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EXHIBIT 10.2
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THIRD AMENDED AND RESTATED LOAN AGREEMENT
BY AND AMONG
XXXXXX PETROLEUM SERVICES CORP.,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AND
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
AS AGENT
JUNE 20, 1997
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS AND GENERAL RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 General Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.1 Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.2 Financial Statements; Projections . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.3 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.5 No Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.6 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.7 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.8 Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.9 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.10 Liens and Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.11 Availability of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.12 Regulations U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.16 Environmental Condition of the Property . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.17 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.18 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.19 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.20 Broker's; Transaction Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 3. THE CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.1 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.2 Revolving Line of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.3 Advances and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.4 Conversions and Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.5 Loan Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.6 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.7 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.8 Payments to the Agent and the Banks . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.9 Payments by the Banks to the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.10 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 3.11 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 3.12 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 3.14 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 3.15 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 3.16 Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.17 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 3.18 Eurodollar Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 3.19 Certain Agreements Regarding Letters of Credit . . . . . . . . . . . . . . . . . . . 48
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Section 3.20 Voluntary Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . 51
Section 3.21 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.1 Conditions Precedent to Initial Credit Extensions . . . . . . . . . . . . . . . . . . 52
Section 4.2 Additional Conditions Precedent to Each Loan . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.2 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.3 Notice; Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.4 Maintenance of Corporate Existence and Properties . . . . . . . . . . . . . . . . . . 57
Section 5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.6 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.7 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.9 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.10 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.11 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.12 Maximum Funded Debt Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.13 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.14 Minimum Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.15 Revenue Producing Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.16 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.17 Notification of Releases of Hazardous Materials . . . . . . . . . . . . . . . . . . . 60
Section 5.18 Environmental Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 5.19 Chattel Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 5.20 Lockbox; Cash Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 5.21 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.1 Limitations on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.2 Limitations on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.3 Limitations on Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.4 Loans, Advances and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.5 Limitations on Fundamental Changes; Disposition of Assets . . . . . . . . . . . . . . 62
Section 6.6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.7 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.8 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.9 Transactions with Affiliates and Other Persons . . . . . . . . . . . . . . . . . . . . 63
Section 6.11 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 6.12 Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 7. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.2 Optional Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.3 Automatic Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.4 Additional Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 8. RELATION OF BANKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
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Section 8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.3 Appointment of Additional Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.4 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.5 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.6 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.7 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.9 Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.10 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.11 Pro Rata Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.12 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.13 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 8.14 No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.15 Third Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 9. ASSIGNMENTS, PARTICIPATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 9.1 Assignments, Participations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 10. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 10.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.1 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.2 Survival of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.3 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 11.6 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 11.7 Expenses; Documentary Taxes; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 78
Section 11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 11.9 Notification of Addresses, Lending Offices, Etc. . . . . . . . . . . . . . . . . . . 79
Section 11.10 Controlling Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 11.11 Table of Contents; Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . 80
Section 11.12 Waivers and Release of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 11.13 Grant of Security Interest; Ratification of Documents . . . . . . . . . . . . . . . 80
Section 11.14 Restatement and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 11.15 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 11.16 Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 11.17 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 11.18 Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.19 ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 11.20 No Oral Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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Exhibits:
A - Form of Compliance Certificate
B - Form of Loan Formula Certificate
C - Form of Notice of Borrowing
D - Form of Notice of Conversion/Continuation
E - Form of Revolving Credit Note
F - Form of Term Note
G - Form of Credit Request
H - Form of Assignment and Acceptance
Schedules:
I - Commitments
1.01A - Ineligible Foreign Countries
1.01B - Permitted International Customers
2.4 - Litigation
2.13 - Subsidiaries
3.1 - Term Note Principal Payments
6.1 - Permitted Existing Indebtedness
6.9 - Transactions with Affiliates
11.8 - Lending Offices; Addresses for Notices
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THIRD AMENDED AND RESTATED LOAN AGREEMENT
This THIRD AMENDED AND RESTATED LOAN AGREEMENT is entered into as of
June 20, 1997, by and between XXXXXX PETROLEUM SERVICES CORP., a Delaware
corporation (the "Borrower"), formerly known as Xxxxxx Corporation, a Delaware
corporation, successor by merger to Xxxxxx Petroleum Services Corp. ("DPSC"), a
Delaware corporation, the SEVERAL FINANCIAL INSTITUTIONS THAT ARE PARTIES TO
THIS AGREEMENT (collectively, the "Banks" and individually a "Bank"), and XXXXX
FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as agent for the Banks (the "Agent").
W I T N E S S E T H:
WHEREAS, DPSC and Xxxxx Fargo Bank (Texas), National Association,
formerly known as First Interstate Bank of Texas, N.A. ("Xxxxx Fargo"), in its
capacity as the sole lender thereunder, entered into a Second Amended and
Restated Loan Agreement dated as of December 13, 1995 (the "Initial
Agreement"), whereby the Bank agreed to make available to DPSC credit upon the
terms and conditions set forth therein; and
WHEREAS, effective as of June 5, 1996, DPSC and Xxxxx Fargo entered
into a First Amendment to Second Amended and Restated Loan Agreement (the
"First Amendment"); and
WHEREAS, pursuant to a Plan and Agreement of Merger, effective as of
June 6, 1996, DPSC merged with and into Xxxxxx Corporation, a Delaware
corporation, and Xxxxxx Corporation amended its Certificate of Incorporation to
change its name to "Xxxxxx Petroleum Services Corp." (the "Merger
Transaction"); and
WHEREAS, on June 11, 1996, but effective as of June 6, 1996, the
Borrower and Xxxxx Fargo entered into an Assumption Agreement (the "Assumption
Agreement"), whereby the Borrower assumed all the duties, liabilities, and
obligations of DPSC in and under the Initial Agreement, as amended by the First
Amendment, and the other Loan Documents (as defined in the Initial Agreement)
and the Loan Documents (as defined in the Initial Agreement) were amended to
substitute the Borrower for DPSC under such documents, all in accordance with
the terms of the Assumption Agreement; and
WHEREAS, effective as of December 13, 1996, Borrower and Xxxxx Fargo
entered into a Second Amendment to Second Amended and Restated Loan Agreement
(the "Second Amendment"); and
WHEREAS, the Initial Agreement, as amended by the First Amendment and
the Second Amendment and the Assumption Agreement, is hereinafter sometimes
called the "Prior Loan Agreement"; and
WHEREAS, the Borrower has requested that the Agent and the Banks amend
and restate the Prior Loan Agreement in its entirety to (i) increase the
amounts available to the Borrower under the revolving credit facility and the
term loan facility and (ii) to modify and amend certain other provisions of the
Prior Loan Agreement; and
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WHEREAS, the Prior Loan Agreement is being amended and restated by
this Agreement in order to reflect the agreements of the parties hereto and to
make the requested amendments on the terms and conditions set forth herein; and
WHEREAS, this Agreement does not extinguish the obligations of the
Borrower under, or discharge or release the liens and security interests of,
the Prior Loan Agreement, the Prior Term Note, the Prior Revolving Credit Note,
the Loan Documents (as defined in the Prior Loan Agreement) or any other
document executed in connection with, evidencing, securing or pertaining to the
Prior Loan Agreement, the Prior Term Note, the Prior Revolving Credit Note; and
nothing contained in this Agreement shall be construed as a substitution or
novation of the Indebtedness under the Prior Loan Agreement, the Prior Term
Note, the Prior Revolving Credit Note, or the instruments securing same, all of
which shall remain in full force and effect except as modified hereby or by any
other instruments executed in connection with this Agreement;
NOW, THEREFORE, to induce the Banks to extend credit and financial
accommodations to the Borrower and in consideration of the mutual agreements,
provisions and covenants contained herein and such other good and valuable
considerations, the receipt and sufficiency of which are acknowledged hereby,
the parties hereto hereby agree to amend and restate the Prior Loan Agreement
as follows:
ARTICLE 1. DEFINITIONS AND GENERAL RULES. The following definitions and
general rules will apply hereto:
Section 1.1 General Rules For the purposes of this Agreement:
(a) The terms defined in this Article 1, unless the
context requires otherwise, will have the meanings applied to them in Section 1
and will include the plural as well as the singular. Additional definitions
may be found in the preamble and throughout this Agreement;
(b) All accounting terms not otherwise defined herein
will have the meanings assigned to them in accordance with GAAP; and
(c) The words "herein," "hereof," "hereunder" and words
of similar import refer to this Agreement as a whole and not to a particular
article, section, paragraph or other subdivision.
Section 1.2 Definitions. As used in this Agreement, the following
terms will have the following meanings unless the context requires otherwise:
Accounts means with respect to any Person all of such Person's
accounts, chattel paper, contract rights, instruments and retail installment
contracts arising out of goods sold or leased (and in each case actually
delivered) or for services rendered by such Person.
Acquisition means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a)
the acquisition of all or substantially all of the assets of a Person, or of
any business or division of a Person, (b) the acquisition of in excess of 50%
of the capital stock of a corporation (or similar entity), which stock
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has ordinary voting power for the election of the members of the acquiree's
board of directors or persons exercising similar functions (other than stock
having such power only by reason of the happening of a contingency), or the
acquisition of in excess of 50% of the partnership interests or equity of any
Person not a corporation which acquisition gives the acquirer the power to
direct or cause the direction of the management and policies of the acquiree,
or (c) a merger or consolidation or any other combination with another Person
(other than a Person that is a Subsidiary) provided that the Borrower or a
Subsidiary of the Borrower is the surviving entity.
ADI means Air Drilling International, Inc., a Delaware
corporation.
ADI Acquisition Agreement means that certain Stock Purchase
and Sale Agreement dated as of May 8, 1997, as amended by Amendment No. 1
thereto dated May 30, 1997, between Borrower, ADI, the shareholders of ADI
("ADI Shareholders") and the preferred shareholders of Services (the "Services
Shareholders" and, together with the ADI Shareholders, the "Selling
Shareholders").
ADI Acquisition Documents means the ADI Acquisition Agreement
and all other agreements or instruments delivered in connection therewith in
order to consummate the Air Drilling Acquisition.
Adjustment Date has the meaning specified in Section 3.10(c)
hereof.
Affiliate of any Person means any Person that, directly or
indirectly, controls or is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through ownership of voting securities,
membership interests or by contract or otherwise.
Agent means Xxxxx Fargo Bank (Texas), National Association in
its capacity as agent for the Banks hereunder, and any successor agent arising
under Section 8.10.
Agreement means this Third Amended and Restated Loan Agreement
as originally executed or hereafter renewed, extended, modified, amended or
restated.
Air Drilling Acquisition means the acquisition by Borrower of
(a) all of the outstanding capital stock of ADI and (b) all of the outstanding
preferred stock of Air Drilling Services, Inc., a Wyoming corporation
("Services"), along with consummation of the other transactions contemplated by
the ADI Acquisition Agreement.
Applicable Margin means, for any day, the specified number of
Basis Points denominated "LIBOR Margin" or "Base Rate Margin," as applicable,
on Schedule 3.10 attached hereto, based upon the Funded Debt Ratio, such
percent to change when and as the Funded Debt Ratio changes, effective on the
date of each such change, determined in accordance with the provisions of
Section 3.10(c) hereof.
Asset Sale means any sale, lease or other disposition
(including any such transaction effected by way of merger or consolidation and
any condemnation of property
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(or any transfer or disposition of property in lieu of condemnation for which
the Borrower or any of its Subsidiaries receives a condemnation award or other
compensation)) by the Borrower or any of its Subsidiaries, including without
limitation any sale-leaseback transaction, whether or not involving a Capital
Lease, of (i) any asset (other than Revenue Producing Assets) but excluding (a)
dispositions of inventory (excluding Revenue Producing Assets), cash, Cash
Equivalents and obsolete, unused or unnecessary equipment, in each case in the
ordinary course of business and (b) dispositions of any Property to the
Borrower or a Guarantor and (ii) Revenue Producing Assets not in the ordinary
course of business.
Assignee has the meaning specified in Section 9.1 of this
Agreement.
Assumption Agreement means that certain Assumption Agreement
dated effective June 6, 1996, by the Borrower in favor of Xxxxx Fargo assuming
the Indebtedness of DPSC to Xxxxx Fargo.
Bank has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include Xxxxx Fargo, including in its
capacity as Issuing Bank, and any successor Issuing Bank; for purposes of
clarification only, to the extent that Xxxxx Fargo or any successor Issuing
Bank may have any rights or obligations in addition to those of the Banks due
to its status as Issuing Bank, its status as such will be specifically
referenced.
Base Rate means, for any day, the higher of: (a) the sum of
0.50% per annum and the latest Federal Funds Rate; and (b) the Prime Rate.
Base Rate Loan means a Loan that bears interest based on the
Base Rate.
Basis Points means one one-hundredth of one percent (1/100 of
1%) per annum.
Borrowing means a borrowing hereunder consisting of Revolving
Credit Loans or Term Loans of the same Type made to the Borrower on the same
day by the Banks pursuant to Section 3.1 or 3.2 of this Agreement, and, other
than in the case of Base Rate Loans, having the same Interest Period.
Business Day means (i) a day (other than Saturday, Sunday or a
legal holiday) on which banks in Houston, Texas, are open for business, and
(ii) if the applicable Business Day relates to any Eurodollar Rate Loan, a day
which is a "Business Day" described in clause (i) hereof and which is also a
day for trading by and between banks in the London interbank Eurodollar market.
Canadian Subsidiary means a Subsidiary incorporated under the
laws of Canada or any province thereof.
Capital Lease means any lease of any property (whether real,
personal or mixed) that, in conformity with GAAP, should be accounted for as a
capital lease on the balance sheet of a Person.
Cash Collateral Account has the meaning specified in Section
5.20.
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Cash Equivalents mean any of the following: (a) securities
with maturities of two hundred seventy (270) days or less from the date of
acquisition thereof issued or fully guaranteed or insured as to payment of
principal and interest by the United States or any agency thereof, (b)
certificates of deposit and bankers acceptances with maturities of one hundred
eighty (180) days or less from the date of acquisition thereof issued by, and
deposit accounts at, any commercial bank having capital and surplus equal to or
greater than $250,000,000 and whose letters of credit are rated at least A-1 by
Standard & Poor's Corporation or P-1 by Xxxxx'x Investors Service, Inc., (c)
commercial paper of a domestic issuer rated at least either A-1 by Standard &
Poor's Corporation or P-1 by Xxxxx'x Investors Service, Inc. with maturities
of two hundred seventy (270) days or less from the date of acquisition thereof,
(d) money market mutual funds which are only allowed to purchase the types of
securities described in clause (a) of this definition, (e) repurchase
agreements with a term of thirty (30) days or less and entered into with a
commercial bank meeting the requirements of clause (b) of this definition and
which repurchase agreements are secured by first a security interest on
obligations of the type described in clause (a) of this definition that have a
market value (exclusive of accrued interest) at least equal to the amount of
each respective repurchase agreement, and (f) securities (other than "margin
stock" as such term is defined in Regulation U) rated at least either BBB by
Xxxxx'x Investors Service, Inc. or BBB by Standard & Poor's Corporation with
maturities of one hundred eighty (180) days or less from the date of
acquisition thereof.
CERCLA means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601, et seq., as
amended.
Change of Control means (a) any "person" or "group" within the
meaning of Section 13(d) and 14(d)(2) of the Exchange Act (a "Group") purchases
or otherwise acquires, directly or indirectly, "beneficial ownership" (as such
term is defined in Rule 13d-3 under the Exchange Act ("Beneficial Ownership")
of securities of the Borrower which, together with any securities owned
beneficially by any "affiliates" or "associates" of such Group (as such terms
are defined in Rule 12b-2 under the Exchange Act), shall represent more than
twenty-five percent (25%) of the combined voting power of the Borrower's
securities which are entitled to vote generally in the election of directors
and which are outstanding on the date immediately prior to the date of such
purchase or acquisitions; (b) a sale of all or substantially all of the assets
of the Borrower and its Subsidiaries to any Person or Group; (c) the
liquidation or dissolution of the Borrower; or (d) during any consecutive
two-year period, individuals who at the beginning of such period constituted
the Board of Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office.
Chattel Paper means a writing or writings which evidence both
a monetary obligation and a security interest in or a lease of specific goods,
including, without limitation, short-term rental agreements relating to
downhole drilling tools and other equipment.
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Closing Date means the date on which all of the conditions
precedent stated in Article 4 hereof have been met to the satisfaction of the
Majority Banks or waived by the Majority Banks in writing (and which in any
event must occur no later than June 30, 1997).
Code means the Internal Revenue Code of 1986, as amended from
time to time, any predecessor statute and any statute enacted in replacement
thereof.
Collateral means the properties and assets described in
Section 3.11 hereof.
Commitment means, for each Bank, the sum of its Line of Credit
Commitment and Term Loan Commitment.
Commitment Percentage means as to any Bank, the percentage of
the aggregate Line of Credit Commitment or Term Loan Commitment constituted by
such Bank's Commitment.
Compliance Certificate means a certificate substantially in
the form of Exhibit A.
Consignment Assets means Revenue Producing Assets (other than
those assets for which a Person has properly complied with the filing and
notice requirements of Section 9.114 of the UCC) sold or delivered on a "sale
on approval" or a "sale or return" (as each of those terms are defined in
Section 2.326 of the UCC), or on consignment, on memorandum, or on a guaranteed
sale basis.
Consolidated Capital Expenditures means, for any period, the
additions to property, plant and equipment and other capital expenditures
(excluding the costs of spare parts acquired or fabricated for use in repairs
of equipment which parts will be expensed when consumed) of the Borrower and
its Subsidiaries for such period, as the same are or would be set forth in a
consolidated statement of cash flows of the Borrower and its Subsidiaries for
such period, determined in accordance with GAAP.
Consolidated Debt Service means, for any period, the sum of
(a) Consolidated Interest Expense for such period and (b) all payments of
principal in respect of Indebtedness of the Borrower and its Subsidiaries
(including, without limitation, Subordinated Indebtedness and the principal
component of any payments in respect of Capital Leases) paid or payable during
such period, determined on a consolidated basis in accordance with GAAP.
Consolidated EBITDA means, for any period, the sum of: (i)
the Consolidated Net Income for such period, plus (ii) to the extent that any
of the items referred to in any of clauses (A) through (C) below were deducted
in calculating such Consolidated Net Income: (A) Consolidated Interest Expense
for such period, (B) depreciation and amortization expense of such Person and
its Subsidiaries for such period, and (C) all taxes measured by income of such
Person and its Subsidiaries; provided, however, that Consolidated Net Income
shall be computed for the purposes of this definition without regard to
expenses incurred by Borrower for stock-based compensation because of
Borrower's adoption of the fair-value-based method of accounting for employee
stock option plans pursuant to Financial Accounting Standards Board Statement
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No. 123, to non-cash write-ups and write-downs, and without giving effect to
extraordinary losses or extraordinary gains for such period.
Consolidated Excess Cash Flow means, for any period, the
Consolidated EBITDA of the Borrower for such period, less taxes measured by
income of the Borrower and its Subsidiaries paid in cash during such period,
less Consolidated Capital Expenditures paid in cash during such period, less
Consolidated Interest Expense paid in cash for such Period, less scheduled
payments of principal in respect of Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, Subordinated Indebtedness and the
principal component of any payments in respect of Capital Leases) paid during
such period, determined on a consolidated basis, in accordance with GAAP.
Consolidated Funded Debt means Funded Debt of a Person and its
Subsidiaries, as determined on a consolidated basis in accordance with GAAP.
Consolidated Interest Expense means, for any period, the
interest expense of the Borrower and its Subsidiaries (including amortization
of debt discounts, net cost under interest rate contracts and all of the
interest but not the principal component of rentals in respect of Capital Lease
obligations) determined on a consolidated basis for such period in accordance
with GAAP.
Consolidated Net Income means, for any period, a Person's
consolidated net income (or loss) after income and franchise taxes determined
in conformity with GAAP, but excluding: (a) the income of any other Person
(other than Subsidiaries) in which such Person or any of its Subsidiaries has
an ownership interest, unless and only to the extent received by such Person or
its Subsidiary in a cash distribution; (b) any after-tax gains or losses
attributable to asset dispositions or adjustments to the carrying value of
non-current assets; and (c) to the extent not included in clauses (a) and (b)
above, any after-tax extraordinary non-cash gains or extraordinary non-cash
losses.
Contingent Liabilities means any and all liabilities of a
Person, direct or indirect, for or in connection with the obligations, stock or
payment of dividends of any other Person, whether such liabilities arise by
guaranty, endorsement, agreement to purchase or repurchase, agreement to lease,
agreement to supply or advance funds (including, without limitation, agreements
to maintain working capital, solvency or other balance sheet conditions or
agreements to purchase stock or make capital contributions) or otherwise;
provided, however, that agreements to purchase or repurchase goods or services
and agreements to lease property entered into in the ordinary course of a
Person's business shall not be deemed to be "Contingent Liabilities."
Contractual Obligations means as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument to which such
Person is a party or by which it or any of its property is bound.
Conversion Date means any date on which the Borrower elects to
convert a Base Rate Loan to a Eurodollar Rate Loan or a Eurodollar Rate Loan to
a Base Rate Loan.
Convertible Currency means Dollars, British pounds sterling,
German deutsche marks, Italian lira, French francs, Norwegian Kroner, Swiss
francs, Canadian
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dollars, Japanese yen, Dutch gilders, and any other currency for which there is
a readily available and established exchange rate.
Credit Exposure means the sum of the undrawn amount of any
Letters of Credit then outstanding plus the aggregate amount of drafts paid
under Letters of Credit for which the Borrower has not reimbursed the Issuing
Bank.
Credit Extension means and includes (a) the making of any
Revolving Credit Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder.
Current Assets means at any date all assets of a Person that,
in accordance with GAAP, would be included as current assets on a balance sheet
of such Person on such date.
Current Liabilities means at any date all liabilities of a
Person that, in accordance with GAAP, would be included as current liabilities
on a balance sheet of such Person on such date.
Default means any event specified in Section 7.1 of this
Agreement, regardless of whether any requirement for the giving of notice or
the lapse of time has been satisfied.
Default Rate means the lesser of (i) a rate that is two
percentage points above the Prime Rate, as it varies, or (ii) the Maximum Rate,
as it varies.
Dollars, dollars and $ means dollars in lawful currency of the
United States of America.
Domestic Lending Office means, with respect to each Bank, the
office of such Bank designated as such on Schedule 11.8 hereto or such other
office of such Bank as such Bank may from time to time specify to the Borrower
and the Agent.
Eligible Accounts means, at any time, the amount equal to the
sum (without duplication) of (i) the aggregate unpaid amount of a Person's
Accounts for which invoices have been issued and payment for which is due
within 60 days, less any down payments plus (ii) the aggregate unpaid amount of
a Person's Accounts at the end of a calendar month for which invoices have not
been issued at the end of such calendar month but for which invoices have been
issued within twenty (20) days after the end of such calendar month and for
which payment is due within 60 days, less any down payments; provided, however,
there shall be excluded from Eligible Accounts (without duplication and only to
the extent otherwise included in Eligible Accounts):
(i) any amount billed and remaining unpaid more
than 120 days from issuance (or any amount remaining unpaid more than
90 days from the due date in the case of instruments, lease agreements
and chattel paper),
(ii) any amount due from suppliers of materials or
inventory to a Person but only to the extent that such Person is
indebted to
-8-
14
such suppliers with respect to materials or supplies purchased by such
Person from such suppliers,
(iii) any Account in which the Banks do not have a
valid and perfected first priority lien, mortgage or security
interest,
(iv) any Account arising from sales to or services
rendered for any Subsidiary or Affiliate of such Person,
(v) any Account arising from sales or leases to
or services rendered for any Governmental Authority (unless such
Governmental Authority is a Governmental Authority of the United
States of America and such Governmental Authority has properly
acknowledged the Agent's first priority security interests in such
Accounts to the satisfaction of the Agent with appropriate
assignments, to the Agent and Banks, and the Agent preapproves the
same in their reasonable discretion),
(vi) any Account arising from sales on a "sale or
return", "sale on approval" (as such terms are defined in the UCC),
consignment, or guaranteed sale basis,
(vii) any contra account and any Account which is
or may be subject to a right of setoff, claim or defense,
(viii) any Account of a Person due from a customer
whose principal place of business is located outside the United States
of America, and any Foreign Account of a Person,
(ix) any Account owed by an account debtor to a
Person, if more than twenty percent (20%) of the balances then
outstanding on accounts owed by such account debtor and any Affiliate
of the account debtor to such Person have remained unpaid for more
than one hundred twenty (120) days from the dates of their original
invoices (or have remained unpaid for more than ninety (90) days from
the due date in the case of instruments, lease agreements and chattel
paper),
(x) the amount of all discounts, allowances,
rebates, credits and adjustments claimed and available to such
Accounts,
(xi) the amount billed for or representing
retainage, if any, until all prerequisites to the immediate payment of
retainage have been satisfied,
(xii) any Account which, when aggregated with all
other Accounts of the same account debtor, constitutes more than 10%
of such Person's total Eligible Accounts before deductions made
pursuant to this clause, and
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(xiii) any Account reasonably rejected by the Agent
as unsuitable (the Agent to advise the Borrower which accounts are
rejected with 10 days advance notice).
