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AMENDED AND RESTATED CREDIT AGREEMENT
Dated October 23, 1996
among
NATIONAL-OILWELL, L.P.
and NATIONAL OILWELL (U.K.) LIMITED
as Borrowers,
THE LENDERS NAMED HEREIN
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
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TABLE OF CONTENTS
1. AMOUNT AND TERMS OF CREDIT . . . . . . . . . . . . . . . . . . . . 2
1.1 Credit Facilities . . . . . . . . . . . . . . . . . . . . . 2
1.2 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 4
1.3 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Interest on the Loans, Applicable Line Margin and
L/C Margin . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.6 Eligible Accounts . . . . . . . . . . . . . . . . . . . . . 8
1.7 Eligible Inventory, Eligible Equipment, Eligible
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . 8
1.9 Cash Management Systems . . . . . . . . . . . . . . . . . . 9
1.10 Receipt of Payments . . . . . . . . . . . . . . . . . . . . 10
1.11 Application and Allocation of Payments . . . . . . . . . . . 10
1.12 Loan Account and Accounting . . . . . . . . . . . . . . . . 10
1.13 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.14 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.15 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.16 Capital Adequacy; Increased Costs; Illegality . . . . . . . 14
1.17 Effect of Amendment and Restatement . . . . . . . . . . . . 16
2. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 16
2.1 Conditions to the Effectiveness of Agreement . . . . . . . . 16
2.2 Further Conditions to Each Revolving Credit Advance
and Term Loan C Advance . . . . . . . . . . . . . . . . . . 18
3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 19
3.1 Existence and Standing; Compliance with Law . . . . . . . . 19
3.2 Chief Executive Offices . . . . . . . . . . . . . . . . . . 19
3.3 Power, Authorization, Enforceable Obligations . . . . . . . 19
3.4 Financial Statements and Projections . . . . . . . . . . . . 20
3.5 Collateral Reports . . . . . . . . . . . . . . . . . . . . . 20
3.6 Material Adverse Effect . . . . . . . . . . . . . . . . . . 20
3.7 Ownership of Property; Liens . . . . . . . . . . . . . . . . 21
3.8 Restrictions; No Default . . . . . . . . . . . . . . . . . . 21
3.9 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . 21
3.10 Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Indebtedness . . . . . . . . . . . . . . . . . . . 22
3.11 Government Regulation . . . . . . . . . . . . . . . . . . . 22
3.12 Margin Regulations . . . . . . . . . . . . . . . . . . . . . 22
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.15 No Litigation . . . . . . . . . . . . . . . . . . . . . . . 25
3.16 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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3.17 Employment Matters . . . . . . . . . . . . . . . . . . . . . 25
3.18 Patents, Trademarks, Copyrights and Licenses . . . . . . . . 25
3.19 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . 26
3.20 Hazardous Materials . . . . . . . . . . . . . . . . . . . . 26
3.21 Insurance Policies . . . . . . . . . . . . . . . . . . . . . 26
3.22 Deposit and Disbursement Accounts . . . . . . . . . . . . . 26
3.23 Government Contracts . . . . . . . . . . . . . . . . . . . . 27
3.24 Customer and Trade Relations . . . . . . . . . . . . . . . . 27
3.25 Agreements and Other Documents . . . . . . . . . . . . . . . 27
3.26 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . 27
3.27 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.28 FEIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4. FINANCIAL STATEMENTS AND INFORMATION . . . . . . . . . . . . . . . 28
4.1 Reports and Notices . . . . . . . . . . . . . . . . . . . . 28
4.2 Communication with Accountants . . . . . . . . . . . . . . . 28
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Maintenance of Existence and Conduct of Business . . . . . . 28
5.2 Payment of Obligations . . . . . . . . . . . . . . . . . . . 29
5.3 Books and Records . . . . . . . . . . . . . . . . . . . . . 29
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 Compliance with Laws . . . . . . . . . . . . . . . . . . . . 31
5.7 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.8 Supplemental Disclosure . . . . . . . . . . . . . . . . . . 31
5.9 Employee Plans . . . . . . . . . . . . . . . . . . . . . . . 32
5.10 Environmental Matters . . . . . . . . . . . . . . . . . . . 32
5.11 Landlords' Agreements, Bailee Letters and Mortgagee
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.12 Consigned Inventory . . . . . . . . . . . . . . . . . . . . 33
5.13 Leased Locations of Collateral . . . . . . . . . . . . . . . 33
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Mergers, Subsidiaries, Etc . . . . . . . . . . . . . . . . . 33
6.2 Investments; Loans and Advances . . . . . . . . . . . . . . 36
