which may be payable in respect of, or in respect of any
modification of, the Loan Agreement and the other Loan Documents. The
provisions of this Section shall survive the termination of the Loan Agreement
and the repayment of the Loans.
Section 6. Governing Law. This Amendment and the rights and
obligations of the parties hereunder and under the Loan Agreement shall be
construed in accordance with and be governed by the laws of the State of Texas
and the United States of America.
Section 7. Descriptive Headings, etc. The descriptive headings of the
several Sections of this Amendment are inserted for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
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Section 8. Entire Agreement. This Amendment and the documents referred
to herein represent the entire understanding of the parties hereto regarding
the subject matter hereof and supersede all prior and contemporaneous oral and
written agreements of the parties hereto with respect to the subject matter
hereof, including, without limitation, any commitment letters regarding the
transactions contemplated by this Amendment.
Section 9. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties on separate counterparts and all of
such counterparts shall together constitute one and the same instrument.
Complete sets of counterparts shall be lodged with the Borrower and the Agent.
Section 10. Amended Definitions. As used in the Loan Agreement
(including all Exhibits thereto) and all other instruments and documents
executed in connection therewith, on and subsequent to the Amendment Effective
Date the term (i) "Agreement" shall mean the Loan Agreement as amended by this
Amendment, and (ii) references to any and all other Loan Documents shall mean
such documents as amended as contemplated hereby.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE []26.02
THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE
PARTIES BEFORE OR SUBSTANTIALLY CONTEMPORANEOUSLY WITH THE EXECUTION HEREOF
TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective duly authorized offices as
of the date first above written.
Exhibit A -- Revised Exhibit H
XXXXX INTERNATIONAL, INC.
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
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Title: C.F.O.
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CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as the Agent and as a Bank
By: /s/ XXXX X. XXXX
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Name: Xxxx X. Xxxx
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Title: Managing Director
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ABN AMRO BANK N.V., HOUSTON AGENCY,
as Co-Agent and as a Bank
By: ABN AMRO North America, Inc.,
as agent
By: /s/ W. XXXXX XXXXXXX
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Name: W. Xxxxx Xxxxxxx
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Title: Group Vice President
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By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
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Title: Senior Vice President
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DEN NORSKE BANK AS,
as Co-Agent and as a Bank
By: /s/ XXXXXX XXXXXXXX
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Name: Xxxxxx Xxxxxxxx
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Title: Senior Vice President
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By: /s/ J. XXXXXX XXXXXX
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Name: J. Xxxxxx Xxxxxx
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Title:
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BANK OF AMERICA, NT & SA
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
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Title: Vice President
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XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By: /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
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Title: Vice President & Senior
Relationship Manager
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XXXXX XXXX XX XXXXXXXXXX N.A.
By: /s/ J. XXXXX XXXXXX
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Name: J. Xxxxx Xxxxxx
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Title: Vice President
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BANK OF NEW YORK
By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
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Title: Vice President
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FIRST UNION NATIONAL BANK (successor
to Corestates Bank, N.A.)
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Senior Vice President
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