Eligible Foreign Accounts means, at any time, the amount equal
to the Dollar equivalent of the aggregate unpaid amount (without duplication)
of a Person's (a) Accounts due from a customer whose principal place of
business is located outside of the United States of America and Canada and (b)
Foreign Accounts, in each instance payable in Convertible Currency; provided
that (i) such Accounts are secured by a letter of credit in form, substance and
amount, and from a bank, reasonably acceptable to the Agent, (ii) such Accounts
are secured by a valid and enforceable export insurance policy issued by the
Export-Import Bank of the United States or an insurance company acceptable to
the Agent, with appropriate assignments, in each case, to the Agent and the
Banks, and the Agent preapprove the same in their reasonable discretion, (iii)
(A) the obligor or its consolidated parent on such Account is Investment Grade,
and (B) the payment of said Account is not due from an office of the obligor
thereon located in one of the countries listed on Schedule 1.01A, or (iv) (A)
the obligor on such Account is pre-approved by the Agent in its reasonable
discretion or described on Schedule 1.01(B) and (B) the payment of said Account
is not due from an office of the obligor thereon located in one of the
countries listed on Schedule 1.01(A); and provided further that, in each
instance, such Accounts otherwise meet all of the requirements to be an
Eligible Account (other than clauses (iii), (v) and (viii) of the definition of
Eligible Accounts); provided further however, for the avoidance of doubt, the
term Eligible Foreign Accounts shall include invoiced and noninvoiced Accounts
of the nature described in that portion of the definition of Eligible Accounts
that precedes clause (i) thereof.
Eligible Jurisdictions means at any time with respect to any
Collateral (i) the jurisdictions listed on Schedule B attached to the Security
Agreement and the Subsidiary Security Agreements or, if any such jurisdiction
is designated on Schedule B as a "Non-Central Filing State", the counties or
parishes listed on Schedule B and (ii) any other jurisdiction in which
Collateral is located so long as Borrower delivers to Agent written notice that
Collateral is, or is to be, located in that jurisdiction within sufficient time
to permit Agent to continue or perfect its security interest in such Collateral
on a continuous basis and Borrower provides to Agent financing statements or
other documents, instruments and opinions reasonably required by Agent to grant
and perfect a first priority security interest (subject only to Permitted
Liens) in such Collateral.
Environmental Laws means any and all laws, subsequent
enactments, amendments and modifications, including without limitation,
federal, state and local laws, statutes, ordinances, rules, regulations,
permits, licenses, approvals, interpretations and orders of courts or
Governmental Authorities relating to the protection of human health or the
environment, including, but not limited to, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Materials.
EPA means the United States Environmental Protection Agency,
and any successor agency.
ERISA means the Employment Retirement Income Security Act of
1974, as amended from time to time, and any regulation promulgated thereunder.
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ERISA Affiliate means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
Eurocurrency Liabilities has the meaning assigned to such term
in Regulation D of the Federal Reserve Board, as in effect from time to time.
Eurodollar Lending Office means, with respect to each Bank,
the office of such Bank designated as such on Schedule 11.8 hereto or such
other office of such Bank as such Bank may from time to time specify to the
Borrower and the Agent.
Eurodollar Rate means, for each Interest Period for any
Eurodollar Rate Loan, an interest rate per annum (rounded upward, if necessary,
to the nearest one-sixteenth of one percent (1/16%)) determined pursuant to the
following formula:
Eurodollar Rate = LIBOR
---------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
Eurodollar Reserve Percentage means the maximum
reserve percentage in effect on the date LIBOR for such Interest
Period is determined (whether or not applicable to any Bank) under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period; and
LIBOR means the rate of interest per annum determined
by the Agent to be the arithmetic mean (rounded upward, if necessary,
to the nearest one-hundredth of one percent (1/100%)) of the rates of
interest per annum notified to the Agent as the rate of interest at
which dollar deposits in an amount approximately equal to the amount
of the Loan to be made or continued as, or converted into, a
Eurodollar Rate Loan and having a maturity equal to such Interest
Period would be offered to major banks in the London Interbank market
at their request at or about 11:00 a.m. (London Time) on the second
Business Day before the commencement of such Interest Period.
Eurodollar Rate Loan means a Loan that bears interest based on
the Eurodollar Rate.
Event of Default means any event specified in Section 7.1 of
this Agreement, provided that any requirement in connection with such event for
the giving of notice or lapse of time has been satisfied.
-11-
17
Exchange Act means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
Federal Funds Rate means, for any period, the rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for the previous day opposite the caption "Federal
Funds (Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such previous day will be the rate set forth in the
daily statistical release designated as the Composite 3:30 p.m. Quotations for
U.S. Government Securities, or any successor publication, published by the
Federal Reserve Bank of New York (including any such successor, the "Composite
3:30 p.m. Quotations") for such previous day under the caption "Federal Funds
Effective Rate" if on any relevant day the appropriate rate for such previous
day is not yet published in either H.15(519) or the Composite 3:30 p.m.
Quotations, the rate for such previous day will be the arithmetic mean of the
rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York City time) on that day by each of three 93) leading brokers
of Federal funds transactions in New York City, selected by the Agent.
Fee Letter has the meaning specified in subsection 3.7(a).
Foreign Accounts means with respect to any Person all of such
Person's Accounts which are generated from the sale or lease of goods or the
provision of services from installations of such Person outside of the United
States and Canada unless the invoices with respect to such Accounts are payable
by the account debtor from a location within the United States.
Foreign Subsidiaries means the foreign Subsidiaries of the
Borrower listed on Schedule 2.13 hereto and any other Subsidiary of the
Borrower that is not a U. S. Subsidiary or a Canadian Subsidiary.
Funded Debt means Indebtedness.
Funded Debt Ratio means at any date the ratio of (i)
Consolidated Funded Debt of the Borrower on such date to (ii) the Consolidated
EBITDA of the Borrower for the twelve consecutive calendar months ending on
such date.
GAAP means generally accepted accounting principles set forth
in the Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and in statements by the Financial Accounting
Standards Board that are applicable to the circumstances as of the date of
determination; and the requisite that such principles be applied on a
consistent basis shall mean that the accounting principles observed in a
current period are comparable in all material respects to those applied in a
preceding period.
Governmental Authority means any nation or government, any
state, province, county, city or other political subdivision, agency or
instrumentality exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
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Guarantors mean collectively each of the Canadian Subsidiaries
and each of the U.S. Subsidiaries of the Borrower as of the date of this
Agreement, as identified on Schedule 2.13 attached hereto, and each other
Subsidiary that executes and delivers a Guaranty.
Guaranty means one or more continuing guaranty agreements in
favor of the Agent and the Banks, in form and substance acceptable to the
Majority Banks, to be executed by the Guarantors, as the same may be renewed,
modified, extended, supplemented or amended, at any time or from time to time.
Hazardous Materials means any substance or material which is
or becomes regulated by, or which may form the basis of liability under, any
Environmental Law.
Hazardous Materials Contamination means the contamination
(whether presently existing or hereafter occurring) of the buildings, facilities
or improvements, air, soil, groundwater or surface water of the Property or
other property as a result of the presence of Hazardous Materials on the
Property at any time.
Hedging Agreement means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
Indebtedness means, for any Person, the sum of the following
(without duplication): (a) all obligations of such Person for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds and similar
instruments; (c) all obligations of such Person to pay the deferred purchase
price of Property or services, except trade accounts payable (other than for
borrowed money) arising in the ordinary course of business of such Person; (d)
all obligations under Capital Leases; (e) all Indebtedness and other
obligations secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person (provided, however, that if such
Indebtedness is not assumed by a Person, the amount of such Indebtedness shall
not be deemed to exceed the greater of the book value or fair market value of
the collateral subject to such Lien); (f) guaranties, endorsements (other than
for collection in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds to
invest in any Person, or otherwise to assure a creditor against loss; (g) all
financial obligations or undertakings of such Person to maintain or cause to be
maintained the financial position or covenants of other Persons; and (h) all
obligations of such Person under or in connection with Hedging Agreements once
such obligations become "debt" according to GAAP.
Indemnified Parties means collectively the Agent and each Bank
and all of their respective directors, officers, employees, agents, successors,
attorneys and assigns.
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Initial Projections means the projections and analysis of the
income statement and balance sheet for the Borrower and its Subsidiaries
(giving effect to the Air Drilling Acquisition), on a consolidated and
consolidating basis, for the five year period following the Closing Date.
Insolvency or Insolvent means, with reference to a Person
other than a partnership, (i) the sum of its debts is greater than all of its
properties, at a fair valuation, exclusive of any properties transferred,
concealed, or removed with intent to hinder, delay, or defraud creditors, or
(ii) is generally not able to pay its debts as they become due; and with
reference to a partnership, a Person is insolvent hereunder if (a) its
financial condition is such that the sum of its debts is greater than the
aggregate of, at a fair valuation, (i) all of such partnership's properties
exclusive of properties transferred, concealed or removed with intent to
hinder, delay or defraud creditors of the partnership, and (ii) the sum of the
excess of the value of each general partner's non-partnership properties,
exclusive of properties transferred, concealed or removed with intent to
hinder, delay or defraud creditors, over such partner's non-partnership debts,
or (b) is generally not able to pay its debts as they become due.
Interest Payment Date means, with respect to each Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Loan, and
with respect to Base Rate Loans, the last day of each calendar quarter and each
date a Base Rate Loan is converted into a Eurodollar Rate Loan or a Eurodollar
Rate Loan is converted to a Base Rate Loan or any Loan is prepaid; provided,
however, that if any Interest Period for any Eurodollar Rate Loan exceeds three
(3) months, interest shall also be paid on the date which falls three (3)
months after the beginning of such Interest Period.
Interest Period means, with respect to any Eurodollar Rate
Loan, the period commencing on the Business Day such Loan is disbursed or
continued or on the Conversion Date on which such Loan is converted to such
Eurodollar Rate Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period pertaining to a
Eurodollar Rate Loan would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall
end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to a
Eurodollar Rate Loan that begins on the last 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 Business Day of the calendar month at
the end of such Interest Period;
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(iii) no Interest Period for any Term Loans shall
extend beyond the Term Maturity Date and no Interest Period for any
Revolving Credit Loan shall extend beyond the Line of Credit
Termination Date; and
(iv) no Interest Period applicable to a Term Loan
or portion thereof shall extend beyond any date upon which is due any
scheduled principal payment in respect of the Term Loans unless the
aggregate principal amount of Term Loans represented by Base Rate
Loans, or by Eurodollar Rate Loans having Interest Periods that will
expire on or before such date, equals or exceeds the amount of such
principal payment.
Interest Rate Contracts means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
Investment Grade, with respect to any Person, means a Person
who has (i) long term unsecured non-credit enhanced Indebtedness is rated BBB-
or better by Standard & Poor's Rating Group or Baa3 by Xxxxx'x Investors
Service, Inc., (ii) total annual revenues in excess of $1,000,000,000 and (iii)
consolidated net worth of at least $250,000,000.
IRS means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
Issue means, with respect to any Letter of Credit, to issue or
to extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing," and "Issuance" have corresponding
meanings.
Issuing Bank means, with respect to a Letter of Credit, Xxxxx
Fargo, and any successor Issuing Bank.
Lending Office means with respect to any Bank, the office or
offices of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, opposite its name
on Schedule 11.8 or such other office or offices of such Bank as such Bank may
from time to time specify to the Borrower and the Agent.
Letter of Credit means a letter of credit Issued pursuant to
Section 3.2 hereof and Letters of Credit means the letters of credit so Issued.
Letter of Credit Advance means each Bank's participation in
any Letter of Credit Borrowing in accordance with its Line of Credit Commitment
Percentage.
Letter of Credit Agreements means the application and letter
of credit agreements now or hereafter executed by the Borrower, such agreements
to be on the Issuing Bank's standard form (with such changes thereto as the
Borrower and the Issuing Bank may agree from time to time) and completed in
form and substance satisfactory to the Issuing Bank.
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Letter of Credit Borrowing means an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made nor converted into a Borrowing of Revolving
Credit Loans under Section 3.19 hereof.
Letter of Credit Sub-Limit means the aggregate sum of Five
Million Dollars ($5,000,000).
Lien shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute or
contract, and including but not limited to the security interest or lien
arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting the property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property which it or
he has acquired or holds subject to a conditional sale agreement, financing
lease or other arrangement pursuant to which title to the property has been
retained by or vested in some other Person for security purposes.
Line of Credit means the line of credit provided for in
Section 3.2 hereof.
Line of Credit Commitment Percentage means, for each Bank,
such Bank's Commitment Percentage of the Line of Credit Commitments as set
forth opposite such Bank's name in Schedule I under the heading "Line of Credit
Commitment Percentage," as the same may be reduced or adjusted as a result of
one or more assignments pursuant to Article 9.
Line of Credit Commitments means the commitments of the Banks
to make Loans pursuant to Section 3.2 and Issue or participate in the Issuance
of Letters of Credit pursuant to Section 3.2 in the maximum aggregate amount of
the lesser of (a) Fifteen Million Dollars ($15,000,000) or (b) the Loan
Formula, and Line of Credit Commitment means, for each Bank, such Bank's
commitment to make Loans or participate in Credit Exposure in an aggregate
amount equal to its Commitment Percentage of the Line of Credit Commitments.
Line of Credit Termination Date means the earlier to occur of
(i) June 30, 2002, or (ii) the date on which the Line of Credit Commitment is
terminated pursuant to the terms hereof.
Loan means an extension of credit by a Bank to the Borrower in
the form of a Term Loan, a Revolving Credit Loan, or Letter of Credit Advance
and Loans means the Term Loans, the Revolving Credit Loans and the Letter of
Credit Advances.
Loan Documents means this Agreement, the Notes, the Letter of
Credit Agreements, the Security Instruments, the Interest Rate Contracts, and
any and all other documents and instruments executed in connection therewith or
contemplated thereby.
Loan Formula means at any time the amount equal to the sum of
(without duplication) (i) an amount equal to 80% of the Eligible Accounts of
the Borrower, its U.S.
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Subsidiaries and its Canadian Subsidiaries, plus (ii) an amount equal to 80% of
the Eligible Foreign Accounts of the Borrower and the Foreign Subsidiaries, in
each case as of the last day of the preceding month; provided that at no time
shall the amount determined by reference to Eligible Foreign Accounts be
greater than 60% of the Loan Formula
Loan Formula Certificate means a loan formula certificate in
substantially the form attached hereto as Exhibit B, setting forth the
computation of the Loan Formula as of the close of business on the last day of
the month immediately preceding the day that such loan formula certificate is
delivered on behalf of the Borrower to the Agent pursuant to Section 5.1
hereof.
Majority Banks means at any time Banks holding at least
sixty-six and two-thirds percent (66 2/3%) of the then aggregate unpaid
principal amount of the Loans, or of, if no such principal amount is then
outstanding, Banks having at least sixty-six and two-thirds percent (66 2/3%)
of the Commitments.
Mandatory Prepayments means such payments from the Borrower to
the Banks as may be necessary to reduce the aggregate principal amount of
indebtedness and liabilities of the Borrower under the Revolving Credit Notes
(including total Credit Exposure) to an amount permitted by the Loan Formula
and this Agreement.
Material Adverse Effect means a material adverse effect on (a)
the business, assets, operations, or financial or other condition of the
Borrower and its Subsidiaries taken as a whole or (b) the Borrower's ability to
perform under any Loan Document to which it is a party or to pay the
Obligations in accordance with the terms of this Agreement and the other Loan
Documents or the Agent's and the Bank's rights to enforce or collect the
Obligations.
Material Asset Sale means (i) each individual Asset Sale by
the Borrower or any of its Subsidiaries the gross sales price of which exceeds
the sum of $50,000 and (ii) all Asset Sales by the Borrower or any of its
Subsidiaries in any fiscal year the aggregate gross sales price of which
exceeds $250,000.
Material Foreign Subsidiaries means, at any time, any Canadian
Subsidiary, any Subsidiary organized under the laws of Venezuela or Scotland
and any other Foreign Subsidiary that, together with its Subsidiaries, (a)
accounted for more than 5% of the revenue of the Borrower and its Subsidiaries
determined on a consolidated basis for the then most recently completed fiscal
year of the Borrower, or (b) was the owner of more than 5% of the assets of the
Borrower and its Subsidiaries determined on a consolidated basis at the end of
such fiscal year of the Borrower, all as shown in the case of (a) and (b) on
the consolidated financial statements of the Borrower and its Subsidiaries for
such fiscal year of the Borrower.
Maximum Rate means the maximum lawful rate of interest
permitted by applicable usury laws, now or hereafter enacted, which interest
rate shall change when and as such laws change, to the extent permitted by such
laws, effective on the day such change in such laws becomes effective;
provided, however, that the term "Maximum Rate" shall mean a rate of interest
equal to five percentage points above the Prime Rate, as it varies, if there is
no Maximum Rate under applicable usury laws.
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Multiemployer Plan means a "multiemployer plan" (within the
meaning of Section 4001(a)(3) of ERISA) to which the Borrower or any ERISA
Affiliate makes, is making, or is obligated to make contributions or has made,
or, during the preceding three calendar years, been obligated to make,
contributions.
Net Cash Proceeds means, with respect to any transaction or
event, an amount equal to the cash proceeds received by the Borrower or any of
its Subsidiaries from or in respect of such transaction or event (including any
cash proceeds received as income or other proceeds of any noncash proceeds of
any Asset Sale), less (x) any expenses reasonably incurred by such Person in
respect of such transaction or event and (y) if such transaction or event is an
Asset Sale, (i) the amount of any Indebtedness secured by a Lien on any asset
disposed of in such Asset Sale and discharged from the proceeds thereof and
(ii) any taxes actually paid or to be payable by such Person (as estimated by a
senior financial or accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower) in respect of such Asset Sale.
Non-Redeemable Stock means capital stock issued by the
Borrower, provided that neither the Borrower nor any of its Subsidiaries has
any obligation to redeem or purchase such stock or to exchange such stock for,
or convert such stock to, any other security (other than Non-Redeemable Common
Stock), whether such obligation arises pursuant to the terms of such stock or
of any agreement relating thereto or otherwise and whether or not such
obligation exists in all circumstances or only upon the occurrence of a
particular event or condition or upon the passage of time or otherwise.
"Non-Redeemable Common Stock" means Non-Redeemable Stock that is common stock
issued by the Borrower.
Note means a Term Note or a Revolving Credit Note, and Notes
means the Term Notes and the Revolving Credit Notes, or all of them, as any or
all of the same may be renewed, rearranged, modified, increased or extended at
any time or from time to time.
Notice of Borrowing means a notice given by the Borrower to
the Bank pursuant to Section 3.3 of this Agreement, in substantially the form
of Exhibit C to this Agreement.
Notice of Conversion/Continuation means a notice given by the
Borrower to the Bank pursuant to Section 3.4 of this Agreement, in
substantially the form of Exhibit D to this Agreement.
Obligations means all Loans, Credit Exposure, and other
Indebtedness, advances, debts, liabilities, obligations, covenants and duties
owing by the Borrower or any of its Subsidiaries, or any of them, to any Bank,
the Agent, or any of the Indemnified Parties under this Agreement or any other
Loan Documents, of any kind or nature, present or future, whether or not
evidenced by any note, draft, acceptance, open account, letter of credit,
surety agreement, guaranty or other instrument, whether or not for the payment
of money, whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, whether joint or
several, due or to become due, now existing or hereafter arising and however
acquired. The term "Obligations" includes, without limitation, all interest,
charges, reasonable expenses, reasonable fees, reasonable attorneys' fees and
disbursements and any other sum
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chargeable to the Borrower or any of its Subsidiaries under this Agreement or
any other Loan Document.
Other Taxes has the meaning specified in Section 3.13(b)
hereof.
Participant has the meaning specified in Section 9.1(d).
PBGC means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
Pension Plan means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which the Company sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or in
the case of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five (5)
plan years.
Permitted Liens means (i) liens created by the Security
Instruments or this Agreement, (ii) liens for taxes, assessments and other
governmental charges not yet payable, or the validity of which are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been set aside in accordance with GAAP on the books of the
Borrower or its Subsidiaries, as applicable, (iii) deposits or pledges of cash
or Cash Equivalents to secure the payment of workmen's compensation,
unemployment insurance or other social security benefits or obligations, public
or statutory obligations, surety or appeal bonds or other obligations of a like
general nature incurred in the ordinary course of business, provided all such
Liens in the aggregate could not reasonably be expected to have a Material
Adverse Effect, (iv) landlords', mechanics', materialmen's, warehousemen's,
carriers', vendors' or other like liens arising by operation of law in the
ordinary course of business securing obligations which are not overdue for a
period longer than 90 days, or which are being contested in good faith by
appropriate proceedings and against which the Borrower or its Subsidiaries, as
applicable, has provided adequate reserves in accordance with GAAP, (v)
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other minor title exceptions with respect
to property which do not materially impair the use of such property in the
operation of the business of the Borrower or its Subsidiaries, as applicable,
or the value of such property, (vi) inchoate statutory liens, liens arising
under ERISA to secure current service pension liabilities as they are incurred
under the provisions of Plans from time to time in effect, (vii) purchase money
Liens or purchase money security interests on any fixed asset acquired or held
by the Borrower in the ordinary course of business, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring such fixed asset; provided that any such Lien attaches to such fixed
asset concurrently with or within thirty (30) days after the acquisition
thereof and provided that at the time any such purchase money Lien or purchase
money security interest attaches, the aggregate principal amount of all
Indebtedness outstanding at any one time that is secured by such purchase money
Lien or purchase money security interest shall not exceed $2,000,000, (viii)
adverse claims and disputes that (A) arise with respect to the Borrower's or
any of its Subsidiaries' Accounts, (B) arise in the ordinary course of each
Person's business, (C) were not incurred in connection with the borrowing of
money or obtaining of advances or credit, (D) do not in the aggregate (I)
materially detract from the value of each Person's Accounts or (II) materially
impair, or interfere with, the operation of each Person's business, and (E)
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would not otherwise cause or result in a Default or Event of Default, and (ix)
liens permitted in the Security Instruments or otherwise by the Majority Banks
in writing.
Person means any corporation, limited liability company,
partnership, trust, estate, individual, unincorporated business entity or
governmental department, administrative agency or instrumentality.
Plan means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Borrower or any of its Subsidiaries sponsors or
maintains or to which the Borrower or any of its Subsidiaries makes, is making
or is obligated to make contributions and includes any Pension Plan.
Post Closing Condition Letter means that certain post closing
condition letter agreement dated as of June 20, 1997, between the Borrower and
the Agent, as the same may be amended, supplemented, modified or restated from
time to time at any time.
Prime Rate means the variable per annum rate of interest most
recently announced by the Agent as its "prime rate," with the understanding
that the Agent's "prime rate" may be one of several base rates and serves as a
basis upon which effective rates of interest from time to time are calculated
for loans making reference thereto and may not be the lowest of the Agent's
base rates.
Prior Revolving Credit Note means that certain promissory note
dated December 13, 1996, executed by the Borrower and payable to the order of
Xxxxx Fargo in the original principal amount of $3,000,000 which note was given
in renewal, rearrangement, and modification of but not in novation or discharge
of that certain promissory note dated January 15, 1993, executed by DPSC and
payable to the order of Xxxxx Fargo in the original principal amount of
$4,875,370.04, which note was assumed by Borrower under the Assumption
Agreement and which note was given in renewal, rearrangement, increase and
modification of, but not in novation or discharge of, that certain revolving
credit note dated November 8, 1991, executed by the Borrower and payable to the
order of the Bank in the original principal amount of $5,000,000.
Prior Term Note means that certain promissory note dated
December 1, 1993, executed by the Borrower and payable to the order of Xxxxx
Fargo in the original principal amount of $10,000,000.
Property means any right or interest of a Person in or to
property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
Regulation U means Regulation U of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Part 221.
Regulation X means Regulation X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Part 224.
Reimbursement Obligation has the meaning specified in Section
3.19(c) hereof.
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Reportable Event means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
Requirement of Law means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.
Responsible Officer means, with respect to (i) any
corporation, the Chairman of the Board of Directors, the President, the chief
executive officer, the chief operating officer or the chief financial officer
(or with respect to financial reporting and compliance with financial
covenants, the chief financial officer or treasurer), and (ii) any partnership,
the aforementioned officers of (x) such partnership's corporate managing
partner or (y) in the event the managing partner is a partnership, such
partnership managing partner's corporate managing partner.