6.3 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 36
6.4 Employee Loans and Affiliate Transactions . . . . . . . . . 37
6.5 Capital Structure and Business . . . . . . . . . . . . . . . 37
6.6 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.8 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . 39
6.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.10 Financial Covenants . . . . . . . . . . . . . . . . . . . . 39
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6.11 Hazardous Materials . . . . . . . . . . . . . . . . . . . . 39
6.12 Sale-Leasebacks . . . . . . . . . . . . . . . . . . . . . . 40
6.13 Cancellation of Indebtedness . . . . . . . . . . . . . . . . 40
6.14 Restricted Payments . . . . . . . . . . . . . . . . . . . . 40
6.15 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.16 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 42
6.17 Change of Corporate Name or Location . . . . . . . . . . . . 42
6.18 Sale of Stock . . . . . . . . . . . . . . . . . . . . . . . 42
6.19 Cash Management . . . . . . . . . . . . . . . . . . . . . . 42
6.20 No Impairment of Upstreaming . . . . . . . . . . . . . . . . 42
6.21 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . 43
6.22 Intercompany Loans . . . . . . . . . . . . . . . . . . . . . 43
6.23 Inconsistent Agreements . . . . . . . . . . . . . . . . . . 44
6.24 Acquisition Documents . . . . . . . . . . . . . . . . . . . 44
7. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 44
7.2 Survival of Obligations Upon Termination of
Financing Arrangements . . . . . . . . . . . . . . . . . . . 44
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES . . . . . . . . . . . . . . 45
8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 45
8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.3 Waivers by Borrowers . . . . . . . . . . . . . . . . . . . . 49
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE
AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.1 Assignment and Participations . . . . . . . . . . . . . . . 49
9.2 Appointment of Administrative Agent . . . . . . . . . . . . 50
9.3 Administrative Agent's Reliance . . . . . . . . . . . . . . 51
9.4 Administrative Agent and Affiliates . . . . . . . . . . . . 52
9.5 Lender Credit Decision . . . . . . . . . . . . . . . . . . . 52
9.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . 52
9.7 Successor Administrative Agent . . . . . . . . . . . . . . . 53
9.8 Setoff and Sharing of Payments . . . . . . . . . . . . . . . 53
9.9 Disbursement of Funds . . . . . . . . . . . . . . . . . . . 54
9.10 Advances; Payments; Information; Non-Funding Lenders . . . . 54
10. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . 58
10.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . 58
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.1 Complete Agreement; Modification of Agreement . . . . . . . 58
11.2 Amendments and Waivers . . . . . . . . . . . . . . . . . . . 58
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11.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 59
11.4 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 60
11.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 61
11.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . 61
11.7 Conflict of Terms . . . . . . . . . . . . . . . . . . . . . 61
11.8 Authorized Signature . . . . . . . . . . . . . . . . . . . . 61
11.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 61
11.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11.11 Section Titles . . . . . . . . . . . . . . . . . . . . . . . 62
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 63
11.13 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . 63
11.14 Press Releases and Public Announcements . . . . . . . . . . 63
11.15 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 63
11.17 Judgment Currency . . . . . . . . . . . . . . . . . . . . . 64
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INDEX OF EXHIBITS AND SCHEDULES
Exhibit A - Form of Amended Revolving Credit Note
Exhibit B - Form of Amended Term C Note
Schedule 1.1(a) - Responsible Individual
Schedule 3.2 - Executive Offices
Schedule 3.4(a) - Financial Statements
Schedule 3.4(b) - Pro Forma
Schedule 3.4(c) - Projections
Schedule 3.7 - Real Estate and Leases
Schedule 3.9 - Labor Matters
Schedule 3.10 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Schedule 3.13 - Tax Matters
Schedule 3.14 - ERISA Plans
Schedule 3.15 - Litigation
Schedule 3.16 - Brokers Fees
Schedule 3.17 - Employment Matters
Schedule 3.18 - Intellectual Property
Schedule 3.20 - Hazardous Materials
Schedule 3.21 - Insurance Policies
Schedule 3.22 - Deposit and Disbursement Accounts
Schedule 3.23 - Government Contracts
Schedule 3.25 - Material Agreements
Schedule 3.28 - FEIN Numbers
Schedule 5.1 Trade Names
Schedule 6.2 - Investments; Loans and Advances
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Employee Loans and Affiliate Transactions
Schedule 6.6 - Guaranties
Schedule 6.7 - Existing Liens
Schedule 6.8 - Asset Sale Program
Schedule 6.22 - Intercompany Loans
Schedule 11.8 - Authorized Signatures
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Schedule A (Recitals) - Definitions
Schedule B (Section 1.2) - Letters of Credit Documents
Schedule C-1 (Section 1.6) - Eligible Accounts
Schedule C-2 (Section 1.6) - UK Eligible Accounts
Schedule D-1 (Section 1.7) - Eligible Inventory
Schedule D-2 (Section 1.7) - UK Eligible Inventory
Schedule E (Subsection 1.9(a)) - Cash Management Systems
Schedule F (Subsection 2.1(b)) - Schedule of Additional
Closing Documents
Schedule G (Subsection 4.1(a)) - Financial Statements and
Projections -- Reporting
Schedule H (Subsection 4.1(b)) - Collateral Reports
Schedule I (Section 6.10) - Financial Covenants
Schedule J (Section 11.10) - Notice Addresses
Schedule K (Subsection 9.10(a)(iii)) - Wire Transfer Account
Information
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This AMENDED AND RESTATED CREDIT AGREEMENT, dated October 23,
1996 and effective as of the Closing Date among NATIONAL-OILWELL, L.P., a
Delaware limited partnership, NATIONAL OILWELL (U.K.) Limited, an English
corporation, GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, for
itself, as a Lender, and as Administrative Agent, THE BANK OF NEW YORK
COMMERCIAL CORPORATION, BTM CAPITAL CORPORATION (f/k/a BOT FINANCIAL
CORPORATION), THE MITSUBISHI TRUST AND BANKING CORPORATION, and SANWA BUSINESS
CREDIT CORPORATION, as Lenders.
RECITALS
WHEREAS, NATIONAL-OILWELL, INC., f/k/a NOW HOLDINGS, INC., a
Delaware corporation ("Holdings") entered into a certain Purchase Agreement
dated as of September 22, 1995 (the "Purchase Agreement") with OILWELL, INC., a
Delaware corporation ("Oilwell"), NATIONAL SUPPLY COMPANY INC., a Delaware
corporation ("National Supply"), USX CORPORATION, a Delaware corporation
("USX"), and ARMCO INC., an Ohio corporation ("Armco") (Oilwell and National
Supply are collectively referred to herein as "Sellers") to purchase all of the
partnership interests (the "Partnership Interests") in National-Oilwell, a
Delaware general partnership ("National-Oilwell") and all of the issued and
outstanding capital stock (the "Purchased Stock") of National-Oilwell Pte.
Ltd., a Singapore corporation ("Singapore") and National-Oilwell Pty. Ltd., an
Australian corporation ("Australia");
WHEREAS, Holdings assigned all of its right, title and interest
in the Purchase Agreement to US Borrower;
WHEREAS, Borrowers entered into a Credit Agreement dated as of
December 29, 1995 (the "Prior Credit Agreement") with the Administrative Agent,
the Lenders that are parties hereto, Xxxxxxx Xxxxx & Co., GECC Capital Markets
Group, Inc. and certain other Lenders pursuant to which the Borrowers received
credit facilities of up to $138,000,000;
WHEREAS, each Borrower secured all of its obligations under the
Prior Credit Agreement by granting to Administrative Agent, on behalf of
Lenders, a security interest in and lien upon all of its personal and real
property;
WHEREAS, Holdings and the Partners guaranteed all of the
obligations of Borrowers to Lenders under the Prior Credit Agreement and
granted to Administrative Agent, on behalf of Lenders, a security interest in
all of the capital stock of NOW International and the Partners and the
partnership interests of US Borrower, respectively, to secure such guaranties;
WHEREAS, NOW International guaranteed all of the obligations of
Borrowers to Lenders under the Prior Credit Agreement and granted to
Administrative Agent, on behalf of Administrative Agent and Lenders, a security
interest in sixty-five percent (65%) of the capital stock of all foreign
Subsidiaries, including UK Borrower, to secure such guaranty;
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WHEREAS, Holdings has completed an initial public offering (as
more fully defined in Schedule A hereto, the "IPO") and in connection therewith
US Borrower has repaid Term Loan A and Term Loan B under the Prior Credit
Agreement;
WHEREAS, Borrowers and the Lenders desire to amend and restate
the Prior Credit Agreement to govern the terms of the Obligations that are
outstanding thereunder and to provide a revolving credit facility to US
Borrower of up to $105,000,000 (including the continuing Obligations
outstanding under the Prior Credit Agreement) and a term loan to UK Borrower of
up to $5,000,000 (including the continuing Obligations outstanding under the
Prior Credit Agreement) as a subfacility of the revolving credit facility
described above, the working capital and general business needs of US Borrower
(including the funding of Permitted Acquisitions) and UK Borrower; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Schedule A. All Schedules, Exhibits and other