Revenue Producing Assets means, for any Person, such Person's
inventory of (i) down-hole drilling tools and fishing tools that are used in a
drilling, fishing or workover application ("revenue producing tools"), (ii)
components, subassemblies, and expendable (replacement) parts of or for revenue
producing tools, (iii) revenue producing tools and expendable (replacement)
parts therefor in production, and (iv) raw materials used to build the assets
described in the foregoing clauses (i), (ii) and (iii) used by a Person or held
by such Person for lease or rent to such Person's customers.
Revolving Credit Loan means any loan by a Bank to the Borrower
pursuant to Section 3.2 of this Agreement and may be a Base Rate Loan or
Eurodollar Rate Loan, and Revolving Credit Loans means all loans by the Banks
to the Borrower pursuant to Section 3.2 of this Agreement.
Revolving Credit Note means a promissory note of the Borrower
payable to the order of a Bank, in substantially the form attached hereto as
Exhibit A, evidencing the aggregate indebtedness of the Borrower to such Bank
resulting from the Revolving Credit Loans made by such Bank, as the same may be
replaced, renewed, extended, modified, supplemented or rearranged from time to
time or at any time.
Security Agreement-Pledges means (i) that certain Security
Agreement-Pledge dated as of even date herewith, between the Borrower, as
debtor, in favor of the Agent for the benefit of and as representative of the
Banks, as secured party, and (ii) any one or more other security agreements in
form and substance acceptable to the Majority Banks to be executed on behalf of
the Borrower and its Subsidiaries, in each instance, as the same may be
renewed, modified, extended, supplemented, rearranged, amended or restated, at
any time from time to time.
Security Agreements means (i) that certain Third Amended and
Restated Security Agreement dated as of even date herewith, between the
Borrower, as debtor, in favor of the Agent for the benefit and as
representative of the Banks, as secured party, amending and restating that
certain Second Amended and Restated Security Agreement dated as of December 1,
1993, between DPSC, as debtor, and Xxxxx Fargo, as secured
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party, and (ii) any one or more other security agreements in form and substance
acceptable to the Majority Banks, to be executed on behalf of the Borrower, in
each instance, as the same may be renewed, modified, extended, supplemented,
rearranged, amended, or restated, at any time or from time to time.
Security Instruments means the Security Agreements, the
Security Agreement-Pledges, the Subsidiary Security Agreements, the Subsidiary
Security Agreement-Pledges, and Guaranties, together with all financing
statements and other documents necessary for recordation of the same or
perfection of the liens, mortgages and security interests granted thereby.
Selling Shareholders has the meaning specified in the
definition of "ADI Acquisition Agreement" in Section 1.1 hereof.
Subordinated Indebtedness means the Indebtedness of a Person,
calculated in accordance with GAAP consistently applied, heretofore or
hereafter incurred, that, by the express terms of the instrument evidencing or
creating such Indebtedness or by the terms of a subordination agreement in form
and substance satisfactory to the Majority Banks, is validly and effectively
made subordinate and subject in right to payment, to whatever extent the
Majority Banks may require, to the prior payment of the Obligations to the
Banks.
Subsidiary means, with respect to any Person, any corporation,
association, partnership, joint venture, limited liability company, or other
business entity, of which more than 50% of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
Subsidiary Security Agreement-Pledges means one or more
security agreements-pledges securing the Obligations, now or hereafter executed
by each U.S. Subsidiary and Material Foreign Subsidiary, in each case, that has
a U.S. Subsidiary or a Material Foreign Subsidiary, in form and substance
acceptable to the Agent and the Majority Banks, as the same may be renewed,
modified, extended, supplemented, rearranged, amended or restated, at any time
from time to time.
Subsidiary Security Agreements means one or more security
agreements securing the Obligations, now or hereafter executed by each U.S.
Subsidiary and Material Foreign Subsidiary, in form and substance acceptable to
the Agent and the Majority Banks, as the same may be renewed, modified,
extended, supplemented, rearranged, amended or restated, at any time from time
to time.
Tangible Net Worth of a Person means, at any time, the total
assets of such Person less the total liabilities of such Person as set forth on
its balance sheet at such date, prepared in accordance with GAAP consistently
applied, plus Subordinated Indebtedness of such Person, except that the sum of
the following shall be excluded therefrom: (i) goodwill, including any amounts
(however designated on such balance sheet) representing the cost of acquisition
of Subsidiaries in excess of underlying tangible assets, unless an appraisal of
such assets made by a reputable firm of appraisers acceptable to the Majority
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Banks at the time of acquisition indicates sufficient value to cover such
excess, (ii) patents, trademarks, copyrights, intangibles and other similar
assets, (iii) any obligations due from holders of equity interests in such
Person, and (iv) any treasury stock that is classified as an asset.
Taxes has the meaning specified in Section 3.13(a) hereof.
Term Loan means any extension of credit by a Bank to the
Borrower pursuant to Section 3.1 of this Agreement and may be a Base Rate Loan
or a Eurodollar Rate Loan, and Term Loans means all extensions of credit by the
Banks to the Borrower pursuant to Section 3.1 of this Agreement.
Term Loan Commitment Percentage means, for each Bank, such
Bank's Commitment Percentage of the Term Loan Commitments as set forth opposite
such Bank's name in Schedule I under the heading "Term Loan Commitment
Percentage," as the same may be reduced or adjusted as a result of one or more
assignments pursuant to Article 9.
Term Loan Commitments means the commitments of the Banks to
make Loans pursuant to Section 3.1 in the maximum aggregate amount of Forty-one
Million Five Hundred Thousand Dollars ($41,500,000) and Term Loan Commitment
means, for each Bank, such Bank's commitment to make Loans in an aggregate
amount equal to its Commitment Percentage of the Term Loan Commitments.
Term Maturity Date means the earlier to occur of (a) June 30,
2002 or (b) the date on which the Term Notes shall be accelerated in accordance
with the provisions of this Agreement.
Term Note means a promissory note of the Borrower, payable to
the order of a Bank, in substantially the form attached hereto as Exhibit F,
evidencing the aggregate indebtedness of the Borrower to such Bank resulting
from the Term Loan made by such Bank, as the same may be replaced, renewed,
extended, modified, supplemented, or rearranged from time to time or at any
time.
Type means either a Base Rate Loan or a Eurodollar Rate Loan.
UCC means the Texas Business and Commerce Code as presently
enacted or hereafter amended.
Unfunded Pension Liability means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
United States and U.S. each means the United States of
America.
U.S. Subsidiary means a Subsidiary incorporated under the laws
of the United States of America or any state thereof.
Xxxxx Fargo means Xxxxx Fargo Bank (Texas), National
Association.
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Wholly-Owned Subsidiary means any corporation in which (other
than directors' qualifying shares required by law) 100% of the capital stock of
each class having ordinary voting power, and 100% of the capital stock of every
other class, in each case, at the time as of which any determination is being
made, is owned, beneficially and of record, by the Company, or by one or more
of the other Wholly-Owned Subsidiaries, or both.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES. The Borrower represents,
warrants and agrees as follows:
Section 2.1 Corporate Authority. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the state or jurisdiction, as the case may be, of
its incorporation and is duly licensed, qualified to do business and in good
standing in each jurisdiction in which the ownership of its property or the
conduct of its business requires such licensing and qualification and in which
failure to be so licensed or qualified would have a Material Adverse Effect,
and has all powers and all permits, consents and authorizations necessary to
own and operate its properties and to carry on its business as presently
conducted. The execution, delivery and performance of this Agreement by the
Borrower, the borrowings and Issuances of Letters of Credit hereunder and the
execution and delivery of the Notes and the other Loan Documents by the
Borrower and its Subsidiaries, as applicable, (i) have been duly authorized by
proper corporate proceedings, and (ii) will not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
Certificate or Articles of Incorporation or Bylaws of the Borrower and its
Subsidiaries, or of any mortgage, indenture, contract, agreement or other
instrument, or any judgment, order or decree, binding upon the Borrower or any
of its Subsidiaries. No consent of the Borrower's, or any of its
Subsidiaries' shareholders or any holder of any Indebtedness of the Borrower or
any of its Subsidiaries is required as a condition to the validity of this
Agreement or any other Loan Document. This Agreement, the Notes, and the other
Loan Documents, when duly executed and delivered in accordance with this
Agreement, will constitute legal, valid and binding obligations of the Borrower
and its Subsidiaries in accordance with their respective terms.
Section 2.2 Financial Statements; Projections. (a) The audited
annual financial statements of the Borrower and its Subsidiaries at April 30,
1996 and the interim financial statements of the Borrower and its Subsidiaries
for the 9 months ended January 31, 1997, and the related statements of income
and retained earnings and cash flow for the periods then ended, copies of which
have been delivered to the Banks, fairly present the financial position of the
Borrower and its Subsidiaries at April 30, 1996 and January 31, 1997, and the
results of its operations and the changes in its financial position for the
periods then ended in conformity with GAAP applied on a basis consistent with
the preceding period; provided, however, that the interim financial statements
of the Borrower shall not be required to include statements of retained
earnings and cash flow, and shall not be required to contain footnote
disclosures in accordance with GAAP. Such financial statements are true and
correct in all material respects and have been prepared in accordance with GAAP
consistently followed throughout the periods involved. No event or condition
having a Material Adverse Effect has occurred since April 30, 1996.
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(b) The Initial Projections have been prepared in good
faith based upon assumptions that Borrower's management believed or believes to
be reasonable at the time such Initial Projections were or are prepared.
Section 2.3 Governmental Approvals. No approvals of any Governmental
Authority having jurisdiction over the Borrower or any of its Subsidiaries are
necessary to permit the Borrower or any of its Subsidiaries to enter into this
Agreement, the Note and the other Loan Documents, to borrow hereunder, to grant
security and guaranty payment and performance of obligations as provided herein
and therein.
Section 2.4 Litigation. Except as set forth on Schedule 2.4 hereto,
there is no action, suit, proceeding, claim or dispute pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries before any court or Governmental Authority or otherwise
contemplated at law, in equity or in arbitration, which, if such action, suit
or proceeding were adversely determined, (i) would subject the Borrower or any
of its Subsidiaries to any liability not fully covered by insurance (subject to
normal deductibles), or (ii) would have a Material Adverse Effect.
Section 2.5 No Event of Default. No Default or Event of Default has
occurred and is continuing or would result from the incurring of obligations by
the Borrower or its Subsidiaries under this Agreement or any Loan Document.
Section 2.6 Use of Proceeds. The proceeds of the Term Loans will be
used by the Borrower (i) to refinance the outstanding principal balance of the
Prior Term Note on the Closing Date, and (ii) to finance the Air Drilling
Acquisition. The proceeds of the Revolving Credit Loans will be used by the
Borrower to finance a portion of the Air Drilling Acquisition, for working
capital and general corporate purposes and Acquisitions permitted by Section
6.4. All loans evidenced by the Notes are and shall be "business loans," as
such term is used in the Depository Institutions Deregulation and Monetary
Control Act of 1980, as amended, and such loans are for business or commercial
purposes and not primarily for personal, family, household or agricultural use,
as such terms are used or defined in Texas Revised Civil Statutes, Article
5069-1.04, Texas Credit Code, Regulation Z promulgated by the Board of
Governors of the Federal Reserve System, and Titles I and V of the Consumer
Credit Protection Act.
Section 2.7 Properties. Each of the Borrower and its Subsidiaries
has and will continue to have in all material respects good and indefeasible
title to all of its assets and properties, free and clear of all liens,
mortgages, security interests and other encumbrances, except for Permitted
Liens.
Section 2.8 Status. Neither the Borrower nor any of its Subsidiaries
is (i) subject to regulation as a "public utility" or "public service
corporation" or the equivalent under any applicable federal or state law, (ii)
an "investment company" or a company "controlled" by an "investment company" or
an "investment advisor" within the meaning of the Investment Company Act of
1940, as amended, or (iii) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utilities
Holding Company Act of 1935, as amended.
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Section 2.9 Tax Returns. Each of the Borrower and its Subsidiaries
has filed all United States tax returns and all city, state and foreign tax
returns required to be filed by it, or obtained extensions of time for filing
such returns (without penalty), and has paid, or made provisions for the
payment of, all taxes which have become due pursuant to any such return or
pursuant to any assessment received by the Borrower or any of its Subsidiaries,
as applicable, except such taxes and assessments, if any, as are being
contested in good faith and as to which adequate reserves have been provided in
accordance with GAAP, and to the best of the Borrower's knowledge, such returns
properly reflect in all material respects any United States income tax, foreign
tax, state tax and city tax of the Borrower or any of its Subsidiaries, as
applicable, for the periods covered thereby.
Section 2.10 Liens and Security Interests. The security interests,
mortgages and liens attaching to the Collateral will constitute at all times
valid, perfected and enforceable first priority security interests, mortgages
and liens in favor of the Agent and the Banks, subject to no prior or superior
lien, mortgage, security interest or other encumbrance, except Permitted Liens.
Except as otherwise provided in Section 3.11, before any funding under the
Notes, the Borrower has taken and has caused its Subsidiaries to take, or will
have participated with the Agent and the Banks in taking, all necessary action
(including making all necessary filings) to provide the Banks with first
priority perfected security interests, mortgages and liens in the Collateral
under the laws of all applicable jurisdictions. Notwithstanding anything
contained herein but subject to Section 3.11, (a) with respect to equipment in
which a security interest would be perfected by taking possession of, or noting
a lien on, a certificate of title or similar document, the Borrower shall not
be required to take action to perfect security interests in such equipment, (b)
with respect to equipment which is leased to lessees located in jurisdictions
where no UCC-1 financing statement (or other filing required by such
jurisdiction to perfect a security interest in such equipment) in favor of the
Agent for the benefit of the Banks has been filed, the Borrower shall be
required to perfect a security interest in such jurisdiction only if requested
to do so by the Agent in writing, (c) to the extent equipment or inventory is
located outside the United States, Canada, Venezuela, Scotland, or any other
jurisdiction in which a Material Foreign Subsidiary has a substantial amount of
Collateral in the ordinary course of the Borrower's or any of its Subsidiaries'
business, the Borrower shall not be required to perfect the security interest
of the Banks in such Collateral, and (d) the Borrower shall not be required to
perfect the security interest of the Banks in Foreign Accounts except to the
extent that such security interest can be perfected by filing in the United
States, Canada, Venezuela, Scotland or any other jurisdiction in which a
Material Foreign Subsidiary has a substantial amount of Collateral or such
Foreign Account is owned by a Material Foreign Subsidiary.
Section 2.11 Availability of Records. The Borrower will, and will
cause each of its Subsidiaries to, permit any representative, accountant,
officer, employee, or attorney of the Agent or any Bank to (i) visit and
inspect any of their properties, (ii) examine their books and financial
records, (iii) verify the due investment and application of the proceeds of the
Loans in accordance with Section 2.6 hereof, and (iv) discuss their affairs,
finances and accounts with their officers and independent certified public
accountants, all at such reasonable times and during reasonable business hours,
and as often as the Agent of any such Bank may deem necessary.
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Section 2.12 Regulations U and X. No part of the proceeds received
by the Borrower hereunder will be used, directly or indirectly, for the purpose
of purchasing or carrying, or for payment in full or in part of Indebtedness
which was incurred for the purpose of purchasing or carrying, any "margin
stock," as such term is defined in Regulation U. No part of the proceeds
received by the Borrower from the Loans made hereunder will be used for any
purpose which violates Regulation X.
Section 2.13 Subsidiaries. Except as set forth on Schedule 2.13
hereto, neither the Borrower nor any of its Subsidiaries has any Subsidiaries
or investments in any Person (other than Cash Equivalents). Schedule 2.13 sets
forth the ownership of each Subsidiary, the number of shares of capital stock
owned by such Person, the certificate numbers representing such shares, the
percentage owned by such Person and the jurisdiction of formation for each
Subsidiary.
Section 2.14 ERISA.
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and to the best
knowledge of the Borrower, nothing has occurred which would cause the loss of
such qualification. The Borrower and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
Section 2.15 Solvency. Neither (a) the Borrower, or (b) the Borrower
and its Subsidiaries taken as a whole is Insolvent and, after giving effect to
the transactions contemplated hereby and by the other Loan Documents, neither
(a) the Borrower or (b) the Borrower and its Subsidiaries taken as a whole will
become Insolvent as a result thereof. Each of (a) the Borrower and (b) the
Borrower and its Subsidiaries taken as a whole is and will be able to pay its
debts as they become due, and has and will have capital sufficient to carry on
its business and all businesses in which it is about to engage; owns and will
own
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property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay its debts and obligations; and,
after giving effect to the transactions contemplated hereby and by the other
Loan Documents, neither (a) the Borrower nor (b) the Borrower and its
Subsidiaries taken as a whole will have incurred, intended to incur, or believe
that it has incurred, debts beyond its ability to pay as such debts become due.
Section 2.16 Environmental Condition of the Property.
(a) The location, construction, occupancy, operation,
condition and use of the Property do not violate any applicable law, statute,
ordinance, rule, regulation, order or determination of any Governmental
Authority, or any restrictive covenant or deed restriction (recorded or
otherwise) affecting the Property, including without limitation all applicable
zoning ordinances and building codes, flood disaster, occupational health and
safety laws and Environmental Laws where such violation could reasonably be
expected to have a Material Adverse Effect.
(b) Without limitation of (a) above, neither the Property
nor the Borrower or any of its Subsidiaries is in violation of or subject to
any existing, pending or threatened administrative enforcement proceeding,
notice of violation, administrative or consent order or agreement, litigation
or settlement by any Governmental Authority or subject to any investigatory or
remedial obligations under any Environmental Laws with respect to the presence
or suspected presence of Hazardous Materials Contamination where such
violation, proceeding, notice, order, agreement, litigation, settlement or
obligation would have a Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries is
subject to any liability or obligation, where such liability or obligation
could reasonable be expected to have Material Adverse Effect, relating to (i)
the environmental conditions on, under or about the Property which violate
Environmental Laws, including without limitation, the air, soil, surface and
ground water conditions at the Property; or (ii) the use, management, handling,
transport, treatment, generation, storage, disposal, release or discharge of
any Hazardous Materials which violate Environmental Laws.
(d) The Borrower and its Subsidiaries have obtained or
are pursuing all permits, licenses or similar authorizations required under any
Environmental Law to construct, occupy, operate or use, or relating to the
existence of buildings, improvements, facilities, fixtures and equipment
forming a part of the Property.
(e) The Borrower and each of its Subsidiaries is not
aware that any Hazardous Materials are now located on the Property or have
escaped or been released into the environment, or deposited, spilled, leaked,
discharged, or disposed of at, on, from, under or near the Property or any
portion thereof when the maintenance of such Hazardous Materials on the
Property or such escape, release, deposit, spill, leak, discharge or disposal
could reasonably be expected to have a Material Adverse Effect. In addition,
(a) no portion of the Property is being used nor, to the knowledge of the
Borrower, or its Subsidiaries has been used by any Person at any previous time
for the generation, disposal, storage, treatment, processing or other handling
of Hazardous Materials in violation of Environmental Laws, and (b) no part of
the Property is affected by any
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Hazardous Materials Contamination, in either case where such use or if such
effect could reasonably be expected to have a Material Adverse Effect.
(f) To the best of Borrower's and its Subsidiaries'
knowledge, no property adjoining or within a one-half mile radius of any
Property is being used, or has been used at any previous time, for the
generation, treatment, storage, processing, disposal or other handling of
Hazardous Materials in violation of Environmental Laws, where such use could
reasonably be expected to have a Material Adverse Effect.
(g) The Property is not currently on, and to Borrower's
and the Subsidiaries' knowledge, has never been on, any federal or state
"superfund" or "superlien" list or registry.
Section 2.17 Compliance. Each of the Borrower and its Subsidiaries
is in compliance in all respects with all applicable governmental approvals and
laws, ordinances and regulations, including without limitation, the Americans
with Disabilities Act, Environmental Laws and zoning, land use, and building
laws, ordinances and regulations, except to the extent that such non-compliance
would not have a Material Adverse Effect.
Section 2.18 Disclosure. All factual information heretofore or
contemporaneously furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Agent and the Banks for purposes of or in connection with
this Agreement, the Notes, and the other Loan Documents, or any transaction
contemplated therein is, and all other such information hereafter furnished by
or on behalf of the Borrower or any of its Subsidiaries to the Agent and the
Banks will be, true and accurate on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time.
Section 2.19 No Burdensome Restrictions. Neither the Borrower nor
any of its Subsidiaries is a party to or bound by any Contractual Obligation or
subject to any charter or corporate restriction or any Requirement of Law which
could cause a Material Adverse Effect.
Section 2.20 Broker's; Transaction Fees. Neither the Borrower nor
any of its Subsidiaries has any obligation to any Person in respect of any
finder's, broker's or investment banker's fee in connection herewith.
ARTICLE 3. THE CREDIT FACILITY.
Section 3.1 Term Loan.
(a) Subject to and upon the terms, conditions, covenants
and agreements contained herein, each Bank severally agrees to make a Term Loan
to the Borrower on the Closing Date in an amount not to exceed such Bank's Term
Commitment. The Term Loan made by each Bank shall be evidenced by a Term Note
payable to the order of such Bank in an amount equal to the Term Commitment of
such Bank.
(b) The principal of and interest to accrue on the Term
Notes shall be due and payable as follows:
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(i) The principal of each Term Note is due and
payable in quarterly installments, all of such installments, except
for the last, being in the amount specified for such installment on
Schedule 3.1 hereto, and the last and final installment being in the
amount of the then remaining unpaid principal balance thereof, the
first such installment of principal being due and payable on September
30, 1997, and each subsequent installment of principal being due and
payable on the last day of each succeeding third calendar month
thereafter until the Term Maturity Date, when the then remaining
unpaid balance of principal of each Term Note shall become due and
payable in full.
(ii) Interest on such principal shall be due and
payable in installments as it accrues on each Interest Payment Date.
(c) All renewals, extensions, modifications, increases,
and rearrangements of the Term Notes, if any, shall be deemed to be made
pursuant to this Agreement and, accordingly, shall be subject to the terms and
provisions hereof, and the Borrower shall be deemed to have ratified, as of
such renewal, extension, modification, increase, or arrangement date, all of
the representations, warranties, covenants and agreements set forth herein.
Section 3.2 Revolving Line of Credit.
(a) Subject to, and upon the terms, conditions, covenants
and agreements contained herein, each Bank severally agrees to make Revolving
Credit Loans to the Borrower at any time, and from time to time, prior to the
Line of Credit Termination Date in such amounts as the Borrower may request up
to, but not exceeding, such Bank's Line of Credit Commitment less, however, in
each instance, (A) such Bank's Line of Credit Commitment Percentage of then
existing Credit Exposure and (B) the principal amount outstanding under such
Bank's Revolving Credit Note; provided, however, that after giving effect to
any Borrowing of Revolving Credit Loans, the aggregate principal amount of all
Revolving Credit Loans then outstanding shall not exceed the total Line of
Credit Commitments less the total existing Credit Exposure.
(b) Subject to, and upon the terms, conditions, covenants
and agreements contained herein and in the Letter of Credit Agreements
delivered in accordance with Section 3.19 hereof, prior to the Line of Credit
Termination Date, the Issuing Bank agrees to issue nontransferable standby
letters of credit, in form and substance satisfactory to the Issuing Bank, for
the account of the Borrower; provided, however, that the aggregate undrawn face
amount of all Letters of Credit at any time outstanding shall not exceed the
lesser of (i) the total Line of Credit Commitments less (Y) the aggregate
amount of drafts paid under Letters of Credit for which the Borrower has not
reimbursed the Issuing Bank and (Z) the principal amount then outstanding under
all Revolving Credit Notes, and (ii) the Letter of Credit Sub-Limit. At no
time shall the sum of all Credit Exposure plus the aggregate amount of
outstanding Revolving Credit Loans exceed the total Line of Credit Commitments.
(c) The Revolving Credit Loans made by each Bank shall be
evidenced by a Revolving Credit Note payable to the order of such Bank in an
amount equal to the
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Line of Credit Commitment of such Bank. Each Bank shall either note in its
books and records or endorse on the schedules annexed to its Revolving Credit
Note, the date, amount and maturity of each Revolving Credit Loan made by it
and the amount of each payment of principal made by the Borrower with respect
thereto. Each Bank is irrevocably authorized by the Borrower to endorse its
Revolving Credit Note and each Bank's record shall be conclusive absent
manifest or material error; provided, however, that the failure of a Bank to
make, or an error in making, a notation thereon with respect to any Revolving
Credit Loan shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any such Revolving Credit Note to such Bank. In the event
of an actual conflict between the terms and conditions of this Agreement and
the terms and conditions of any Letter of Credit Agreements, the terms and
conditions of this Agreement shall prevail.