attachments hereto, or expressly identified to this Agreement, are incorporated
herein by reference, and taken together, shall constitute but a single
agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility. (i) Upon and subject to the terms
and conditions hereof, each Lender, severally and not jointly, agrees to make
or continue to make available, from time to time, until the Commitment
Termination Date, for US Borrower's use and upon the request of US Borrower
therefor, its Pro Rata Share of advances (each, a "Revolving Credit Advance")
in an aggregate amount which shall not at any given time exceed the lesser at
such time of (A) the Maximum Revolving Credit Loan and (B) an amount equal to
the Borrowing Base of US Borrower, less, in each case, the amount of the
Letter of Credit Obligations ("Borrowing Availability"); provided that in no
event shall the Revolving Credit Loan of any Lender exceed its Revolving Credit
Loan Commitment less its Pro Rata Share of the Letter of Credit Obligations at
such time. Until all amounts outstanding in respect of the Revolving Credit
Loan shall become due and payable on the Commitment Termination Date, US
Borrower may from time to time borrow, repay and reborrow under this Section
1.1(a). Each Revolving Credit Advance shall be made by delivery of a Borrowing
Notice by US Borrower to the individual at the Administrative Agent identified
on Schedule 1.1(a) at the address specified thereon, given no later than (x)
12:00 (noon) (New York time) on the Business Day of the proposed Revolving
Credit Advance, in the case of an Index Rate Loan, or (y) 12:00 (noon) (New
York time) on the day which is three (3) Business Days prior to the proposed
Revolving Credit Advance in the case of a LIBOR Loan; provided that unless US
Borrower shall also have complied with the requirements of Section 1.5(e), all
such Revolving Credit Advances
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shall bear interest by reference to the Index Rate; provided further that any
Revolving Credit Advance requested as a LIBOR Loan shall be in a minimum amount
of $5,000,000 and multiples of $1,000,000 in excess of such amount. Each
Borrowing Notice shall be given in writing (by telecopy or overnight courier)
or by telephone confirmed immediately in writing.
(ii) US Borrower shall execute and deliver to each Lender an
amended and restated note to evidence the Revolving Credit Loan, such note to
be in the principal amount of the Revolving Credit Loan Commitment of such
Lender, dated October 23, 1996 and substantially in the form of Exhibit A (each
an "Amended Revolving Credit Note" and, collectively, the "Amended Revolving
Credit Notes"). The Amended Revolving Credit Notes shall represent the
obligation of US Borrower to pay the amount of the Revolving Credit Loan
Commitment or, if less, the aggregate unpaid principal amount of all Revolving
Credit Advances made by Lenders to US Borrower and all other Obligations of US
Borrower together with interest thereon as prescribed in Section 1.5. The date
and amount of each Revolving Credit Advance and each payment of principal with
respect thereto shall be recorded on the books and records of Administrative
Agent, which books and records shall constitute prima facie evidence of the
accuracy of the information therein recorded. The entire unpaid balance of the
Revolving Credit Loan shall be immediately due and payable on the Commitment
Termination Date.
(b) Term Loan C. Upon and subject to the terms and conditions
hereof, each Lender having a Term Loan C Commitment, severally and not jointly,
agrees to make or continue to make as a subfacility of the Revolving Credit
Loan Facility available, from time to time, for UK Borrower's use and upon the
request of US Borrower therefor, its Pro Rata Share of advances under Term Loan
C in an aggregate amount equal to its Term Loan C Commitment (collectively,
"Term Loan C"); provided that the aggregate outstanding principal amount of
Term Loan C shall not at any time exceed an amount equal to the UK Borrowing
Base. Until all amounts outstanding in respect of Term Loan C shall become due
and payable on the Commitment Termination Date, amounts advanced under the Term
Loan C facility may be repaid and reborrowed. Term Loan C shall be evidenced
by amended and restated notes, each dated October 23, 1996 and substantially in
the form of Exhibit B (each an "Amended Term C Note"), and UK Borrower shall
execute and deliver the same to each such Lender. All advances and payments
under Term Loan C shall be in United States Dollars. All Borrowing Base
Certificate calculations for UK Borrower shall be converted to United States
Dollars at the then current exchange rates as quoted in the Wall Street
Journal, with the basis for such calculation set forth on each Borrowing Base
Certificate of UK Borrower.
The entire unpaid balance of Term Loan C shall be immediately due and payable
on the Commitment Termination Date.
(c) Reliance on Notices; Appointment of Borrower Representative.
Administrative Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Borrowing Notice or similar notice believed by
Administrative Agent to be genuine. Administrative Agent may assume that each
Person executing and delivering such a notice was duly authorized, unless the
responsible individual acting thereon for Administrative Agent has actual
knowledge to the contrary.
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UK Borrowers hereby designate Borrower Representative as its representative and
agent on its behalf for the purposes of issuing Borrowing Notices, giving
instructions with respect to the disbursement of the proceeds of the Loans,
selecting interest rate options, giving and receiving all other notices and
consents hereunder or under any of the other Loan Documents and taking all
other actions (including in respect of compliance with covenants) on behalf of
Borrowers under the Loan Documents. Borrower Representative hereby accepts
such appointment. Administrative Agent and each Lender may regard any notice
or other communication pursuant to any Loan Document from Borrower
Representative as a notice or communication from all Borrowers, and may give
any notice or communication required or permitted to be given to any Borrower
or Borrowers hereunder to Borrower Representative on behalf of such Borrower or
Borrowers. UK Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.
1.2 Letters of Credit. Subject to the terms and conditions of
Schedule B, US Borrower shall have the right to request the issuance of Letters
of Credit and Lenders agree to incur Letters of Credit Obligations with respect
thereto.
1.3 Prepayment. (a) In the event that the outstanding balance
of the Revolving Credit Loan shall, at any time, exceed the lesser at such time
of (i) the Maximum Revolving Credit Loan and (ii) the Borrowing Base of US
Borrower, less, in each case, the outstanding amount of the Letter of Credit
Obligations, US Borrower shall immediately and without notice or demand of any
kind (x) repay the Revolving Credit Loan in the amount of such excess and (y)
if any excess remains after repaying the Revolving Credit Loan, cash
collateralize the Letter of Credit Obligations in such amount as may be
necessary to eliminate such remaining excess. In the event that the
outstanding balance of Term Loan C shall, at any time, exceed the UK Borrowing
Base, UK Borrower shall immediately and without notice or demand of any kind
repay Term Loan C in the amount of such excess.
(b) (i) Except for the proceeds of assets of NOW Canada (other
than property or assets of NOW Canada, if any, included in the Asset Sale
Program) required to be paid to General Electric Capital Canada Inc. pursuant
to the NOW Canada Credit Agreement and proceeds of assets and property subject
to subsection 1.3(b)(ii), immediately upon receipt by US Borrower or any
Subsidiaries of Net Proceeds of any asset disposition permitted by subsection
6.8(ii), (iii) or (iv) (including all Net Proceeds of the Asset Sale Program),
US Borrower shall prepay the Revolving Credit Loan in an amount equal to one
hundred percent (100%) of such Net Proceeds; provided that the Maximum
Revolving Credit Loan shall not be reduced as a result of any such prepayment,
and such amounts may be reborrowed.
(ii) Immediately upon receipt by UK Borrower or any of its
Subsidiaries of Net Proceeds of any asset disposition permitted by subsections
6.8(ii), 6.8(iii) or 6.8(iv) (other than assets of UK Borrower, if any,
included in the Asset Sale Program) or receipt by UK Borrower of any
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payment by NOW Canada on its intercompany Indebtedness to UK Borrower permitted
by subsection 6.22(iii), UK Borrower shall prepay Term Loan C in an amount
equal to one hundred percent (100%) of such Net Proceeds or of such payment, as
applicable.