(d) Letters of Credit shall be issued only for purposes
approved by the Issuing Bank in its sole and absolute discretion, and shall be
issued for a period not in excess of one (1) year and shall expire no later
than the Line of Credit Termination Date.
(e) The principal of and interest to accrue on the
Revolving Credit Notes shall be due and payable as follows:
(i) Interest to accrue on the Revolving Credit
Notes shall be due and payable in installments as it accrues on each
Interest Payment Date;
(ii) the principal amount of the Revolving Credit
Notes then outstanding shall be due and payable in full on or before
the Line of Credit Termination Date.
(f) All renewals, extensions, modifications, increases,
and rearrangements of the Revolving Credit Notes, if any, shall be deemed to be
made pursuant to this Agreement and, accordingly, shall be subject to the terms
and provisions hereof, and the Borrower shall be deemed to have ratified, as of
such renewal, extension, modification, increase, or rearrangement date, all of
the representations, warranties, covenants and agreements set forth herein.
Section 3.3 Advances and Letters of Credit.
(a) Each Borrowing of Revolving Credit Loans shall be
made upon the irrevocable written notice of the Borrower in the form of a
Notice of Borrowing (which notice must be received by the Bank prior to 11:00
a.m. (Houston, Texas time) (i) three (3) Business Days prior to the requested
borrowing date, in the case of Eurodollar Rate Loans, and (ii) one (1) Business
Day prior to the requested borrowing date, in the case of Base Rate Loans,
specifying:
(1) the total amount of the Borrowing which shall
be in an aggregate minimum principal amount of (A) One Million Dollars
($1,000,000), in the case of Eurodollar Rate Loans, and (B) Five
Hundred Thousand Dollars ($500,000), in the case of Base Rate Loans,
and, in either case, in an integral multiple of One Hundred thousand
Dollars ($100,000) above such amount;
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(2) the requested borrowing date which shall be a
Business Day;
(3) whether the Borrowing is to be a Revolving
Credit Loan comprised of Eurodollar Rate Loans or Base Rate Loans, and
the amount of each in conformance with Section 3.2 above; and
(4) the duration of the Interest Period
applicable to such Loans included in such notice, subject to the
definition of Interest Period. If the Notice of Borrowing shall fail
to specify the duration of the Interest Period for any Borrowing
comprised of Eurodollar Rate Loans, such Interest Period shall be
three months;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Bank as aforesaid not
later than 11:00 a.m. (Houston, Texas time) one (1) Business Day before the
Closing Date and such Borrowing will consist of Base Rate Loans only.
(b) Upon receipt of the Notice of Borrowing, the Agent
shall promptly notify each Bank thereof and of the amount of such Bank's
Commitment Percentage of the Borrowing.
(c) Each Bank will, in the case of each Borrowing
consisting of a Revolving Credit Loan, make the amount of its Commitment
Percentage of the Borrowing available to the Agent for the account of the
Borrower at the office specified by the Agent in Section 11.8 for payment by
10:00 a.m. (Houston, Texas time) on the borrowing date requested by the
Borrower in funds immediately available to the Agent. Unless any applicable
condition specified in Article 4 has not been satisfied, the proceeds of all
such Loans will then be made available to the Borrower by the Agent at such
office by crediting the account of the Borrower on the books of the Agent with
the aggregate of the amounts made available to the Agent by the Banks and in
like funds as received by the Agent.
(d) The provisions of Section 3.3(a) notwithstanding, if
the Borrower shall not have given a timely notice of a Borrowing to be made on
the last day of any Interest Period for outstanding Eurodollar Rate Loans, then
unless the Bank shall have received notice that the Borrower elects not to make
a Borrowing on such day (such notice to have been received at least two
Business Days prior to such day) the Bank shall be deemed to have received a
Notice of Borrowing from the Borrower requesting Base Rate Loans to be made on
such day in an amount equal to the amount of such outstanding Eurodollar Rate
Loans reduced to the extent necessary to reflect any reductions of the
Commitments on or prior to such day.
(e) After giving effect to any Borrowing, there may not
be more than five (5) different Interest Periods in effect.
(f) (i) Each Letter of Credit shall be Issued upon
receipt by the Issuing Bank of a written request of the Borrower (a
"Credit Request") in substantially the form of Exhibit F together with
a duly executed Letter of
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Credit Agreement not later than 11:00 a.m. (Houston, Texas time) three
(3) Business Days prior to the date set for the Issuance of such
Letter of Credit. The Agent will advise the Banks of the face amount
of each Letter of Credit requested within two (2) Business Days of its
receipt of the Borrower's request for a Letter of Credit.
(ii) Each Credit Request shall be irrevocable and
shall specify, among other things:
(1) the proposed date of issuance of the
Letter of Credit, which shall be a Business Day;
(2) the stated amount of the Letter of
Credit;
(3) the date of expiration of the Letter
of Credit;
(4) the name and address of the
beneficiary of the Letter of Credit;
(5) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder;
(6) the full text of any certificate to
be presented by the beneficiary in case of any drawing thereunder;
(7) the purpose of the Letter of Credit;
and
(8) the aggregate amount of (y) Credit
Exposure (including the requested Letter of Credit) to be existing on
the date of Issuance of such Letter of Credit, and (z) all Revolving
Credit Loans to be outstanding on the date of Issuance of such Letter
of Credit; and shall contain a certification to the Issuing Bank that
the Issuance of such Letter of Credit will not cause the sum of the
amounts referred to in clause (8) (y) and (8) (z) above to exceed the
aggregate amount of Borrowings and Credit Exposure permitted pursuant
to Section 3.2 of this Agreement.
(iii) Any request for amendment to or extension of
the expiry date of any previously issued Letter of Credit shall be
submitted pursuant to a Credit Request by the Borrower to the Issuing
Bank not later than two (2) Business Days prior to the date of the
proposed amendment or extension. The Agent shall promptly notify the
Banks of each request for an amendment to or renewal of any Letter of
Credit. The Issuing Bank shall not amend or extend the expiry date of
any Letter of Credit if the issuance of a new Letter of Credit having
the same terms and conditions as such Letter of Credit as so amended
or extended would be prohibited by any provision of Section 3.1 or
3.2(f) of this Agreement.
(g) There shall be only one (1) Borrowing of the Term
Loans and to the extent the amount of the Borrowing of the Term Loan (as set
forth in the Notice of
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Borrowing) is less than the total Term Commitments, the Term Commitment of each
Bank shall be automatically reduced by an amount equal to such Bank's Term
Commitment Percentage of the difference between the amount of the Borrowing of
the Term Loan (as set forth in the Notice of Borrowing) and the total Term
Commitment.
Section 3.4 Conversions and Renewals.
(a) The Borrower may upon irrevocable written notice to
the Agent in accordance with Section 3.4(b):
(i) elect to convert on any Business Day, any
Base Rate Loans (or any part thereof) into Eurodollar Rate Loans;
provided, that the amount so converted is in an amount not less than
the minimum amount specified in paragraph (1) of Section 3.3(a);
(ii) elect to convert on any Interest Payment
Date, any Eurodollar Rate Loans maturing on such Interest Payment
Date (or any part thereof) into Base Rate Loans; provided, that if
the aggregate amount of Eurodollar Rate Loans shall have been reduced,
by payment, prepayment, or conversion of part thereof to be less than
One Million Dollars ($1,000,000), the Eurodollar Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date
the right of the Borrower to continue such Loans as Eurodollar Rate
Loans, as the case may be, shall terminate; or
(iii) elect to renew, on any Interest Payment Date
therefor, any Eurodollar Rate Loans (or any part thereof); provided,
that the amount so renewed is in an amount not less than the minimum
amount specified in paragraph (1) of Section 3.3(a).
(b) The Borrower shall deliver by telex, cable or
facsimile, confirmed immediately by a telephone call and by delivery of the
hard copy original thereof, a Notice of Conversion/ Continuation received by
Agent not later than 11:00 a.m. (Houston, Texas time) at least (i) three (3)
Business Days in advance of the Conversion Date or renewal date, if the
Revolving Credit Loans are to be converted into or continued as Eurodollar Rate
Loans; and (ii) one (1) Business Day in advance of the Conversion Date, if the
Revolving Credit Loans are to be converted into Base Rate Loans, specifying
(1) the proposed Conversion Date or renewal date;
(2) the aggregate amount of Revolving Credit
Loans to be converted or renewed;
(3) the nature of the proposed conversion or
continuation; and
(4) the duration of the requested Interest
Period, subject to the definition of Interest Period.
(c) If upon the expiration of any Interest Period
applicable to Eurodollar Rate Loans, the Borrower has failed to select a new
Interest Period to be applicable to
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such Eurodollar Rate Loans, or if any Event of Default shall then have occurred
and be continuing, the Borrower shall be deemed to have elected to convert such
Eurodollar Rate Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation,
the Agent shall promptly notify each Bank thereof. All conversions and
renewals shall be made pro rata according to the respective outstanding
principal amounts of the Loans held by each Bank with respect to which such
notice was given.
(e) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or renewal of any Loans, there
shall be not more than five (5) different Interest Periods in effect.
Section 3.5 Loan Formula. The aggregate principal amount at any time
remaining unpaid on Revolving Credit Loans plus the sum of the then existing
Credit Exposure will not be in excess of the Line of Credit Commitments.
Section 3.6 Prepayments.
(a) Subject to Section 3.17, the Borrower may, at any
time or from time to time, upon at least three (3) Business Days' notice to the
Agent, in the case of Eurodollar Rate Loans, and at least one (1) Business
Days' notice to the Agent, in the case of Base Rate Loans, prepay the principal
of the Loans, in whole or in part, in amounts of Five Million Dollars
($5,000,000) or any integral multiple of One Million Dollars ($1,000,000) above
such amount (each such prepayment of principal to be accompanied by payment of
accrued unpaid interest in respect thereof to the date of prepayment);
provided, however, that because the Revolving Credit Note is a master revolving
credit note, the Revolving Credit Note shall remain in full force and effect
until terminated as provided therein or until, at a time when no amounts,
principal, interest or otherwise, are then owing, the Borrower releases the
Banks from any obligation to make Loans and issue Letters of Credit pursuant to
the Line of Credit. Any such prepayment shall be applied first to accrued
interest under the Note or Notes being so prepaid, then to the discharge of any
expenses or damages for which the Agent and the Banks may be entitled to
receive reimbursement under any agreement with the Borrower, and the balance
remaining, if any, shall be applied to the reduction of principal of the Notes
being so prepaid in the inverse order of maturity; provided, that, in the case
of prepayments of the Term Loans, amounts so applied to the reduction of the
principal thereof shall be applied to reduce all scheduled payments pro rata.
Such notice of prepayment shall specify the date and amount of such prepayment
and whether such prepayment is of the Term Loan or a Revolving Credit Loan, or
Base Rate Loans or Eurodollar Rate Loans, or any combination thereof and the
Agent shall promptly notify each Bank thereof and of such party's Commitment
Percentage of such prepayment. Such notice shall not thereafter be revocable
by the Borrower. If such notice is given, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and the amounts required pursuant to Section
3.17.
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(b) The Borrower shall make all Mandatory Prepayments, if
any, as and when each Loan Formula Certificate is delivered to the Agent
pursuant to Section 5.1 of this Agreement.
(c) In addition to the foregoing, and in addition to all
scheduled payments in respect of the Term Loans pursuant to Section 3.1(b)(i),
if the aggregate outstanding principal balance of the Term Notes is equal to or
greater than $20,000,000, the Borrower shall, within ninety (90) days after the
end of each fiscal year during the term hereof (commencing with the fiscal year
of the Borrower ending in 1998) during which the Funded Debt Ratio at any time
was (i) equal to or greater than 2.5 to 1.0, prepay a portion of the Term Loans
in an amount equal to seventy-five percent (75%) of Consolidated Excess Cash
Flow for such fiscal year, and (ii) equal to or greater than 1.5 to 1.0 but
less than 2.5 to 1.0, prepay a portion of the Term Loans in an amount equal to
fifty percent (50%) of Consolidated Excess Cash Flow for such fiscal year, such
prepayments in each case to be applied to reduce all then remaining scheduled
payments in respect of the Term Loans pro rata.
(d) In addition to the foregoing, and in addition to all
scheduled payments in respect of the Term Loans pursuant to Section 3.1(b)(i),
the Borrower shall, within ten (10) days after any Material Asset Sale or
issuance by the Borrower or any of its Subsidiaries of any debt or equity
securities (other than an issuance to the Borrower of capital stock by a
Subsidiary of the Borrower), prepay a portion of the Term Loans in an amount
equal to one hundred percent (100%) of the Net Cash Proceeds of such sale or
issuance, such prepayments in each case to be applied to reduce all then
remaining scheduled payments in respect of the Term Loans pro rata.
(e) Any prepayments pursuant to Section 3.6(b), 3.6(c) or
3.6(d) above made on a day other than an Interest Payment Date for any Loan
shall be applied first to Base Rate Loans, if any, then outstanding and then to
Eurodollar Rate Loans with the shortest Interest Periods remaining.
Section 3.7 Fees.
(a) Upfront, Agency Fees. The Borrower shall pay an up
front fee to the Agent for the account of the Banks in accordance with, and
shall pay an agency fee to the Agent for the Agent's own account, as required
by, the letter agreement (as the same may be amended or restated from time to
time at any time "Fee Letter") between the Borrower and the Agent dated June
20, 1997.
(b) Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Bank a commitment fee in an amount (the
"Commitment Fee") equal to the specified number of Basis Points per annum
denominated "Commitment Fee" on Schedule 3.10 attached hereto, based upon the
Funded Debt Ratio, such percent to change when and as the Funded Debt Ratio
changes, effective on the date of each such change, determined in accordance
with the provisions of Schedule 3.10 hereof, multiplied by the average daily
unused portion of the Line of Credit Commitment. The Commitment Fee shall
accrue from the date this Agreement is executed by all parties hereto to the
Line of Credit Termination Date and shall be payable quarterly in arrears, all
such payments, except for the last such payment, becoming due and payable on
the last day of each calendar quarter commencing with the calendar quarter
ending September 30, 1997, and
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the last and final installment becoming due and payable on the Line of Credit
Termination Date.
(c) Letter of Credit Fee. The Borrower agrees to pay to
the Agent for the pro rata benefit of the Banks a letter of credit fee for
Issuing the Letters of Credit under the Line of Credit (calculated separately
for each Letter of Credit), payable at the time of Issuance and on each
anniversary thereof, calculated as the product of (i) the specified number of
Basis Points denominated "Letter of Credit Fee" on Schedule 3.10 attached
hereto, based upon the Funded Debt Ratio, such percent to change when and as
the Funded Debt Ratio changes, effective on the date of each such change,
determined in accordance with the provisions of Schedule 3.10 hereof,
multiplied by (ii) the face amount of such Letter of Credit. Such commission
shall be due and payable upon issuance and be non-refundable. In addition, the
Borrower shall pay the Issuing Bank (x) an Issuance fee of one-quarter of one
percent (0.25%) per annum on the face amount of each Letter of Credit, at the
time of such Issuance, and (y) its standard amendment, transfer, negotiation
and other fees.
Section 3.8 Payments to the Agent and the Banks.
(a) All payments (including prepayments) to be made by
the Borrower on account of principal, interest and fees shall be made without
set-off or counterclaim and shall be made to the Agent, for the account of the
Banks (except as otherwise expressly contemplated hereby), at the Agent's
office set forth in Section 11.8 in U.S. Dollars and in immediately available
funds no later than 11:00 a.m. (Houston, Texas time) on the date such payments
are due. The Agent shall distribute such payments pro rata to each Bank in
accordance with its Commitment Percentage of such principal, interest, fees or
other amounts, promptly upon receipt in like funds as received. Any payment
which is received by the Agent later than 11:00 a.m. (Houston, Texas time)
shall be deemed to have been received on the immediately succeeding Business
Day. If and to the extent that the Agent receives any payment or prepayment
from the Borrower and fails to distribute such payment or prepayment to the
Banks ratably on the basis of their respective commitment percentages on the
day the Agent receives such payment or prepayment (if received prior to 11:00
a.m. on such day) or the next Business Day if received after 11:00 a.m., then
the Agent shall pay to each Bank such Bank's Commitment Percentage thereof
together with interest thereon at the Federal Funds Rate for each day from the
date such amount should have been distributed by the Agent to the Banks until
the day the Agent pays such amounts to the Banks as above described.
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of Eurodollar Rate Loans to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
(c) Unless the Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the Agent may
assume that the Borrower has made such payment in full to the Agent on such
date and the Agent may (but shall not
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be required to), in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent the Borrower shall not have made such payment in full to
the Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank, together with interest thereon for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amounts to the Agent, at the Federal Funds Rate as in effect on such date.
(d) With respect to any and all principal and interest
payments commitment fees, letter of credit fees or other fees described in
Section 3.7 hereof, due and payable to the Agent, the Issuing Bank, or any Bank
under the Loan Documents, the Borrower hereby irrevocably authorizes the Agent
to debit the operating account of the Borrower with Xxxxx Fargo, account
#4159715457, or its successor or replacement account, in an amount such that
the aggregate amount debited from such operating deposit account does not
exceed such payment amount or fee. If there are insufficient funds in such
operating account to cover the amount of such payment or fee then due, such
debits will be reversed (in whole or in part, in the Agent's sole discretion)
and such amount not debited shall be deemed to be unpaid. No such debit under
this subsection shall be deemed a set-off.
Section 3.9 Payments by the Banks to the Agent.
(a) Each Bank shall make available to the Agent in
immediately available funds for the account of the Borrower the amount of its
Commitment Percentage of any Borrowing.
(b) Unless the Agent shall have received notice from a
Bank on the Closing Date or, with respect to each Borrowing after the Closing
Date, at least one (1) Business Day prior to the date of any proposed Borrowing
that such Bank will not make available to the Agent for the account of the
Borrower the amount of such Bank's Commitment Percentage of such Borrowing, the
Agent may assume that each Bank has made such amount available to the Agent on
such borrowing date and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Bank shall not have made such
full amount available to the Agent and the Agent in such circumstances makes
available to the Borrower such amount, such Bank shall within two (2) Business
Days following the date of such Borrowing make such amount available to the
Agent together with interest at the Federal Funds Rate for each day during such
period. A certificate of the Agent submitted to any Bank with respect to
amounts owing under this Section 3.9(b) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Agent shall
constitute such Bank's Loan on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to the Agent within two (2)
Business Days following the date of such Borrowing, the Agent shall notify the
Borrower of such failure to fund and, upon demand by the Agent, the Borrower
shall pay to the Agent such amount, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(c) The failure of any Bank to make any Loan on any date
of Borrowing shall not relieve any other Bank of its obligation, if any,
hereunder to make a Loan on the
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date of such Borrowing pursuant to the provisions contained herein, but no Bank
shall be responsible for the failure of any other Bank to make the Loan to be
made by such other Bank on the date of any Borrowing.
Section 3.10 Computation of Fees and Interest.
(a) Subject to Section 3.10(b), each Loan shall bear
interest on the outstanding principal amount thereof from the date when made
until it becomes due at a rate per annum equal to the lesser of (i) the Maximum
Rate, on the one hand, and (ii) the sum of (x) the Eurodollar Rate or the Base
Rate, as the case may be, plus (y) the Applicable Margin as the same may be
adjusted in accordance with the provisions of Section 3.10(c), on the other
hand (any interest rate referred to in this Section 3.10(a)(ii), together with
the Default Rate as and when applicable in accordance with Section 3.10(b)
hereof, is referred to in the next succeeding sentence as an "Accrual Rate").
Notwithstanding the foregoing, if at any time the Accrual Rate shall exceed the
Maximum Rate and thereafter the Accrual Rate shall become less than the Maximum
Rate, the rate of interest payable hereunder and under the Notes shall be the
Maximum Rate until the Banks shall have received the amount of interest which
the Banks would have received if the Accrual Rate had not been limited by the
Maximum Rate during the period of time the Accrual Rate exceeded the Maximum
Rate.
(b) During the continuation of any Event of Default or
after acceleration, the Borrower shall pay interest (after as well as before
judgment to the extent permitted by law) on the principal amount of all Loans
due and unpaid, at the lesser of (i) the Default Rate and (ii) the Maximum
Rate.
(c) The Applicable Margin, Letter of Credit Fee and
Commitment Fee shall be the respective number of Basis Points specified in
Schedule 3.10 attached hereto in the column corresponding to the Funded Debt
Ratio as of the last Adjustment Date (the Applicable Margin, Letter of Credit
Fee and Commitment Fee on and from the Closing Date until the first Adjustment
Date shall be determined on the assumption that the Funded Debt Ratio is
greater than or equal to 2.0 to 1.0 but less than 2.5 to 1.0). The Applicable
Margin, the Letter of Credit Fee and the Commitment Fee shall be calculated in
reliance on the most recent financial reports and Compliance Certificate
delivered pursuant to Sections 5.1(a), 5.1(c) and 5.1(i) hereof with respect to
the fiscal quarter ending immediately before the fiscal quarter in question
(e.g., the financial statements for the first fiscal quarter of a fiscal year
are used to determine the Applicable Margin, Letter of Credit Fee and
Commitment Fee for the period beginning on the below-defined "Adjustment Date"
occurring in the second fiscal quarter). Each adjustment of the Applicable
Margin, Letter of Credit Fee and Commitment Fee shall be made by the Agent as
of the first day following the date of delivery of the financial statements and
Compliance Certificate pursuant to Sections 5.1(a), 5.1(d) and 5.1(i) (the
"Adjustment Date"). Such adjusted Applicable Margin, Letter of Credit Fee and
Commitment Fee shall be effective as of the Adjustment Date, except that with
respect to all Eurodollar Rate Loans outstanding on the Adjustment Date, the
adjusted Applicable Margin shall apply as of the first day of the Interest
Period next following the Adjustment Date. Notwithstanding the foregoing, in
the event the Borrower shall fail for any reason to deliver any of the
requisite financial statements or related Compliance Certificate, within five
(5) days of the applicable date specified in Sections 5.1(a), 5.1(c) and 5.1(i)
the Applicable Margin, Letter of Credit Fee and Commitment Fee shall be
determined, from
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the first day after the date such financial statements and Compliance
Certificate were required to have been delivered pursuant to Sections 5.1(a),
5.1(c) and 5.1(i) (without regard to any grace or cure period applicable
thereto pursuant to Article 7 hereof) until the same are delivered in
accordance therewith, on the assumption that the Funded Debt Ratio is greater
than or equal to 2.50 to 1.0.
(d) All computations of interest for Base Rate Loans
shall be made on the basis of a three hundred sixty-five (365) or three hundred
sixty-six (366) day year, as the case may be, and actual days elapsed. All
other computations of fees and interest under this Agreement shall be made on
the basis of a three hundred sixty (360) day year and actual days elapsed
unless such calculation would result in a usurious rate, in which case interest
shall be calculated on the per annum basis of 365 or 366 days, as the case may
be. Interest and fees shall accrue during each period during which interest or
such fees are computed from and including the first day thereof to but
excluding the last day thereof.
(e) The Agent shall, as soon as practicable, notify the
Borrower and the Banks of each determination of a Eurodollar Rate, provided
that any failure to do so shall not relieve the Borrower of any liability
hereunder. Any change in the interest rate on a Loan resulting from a change
in the Eurodollar Reserve Percentage, Eurocurrency Liabilities, the Federal
Funds Rate, or the Prime Rate shall become effective as of the opening of
business on the day on which such change in the Eurodollar Reserve Percentage,
Eurocurrency Liabilities, the Federal Funds Rate, or the Prime Rate shall
become effective. The Agent shall, as soon as practicable notify the Borrower
and the Banks of the effective date and the amount of each such change provided
that any failure to do so shall not relieve the Borrower of any liability
hereunder.
(f) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Banks in the absence of manifest error. The Agent shall,
at the request of the Borrower or any Bank, deliver to the Borrower or such
Bank, as the case may be, a statement showing the quotations used by the Agent
in determining any interest rate pursuant to this Section 3.10.
Section 3.11 Security.