(c) (i) Except for the insurance proceeds of assets and property
of NOW Canada (other than property or assets of NOW Canada, if any, included in
the Asset Sale Program) required to be paid to General Electric Capital Canada
Inc. pursuant to the NOW Canada Credit Agreement and proceeds of assets and
property subject to subsection 1.3(c)(ii), immediately upon receipt by US
Borrower or any of its Subsidiaries of insurance proceeds received in the event
of loss or the seizure or requisition of any property or assets of US Borrower
or any Subsidiary, US Borrower shall prepay the Revolving Credit Loan to the
extent required in accordance with Section 5.5; provided that the Maximum
Revolving Credit Loan shall not be reduced as a result of any such prepayment
and such amounts may be reborrowed.
(ii) Immediately upon receipt by UK Borrower or any of its
Subsidiaries of insurance proceeds received in the event of loss or the seizure
or requisition of any property or assets of UK Borrower or any of its
Subsidiaries (other than property or assets included in the Asset Sale
Program), UK Borrower shall prepay Term Loan C in an amount equal to such
insurance proceeds.
(d) Upon at least fifteen (15) days' prior written notice to
Administrative Agent, UK Borrower shall have the right at any time to
voluntarily prepay all or part of Term Loan C in a minimum amount of $500,000
and integral multiples thereof; provided that any such voluntary prepayment
shall be accompanied by the payment of any LIBOR funding breakage costs in
accordance with subsection 1.13(c).
(e) Upon at least fifteen (15) days' prior written notice to
Administrative Agent, US Borrower may voluntarily permanently reduce the
Revolving Credit Loan Commitment in whole, or in part ratably among Lenders in
a minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000
in excess thereof; provided that the amount of the Revolving Credit Loan
Commitment may not be reduced below the aggregate principal amount of the
outstanding Revolving Credit Loan; provided further that any such voluntary
reduction shall be accompanied by the payment of any LIBOR funding breakage
costs in accordance with subsection 1.13(c); provided further that any Letter
of Credit Obligations outstanding as of the date of such reduction, to the
extent necessary, shall be canceled and returned or cash collateralized in the
manner described in Schedule B. Upon any such permanent reduction or
termination of the Revolving Credit Loan Commitment, US Borrower's right to
receive Revolving Credit Advances shall simultaneously terminate or be
permanently reduced to the same degree, as the case may be.
1.4 Use of Proceeds. US Borrower may utilize the proceeds of
all Revolving Credit Advances (i) for the financing of ordinary working capital
and general partnership needs of US Borrower (but excluding in any event any
direct or indirect redemption of partnership interests or purchase of any Stock
of Holdings or either Partner other than as permitted by Section 6.14; (ii) for
intercompany loans as permitted by this Agreement; and (iii) for Permitted
Acquisitions. UK
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Borrower may utilize the proceeds of Term Loan C to repay existing Indebtedness
owing to US Borrower and for ordinary working capital purposes.
1.5 Interest on the Loans, Applicable Line Margin and L/C
Margin. (a) US Borrower and UK Borrower shall pay interest to Administrative
Agent, for the ratable benefit of Lenders with respect to the Loans made by
each Lender, in arrears on each applicable Interest Payment Date, at a rate
equal to: (i) the Index Rate plus the Applicable Index Margin per annum or, at
the election of US Borrower in accordance with subsection 1.5(e), the
applicable LIBOR Rate plus the Applicable LIBOR Margin per annum.
The Applicable Line Margin, Applicable L/C Margin, Applicable
Index Margin, and Applicable LIBOR Margin will be .375%, 1.375%, .75%, and
2.00% per annum, respectively, as of the Closing Date. The Applicable Margins
will be adjusted (up or down) prospectively on a quarterly basis as determined
by Holdings' consolidated financial performance for the trailing four quarters,
commencing with the first day of the first calendar month that occurs more than
five (5) days after delivery of Holdings' quarterly Financial Statements to
Lenders for the Fiscal Quarter ending March 31, 1997. Adjustments in
Applicable Margins will be determined by reference to the following grid:
IF FUNDED APPLICABLE APPLICABLE APPLICABLE APPLICABLE
--------- ---------- ---------- ---------- ----------
DEBT/EBIT LINE L/C MARGIN INDEX LIBOR
--------- ----- ----------- ------ ------
RATIO IS: MARGIN IS: IS: MARGIN IS: MARGIN IS:
--------- ---------- --- ---------- ----------
=(1.25 0.250% 0.875% 0.25% 1.50%
)1.25 but =(3.00 0.375% 1.375% 0.75% 2.00%
)3.00 0.50% 1.875% 1.25% 2.50%
All adjustments in the Applicable Margins after March 31, 1997,
will be implemented quarterly on a prospective basis, commencing with the first
day of the first calendar month that occurs more than five (5) days after the
date of delivery to Lenders of the quarterly unaudited or annual audited (as
applicable) Financial Statements of Holdings evidencing the need for an
adjustment. Concurrently with the delivery of those Financial Statements, US
Borrower shall deliver to Administrative Agent and Lenders a certificate,
signed by its Chief Financial Officer or Treasurer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable
Margins. Failure to timely deliver such Financial Statements shall, in
addition to any other remedy provided for in this Agreement, result in an
increase in the Applicable Margins to the highest level set forth in the
foregoing grid, until the first day of the first calendar month commencing at
least five (5) days after the date of the delivery of those Financial
Statements demonstrating that such an increase is not required. If a Default or
Event of Default shall have occurred or be continuing at the time any reduction
in the Applicable Margins is to be implemented, that reduction shall be
deferred
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until the first day of the first calendar month following the date on which
such Default or Event of Default is waived or cured.