(a) Payment of the Notes and the Obligations and the
performance of the covenants set forth in this Agreement and the other Loan
Documents will be secured, directly or indirectly, by a first priority
perfected security interest, mortgage, assignment or lien, as the case may be,
in and upon the following described property and assets:
(i) all of the Borrower's, its U.S. Subsidiaries'
and, subject to the applicable provisions of the Post Closing
Condition Letter, Material Foreign Subsidiaries' present and future
accounts, inventory, equipment, fixtures, documents, instruments,
general intangibles, chattel paper (as such terms are defined in the
UCC), notes receivable, drafts, acceptances, patents, copyrights,
trademarks, trade secrets and other intellectual property, rental
agreements and lease agreements relating to any of the foregoing, and
contract rights now owned or existing and hereafter acquired or
arising, wherever located, and all the proceeds thereof, which
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property and assets are more particularly described in, and which
security interests will be evidenced by, one or more Security
Agreements or Subsidiary Security Agreement-Pledges, as applicable;
and
(ii) 100% of the outstanding capital stock or
other ownership interest of all U.S. Subsidiaries and, subject to the
applicable provisions of the Post Closing Condition Letter, 66 1/2% of
the outstanding capital stock or other ownership interest of all
Material Foreign Subsidiaries now owned or hereafter acquired by the
Borrower or any of its Subsidiaries, which security interest will be
evidenced by one or more Security Agreement-Pledges and Subsidiary
Security Agreement-Pledges;
(b) Payment of the Notes and the Obligations will be
guaranteed by the Guarantors, each of such guarantees to be evidenced by a
Guaranty. If at any time after the date of this Agreement any Person becomes a
U.S. Subsidiary or a Material Foreign Subsidiary of the Borrower, the Borrower
shall cause each such Person to do the following, within thirty (30) days after
such Person becomes a U.S. Subsidiary or a Material Subsidiary of the Borrower:
(i) execute and deliver to the Agent a Guaranty, (ii) the Borrower and/or such
Subsidiary, as applicable, shall grant to the Agent, for the benefit of the
banks, a first priority perfected security interest in 100% of the stock or
other ownership interest in any such U.S. Subsidiary and 66 1/2% of the stock
or other ownership interest in any such Material Foreign Subsidiary, in form
and substance acceptable to the Agent and the Majority Banks, in each instance,
(iii) enter into a valid, binding and enforceable Subsidiary Security Agreement
(granting the Agent, for the benefit of the Banks, a first priority perfected
security interest (in scope and substance acceptable to the Agent and the
Majority Banks) in the property of the type described in Section 3(a)(i) hereof
owned by such Subsidiary, (iv) execute such other documents and instruments as
may be necessary to comply with Subsection 3.11(c) below, and (v) furnish the
Agent, for the benefit of the Agent and the Banks, a written opinion of counsel
to such Person reasonably acceptable to the Agent and the Majority Banks
covering such matters as the Agent and the Majority Banks may reasonably
require.
(c) The Borrower will, and will cause each of its U.S.
Subsidiaries and Material Foreign Subsidiaries to, execute, acknowledge and
deliver to the Agent and the Banks such instruments, mortgages, chattel
mortgages, deeds of trust, security agreements, security agreement-pledges,
statements, assignments and financing statements, in form and substance
acceptable to the Agent and the Majority Banks, as in the good faith and
discretion of counsel for the Agent and the Majority Banks may be necessary to
enforce, grant to the Agent and the Banks and perfect, in the United States,
Canada, Venezuela, Scottland and such other jurisdictions in which the
Collateral owned by such Subsidiaries is located, the security interests,
liens, assignments and mortgages on the Collateral. Each of the Borrower, the
Agent and the Banks agrees that all Collateral now or hereafter securing any of
the Obligations hereunder also shall secure any and all other indebtedness and
liabilities now or hereafter owing by the Borrower to the Agent and the Banks
under the Loan Documents.
(d) At such time as (i) the Term Notes have been repaid
in full in cash and (ii) no Default exists, then (A) the Material Foreign
Subsidiaries shall be deemed released from their Obligations under the
Guaranties and the Subsidiary Security Agreements to which they are a party and
the security interests in the Collateral described
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therein (provided that such release shall not terminate or release any
Subsidiary Security Agreement Pledge of such Subsidiary which covers any
outstanding capital stock or other ownership interest of the Material Foreign
Subsidiaries, which security interest shall remain in full force and effect),
and (B) the obligations of the Borrower and its Subsidiaries to (1) secure the
Obligations with the Material Foreign Subsidiaries' property of the type
described in Section 3.11(a)(i) and (2) deliver a guaranty of the Obligations
executed by any Material Foreign Subsidiary, shall terminate. Borrower may
request Agent to confirm in writing that such release has occurred by giving
Agent a certificate that the foregoing conditions have been met and such
evidence thereof (or legal opinions in connection therewith) as Agent may
request. Upon receipt of such request, certificate and evidence and upon
satisfaction of such conditions, Agent shall (and each Lender hereby
irrevocably authorizes Agent to) execute such documents as Agent deems
appropriate to confirm such release of the Material Foreign Subsidiaries from
their respective obligations under their respective Guarantees and Subsidiary
Security Agreements (other than with respect to security interests in 66 1/2%
of the outstanding capital stock or other ownership interest of the Material
Foreign Subsidiaries, which security interest shall remain in full force and
effect).
Section 3.12 No Default. The Agent, the Issuing Bank, and the Banks
may, but shall not be required to, make or continue any advance or issue any
Letter of Credit under the Line of Credit or renew any Note if an event has
occurred and is continuing which constitutes an Event of Default.
Section 3.13 Taxes.
(a) Subject to Section 3.13(g), any and all payments by
the Borrower to each Bank or the Agent under this Agreement shall be made free
and clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Bank's or the Agent's, as the case may be, net income by
the jurisdiction under the laws of which such Bank or the Agent, as the case
may be, is organized or maintains a Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes"); provided, however, nothing in this Agreement shall be construed to
require the Borrower to pay any Other Taxes if the payment of such Other Taxes
by the Borrower is prohibited by applicable laws.
(c) Subject to Section 3.13(i), the Borrower will
indemnify and hold harmless each Bank and the Agent for the full amount of
Taxes or Other Taxes (including without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 3.13) paid by
such Bank or the Agent (as the case may be) and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally
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asserted. Payment under this indemnification shall be made within thirty (30)
days from the date such Bank or the Agent, as the case may be, makes written
demand therefor.
(d) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then, subject to Section 3.13(i),
(i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.13) such Bank or the Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been
made,
(ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(e) Within thirty (30) days after the date of any payment
by the Borrower of Taxes or Other Taxes, the Borrower will furnish to the Agent
the original or a certified copy of a receipt evidencing payment thereof, or
other evidence of payment satisfactory to the Agent.
(f) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code, and such Bank claims exemption from U.S.
withholding tax under Section 1441 or 1442 of the Code, such Bank shall deliver
to the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement; or
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of
such Bank, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank during
which interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction. In addition, in the event any Bank claims exemption from, or
reduction of, withholding tax under a United States tax treaty by providing IRS
Form 1001 and such Bank sells, assigns, grants
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a participation in, or otherwise transfers all or part of the obligations of
the Borrower to such Bank under this Agreement, such Bank agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
obligations of the Borrower to such Bank under this Agreement. To the extent
of such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid. In the event any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the obligations of the
Borrower to such Bank under this Agreement, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(g) If any Bank is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest payment to
such Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (f) are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(h) If the IRS or any authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this subsection (h), together with all costs, expenses and
attorneys' fees.
(i) The Borrower will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
Section 3.13(d) to any Bank for the account of any Lending Office of such Bank:
(i) if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank to comply
with its obligations under Section 3.13(f) in respect of such Lending
Office;
(ii) if such Bank shall have delivered to the
Borrower a Form 4224 in respect of such Lending Office pursuant to
Section 3.13(f) and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Borrower hereunder for the
account of such Lending Office for any reason other than a change in
United States law or regulations or in the official interpretation of
such law or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 4224; or
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(iii) if such Bank shall have delivered to the
Borrower a Form 1001 in respect of such Lending Office pursuant to
Section 3.13(f) and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal
income tax in respect of payments by the Borrower hereunder for the
account of such Lending Office for any reason other than a change in
United States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of any such law, treaty
or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 1001.
(j) If, at any time, the Borrower requests any Bank to
deliver any forms or other documentation pursuant to Section 3.13(f), then the
Borrower shall, on demand of such Bank through the Agent, reimburse such Bank
for any costs or expenses reasonably incurred by such Bank in the preparation
or delivery of such forms or other documentation.
(k) The agreements and obligations of the Borrower
contained in this Section 3.13 shall survive the payment in full of principal
and interest hereunder and under the Notes and are subject in their entirety to
the terms and provisions of Section 11.6 hereof.
Section 3.14 Sharing of Payments, Etc.. If, other than as provided
in Sections 3.15, 3.16, or 3.17, any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Loans made by it in excess of its Commitment
Percentage of payments on account of the Loans obtained by all the Banks, such
Bank shall forthwith purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase by such Bank from each other Bank shall be rescinded and
each other Bank shall repay to the purchasing Bank the purchase price paid
thereto to the extent of such recovery together with an amount equal to such
paying Bank's Commitment Percentage (according, to the proportion of (a) the
amount of such paying Bank's required repayment to (b) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
The Borrower agrees that any Bank so purchasing a participation from another
Bank pursuant to the provisions of this Section 3.14 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
Section 3.15 Illegality.
(a) If the introduction of any Requirement of Law or any
change in or in the interpretation or administration thereof shall make it
unlawful, or any central bank or other Governmental Authority shall assert that
it is unlawful, for any Bank or its Lending Office to make Eurodollar Rate
Loans, then, on notice thereof by such Bank through the Agent to the Borrower,
the obligation of such Bank to make Eurodollar Rate Loans shall
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be suspended until such notifying Bank shall have notified the Agent and the
Borrower that the circumstances giving rise to such determination no longer
exists.
(b) If it shall be unlawful to maintain any Eurodollar
Rate Loan, the Borrower shall prepay in full all Eurodollar Rate Loans of such
Bank then outstanding, together with interest accrued thereon, either on the
last day of the Interest Period thereof if such Bank may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Bank
may not lawfully continue to maintain such Eurodollar Rate Loans together with
any amounts required to be paid in connection therewith pursuant to Section
3.17.
(c) If the Borrower is required to prepay any Eurodollar
Rate Loan immediately as provided in Section 3.15(b), then concurrently with
such prepayment, the Borrower shall borrow from such Bank, in the amount of
such prepayment, a Base Rate Loan.
(d) If the obligation of any Bank to make or maintain
Eurodollar Rate Loans has been terminated, the Borrower may elect, by giving
notice to such Bank through the Agent that all Loans which would otherwise be
made by such Bank as Eurodollar Rate Loans shall be instead Base Rate Loans.
Section 3.16 Increased Cost and Reduced Return.
(a) If, due to either (i) the introduction of or any
change (other than any change by way of imposition of or increase in reserve
requirements included in the Eurodollar Reserve Percentage) in or in the
interpretation of any Requirement of Law or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Bank of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Borrower shall be liable for, and shall from
time to time, upon demand therefor by such Bank (with a copy of such demand to
the Agent), pay to the Agent for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased costs.
(b) The Borrower agrees that if, due to any Requirement
of Law, or because of any change in any existing Requirement of Law, or in the
interpretation thereof by any official authority, whether or not having the
force of law, which comes into effect after the date of this Agreement, (i) the
Issuing Bank, the Agent or any other Bank or the Borrower should with respect
to any Letters of Credit issued or to be issued pursuant to the terms hereof,
be subject to any tax, charge, fee, deduction or withholding of any kind
whatsoever, or (ii) reserve requirements, or changes in existing reserve
requirements, should be imposed on the Issuing Bank, the Agent or any other
Bank with respect to any Letters of Credit issued or to be issued pursuant to
the terms hereof, and if any of the above-mentioned measures, or any other
similar measure, should result in (A) any increase in the cost to the Agent or
any other Bank of issuing, maintaining, confirming or participating any Letter
of Credit pursuant to this Agreement or of any transaction under or in
connection with any Letter of Credit or this Agreement, or (B) any reduction in
the payment or deposit of any amount (principal, interest, fee or otherwise)
receivable by the Issuing Bank, the Agent or any other Bank in respect of any
Letter of Credit or of any transaction under any Letter of Credit, then the
Borrower shall pay to the Agent upon
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demand such increased cost or reduction, including such additional amounts as
may be necessary so that every net payment or deposit, after deduction or
withholding for or on account of such payment or deposit (including any taxes
levied on additional amounts paid pursuant to this Section) will not be less
than the corresponding amount provided for under applicable Letters of Credit
or Letter of Credit Agreements.
(c) If any Bank shall have determined that the
introduction of any applicable Requirement of Law or guideline regarding
capital adequacy, or any change therein any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by such Bank (or its Lending Office) or any corporation controlling
such Bank with any request, guideline or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, affects or would affect the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such
Bank, and such Bank (taking, into consideration such Bank's or such corporation
s, policies with respect to capital adequacy and such Bank's desired return on
capital) determines that the amount of such capital is increased as a
consequence of such Bank's obligation under this Agreement, then, upon demand
of such Bank, the Borrower shall immediately pay to such Bank, from time to
time as specified by such Bank, additional amounts sufficient to compensate
such Bank for such increase.
(d) The provisions of this Section 3.16 are subject in
their entirety to the provisions of Section 11.6 of this Agreement.
Section 3.17 Funding Losses. Subject to the provisions of Section
11.6 of this Agreement, the Borrower agrees to reimburse each Bank and to hold
such Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of:
(a) failure of the Borrower to make any payment or
prepayment of principal with respect to any Eurodollar Rate Loan (including
payments made after any acceleration thereof),
(b) failure of the Borrower to borrow, continue or
convert a Loan after the Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation,
(c) failure of the Borrower to make any prepayment after
the Borrower has given a notice in accordance with Section 3.6, and/or
(d) prepayment (whether optional or mandatory under the
terms of this Agreement) of a Eurodollar Rate Loan on a day which is not the
last day of the Interest Period with respect thereto,
including, without limitation, any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its Eurodollar
Rate Loans hereunder or from fees payable to terminate the deposits from which
such funds were obtained. A certificate of the respective Bank with respect to
amounts owing under this Section 3.17 shall be conclusive absent manifest
error.
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This covenant shall survive termination of this Agreement and the Loan
Documents and repayment of the Loans and the extinguishment of all Credit
Exposure.
Section 3.18 Eurodollar Rate Protection. In the event that (a) the
Majority Banks shall have determined (which determination shall be conclusive
and binding upon the Borrower) that for any reason adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate applicable for any
requested Interest Period with respect to a proposed Loan that the Borrower has
requested be made as a Eurodollar Rate Loan or (b) the Majority Banks shall
determine (which determination shall be conclusive and binding upon the
Borrower) that the Eurodollar Rate applicable for any requested Interest Period
with respect to a proposed Loan that the Borrower has requested be made as a
Eurodollar Rate Loan do not adequately and fairly reflect the cost to the Bank
of funding such Loan, the Agent shall forthwith give telex or facsimile notice
of such determination to the Borrower and each Bank at least one day prior to
the proposed borrowing date for such Eurodollar Rate Loan. If such notice is
given, any requested Eurodollar Rate Loan shall be made as a Base Rate Loan.
Until such notice has been withdrawn by the Agent, no further Eurodollar Rate
Loans may be requested by the Borrower and on the Interest Payment Date of any
Eurodollar Rate Loan then outstanding and so affected, such outstanding
Eurodollar Rate Loan shall be converted into a Base Rate Loan.
Section 3.19 Certain Agreements Regarding Letters of Credit.
(a) The Issuing Bank shall not have any obligation to
issue a Letter of Credit unless the Borrower shall have complied with all the
terms and conditions of this Agreement. If, in accordance with its standard
operating procedures, the Issuing Bank determines that a demand for payment
under a Letter of Credit conforms to the terms and conditions of such Letter of
Credit, the Issuing Bank shall, as soon as reasonably practicable, give notice
to the Borrower and to the Banks of the date it will make payment to the
applicable beneficiary in accordance with the terms of such Letter of Credit.
The Borrower's obligation to reimburse the Agent as provided herein is
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, under all circumstances
whatsoever, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of
this Agreement, any Letter of Credit, any Letter of Credit Agreement,
or any other document;
(ii) the existence of any claim, setoff, defense
or other right which the Borrower may have at any time against the
beneficiary of any Letter of Credit, the Agent, the Banks, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, or any Letter of Credit Agreement, the transactions
contemplated herein or any unrelated transactions;
(iii) any draft, certificate or other document
presented under any Letter of Credit proves to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein is
untrue or inaccurate in any respect whatsoever;
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(iv) payment by the Issuing Bank under any Letter
of Credit against presentation of a sight draft or certificate which
complies in all material respects with the terms of a Letter of Credit
but does not strictly comply therewith;
(v) the surrender or impairment of any Collateral;
(vi) any failure of the Issuing Bank or any Bank
to provide notice to the Borrower of any drawing under a Letter of
Credit;
(vii) the occurrence or continuance of a Default
or Event of Default; or
(viii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.
(b) Each Bank hereby agrees that it shall be liable under
and pursuant to each Letter of Credit pro rata in proportion to its Commitment
Percentage of the face amount thereof to the same extent and with the same
effect as if such Bank had issued such Letter of Credit. In that regard,
immediately upon the issuance by the Issuing Bank of any Letter of Credit in
accordance with this Agreement, each other Bank shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation in such
Letter of Credit, including all obligations of the Borrower with respect
thereto and any security therefor or guaranty pertaining thereto, in an amount
equal to the product of (i) the Line of Credit Commitment Percentage of such
Bank and (ii) the stated amount of such Letter of Credit. For purposes of
Section 3.7(b) of this Agreement, each issuance of a Letter of Credit by the
Issuing Bank shall be deemed to utilize the Line of Credit Commitment of each
Bank (other than the Issuing Bank) by an amount equal to the amount of such
participation and to utilize the Line of Credit Commitment of the Issuing Bank
by an amount equal to the stated amount of such Letter of Credit less the
aggregate amount of all participations therein.
(c) The Borrower hereby unconditionally and irrevocably
agrees to reimburse the Issuing Bank for each payment made by the Issuing Bank
under any Letter of Credit issued by the Issuing Bank (a "Reimbursement
Obligation") on the date the Issuing Bank is making such payment in accordance
with Section 3.19(a) of this Agreement (or, if the Issuing Bank's notice to the
Borrower pursuant to Section 3.19(a) was given after 12:00 Noon (Houston, Texas
time) on such date, on the Business Day next following such date), together
with, (i) if applicable, interest on the amount paid by the Issuing Bank from
the date the payment was made until it becomes due at a rate per annum equal to
the lesser of (y) the Maximum Rate, or (z) the Base Rate plus the Applicable
Margin, and (ii) if such reimbursement is not made when due (whether directly,
by means of Loans as provided in Section 3.19(d) below or by application of any
funds then contained in any Cash Collateral Account) interest on the amount so
paid by the Issuing Bank from and including the date on which it becomes due to
but not including the date the Issuing Bank is reimbursed therefor at a rate
per annum equal to the lesser of (y) the Maximum Rate, or (z) the Default Rate.
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(d) Subject to the conditions contained in Article 4, the
Borrower may satisfy its Reimbursement Obligation to the Issuing Bank by
borrowing Base Rate Loans hereunder in accordance with Sections 3.2 and 3.3 of
this Agreement, the proceeds of which Loans will be used to reimburse the
Issuing Bank for the amount of any disbursement made by it under a Letter of
Credit, together with interest thereon to the extent provided in Section
3.19(c). If the Borrower shall fail to reimburse or cause the Issuing Bank to
be reimbursed directly or by application of funds contained in any Cash
Collateral Account on the same day the Issuing Bank honors a drawing under a
Letter of Credit (or, if the Issuing Bank's notice to the Borrower pursuant to
Section 3.19(a) was given after 12:00 Noon (Houston, Texas time) on such date,
on the Business Day next following such date), the Agent shall promptly notify
the other Banks thereof; provided, however, that if on the date of such
notification there shall not exist any Default under Section 7.1(g) or 7.1(h),
the Borrower shall be deemed to have requested that Base Rate Loans be made by
the Banks, to be disbursed on the date of payment by the Issuing Bank under
such Letter of Credit. In the event that any Bank fails to make available to
the Agent the amount of such Bank's Loan, on the date payment is made under the
Letter of Credit, the Issuing Bank shall be entitled to recover such amount on
demand from such Bank together with interest thereon at the Federal Funds Rate.
(e) If any Reimbursement Obligation of the Borrower is
not repaid directly by the Borrower when due and cannot be repaid by means of a
Borrowing of Loans and there shall not then be sufficient funds available for
the payment due to the Issuing Bank in any Cash Collateral Account, each other
Bank will promptly pay to the Agent the amount of such other Bank's
participation in such Reimbursement Obligation determined in accordance with
Section 3.19(b). Each Bank's obligation to pay the amount of its participation
in a Reimbursement Obligation in accordance with this Agreement, as a result of
a drawing under a Letter of Credit, shall be absolute and unconditional and
without recourse to the Issuing Bank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the Issuing Bank, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default, an Event of Default or a Material Adverse Effect; or (iii) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing; provided, however, that each Bank's obligation to make
Revolving Credit Loans under Section 3.2 is subject to the conditions set forth
in Section 4.2.
(f) Upon and only upon receipt by the Issuing Bank of
funds from the Borrower (i) in reimbursement of any payment made under a Letter
of Credit with respect to which any Bank has theretofore made a payment to the
Agent pursuant to Section 3.19(d) or 3.19(e), or (ii) in payment of interest on
any Reimbursement Obligation, the Agent will pay to each such Bank, in the same
funds as those received by the Issuing Bank, such Bank's Line of Credit
Commitment Percentage of such funds.
(g) If the Agent is required at any time to return to the
Borrower or to a trustee, receiver, liquidator, custodian or other similar
official any portion of the payments made by the Borrower to the Issuing Bank
in reimbursement of a payment made under any Letter of Credit or interest
thereon, each Bank shall, on demand of the Agent, forthwith return to the Agent
its Line of Credit Commitment Percentage of any amounts so returned by the
Agent, plus, to the extent the Issuing Bank is required to pay interest to the
Borrower or such official and such interest remains unreimbursed, interest
thereon from
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the date such demand is made to but not including the date such amounts are
returned by such Bank to the Agent, at a rate per annum equal to the Federal
Funds Rate.
(h) The Borrower assumes all risks of the acts or
omissions of beneficiaries of any of the Letters of Credit with respect to
their use of the Letters of Credit. The Issuing Bank will not pay drafts drawn
under Letters of Credit unless such conform to the requirements of the
applicable Letter of Credit. Except in the case of gross negligence or willful
misconduct on the part of the Issuing Bank or any of its employees, neither the
Issuing Bank nor its correspondents nor any of the other Banks nor the Agent
shall be responsible for any of the following (INCLUDING, BUT NOT LIMITED TO,
THOSE CAUSED BY THE ISSUING BANK'S, ITS CORRESPONDENT'S, ANY OF THE OTHER
BANKS', OR THE AGENT'S OWN NEGLIGENCE): (i) the validity or genuineness of
certificates or other documents, even if such certificates or other documents
should in fact prove to be invalid, fraudulent or forged; (ii) errors,
omissions, interruptions or delay in the transmission or delivery of any
messages, by mail, telex, facsimile or otherwise, whether or not they be in
code; (iii) errors in the translation or for errors in interpretation of
technical terms; or (iv) any consequences arising from causes beyond the
Issuing Bank's control or the control of their correspondents; nor shall the
Issuing Bank be responsible for any error, neglect or default of any of their
correspondents; and none of the above shall affect, impair or prevent the
vesting of any of the Issuing Bank's rights or powers hereunder or under any
Letter of Credit, all of which rights shall be cumulative. The Issuing Bank
and its correspondents may accept certificates or other documents that appear
on their face to be in order, without responsibility for further investigation.
In furtherance but not in limitation of the foregoing provisions, the Borrower
agrees that any action taken by the Issuing Bank or any of its correspondents
in good faith in connection with any such Letter of Credit, or any related
drafts, certificates, documents or instruments, shall be binding on the
Borrower and shall not put the Issuing Bank or its correspondents under any
resultant liability to the Borrower; and the Borrower makes a like agreement as
to any inaction or omission, unless in breach of good faith.
(i) The Banks severally agree to indemnify the Agent and
the Issuing Bank and each officer, director, employee, agent and Affiliate of
the Agent and the Issuing Bank ratably according to their Line of Credit
Commitment Percentages, to the extent not reimbursed by the Borrower, from and
against any and all actions, causes of action, suits, losses, liabilities,
damages, and expenses which may at any time (including at any time following
the payment of any of the Reimbursement Obligations) be imposed on, incurred by
or asserted against such Person in any way relating to or arising out of the
issuance of, transfer of, or payment or failure to pay under any Letter of
Credit issued pursuant to this Agreement or the use of proceeds of any payment
made under any Letter of Credit issued in accordance with the terms of this
Agreement and EVEN IF CAUSED BY SUCH PERSON'S OWN NEGLIGENCE; provided,
however, that no Bank shall be liable for the payment of any portion of such
actions, causes of action, suits, losses, liabilities, damages and expenses
resulting solely from such Person's gross negligence or willful misconduct.