(b) If any payment on any Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and all calculations of interest shall be made by Administrative Agent on the
basis of a three hundred and sixty (360) day year, in each case for the actual
number of days occurring in the period for which such interest or Fees are
payable. The Index Rate shall be determined each day based upon the Index Rate
as in effect each day. Each determination by Administrative Agent of an
interest rate hereunder shall be conclusive, absent manifest error.
(d) So long as any Event of Default shall have occurred and be
continuing, the Letter of Credit Fees and the interest rates applicable to the
respective Loans and any other Obligations shall be increased by two percent
(2%) per annum above the Letter of Credit Fees or the rate of interest, as the
case may be, otherwise applicable hereunder ("Default Rate").
(e) Provided no Default or Event of Default shall have
occurred and be continuing, US Borrower may elect by delivery of a Borrowing
Notice to Administrative Agent not later than 12:00 noon (New York time) on the
third (3rd) Business Day prior to (i) the date of any proposed Revolving Credit
Advance or Term Loan C advance all or any part of which is to bear interest at
the LIBOR Rate, (ii) the end of each LIBOR Period with respect to any LIBOR
Loans, or (iii) the date on which US Borrower wishes to convert any Index Rate
Loan to a LIBOR Loan, to have all or some portion of the Revolving Credit Loan
or Term Loan C bear or continue to bear, as applicable, interest at the LIBOR
Rate for the next succeeding LIBOR Period as designated by US Borrower in such
Borrowing Notice. Each Borrowing Notice shall be given in writing (by telecopy
or overnight courier) or by telephone confirmed immediately in writing. If no
Borrowing Notice is received with respect to a LIBOR Loan by 12:00 (noon) (New
York time) on the third (3rd) Business Day prior to the end of the LIBOR Period
with respect to such LIBOR Loan, such LIBOR Loan shall be converted to an Index
Rate Loan at the end of the LIBOR Period. US Borrower shall have the option to
(i) convert at any time all or any part of its outstanding Loan or Loans equal
to $5,000,000 and integral multiples of $1,000,000 in excess of that amount
from LIBOR Loans to Index Rate Loans or from Index Rate Loans to LIBOR Rate
Loans, or (ii) upon the expiration of any LIBOR Period applicable to a LIBOR
Loan, to continue all or any portion of such Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a LIBOR Loan, and
the succeeding LIBOR Period(s) of such continued Loan shall commence on the
last day of the LIBOR Period of the Loan to be continued; provided that LIBOR
Loans may be converted into Index Rate Loans only on the expiration date of a
LIBOR Period applicable thereto; provided further, that no outstanding Loan may
be made or continued as, or be converted into, a LIBOR Loan when any Default or
Event of Default has occurred and is continuing.
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(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if, at any time until payment in full of all of the Obligations
and the termination of the Commitments, the rate of interest payable hereunder
exceeds the highest rate of interest permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto
(the "Maximum Lawful Rate"), then in such event and so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided that if at any time thereafter
the rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by Administrative Agent, on
behalf of Lenders, from the making of such advances hereunder is equal to the
total interest which would have been received had the interest rate payable
hereunder been (but for the operation of this subsection 1.5(f)) the interest
rate payable since the Funding Date as otherwise provided in this Agreement.