Section 3.20 Voluntary Termination or Reduction of Commitments.
Subject to Section 3.17 of this Agreement, the Borrower may upon not less than
five (5) Business Days' prior notice to the Agent, terminate the Line of Credit
Commitments or permanently reduce the Line of Credit Commitments by an
aggregate minimum amount of $5,000,000 or any integral multiple of $1,000,000
above such amount, provided, that no such
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reduction or termination shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the then outstanding principal amount of the Loans plus all then
existing Credit Exposure would exceed the amount of the Line of Credit
Commitments then in effect and, provided, further, that once reduced in
accordance with this Section 3.20, the Line of Credit Commitments may not be
increased. Any reduction of the Line of Credit Commitments shall be applied to
each Bank's Line of Credit Commitment in accordance with such Bank's Line of
Credit Commitment Percentage. If the Line of Credit Commitments are terminated
in their entirety, all accrued commitment fees to, but not including, the
effective date of such termination shall be payable on the effective date of
such termination without any premium or penalty.
Section 3.21 Change of Lending Office. Each Bank agrees that, upon
the occurrence of any event giving rise to the operation of Section 3.13(d),
3.15, 3.16, or 3.18 hereof with respect to such Bank, it will, if requested by
Borrower, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for its Loan (provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage) with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 3.13, 3.15, 3.16, or
3.18.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.1 Conditions Precedent to Initial Credit Extensions. The
obligation of the Bank to make the initial Revolving Credit Loan or issue the
initial Letter of Credit provided herein is subject to the condition precedent
that on or before the Closing Date the following shall have been delivered to
the Agent and the Banks in form and substance satisfactory to the Agent and the
Banks:
(a) This Agreement and the Notes dated the Closing Date
and duly executed and delivered by the Borrower.
(b) The other Loan Documents and such evidence of
filings, acknowledgments or acceptances of any such documents as the Agent and
the Banks may reasonably request or require, all duly executed and delivered by
all parties thereto. The Security Instruments shall be effective to grant to
the Agent and the Banks first priority perfected liens and security interests
in the Collateral.
(c) Written opinion or opinions, dated the Closing Date,
of counsel for the Borrower and its Subsidiaries in form and substance
satisfactory to the Agent and the Banks covering all such matters as the Agent
and the Banks may require.
(d) A copy of the Borrower's and its Subsidiaries'
articles or certificates of incorporation, as the case may be, and bylaws,
including all amendments thereto, all certified, in the case of certificates or
articles of incorporation, by the Secretary of State of the respective Person's
state of incorporation, and, in the case of, bylaws, by the Secretary or an
Assistant Secretary of such Person, as the case may be, as being in full force
and effect on the Closing Date, and all other documents the Agent and the Banks
may request
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relating to the existence, qualification and good standing of the Borrower and
its Subsidiaries.
(e) A copy of a resolution or resolutions passed by the
Boards of Directors of the Borrower and its Subsidiaries certified by the
Secretary or an Assistant Secretary of such Person as being in full force and
effect on the Closing Date, each of which corporate resolutions authorizing the
borrowings and Letters of Credit provided for herein and/or the execution,
delivery and performance of this Agreement, and the other Loan Documents, and
any other instrument or agreement required hereunder from such Person, as the
case may be, and providing as to the incumbency, and containing the specimen
signature or signatures, of the person or persons authorized to execute and
deliver this Agreement, the Notes, and the other Loan Documents and any other
instrument or agreement required hereunder.
(f) A summary of the insurance coverage of the Borrower
and its Subsidiaries, which shall be in form, scope and substance reasonably
satisfactory to the Agent and the Banks, together with certificates from each
insurer required pursuant to Section 5.5 hereof.
(g) Evidence satisfactory to the Majority Banks that as
of the Closing Date the Agent and the Banks have a first priority perfected
Lien on the Collateral and that there exist no Liens (other than Permitted
Liens) on any Property of the Borrower or any of its Subsidiaries, except as
specifically provided in Section 3.11 hereof.
(h) The fees then payable pursuant to Sections 3.7 and
11.7 of this Agreement (including the fees, expenses and disbursements of the
Bank's counsel), shall have been paid to the Agent or any Bank or such counsel,
as applicable.
(i) A certificate signed by a Responsible Officer, dated
as of the Closing Date, stating that (i) the representations and warranties
contained in Article II are true and correct on and as of such date, as though
made on and as of such date, taking into account the Air Drilling Acquisition,
(ii) no Default or Event of Default exists or would result from the Credit
Extension being made on the Closing Date, (iii) there has occurred since April
30, 1996, no event or circumstance that has resulted or would reasonably be
expected to result in a Material Adverse Effect and (iv) all of the conditions
precedent set forth in Section 4.2 have been satisfied.
(j) Photocopies of the principal Acquisition Documents
(duly executed and delivered by each party thereto each in form and substance
satisfactory to the Agent and the Majority Banks), certified as being true,
correct and complete by a Responsible Officer of Borrower, a letter from
counsel to each Selling Shareholder permitting the Agent to rely upon such
counsel's opinion delivered to Borrower in connection with the Air Drilling
Acquisition as if such opinion had been addressed to the Agent, and evidence,
to Agent's satisfaction, that (a) Borrower has consummated (or concurrently
with the initial Loans is consummating) the Air Drilling Acquisition for a
total consideration of not more that $47,000,000 (including the assumption of
liabilities), (b) the Air Drilling Acquisition was consummated without the
waiver by the Borrower of any of the conditions precedent to the closing
thereof contained in the Acquisition Agreement and (c) each of the Borrower and
the Selling Shareholders has obtained any approvals required for
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the consummation of the Air Drilling Acquisition including, without limitation,
approvals required under the Xxxx-Xxxxx- Xxxxxx Antitrust Improvements Act of
1976, as amended.
(k) Evidence that all Indebtedness of the Company and its
Subsidiaries required to be repaid as set forth on Schedule 6.1 shall have been
(or shall simultaneously with the initial Loans be) repaid, all liens securing
the same shall have been (or shall simultaneously with the initial Loans be)
terminated and all commitments thereunder shall have been (or shall
simultaneously with the initial Loans be) cancelled.
(l) Such other evidence as the Bank may reasonably
request to establish the consummation of the transactions contemplated hereby,
the taking of all proceedings in connection herewith and compliance with the
conditions set forth in this Agreement.
Section 4.2 Additional Conditions Precedent to Each Loan. The
obligation of each Bank to make any Loan or the Issuing Bank to issue any
Letter of Credit provided herein is subject to the following further conditions
precedent:
(a) Notice, Application. The Agent shall have received
(with, in the case of the initial Revolving Credit Loan only, a copy for each
Bank) a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable or in the case of any Issuance of any Letter of Credit, the Issuing
Bank and the Agent shall have received a Credit Request, as required under
Section 3.3(f).
(b) The representations and warranties contained herein
and in the other Loan Documents shall be true and correct on the date of each
Loan or the date of issuance of each Letter of Credit (except such
representations and warranties that relate solely to an earlier date and that
were true and correct on such earlier date) and each of the Borrower and its
Subsidiaries shall be deemed to repeat such representations and warranties made
by it on such date.
(c) The Borrower and its Subsidiaries shall have
performed and complied with all agreements and conditions contained in this
Agreement and the other Loan Documents. No Event of Default or Default shall
have occurred and be continuing or shall result from such Loan or issuance of
Letters of Credit.
(d) The making of the Loans and the issuance of all
Letters of Credit shall not be prohibited by the laws and regulations of the
jurisdictions to which the Agent, any Bank, the Borrower or its Subsidiaries is
subject (including, without limitation, Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System), and shall not subject the Agent or
any Bank to any penalty or, in the reasonable judgment of the Majority Banks,
other burdensome condition under or pursuant to any applicable law or
governmental regulation.
(e) There shall be no suit, action, investigation,
inquiry or other proceeding by any Governmental Authority or any other Person
or any other legal or administrative proceeding pending or, to the knowledge of
the Borrower, threatened, which (i) questions the validity or legality of this
Agreement, any of the other Loan Documents or any of the transactions
contemplated by this Agreement or the other Loan Documents or seeks damages in
connection with any of the foregoing or (ii) if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
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(f) No event or condition having a Material Adverse
Effect shall have occurred since April 30, 1996.
Each Notice of Borrowing and Credit Request submitted by the Borrower hereunder
shall constitute a representation and warranty by the Borrower hereunder, as of
the date of each such notice and as of each Borrowing date, or Issuance date,
as applicable, that the conditions in this Section 4.2 are satisfied.
ARTICLE 5. AFFIRMATIVE COVENANTS.
During the term of this Agreement, and for so long as any Bank shall
have any Commitment or any Letter of Credit remains outstanding hereunder, and
until the Notes and all of the Obligations have been paid in full and there
shall exist no Credit Exposure, unless compliance with the provisions of the
following subsections shall have been waived in writing by the Majority Banks,
the Borrower agrees as follows:
Section 5.1 Financial Statements. The Borrower will and, as
applicable, will cause its Subsidiaries to furnish the following to the Agent
with copies for each Bank:
(a) As soon as available, but in any event, within one
hundred twenty (120) days after the end of each fiscal year of the Borrower, a
copy of the Borrower's and its Subsidiaries' annual audited consolidated
financial statements (consisting of at least a balance sheet and related
statements of income, retained earnings and cash flow prepared in conformity
with GAAP applied on a basis consistent with that of the preceding fiscal
year), and accompanied by an unqualified opinion of an independent certified
public accountant selected by the Borrower and acceptable to the Majority
Banks;
(b) As soon as available, but in any event not later than
one hundred twenty (120) days after the end of each fiscal year of the
Borrower, an unaudited consolidating balance sheet of the Borrower and each of
its Subsidiaries as at the end of such fiscal year and the related
consolidating statement of income for such fiscal year, all in reasonable
detail certified by a proper Responsible Officer of the Borrower as having been
used in connection with the preparation of the financial statements referred to
in Section 5.1(a) hereof;
(c) As soon as available, but in any event, within
forty-five (45) days of the end of each quarter of each fiscal year during the
term hereof, unaudited interim consolidating and consolidated financial
statements of the Borrower and each of its Subsidiaries prepared and certified
by a proper Responsible Officer of the Borrower and prepared similarly to the
audited statements referred to in clause (a) above (subject to normal year-end
audit adjustments) and consisting of at least balance sheets as of the close of
such period and statements of income, retained earnings and cash flow for the
quarter then ended and for the period from the beginning of the fiscal year to
the close of such period;
(d) Upon request by any Bank, a copy of the federal
income tax return of the Borrower and its Subsidiaries, for the current fiscal
year then ended, certified by a proper Responsible Officer of such Person;
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(e) Promptly upon their becoming available, Borrower will
deliver copies of: (i) all financial statements, reports, notices and proxy
statements sent or made available by the Borrower or any of its Subsidiaries to
their security holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by the Borrower or any
of its Subsidiaries with any securities exchange or with the U.S. Securities
and Exchange Commission or any Governmental Authority; and (iii) all press
releases and other statements made available by the Borrower or any of its
respective Subsidiaries to the public concerning the financial condition of the
Borrower or any of its Subsidiaries;
(f) (i) Promptly after the filing thereof with the
United States Secretary of Labor or the Pension Benefit Guaranty Corporation,
copies of each annual and other report with respect to each Plan or any trust
created thereunder, and (ii) immediately upon becoming aware of the occurrence
of any "reportable event," as such term is defined in Section 4043 of ERISA, 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 notice
signed by the President or a principal financial officer of the Borrower
specifying the nature thereof, what action the Borrower is taking or proposes
to take with respect thereto and, when known, any action taken by the Internal
Revenue Service with respect thereto;
(g) As soon as available, but in any event, within 20
days after the end of each month during the term hereof, a Loan Formula
Certificate for the appropriate time period, certified by a Responsible Officer
of the Borrower containing a certificate of a Responsible Officer of the
Borrower stating that a review of the activities of the Borrower and its
Subsidiaries during the period covered by such certificate has been made under
his supervision with a view to determining whether the Borrower and its
Subsidiaries have kept, observed, performed and fulfilled all of their
obligations under this Agreement, the Notes, the Security Instruments and the
other Loan Documents, and that, to the best of his knowledge, during such
period, each has kept, observed, performed and fulfilled each and every
covenant in this Agreement, the Notes, the Security Instruments and the other
Loan Documents, and is not at the time in default under any of the same, or if
it shall have been or shall be in default, specifying the same;
(h) Simultaneously with the delivery of each set of
financial statements referred to in clause (c) above, a quarterly listing and
aging of accounts receivable of the Borrower and its Subsidiaries, certified by
a Responsible Officer of the Borrower;
(i) Simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (c) above, a Compliance
Certificate certified by a Responsible Officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.11, 5.12, 5.13,
5.14, and 5.15 hereof, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(j) As soon as available, but in any event, no later than
30 days prior to the end of each fiscal year of the Borrower, projections of
the Borrower's and its
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Subsidiaries' financial statements for the next fiscal year of the Borrower
certified by a Responsible Officer of the Borrower; and
(k) Such other financial and other information concerning
the Borrower and its Subsidiaries as the Agent or any Bank shall request from
time to time.
Section 5.2 Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay all Obligations in accordance with their
terms and will, and will cause each of its Subsidiaries to, pay and discharge
all other Indebtedness in the ordinary course of business where failure to pay
and discharge such other Indebtedness would have a Material Adverse Effect;
provided, further, that notwithstanding the foregoing, the Borrower and its
Subsidiaries may contest in good faith any such other Indebtedness by
appropriate proceedings so long as adequate reserves are established as
required by GAAP.
Section 5.3 Notice; Litigation. The Borrower shall and shall
cause each of its Subsidiaries to, promptly give written notice to the Agent
and each Bank of (i) the occurrence of any Default or Event of Default, (ii)
any legal, judicial or regulatory proceedings affecting the Borrower or any
Subsidiary or any of their properties or assets in which the amount involved is
material, is not covered (subject to normal deductibles) by insurance and is
likely to have a Material Adverse Effect, (iii) any dispute between the
Borrower or any of its Subsidiaries and any Governmental Authority or other
Person that is likely materially to interfere with the normal business
operations of the Borrower or any of its Subsidiaries , (iv) any substantial
damage to any material part of the Collateral, specifying the nature and extent
of damage and whether such damage is being repaired in due course, or total
loss or destruction of any material part of the Collateral, (v) any other
action, event or condition of any nature of which it has knowledge which, in
the reasonable opinion of the Borrower is likely to have, or lead to, or result
in, any Material Adverse Effect, and (vi) the voluntary or involuntary
bankruptcy of, or any assignment for the benefit of creditors or the seeking of
any relief under any bankruptcy or other similar laws by, the Borrower or any
of its Subsidiaries.
Section 5.4 Maintenance of Corporate Existence and Properties. The
Borrower will, and will cause each of its Subsidiaries to, (i) continue to
engage in the businesses presently being operated, (ii) maintain its corporate
existence and good standing in each jurisdiction in which it is required to be
qualified, if its failure to be so qualified would have a Material Adverse
Effect, (iii) keep and maintain all franchises, permits, licenses and
properties useful and necessary in the conduct of its business in good order
and condition if failure to do so would have a Material Adverse Effect, and
(iv) duly observe and conform to all material requirements of any Governmental
Authorities relative to the conduct of its business or the operation of its
properties or assets, if such failure duly to observe and conform to such
requirements would have a Material Adverse Effect or could result in criminal
prosecution.
Section 5.5 Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain insurance with financially sound and responsible
companies, in such form, in such amounts and against such risks (including,
without limitation, public liability and property damage insurance) as is
customarily carried by companies engaged in the same or similar businesses,
operating like properties and similarly situated, plus any additional
insurance, if any, required in the Security Instruments. The Borrower and its
Subsidiaries
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will have the right to place any such insurance with any insurance carrier
acceptable to the Majority Banks. Upon execution of this Agreement, the
Borrower will furnish the Agent, with copies to each Bank (i) a summary of the
insurance coverage of the Borrower and its Subsidiaries, together with
certificates showing the Bank as loss payee to the extent its interests may
appear, all such policies to be noncancellable without 15 days' prior written
notice to the Agent, and will supplement such summary from time to time as the
amounts or terms of such insurance coverage change, and (ii) copies of the
applicable policies and proof of payment of the premiums therefor.
Section 5.6 Payment of Taxes. The Borrower will, and will cause each
of its Subsidiaries to, pay and discharge when due all taxes, assessments and
other liabilities, except those being contested in good faith by appropriate
proceedings, and against which the Borrower or its applicable Subsidiary has
set up adequate reserves, in accordance with GAAP.
Section 5.7 Accounts Receivable. The Borrower will, and will cause
each of its Subsidiaries to, maintain its accounts receivable in a manner
consistent with normal business practices, including normal terms and
conditions for payment, for companies engaged in similar operations in similar
jurisdictions.
Section 5.8 Further Assurances. The Borrower will, and cause each of
its Subsidiaries to, at any time and from time to time, execute and deliver
such further instruments and take such further action as may reasonably be
requested by the Majority Banks, in order to cure any defects in the execution
and delivery of, or to comply with or accomplish the covenants and agreements
contained in this Agreement, the Notes, the Security Instruments or the other
Loan Documents.
Section 5.9 Inspection. The Borrower will, and will cause each of
its Subsidiaries to, permit the Agent or any Bank (and any Person appointed by
the Agent or any Bank to act for it and on its behalf) to examine its corporate
and financial books and records and other records, books and properties, to
perform audits of the Collateral and to discuss its affairs, finances and
accounts with the officers of the Borrower and the Borrower's Subsidiaries, and
the Borrower's and the Borrower's Subsidiaries' independent certified public
accountants all at the expense of the Borrower and at all reasonable times and
as often as may be reasonably requested.
Section 5.10 Solvency. The Borrower will not be, and will not permit
the Borrower and its Subsidiaries taken as a whole, to be, Insolvent.
Section 5.11 Current Ratio. The Borrower and its Subsidiaries will
maintain a ratio of Current Assets to Current Liabilities of not less than 1.30
to 1.0, determined on a consolidated basis, at all times throughout the term
hereof.
Section 5.12 Maximum Funded Debt Ratio. The Borrower and its
Subsidiaries will maintain a Funded Debt Ratio during each period set forth
below of not greater than the ratio set forth below opposite such period:
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Funded Debt
Period Ratio
------ -----------
Closing Date
through and including
June 30, 2000 3.0 to 1.0
July 1, 2000 and
thereafter 2.5 to 1.0.
Section 5.13 Tangible Net Worth. The Borrower and its Subsidiaries
will maintain a positive Tangible Net Worth, determined on a consolidated
basis, at all times during the term of this Agreement in an amount not less
than the sum of:
(a) Ninety percent (90%) of the Tangible Net
Worth of the Borrower and its Subsidiaries at April 30, 1997
determined on a consolidated basis from the annual audited financial
statements of the Borrower and its Subsidiaries for the fiscal year of
the Borrower ending 1997 required pursuant to Section 5.1(a) hereof,
plus
(b) seventy-five percent (75%) of Net Income of
the Borrower for each month ending after April 30, 1997, in each case,
for which Consolidated Net Income is positive (but with no deduction
on account of negative Consolidated Net Income for any month), plus
(c) upon the consummation of any issuance of
Non-Redeemable Stock after April 30, 1997, one hundred percent (100%)
of the amount of Net Cash Proceeds received by the Borrower or any of
its Subsidiaries from all such issuances.
Section 5.14 Minimum Debt Service Coverage Ratio. The Borrower and
its Subsidiaries will maintain a ratio of (i) Consolidated EBITDA for the
period of 12 full consecutive calendar months ending on the last day of each
fiscal quarter of the Borrower throughout the term hereof less taxes measured
by income of the Borrower and its Subsidiaries paid in cash during such period,
to (ii) Consolidated Debt Service for such period, of not less than 1.3 to 1.0.
Section 5.15 Revenue Producing Assets. The Borrower and its
Subsidiaries will maintain, at all times, Revenue Producing Assets (exclusive
of Consignment Assets) determined on an original cost basis of not less than an
amount equal to the greater of (i) one hundred-ten percent (110%) of the then
aggregate outstanding principal balance of the Term Notes or (ii) one
hundred-ten percent (110%) of the aggregate Commitment Amount set forth on
Schedule I with respect to the Line of Credit.
Section 5.16 Environmental Compliance. The Borrower will, and will
cause each of its Subsidiaries, and their respective contractors and invitees
to, comply in all respects with the requirements of all Governmental
Authorities pursuant to Environmental Laws. Borrower shall not, and shall not
permit any of its Subsidiaries to, cause or permit any
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Hazardous Materials to be brought upon or kept or used on or about the Property
in violation of any Environmental Law or which results in any Hazardous
Materials Contamination which could reasonably be expected to have a Material
Adverse Effect.
Section 5.17 Notification of Releases of Hazardous Materials. The
Borrower will, and will cause each of its Subsidiaries to, immediately notify
the Agent and each of the Banks of, and provide the Agent and each of the Banks
with copies of any notifications of, discharges or releases or threatened
releases or discharges of a Hazardous Material on, upon, into, or from the
Property that could reasonably be expected to have a Material Adverse Effect
which are given or required to be given by or on behalf of the Borrower or any
of its Subsidiaries to any Governmental Authorities. Such copies of
notifications shall be delivered to the Agent and each of the Banks at the same
time as they are delivered to the Governmental Authorities. The Borrower will,
and will cause each of its Subsidiaries to, promptly undertake and diligently
pursue to completion any appropriate and legally required or authorized
investigation, abatement and remedial containment and cleanup action in the
event of any release or discharge, or threatened release or discharge, of a
Hazardous Material on, upon, into or from the Property.
Section 5.18 Environmental Indemnification. The Borrower hereby
indemnifies and agrees to hold harmless the Indemnified Parties from and
against all liabilities, claims, actions, consequential damages, costs and
expenses or loss, regardless of whether any of the foregoing are foreseeable or
unforeseeable, whether by Governmental Authorities or third parties, so long as
any of the foregoing occur directly or indirectly by virtue of (i) the breach
of any representation or warranty, or affirmative or negative covenant
regarding any Environmental Laws or Hazardous Materials; (ii) any Hazardous
Material being present at any time in, upon or around any part of any Property,
or in the soil, air, groundwater, or surface water on, above or under the
Property; (iii) the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a Hazardous Material on,
under or about the Property; (iv) operations of Borrower or any of its
Subsidiaries; or (v) the imposition or recording of liens on the Property
pursuant to any Environmental Laws. The liabilities, claims, actions,
consequential damages, costs and expenses and losses included in the indemnity
in this Section shall include, without limitation, amounts paid in settlement
of claims, all consultant, expert and legal fees and expenses of any
Indemnified Party's legal counsel costs and expense incurred in connection with
any investigations of site conditions, or any abatement, cleanup, remediation,
removal, or restoration work, or any damages or injuries to the person or
property of any third parties or to land, air, water or other natural
resources. Upon demand by the Majority Banks, the Borrower and its
Subsidiaries shall jointly and severally defend any investigation, action, or
proceeding alleging the presence of any Hazardous Material which affects any
Property or which is brought or commenced against any Indemnified Party,
whether alone or together with the Borrower, its Subsidiaries or any other
person, all at the Borrower's cost and expense but with counsel to be approved
by the Majority Banks in the exercise of its reasonable judgment.
Section 5.19 Chattel Paper. The Borrower will, and will cause each
of its U.S. Subsidiaries and Material Foreign Subsidiaries (to the extent the
laws of the relevant jurisdiction make it desirable to do so) to, stamp or
otherwise imprint all Chattel Paper (other than Chattel Paper consisting of
Foreign Accounts) relating to any of its respective assets with a legend in the
following form:
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"THIS CHATTEL PAPER IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION, AS AGENT FOR THE BENEFIT OF THE
BANKS (AS SUCH TERM IS DEFINED IN THAT CERTAIN THIRD AMENDED AND RESTATED
CREDIT AGREEMENT DATED AS OF JUNE 20, 1997, AMONG XXXXXX PETROLEUM SERVICES,
CORP., THE FINANCIAL INSTITUTIONS A PARTY THERETO FROM TIME TO TIME (THE
"BANKS"), AND THE AGENT, AS THE SAME MAY BE AMENDED OR RESTATED AT ANY TIME."
Section 5.20 Lockbox; Cash Collateral Account. Notwithstanding any
provision herein or in the other Loan Documents to the contrary, after the
occurrence of an Event of Default, the Borrower agrees to direct all customers
and licensees to send all sales remittance checks, license and royalty payments
and proceeds to a post office box (the "Lockbox") designated by the Agent for
the benefit of the Banks for collection and deposit in, and to deposit all cash
generated by cash sales and cash prepayments at time of purchase by the
Borrower's customers, and all proceeds (collectively, the "Proceeds") of
accounts, accounts receivable, license agreements, royalty agreements, and
credit card sales received by it into a cash collateral account (the "Cash
Collateral Account") designated by the Agent for the benefit of the Banks and
from which only officers of the Agent will be authorized to withdraw funds.
The Proceeds shall be deposited promptly in the Cash Collateral Account upon
receipt thereof by the Borrower in the form received with any endorsements
necessary for collection). After the occurrence of an Event of Default, all
Proceeds deposited in the Cash Collateral Account shall be applied to the
reduction of the Revolving Credit Note.
Section 5.21 ERISA. The Borrower shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
ARTICLE 6. NEGATIVE COVENANTS.
During the term of this Agreement, and for so long as any Bank shall
have any Commitment hereunder, and until the Notes and all of the Obligations
have been paid in full and there shall exist no Credit Exposure, unless
compliance with the following subsections shall have been waived in writing by
the Majority Banks, the Borrower agrees as follows:
Section 6.1 Limitations on Indebtedness. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Indebtedness except (i) the Indebtedness incurred under this
Agreement and the other Loan Documents, (ii) existing Indebtedness described on
Schedule 6.1 attached hereto, (iii) Capital Leases or other Indebtedness
incurred to finance the purchase of tangible, fixed or capital assets in an
aggregate amount not to exceed $500,000 at any one time outstanding, (iv)
Indebtedness incurred by the Borrower from the Guarantors, (v) Indebtedness of
any Guarantor of the Borrower to the Borrower or any other Guarantor, (vi)
Indebtedness of any Subsidiary of Borrower (other than Guarantors) to Borrower
or any of Borrower's other Subsidiaries (other than Guarantors), when
aggregated with all loans, advances, extension of credit and investments
(without duplication), not to exceed the aggregate
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amount set forth in Section 6.4(v) at any one time outstanding and (vii) other
Indebtedness of the Borrower and the Guarantors not to exceed an aggregate
amount of $2,000,000 at any one time outstanding.
Section 6.2 Limitations on Liens. The Borrower will not, and will
not permit any of its Subsidiaries to, create, assume or suffer to exist any
Lien of any kind upon any of its Properties or assets, whether now owned or
hereafter acquired, except Permitted Liens.
Section 6.3 Limitations on Contingent Liabilities. The Borrower will
not, and will not permit any of its Subsidiaries to, create, assume or suffer
to exist any Contingent Liabilities, except (i) as permitted hereunder, (ii)
guaranties of Indebtedness of the Borrower or any Subsidiary permitted pursuant
to Section 6.1 hereof, (iii) for endorsements of instruments for collection in
the ordinary course of business, (iv) reimbursement obligations in connection
with letters of credit and performance bonds to secure the performance of bids
and trade contracts (other than for borrowed money) incurred in the ordinary
course of the Borrower's and its Subsidiaries' business and (v) any such
liability in favor of the Agent and the Banks under this Agreement or the other
Loan Documents.
Section 6.4 Loans, Advances and Investments. The Borrower will not,
and will not permit any of its Subsidiaries to, make or permit to remain
outstanding any advances, loans or extensions of credit to, or purchase or own
any stock, bonds, notes, debentures, or other securities of, or make any
investments in, any Person (other than the Borrower or a Guarantor) except (i)
accounts, instruments, chattel paper, and general intangibles (as defined in
the UCC) arising or acquired, and trade credit extended, in the ordinary course
of business as presently conducted, (ii) Cash Equivalents, (iii) expenses,
advances and loans made to employees of the Borrower in the ordinary course of
business and not exceeding an aggregate amount of $750,000 at any one time
outstanding, (iv) Acquisitions, provided that the aggregate of all amounts
expended and liabilities assumed by Borrower and its Subsidiaries for all
Acquisitions during a fiscal year shall not exceed $5,000,000, (v) advances,
loans or extensions of credit to Subsidiaries (other than Guarantors) at any
one time outstanding plus the aggregate of all investments in Subsidiaries
(other than Guarantors) in an aggregate amount not to exceed (y) $13,000,000,
so long as any amounts remain owing on the Term Notes and (z) $18,000,000,
after the Term Notes have been paid in full in cash.
Section 6.5 Limitations on Fundamental Changes; Disposition of
Assets. The Borrower will not, and will not permit any of its Subsidiaries to,
(a) enter into any merger or consolidation, except any
Subsidiary of the Borrower may merge, consolidate or combine with or into (i)
the Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or (ii) any one or more Subsidiaries of the Borrower (provided
that if any transaction shall be between a Subsidiary and a wholly-owned
Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving
corporation);
(b) liquidate or dissolve itself (or suffer any
liquidation or dissolution); provided, however, that this Subsection 6.5(b)
shall not apply to any Subsidiary;
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(c) convey, sell, lease (other than leases of inventory
entered into in the ordinary course of business), charter or otherwise dispose
of all or substantially all of its property, assets or business; or
(d) except in the ordinary course of business, enter into
any arrangement, directly or indirectly, whereby the Borrower or its applicable
Subsidiary would sell or transfer any properties (other than real property),
either now owned or thereafter acquired, and then or thereafter lease as lessee
such properties or any part thereof or any property (other than real property)
to be used for substantially the same purpose.
Section 6.6 Dividends. The Borrower will not, and will not permit
any of its Subsidiaries (other than Wholly-Owned Subsidiaries) to, declare or
pay any dividend (other than dividends payable solely in stock) or make any
other distribution on account of, or purchase, acquire, retire, or redeem any
stock of the Borrower or any such Subsidiaries whether now owned or hereafter
outstanding.
Section 6.7 ERISA Compliance. The Borrower shall not, and shall not
suffer or permit any of its ERISA Affiliates to: (a) engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably expected to result in liability
of the Company in an aggregate amount in excess of $500,000; or (b) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
Section 6.8 Nature of Business. The Borrower will not, and will not
permit any of its Subsidiaries to, (i) engage in any lines of business or
business ventures other than those in which it is presently engaged or that are
directly related thereto, (ii) change in any material respect its methods of
operation or manner of doing business, (iii) without 45 days prior written
notice to the Agent and the Majority Banks, change the location of its chief
executive office, or (iv) change its name (without 45 days prior written notice
to the Agent and the Majority Banks), its identity as a corporation or its
corporate structure.
Section 6.9 Transactions with Affiliates and Other Persons. Except
as disclosed on Schedule 6.9, the Borrower will not, and will not permit any of
its Subsidiaries to, engage in any transaction with an Affiliate, which
individually or together with other transactions subject to this Section 6.9 is
material, on terms less favorable to it than would be obtainable at the time in
comparable transactions with Persons not affiliated with the Borrower or its
Subsidiaries, as the case may be. The Borrower will not, and will not permit
any of its Subsidiaries to, incur, create or assume any commitments to make
payments, whether as rental or otherwise, under any lease, rental or other
arrangement, written or oral, for the use of any other Person if, under the
terms of any such agreements, the amount of rentals payable thereunder is
greater than a fair market rental.
Section 6.10 Lease Obligations. The Borrower shall not, and shall
not suffer or permit any Subsidiary to, create or suffer to exist any
obligations for the payment of rent for any property under lease or agreement
to lease, except for:
(a) leases of the Borrower and of Subsidiaries in
existence on the Closing Date and any renewal, extension or refinancing
thereof;
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(b) operating leases entered into by the Borrower or any
Subsidiary after the Closing Date in the ordinary course of business;
(c) leases entered into by the Borrower or any Subsidiary
after the Closing Date pursuant to sale- leaseback transactions permitted under
subsection 6.5(d);
(d) Capital Leases other than those permitted under
clauses (a) and (c) of this Section, entered into by the Borrower or any
Subsidiary after the Closing Date to finance the acquisition of equipment;
provided that the aggregate annual rental payments for all such Capital Leases
shall not exceed in any fiscal year $1,000,000.
Section 6.11 Accounting Changes. The Borrower shall not, and shall
not suffer or permit any Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of the Borrower or of any Subsidiary without 45 days
prior written notice to the Agent and the Majority Banks.
ARTICLE 7. DEFAULT.
Section 7.1 Events of Default. The occurrence of any of the
following events or conditions shall constitute an "Event of Default":
(a) Failure of the Borrower to pay any principal of or
interest on any Notes, or failure to make any mandatory prepayment hereunder
when due;
(b) Any representation or warranty made by the Borrower
or any of its Subsidiaries in this Agreement or in any of the other Loan
Documents or in any certificate, financial or other statement furnished by the
Borrower or any of its Subsidiaries pursuant hereto or thereto or in connection
herewith or therewith is false in any material respect as of the date made or
furnished;
(c) Failure to observe or perform any of the covenants,
terms or agreements contained in Sections 3.6, 5.2, 5.5, 5.8, 5.9, 5.10, 5.11,
5.12, 5.13, 5.14, 5.15, 5.20 or Article 6 hereof;
(d) Failure to pay any amounts due hereunder or under any
other Loan Document (other than those described in Section 7.1(a) above) when
due or declared due, or failure to observe or perform any other covenants,
terms or agreements contained in this Agreement, any Loan Document or any other
agreements with the Agent or any Bank, and such failure to pay or other default
shall continue unremedied for a period of fifteen (15) days after the earlier
of (i) the date upon which the Borrower or its applicable Subsidiaries, knew or
should have known of such failure or (ii) the date upon which written notice
thereof has been given to the Borrower by the Agent or any Bank;
(e) The Borrower or any of its Subsidiaries (i) is
generally not paying its Indebtedness as it becomes due, (ii) fails to pay any
principal of or interest on any obligation or obligations for borrowed money
under any agreement involving an amount or amounts greater than $500,000 beyond
the period of grace, if any, provided for in the instrument or agreement under
which the same was created, or (iii) fails to observe or
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perform any other term, condition or agreement contained in any obligation or
obligations for borrowed money under any agreement involving an amount or
amounts greater than $500,000 or in any instrument or agreement evidencing,
securing or relating thereto if the effect thereof is to cause or permit the
holder or holders of such obligation (or a trustee or an agent on behalf of
such holder or holders) to cause any such obligation to become due prior to its
stated maturity;
(f) An event of default shall occur under any of the Loan
Documents;
(g) Any Loan Document ceases to be in full force and
effect and valid, binding, and enforceable in accordance with its terms, or any
of the Security Instruments ceases to create a valid and perfected first
priority Lien as required hereby and thereby, or the Borrower or any of its
Subsidiaries shall so state in writing;
(h) Filing by the Borrower or any of its Subsidiaries of
a voluntary petition or any answer seeking reorganization, arrangement,
readjustment of its or his debts or for any other relief under any applicable
bankruptcy act or law, or under any other insolvency act or law, now or
hereafter existing, or any action by the Borrower or any of its Subsidiaries
consenting to, approving of or acquiescing in any such petition or proceeding;
the application by the Borrower or any of its Subsidiaries for, or the
appointment by consent or acquiescence of, a receiver or trustee for the
Borrower or any of its Subsidiaries or for all or a substantial part of its or
his property; the making by the Borrower or any of its Subsidiaries of an
assignment for the benefit of creditors, the inability of the Borrower or any
of its Subsidiaries, or the admission by the Borrower or any of its
Subsidiaries in writing of its inability, to pay its debts as they mature (the
term "acquiescence" means the failure to file a petition or motion in
opposition to such petition or proceeding or to vacate or discharge any order,
judgment or decree providing for such appointment within 30 days after the
appointment of a receiver or trustee);
(i) Filing of an involuntary petition against the
Borrower or any of its Subsidiaries in bankruptcy or seeking reorganization,
arrangement or readjustment of its or his debts or for any other relief under
any applicable bankruptcy act or law, or under any other insolvency act or law,
now or hereafter existing and such petition remains undismissed or unanswered
for a period of 30 days from such filing; or the involuntary appointment of a
receiver or trustee for the Borrower or any of its Subsidiaries for all or a
substantial part of its or his property and such appointment remains unvacated
or unopposed for a period of 10 days from such appointment; or the issuance of
a writ of attachment, execution or similar process against any substantial part
of the Property of the Borrower or any of its Subsidiaries and such writ
remains unbonded or undismissed for a period of 10 days from notice to the
Borrower or any of its Subsidiaries of its issuance;
(j) Final judgment for the payment of money in excess of
$500,000 shall be rendered against the Borrower or any of its Subsidiaries and
the same shall remain undischarged for a period of 30 days, during which
execution shall not be effectively stayed; or
(k) (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of $500,000; (ii) the aggregate amount
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of Unfunded Pension Liability among all Pension Plans at any time exceeds
$500,000; or (iii) the Borrower or any ERISA Affiliate shall fail to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of $500,000; or
(l) There occurs any Change of Control; or
(m) There occurs a Material Adverse Effect; or
(n) Any Guarantor fails in any material respect to
perform or observe any term, covenant or agreement in its Guaranty; or any
Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or any Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder.
Section 7.2 Optional Acceleration. Upon the occurrence and
continuance of any Event of Default set forth in Subsection 7.1(a), (b), (c),
(d), (e), (f), (g), (j), (k), (l), (m), or (n) hereof, any obligation of the
Agent and all of the Banks to extend credit to the Borrower pursuant hereto
shall immediately terminate and the Agent, at the request of the Majority
Banks, and with the consent of the Majority Banks, without notice to the
Borrower or any of its Subsidiaries, may declare the principal of and interest
accrued on the Notes to be forthwith due and payable, WHEREUPON THE SAME SHALL
BECOME DUE AND PAYABLE WITHOUT ANY PRESENTMENT, DEMAND, PROTEST, NOTICE OF
PROTEST, NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION, OR NOTICE OF
ANY KIND (EXCEPT NOTICE REQUIRED PURSUANT TO THIS AGREEMENT OR OTHERWISE BY
LAW), ALL OF WHICH ARE HEREBY WAIVED. With respect to all Letters of Credit
that shall not have matured or with respect to which presentment for honor
shall not have occurred, Borrower shall deposit in a Cash Collateral Account at
the Agent an amount equal to the aggregate undrawn amount of Letters of Credit,
and the unused portions thereof, if any, shall be returned to Borrower after
the respective expiration dates of the Letters of Credit and after all Notes
and Obligations hereunder, under the Security Instruments and under the Letter
of Credit Agreements are paid in full.
Section 7.3 Automatic Acceleration. Upon the occurrence of any Event
of Default set forth in Subsection 7.1(h) or (i) hereof, any obligation of the
Agent and all of the Banks to make advances under the Notes shall automatically
terminate and the principal of and interest accrued on the Notes shall be
immediately and automatically due and payable without notice or demand of any
kind, and THE SAME SHALL BE DUE AND PAYABLE IMMEDIATELY WITHOUT ANY
PRESENTMENT, ACCELERATION, DEMAND, PROTEST, NOTICE OF INTENT TO ACCELERATE,
NOTICE OF ACCELERATION, NOTICE OF PROTEST OR NOTICE OF ANY KIND (EXCEPT NOTICE
REQUIRED PURSUANT TO THIS AGREEMENT OR OTHERWISE BY LAW), ALL OF WHICH ARE
HEREBY WAIVED. With respect to all Letters of Credit that shall not have
matured or with respect to which presentment for honor shall not have occurred,
Borrower shall deposit in a Cash Collateral Account at the Agent an amount
equal to the aggregate undrawn amount of Letters of Credit, and the unused
portions thereof, if any, shall be returned to Borrower after the respective
expiration dates of the
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Letters of Credit and after all Notes and Obligations hereunder, under the
Security Instruments and under the Letter of Credit Agreements are paid in
full.
Section 7.4 Additional Remedies. In case any one or more Events of
Default or Defaults shall occur and be continuing the Agent shall, at the
request of the Majority Banks, and with the consent of the Majority Banks may,
proceed to protect and enforce the rights of the Agent and the Banks by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein, in the Notes, or in the
other Loan Documents, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law, or otherwise. In addition, the Borrower will pay to the
Agent and the Banks such further amount as shall be sufficient to cover the
cost and expenses of collection, including, without limitation, reasonable
attorneys' fees, expenses and disbursements. No course of dealing and no delay
on the part of any holder of the Notes in exercising any right, power or remedy
shall operate as a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. No right, power or remedy conferred by this Agreement, the
Notes, or by the other Loan Documents upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise.
ARTICLE 8. RELATION OF BANKS.
Section 8.1 Appointment.
(a) Each Bank hereby irrevocably appoints, designates and
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent. Without limiting the generality of the foregoing sentence, the use of
the term "agent" in this Agreement and the other Loan Documents with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks
with respect to any Letters of Credit Issued by it and the documents associated
therewith; provided, however, that the Issuing Bank shall have all of the
benefits and immunities (i) provided to the Agent in this Article 8 with
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit Issued by it or proposed to be Issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent", as used in this Article 8,
included the Issuing Bank with
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respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
Section 8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents, employees, any
additional co-agent appointed pursuant to Section 8.3 below, or
attorney-in-fact that it selects with reasonable care.
Section 8.3 Appointment of Additional Co-Agent.
(a) It is the purpose of this Agreement that there shall
be no violation of any law of any jurisdiction denying or restricting the right
of banking corporations or associations to transact business as agent in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or the Loan Documents and in particular in case of the enforcement thereof on
Default, or in case the Agent deems that by reasons of any present or future
law of any jurisdiction it may not exercise any of the powers, rights or
remedies herein or therein granted to the Agent or take any other action which
may be desirable or necessary in connection therewith, the Agent, with the
consent of the Majority Banks, may appoint an additional individual or
institution as a separate or additional co-agent, in which event each and every
remedy, power, right, claim, demand, cause of action, immunity, interest and
lien expressed or intended by this Agreement or the other Loan Documents to be
exercised by or vested in or conveyed to the Agent with respect thereto shall
be exercisable by and vest in such separate or additional co-agent, but only to
the extent necessary to enable such separate or additional co-agent to exercise
such powers, rights and remedies, and every covenant and obligation necessary
to the exercise thereof by such separate or additional co-agent shall run to
and be enforceable by either of them.
(b) Should any conveyance or instrument in writing from
the Banks be required by such separate or additional co-agent so appointed by
the Agent for more fully and certainly vesting in and confirming to him or it
such rights, powers, duties and obligations, any and all such conveyances and
instruments shall, on request, be executed, acknowledged and delivered by the
Majority Banks. In case any such separate or additional co-agent or a
successor, shall die, become incapable of acting, resign or be removed, all
the rights, powers, duties and obligations of such separate or additional
co-agent, so far as permitted by law, shall vest in and be exercised by the
Agent until the appointment of a successor to such separate or additional
co-agent. Any such separate or additional co-agent appointed by the Agent
pursuant to this Section 8.3 may be removed by the Agent at any time, in which
case all powers, rights and remedies vested in such separate or additional
co-agent shall again vest in the Agent as if no such appointment of additional
co-agent had been made.
Section 8.4 Liability of Agent. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (a) liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document (except for its
own gross negligence or willful misconduct), or (b) responsible in any manner
to any of the Banks for any recital, statement, representation or warranty made
by the Borrower or any of its Subsidiaries or any officer of any of them
contained in this Agreement or in any other Loan Document or in any
certificate, report,
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statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document or
for the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower or any of its Subsidiaries to perform its
obligations hereunder or thereunder, or (c) required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan
Document. The Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Agent pursuant to Article 9,
together with the approval of the Borrower (if such approval is required under
Article 9), which approval of the Borrower shall not be unreasonably withheld,
to such assignment or transfer. The Agent shall not be under any obligation to
any Bank to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the Properties, books or records of the Borrower
or any of its Subsidiaries.
Section 8.5 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telecopy, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Majority Banks
as it deems appropriate and, if it so requests, it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Banks and all future holders of the Obligations.
(b) For purposes of determining compliance with the
conditions specified in Article 4, each Bank shall be deemed to have consented
to, approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Banks.
Section 8.6 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
payable to the Agent for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Majority Banks in accordance with Article 7 hereof; provided,
however, that unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to)
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take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable and in the best
interests of the Banks.
Section 8.7 Credit Decision. Each Bank expressly acknowledges that
neither the Agent nor any of its Affiliates nor any officer, director,
employee, agent, attorney-in-fact of any of them has made any representation or
warranty to it and that no act by the Agent hereinafter taken, including any
review of the affairs of the Borrower and its Subsidiaries shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent and the other Banks that it has, independently and
without reliance upon the Agent and the other Banks and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and its Subsidiaries and
made its own decision to enter into this Agreement and the other Loan Documents
and extend credit to the Borrower hereunder. Each Bank also represents that it
will, independently and without reliance upon the Agent and the other Banks and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Banks by
the Agent hereunder, the Agent (a) shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates, (b) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement or any other Loan Document,
and (c) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document, or any instrument or document furnished or executed
pursuant hereto or therewith.
Section 8.8 Indemnification. The Banks agree to indemnify the Agent
(to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligations of the Borrower to do so), ratably according to their
respective Commitment Percentages of their outstanding Loans, or, if no Loans
are outstanding, their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever which may at any time
(including at any time following the repayment of the Loans) be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement, any other Loan Documents, or any document contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection with
any of the foregoing; provided, however, that no Bank shall be liable for the
payment to the Agent of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements resulting solely from the Agent's gross negligence or willful
misconduct. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT THE AGENT
SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
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COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND ARISING OUT OF OR RESULTING FROM
THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OF SUCH PERSON. The
Agent shall not be required to do any act hereunder or under any other document
or instrument delivered hereunder or in connection herewith or take any action
toward the execution or enforcement of the agencies hereby created, or to
prosecute or defend any suit in respect to this Agreement or the Loan Documents
or any collateral security, unless indemnified to its satisfaction by the
holders of the Notes against loss, cost, liability, and expense. If any
indemnity furnished to the Agent for any purpose is, in the opinion of such
Person insufficient or becomes impaired, such Person may call for additional
indemnity and not commence or cease to do the acts indemnified against until
such additional indemnity is furnished. Without limitation of the foregoing,
each Bank agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including, without limitation, the costs
and expenses which the Borrower is obligated to pay under Section 11.7 hereof)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower.
Section 8.9 Agent in Individual Capacity. Xxxxx Fargo and its
Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from and generally engage in any kind of business with the
Borrower and its Subsidiaries as though Xxxxx Fargo were not the Agent
hereunder and its Affiliates may accept fees and other consideration from the
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Banks. With respect to its Loans and its
Commitment Percentage of outstanding Credit Exposure, Xxxxx Fargo (and any
successor acting as Agent) shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" shall include Xxxxx Fargo in its
individual capacity.
Section 8.10 Successor Agent. The Agent may resign as Agent upon
thirty (30) days' notice to the Banks. If the Agent shall resign as Agent
under this Agreement, the Majority Banks shall appoint from among the Banks a
successor agent for the Banks. If no successor Agent is appointed prior to the
effective date of the resignation of the Agent, the Agent shall appoint, after
consulting with the Banks, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent and the retiring Agent's
rights, powers and duties, as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 8 and
Section 11.7 hereof shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
Section 8.11 Pro Rata Sharing. All payments of principal and
interest on the Loans are to be divided pro rata among the Banks participating
in such Loans according to their respective Commitment Percentages. All
payments of fees to be shared among the Banks (except as set forth in the Fee
Letter with respect to the fees described therein and fees payable solely for
the account of the Agent or the Issuing Bank) are to be divided
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among the Banks pro rata according to the Commitment Percentage of each Bank in
respect of the Loan to which the fees relate, or, if there are no amounts
outstanding in respect of a Loan, according to the Commitments of the Banks
under the Loan to which the fees relate.
Section 8.12 Approvals. Upon any occasion requiring or permitting an
approval, consent, waiver, election or other action on the part of the Majority
Banks, action shall be taken by the Agent for and on behalf of, or for the
benefit of all Banks, upon the direction of the Majority Banks, and any such
action shall be binding on all Banks. Unless all Banks agree in writing, no
amendment, modification, consent or waiver shall be effective which
(a) increases the amount of the Loans or the availability
of Letters of Credit, or increases the Commitment or Commitment Percentage of
any Bank;
(b) reduces interest, principal or commitment fees owing
hereunder or under the Notes;
(c) extends the fixed date on which any sum is due
hereunder or under the Notes;
(d) waives an Event of Default arising from a failure to
pay principal of or interest on a Loan within the applicable grace period if
any;
(e) changes the provisions of this Section 8.12;
(f) releases any Guaranty; or
(g) releases any Collateral other than in connection with
the sale of any Property or assets permitted under this Agreement.
Section 8.13 Collateral Matters.
(a) Priority of Liens and Security Interests.
Notwithstanding any provisions to the contrary contained in the Security
Instruments, and irrespective of the time, order or method of attachment or
perfection of the liens and security interests granted thereby or the time or
order of filing or recording of financing statements or other liens, mortgages,
deeds of trust or security interests, and irrespective of anything contained in
any filing or agreement to which any of the Banks may now or hereafter be a
party, the Agent and the Banks hereby agree among themselves, as to the
priorities to be accorded the Collateral, that the security interests securing
the Obligations and created in favor of the Banks under the Security
Instruments shall constitute a first priority security interest in all
Collateral and the proceeds thereof to be shared on a pari passu basis by all
of the Banks.
(b) Order of Distributions. Any proceeds received by the
Agent from the foreclosure, sale or other disposition of any of the Collateral
and any other proceeds received by the Agent pursuant to the terms hereof and
of the Security Instruments, including, without limitation, insurance proceeds,
shall be applied by the Agent as follows:
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(i) FIRST, to the payment of all agency fees
payable to and costs and expenses of the Agent incurred in connection
with the collection of such proceeds or the protection of the rights
and interests of the Banks therein;
(ii) SECOND, to the ratable payment of accrued and
unpaid interest on the unpaid principal amount of all outstanding
Obligations to the date of such application, pro rata among the Banks
according to each Bank's applicable Commitment Percentage;
(iii) THIRD, to the payment of the unpaid principal
amount of all Obligations outstanding, pro rata among the Banks
according to each Bank's applicable Commitment Percentage (whether by
acceleration or otherwise);
(iv) FOURTH, to the payment of, without
duplication, any other indebtedness due and payable on the date of
such application arising pursuant to the obligations of the Borrower
under this Agreement and the other Loan Documents, pro rata among the
Banks according to each Bank's applicable Commitment Percentage; and
(v) FIFTH, the balance, if any, shall be paid to
the Borrower or as a court or Governmental Authority of competent
jurisdiction may direct.
(c) Rights to Enforce. So long as any Obligations are
outstanding, the Agent shall have the sole and exclusive right to carry out the
provisions of the Security Instruments and to enforce all rights and privileges
accruing to the Agent by reason of the Security Instruments.
(d) Further Assurances. The Agent and the Banks each
agree to execute any further documents or amendments as may be necessary to
effect the purposes of this Article 8, including, without limitation, any
registration or recordation upon any applicable public records.
(e) Proceeds. Each Bank agrees that (i) if at any time
it shall receive any proceeds of any Collateral or any proceeds pursuant to the
terms of any of the Security Instruments (other than through application by the
Agent in accordance with Section 8.13(b) hereof), it shall promptly turn the
same over to the Agent for application in accordance with Section 8.13(b)
hereof, (ii) it will not take or cause to be taken any action, including,
without limitation, the commencement of any legal or equitable proceedings, the
purposes of which are or could be to give such Bank any preference or priority
against the other Banks with respect to the Collateral, and (iii) it will not
take or cause to be taken any action to accelerate the maturity of the
Obligations owing to it or to waive any default thereunder unless the Majority
Banks shall have agreed in writing to accelerate all the Obligations or to
waive such default, any agreement of the Majority Banks not to accelerate or to
waive such default shall be binding on all the Banks with respect to
acceleration and waiver of defaults under this Agreement.
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(f) Limitation on Action. The Agent shall not be
required to take any action to enforce the Security Instruments or to realize
upon any Collateral, unless the Majority Banks shall have so requested in
writing to the Agent. Upon receipt of such written request the Agent shall (i)
notify all the other Banks thereof in writing or by telecopy or telex, and (ii)
take such action as may be lawfully available to it under the Security
Instruments or with respect to any Collateral; provided that, the Agent shall
be fully justified in failing or refusing to take any such action unless it
shall first be indemnified to its satisfaction by the Banks requesting or
acquiescing in any such action for any liability and expense which might result
from such action. If any indemnity furnished to the Agent shall become
impaired, the Agent may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given.
Section 8.14 No Liability. The Banks have not made to each other,
nor do they hereby or otherwise make to each other, any warranties, express or
implied, nor do they assume any liability to each other with respect to (a)
obligors under any instruments of guarantee; (b) the enforceability, validity,
value or collectability of the advances or other extensions of credit made or
acceptances created, any collateral therefor, or any guarantee or security
which may have been granted to any of them in connection with any of the
agreements; or (c) the Borrower's or any of its Subsidiaries' title or right to
transfer any other Collateral. No Bank shall be liable to any other Bank for
any action or failure to act or any error in judgment, negligence or mistake or
oversight whatsoever on the part of any Bank or any Bank's agents, officers,
employees, or attorneys with respect to any transaction relating to the
agreements or security or guarantees therefor, provided such Bank has acted in
good faith and has not been guilty of gross negligence or willful misconduct.
Section 8.15 Third Party Rights. The agreements and covenants
contained in this Article 8 are solely for the benefit of the Agent and the
Banks and their respective successors and assigns, and no other person, firm,
entity or corporation shall have any right, benefit, priority or interest
under, or because of the existence of, this Article 8.
ARTICLE 9. ASSIGNMENTS, PARTICIPATIONS.
Section 9.1 Assignments, Participations, etc..
(a) Any Bank may, with the written consent of the
Borrower (at all times other than during the existence of a Default) and the
Agent and the Issuing Bank, which consent of the Borrower shall not be
unreasonably withheld, and upon written notice to the Agent, at any time assign
and delegate to one (1) or more banks, insurance companies, finance companies,
financial institutions, funds, or other entities and, with notice to the Agent
but without the consent of the Borrower, the Agent or the Issuing Bank may
assign to any of its one-hundred percent (100%) owned Affiliates (each an
"Assignee") all or an equal percentage of all of the Loans and outstanding
Credit Exposure of such Bank, and the Commitments and any other rights or
obligations of such Bank hereunder in a minimum amount of Five Million Dollars
($5,000,000), provided, however, that the Borrower and the Agent shall be
entitled to continue to deal solely and directly with such Bank in connection
with the interests so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to such Assignee, shall have been given to the
Borrower and the Agent by
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such Bank and such Assignee, and (ii) such Bank and its Assignee shall have
delivered to the Borrower and the Agent an Assignment and Acceptance in the
form of Exhibit H attached hereto, together with any Note or Notes subject to
such assignment; and (iii) the assignor Bank or the Assignee has paid to the
Agent a processing fee in the amount of Three Thousand Dollars ($3,000.00).
(b) From and after the date that the Agent notifies the
assignor Bank that it has received the Assignment and Acceptance, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Loan Documents.
(c) Within five (5) Business Days after its receipt of
notice by the Agent that it has received an executed Assignment and Acceptance,
the Borrower shall execute and deliver to the Agent, new Notes evidencing such
Assignee's assigned Loans, Credit Exposure and Commitments and, if the assignor
Bank has retained a portion of its Loans, Credit Exposure and its Commitments,
replacement Notes in the principal amount of the Revolving Credit Loans and
Term Loans retained by the assignor Bank (such Notes to be in exchange for, but
not in payment of, the Notes held by such Bank). Immediately upon each
Assignee's making its payment under the Assignment and Acceptance, this
Agreement and Schedule I hereto, shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of such Assignee and
the resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
(d) Any Bank may at any time sell to one (1) or more
banks or other entities (a "Participant") a participating interest in any of
its Loans and Credit Exposure, and the Commitments of such Bank or any other
interest of such Bank hereunder, provided, however, that (i) such Bank's
obligations under this Agreement shall remain unchanged, (ii) such Bank shall
remain solely responsible for the performance of such obligations, (iii) the
Borrower, the Issuing Bank and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement and (iv) no Bank shall transfer or grant any participating
interest under which the Participant shall have rights to approve any amendment
to, or any consent or waiver with respect to this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks as described in the first proviso to Section
10.1. In the case of any such participation, the Participant shall be entitled
to the benefit of Sections 3.13, 3.16 and 11.7(b) and (c) as though it were
also a Bank hereunder, and if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this
Agreement.
(e) Notwithstanding any other provision in this
Agreement, any Bank may at any time create a security interest in, or pledge,
all or any portion of its rights
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under and interest in this Agreement [and the Note held by it] in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
ARTICLE 10. AMENDMENTS AND WAIVERS.
Section 10.1 Amendments and Waivers. No amendment, modification or
waiver of any provision of this Agreement or any Loan Document and no consent
with respect to any departure by the Borrower or any of its Subsidiaries
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks, and then such waiver shall be effective only
in the specific instance and for the specific purpose for which given;
provided, however, that no such wavier, amendment, modification or consent that
requires the written consent of all Banks pursuant to Section 8.12 shall be
effective unless the written consent of all Banks is so obtained and provided
further that no amendment, wavier or consent shall, unless in writing and
signed by the Agent in addition to the Majority Banks, affect the rights or
duties of the Agent under this Agreement.
ARTICLE 11. MISCELLANEOUS.
Section 11.1 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Bank, any right,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law or in any other agreement.
Section 11.2 Survival of Agreements. All representations and
warranties, all covenants and all provisions for indemnification and for the
payment of expenses contained in this Agreement or made in writing by or on
behalf of the Borrower or any other Person in connection with the transactions
contemplated by this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents, any investigation at any time made by
the Agent or any Bank or on its or their behalf, the making of any Loans by the
Agent or any Bank under this Agreement, any transfer of title to any Property
(whether by sale, foreclosure, deed in lieu of foreclosure or otherwise) and
any disposition or payment of the Notes. All statements contained in any
certificate or other instrument delivered by or on behalf of the Borrower, any
of its Subsidiaries or any other Person pursuant to this Agreement and the
other Loan Documents or in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall be deemed representations and
warranties of the Borrower under this Agreement.
Section 11.3 Successors. This Agreement shall be binding upon each
of the Borrower and its Subsidiaries, and their respective successors and
assigns and shall inure to the benefit of the Agent, each Bank and their
respective successors and assigns.
Section 11.4 Counterparts. This Agreement may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
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Section 11.5 Severability. In case any one or more of the provisions
contained in this Agreement, the Notes, or any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not be affected in any way thereby.
Section 11.6 Interest. (a) It is the intention of the parties
hereto to comply strictly with applicable usury laws, if any; accordingly,
notwithstanding any provision to the contrary in this Agreement or in any of
the other Loan Documents, in no event shall the Loan Documents require or
permit the payment, taking, reserving, receiving, collection or charging of any
sums constituting interest under applicable laws which exceed the maximum
amount permitted by such laws. If any such excess interest is called for,
contracted for, charged, taken, reserved, or received in connection with any
credit extension under this Agreement or in any of the documents securing the
payment hereof or otherwise relating hereto, or in any communication by the
Agent, any Bank or any other person to the Borrower or any other person, or in
the event all or part of the principal or interest of any Loan shall be prepaid
or accelerated, so that under any of such circumstances or under any other
circumstance whatsoever the amount of interest contracted for, charged, taken,
reserved, or received on the amount of principal actually outstanding from time
to time under this Agreement or any other Loan Document shall exceed the
maximum amount of interest permitted by applicable usury laws, then in any such
event it is agreed as follows: (i) the provisions of this paragraph shall
govern and control, (ii) neither the Borrower nor any other Person now or
hereafter liable for the payment of the Obligations shall be obligated to pay
the amount of such interest to the extent such interest is in excess of the
maximum amount of interest permitted by applicable usury laws, if any, (iii)
any such excess which is or has been received notwithstanding this paragraph
shall be credited against the then unpaid principal balance hereof or, if the
Obligations have been or would be paid in full by such credit, refunded to
Borrower, and (iv) the provisions of the Loan Documents, and any communication
to Borrower, shall immediately be deemed reformed and such excess interest
reduced, without the necessity of executing any other document, to the maximum
lawful rate allowed under applicable laws as now or hereafter construed by
courts having jurisdiction hereof or thereof. Without limiting the foregoing,
all calculations of the rate of interest contracted for, charged, taken,
reserved, or received in connection herewith which are made for the purpose of
determining whether such rate exceeds the maximum lawful rate shall be made to
the extent permitted by applicable laws by amortizing, prorating, allocating
and spreading during the period of the full term of the Obligations, including
all prior and subsequent renewals and extensions, all interest at any time
contracted for, charged, taken, reserved, or received. The terms of this
paragraph shall be deemed to be incorporated in every Loan Document.
(b) The Borrower and each Bank agree that Tex. Civ. Stat.
Xxx art. 0000 Xx. 15 (which regulates certain revolving loan accounts and
revolving tri-party accounts) shall not apply to any revolving loan accounts
created under this Agreement or any Revolving Credit Note or maintained in
connection therewith.
(c) To the extent that the interest rate laws of the
State of Texas are applicable to this Agreement or any Note, the applicable
interest rate ceiling is the indicated (weekly) ceiling determined in
accordance with Article 5069-1.04(a)(1) of the Texas Revised Civil Statutes, as
amended, and, to the extent that this Agreement or any
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Note is deemed an open end account as such term is defined in Article
5069-1.01(f) of the Texas Revised Civil Statutes, as amended, the Majority
Banks retain the right to modify the interest rate in accordance with
applicable law.
Section 11.7 Expenses; Documentary Taxes; INDEMNIFICATION.
(a) The Borrower will pay (i) all out-of-pocket expenses
of the Agent (including reasonable fees, expenses and disbursements of counsel
for the Agent) in connection with the preparation, negotiation, enforcement,
operation, syndication, and administration of this Agreement, the Notes, the
other Loan Documents, or any documents executed in connection therewith, or any
waiver, modification or amendment of any provision hereof or thereof; and (ii)
pay or reimburse the Agent and each Bank for all costs and expenses incurred by
them in connection with the enforcement, attempted enforcement, or preservation
of any rights or remedies under this Agreement or any other Loan Document
during the existence of an Event of Default or after acceleration of the Loans
(including in connection with any "workout" or restructuring regarding the
Loans, and including in any Insolvency Proceeding, appellate proceeding, all
court costs and costs of collection (including, without limitation, reasonable
fees, expenses and disbursements of counsel for the Agent and any Bank), then,
and in any such event, the attorneys' fees arising from such services and all
expenses, costs, charges and other fees incurred by such counsel in any way or
respect arising in connection with or relating to any of the events or actions
described in this Section together with interest thereon from the date incurred
until paid by the Borrower at the maximum rate allowed by applicable laws,
which Borrower agrees to pay on demand, shall constitute Obligations and shall
be secured by and entitled to the benefits of the Loan Documents. The Borrower
agrees to indemnify the Indemnified Parties from and hold it harmless against
any documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery by the Borrower or any other
Person of this Agreement, the Notes, the other Loan Documents, and any
documents executed in connection therewith AND EXPRESSLY INDEMNIFIES AND AGREES
TO HOLD HARMLESS THE INDEMNIFIED PARTIES FROM ANY SUCH CLAIMS, DAMAGES,
LIABILITIES, AND EXPENSES ARISING BY REASON OF ANY INDEMNIFIED PARTY'S OWN
NEGLIGENCE.
(b) The Borrower shall indemnify the Indemnified Parties
from, and hold the Indemnified Parties harmless against, any and all costs,
losses, liabilities, claims, damages or expenses incurred by them (whether or
not any of the Indemnified Parties is designated a party thereto), INCLUDING
THOSE CAUSED BY THE INDEMNIFIED PARTIES' OWN NEGLIGENCE but excluding those
caused by the Indemnified Parties' gross negligence or willful misconduct,
arising out of or by reason of any litigation or other similar proceeding
(including preparation for such litigation or proceeding) related to the
execution, delivery, and performance of this Agreement, the Notes, or the other
Loan Documents, or any actual or proposed use by the Borrower of the proceeds
of the issuance of the Notes or the Borrower's entering into and performing of
any agreement or instrument referred to herein, including, without limitation,
the reasonable fees and disbursements of the Indemnified Parties' counsel
incurred in connection therewith.
(c) The Borrower also agrees to pay, and will save the
Indemnified Parties harmless from, all claims, demands and liabilities in
respect of the fees and commissions, if any, of brokers and finders alleged to
have been incurred in connection
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with any of the transactions contemplated by this Agreement and the other Loan
Documents and any expenses, including reasonable legal fees arising in
connection with such claims, demands or liabilities.
Section 11.8 Notices.
(a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Borrower by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
Schedule 11.8, and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on Schedule 11.8; or, as directed to the Borrower
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article 3 and 8 to the Agent shall not be effective until
actually received by the Agent, and notices pursuant to Article 3 to the
Issuing Bank shall not be effective until actually received by the Issuing Bank
at the address specified for the "Issuing Bank" on the applicable signature
page hereof.
(c) Any agreement of the Agent and the Banks herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Borrower. The Agent and the Banks shall be entitled
to rely on the authority of any Person purporting to be a Person authorized by
the Borrower to give such notice and the Agent and the Banks shall not have any
liability to the Borrower or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Borrower to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Banks of a confirmation which is at
variance with the terms understood by the Agent and the Banks to be contained
in the telephonic or facsimile notice.
Section 11.9 Notification of Addresses, Lending Offices, Etc.. Each
Bank shall notify the Agent in writing of any changes in the address to which
notices to such Bank should be directed, of payment instructions in respect to
all payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
Section 11.10 Controlling Document. In the event of actual conflict
in the terms and provisions of this Agreement, the Notes and the other Loan
Documents, the terms and provisions of this Agreement will control.
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Section 11.11 Table of Contents; Descriptive Headings. The table of
contents and the descriptive headings of the several sections of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
Section 11.12 Waivers and Release of Claims. As additional
consideration to the execution, delivery, and performance of this Agreement by
the parties hereto and to induce the Agent, the Issuing Bank and the Banks to
enter into this Agreement, the Borrower represents and warrants that (a) the
Borrower knows of no defenses, counterclaims or rights of setoff to the payment
of any indebtedness of the Borrower to the Banks, and (b) the Borrower for
itself, its Subsidiaries, their respective representatives, agents, officers,
directors, employees, shareholders, and successors and assigns, hereby fully,
finally, completely, generally and forever releases, discharges, acquits,
waives and relinquishes the Indemnified Parties, from any and all claims,
actions, demands, and causes of action of whatever kind or character, whether
joint or several, whether known or unknown, for any and all injuries, harm,
damages, penalties, costs, losses, expenses, attorneys' fees, and/or liability
whatsoever and whenever incurred or suffered by any of them that arose or
accrued prior to the execution of this Agreement. Notwithstanding any
provision of this Agreement, the Prior Loan Agreement or any other Loan
Document, this Section 11.12 shall remain in full force and effect and shall
survive the delivery of the Notes, this Agreement and the other Loan Documents
and the making, extension, renewal, modification, amendment or restatement of
any thereof.
Section 11.13 Grant of Security Interest; Ratification of Documents.
The Borrower hereby grants to the Agent for the benefit of the Banks a security
interest and lien in the Collateral to secure payment and performance of the
Obligations, including, without limitation, the Notes and the Letter of Credit
Agreements. All Loan Documents executed in connection herewith and with the
Prior Loan Agreement are and remain in full force and effect in accordance with
their respective terms. Without in any way limiting the generality of the
foregoing, the Borrower hereby ratifies and confirms the Security Instruments,
and the liens, security interests and obligations created thereby, and the
Borrower hereby confirms and agrees that any and all liens, security interests
and obligations created by the Security Instruments and other security or
Collateral now or hereafter held by the Agent and the Banks as security for
payment and performance of the Obligations under the Prior Loan Agreement, are
hereby renewed and carried forward to secure payment and performance of all of
the Obligations, including, without limitation, the Notes and the Letter of
Credit Agreements. The Security Instruments are and remain legal, valid and
binding obligations of the parties thereto, enforceable in accordance with
their respective terms. References in the Loan Documents (other than this
Agreement) to the Prior Loan Agreement, the "Agreement," the "Loan Agreement"
and words of similar import shall be deemed to be references to the Prior Loan
Agreement as amended and restated by this Agreement.
Section 11.14 Restatement and Amendment. This Agreement restates,
amends and supersedes the Prior Loan Agreement in its entirety, but does not
novate or discharge the Prior Loan Agreement. The recitals at the beginning of
this Agreement are incorporated into this Agreement as agreements of the
parties hereto.
Section 11.15 No Waiver. The Borrower agrees that no Event of
Default and no Default has been waived or remedied by the execution of this
Agreement by the Agent and
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the Banks, and any such Default or Event of Default heretofore arising and
currently continuing shall continue after the execution and delivery hereof.
Section 11.16 Acknowledgment. Each of the Borrower and its
Subsidiaries ratifies and confirms that the Security Instruments are and remain
in full force and effect in accordance with their respective terms and that the
Collateral is unimpaired. Each of the Borrower and its Subsidiaries hereby
acknowledges and agrees that (a) the liens created and evidenced by the Loan
Documents are valid and existing liens of the recited dignity and priority, and
(b) no other granting of a lien or security interest or assignment has been or
will be executed affecting the Collateral without the Agent's and the Majority
Banks' prior written consent.
SECTION 11.17 GOVERNING LAW. THIS AGREEMENT, THE NOTES, THE SECURITY
INSTRUMENTS AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE
EXTENT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY APPLY.
SECTION 11.18 SUBMISSION TO JURISDICTION. WITH RESPECT TO ANY AND
ALL DISPUTES ARISING HEREUNDER, UNDER THE NOTES, UNDER THE OTHER LOAN
DOCUMENTS, OR UNDER ANY OF THE OTHER INSTRUMENTS AND DOCUMENTS EXECUTED IN
CONNECTION HEREWITH OR THEREWITH NOT SETTLED, OR SUBJECT TO ARBITRATION,
PURSUANT TO THE ARBITRATION PROGRAM REFERENCED IN SECTION 11.19 HEREOF, THE
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY NOTES AND ANY DOCUMENT TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT OF ANY THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS
OF THE STATE OF TEXAS, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF TEXAS, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT
TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM AND MAIL), POSTAGE PREPAID, TO IT AT
ITS ADDRESS SPECIFIED ON THE SIGNATURE PAGE HEREOF; AND
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(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
SECTION 11.19 ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute shall
be resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any
action, dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including without limitation, any of
the foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Loan Documents. Any party
may by summary proceedings bring an action in court to compel arbitration of a
Dispute. Any party who fails or refuses to submit to arbitration following a
lawful demand by any other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered
by the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
Loan Documents. The arbitration shall be conducted at a location in Texas
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute
shall apply to any arbitration proceeding. All discovery activities shall be
expressly limited to matters directly relevant to the Dispute being arbitrated.
Judgment upon any award rendered in an arbitration may be entered in any court
having jurisdiction; provided however, that nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded
to it under 12 U.S.C. Section 91 or any similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary
remedies, including without limitation injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver, from a court of
competent jurisdiction before, after or during the pendency of any arbitration
or other proceeding. The exercise of any such remedy shall not waive the right
of any party to compel arbitration hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators
must be active members of the Texas State Bar with expertise in the substantive
laws applicable to the subject matter of the Dispute. Arbitrators are
empowered to resolve Disputes by summary rulings in response to motions filed
prior to the final arbitration hearing. Arbitrators (i) shall resolve all
Disputes in accordance with the substantive law of the state of Texas, (ii)
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may grant any remedy or relief that a court of the state of Texas could order
or grant within the scope hereof and such ancillary relief as is necessary to
make effective any award, and (iii) shall have the power to award recovery of
all costs and fees, to impose sanctions and to take such other actions as they
deem necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Texas Rules of Civil Procedure or other applicable law.
Any Dispute in which the amount in controversy is $5,000,000 or less shall be
decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported
by substantial evidence or which is based on legal error, (ii) an award shall
not be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the state of Texas, and (iii) the parties shall have in
addition to the grounds referred to in the Federal Arbitration Act for
vacating, modifying or correcting an award the right to judicial review of (A)
whether the findings of fact rendered by the arbitrators are supported by
substantial evidence, and (B) whether the conclusions of law are erroneous
under the substantive law of the state of Texas. Judgment confirming an award
in such a proceeding may be entered only if a court determines the award is
supported by substantial evidence and not based on legal error under the
substantive law of the state of Texas.
(f) Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose
the existence, content or results thereof, except for disclosures of
information by a party required in the ordinary course of its business, by
applicable law or regulation, or to the extent necessary to exercise any
judicial review rights set forth herein. If more than one agreement for
arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the Loan Documents or the
subject matter of the Dispute shall control. This arbitration provision shall
survive termination, amendment or expiration of any of the Loan Documents or
any relationship between the parties.
SECTION 11.20 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, THE NOTES,
THE OTHER LOAN DOCUMENTS, AND THE INSTRUMENTS AND DOCUMENTS EXECUTED IN
CONNECTION HEREWITH, 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.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed in Houston, Texas, as of the date first above-mentioned.
THE BORROWER:
XXXXXX PETROLEUM SERVICES
CORP.
By /s/ XXXXX X. XXXXX
-------------------------------------
Xxxxx X. Xxxxx
Senior Vice President
THE AGENT:
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By /s/ XXXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
THE BANKS:
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By /s/ XXXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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