Thereafter, the interest rate payable hereunder shall be the rate of interest
provided in subsections 1.5(a) through (e) of this Agreement, unless and until
the rate of interest again exceeds the Maximum Lawful Rate, in which event this
subsection 1.5(f) shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount which
such Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. In the event
the Maximum Lawful Rate is calculated pursuant to this subsection 1.5(f), such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made.
In the event that a court of competent jurisdiction, notwithstanding the
provisions of this subsection 1.5 (f), shall make a final determination that a
Lender has received interest hereunder or under any of the other Loan Documents
in excess of the Maximum Lawful Rate, Administrative Agent shall, to the extent
permitted by applicable law, promptly apply such excess first to any interest
due and not yet paid hereunder in respect of the Loans, then to the outstanding
principal of the Loans, then to Fees and any other unpaid Obligations and
thereafter shall refund any excess to the applicable Borrower or as a court of
competent jurisdiction may otherwise order.
1.6 Eligible Accounts. Based on the most recent Borrowing
Base Certificate delivered by the applicable Borrower to Administrative Agent
and on other information available to Administrative Agent, Administrative
Agent shall in its reasonable discretion determine which Accounts shall be
deemed to be "Eligible Accounts" for purposes of determining the amounts, if
any, which are (i) permitted to be outstanding to US Borrower under the
Revolving Credit Loan and (ii) permitted to be outstanding to UK Borrower under
Term Loan C. In determining whether a particular Account constitutes an
Eligible Account, Administrative Agent shall not include any such Account which
meets any of the criteria set forth in Schedule C-1 or Schedule C-2, as
applicable. Administrative Agent reserves the right, at any time and from time
to time after the Closing Date, in the exercise of its reasonable credit
judgment (i) to adjust any eligibility criteria or to establish new eligibility
criteria as to any Borrower, which are more restrictive than those set forth in
Schedule C-1 and Schedule C-2, and (ii) establish reserves against Borrowing
Availability.
1.7 Eligible Inventory, Eligible Equipment, Eligible Real
Estate. (a) Based on the most recent Borrowing Base Certificate delivered by
the applicable Borrower to Administrative
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Agent and on other information available to Administrative Agent,
Administrative Agent shall in its reasonable discretion determine which
Inventory of such Borrower shall be deemed to be "Eligible Inventory" for
purposes of determining the amounts, if any, which are (1) permitted to be
outstanding to US Borrower under the Revolving Credit Loan and (2) permitted to
be outstanding to UK Borrower under Term Loan C. In determining whether any
particular Inventory constitutes Eligible Inventory, Administrative Agent shall
not include Inventory which meets any of the criteria set forth in Schedule D-1
or Schedule D-2, as applicable. Administrative Agent reserves the right, at
any time and from time to time after the Closing Date, in the exercise of its
reasonable credit judgment, (i) to adjust any eligibility criteria or to
establish new eligibility criteria as to any Borrower, which are more
restrictive than those set forth in Schedule D-1 and Schedule D-2, and (ii)
establish reserves against Borrowing Availability.
(b) Administrative Agent reserves the right at any time from
and after the Closing Date, in the exercise of its reasonable credit judgment,
(i) to adjust any eligibility criteria or to establish new eligibility criteria
(which adjustment or new criteria may be more restrictive) with respect to
Eligible Equipment, Eligible On-Lease Inventory and Eligible Real Estate, and
(ii) establish reserves with respect to Eligible Equipment, Eligible On-Lease
Inventory and Eligible Real Estate, including without limitation, repair
reserves, reserves to assure payment of Liens, including Permitted Encumbrances
with respect thereto, and environmental remediation reserves with respect to
Eligible Real Estate.
1.8 Fees. (a) US Borrower shall pay to GE Capital,
individually, the fees specified in the GE Capital Fee Letter, at the times
specified for payment therein.
(b) As additional compensation for Lenders' costs and risks in
making the Revolving Credit Loan available to US Borrower, US Borrower agrees
to pay to Administrative Agent, for the ratable benefit of Lenders, in arrears,
on the first Business Day of each month prior to the Commitment Termination
Date and on the Commitment Termination Date, a fee for US Borrower's non-use of
available funds (the "Non-Use Fee") in an amount equal to the Applicable Line
Margin from time to time in effect (calculated on the basis of a 360-day year
for actual days elapsed) of the difference between the respective daily
averages of (i) the Maximum Revolving Credit Loan (as it may be adjusted from
time to time hereunder) and (ii) the amount of the Revolving Credit Loan and
Letter of Credit Obligations outstanding during the period for which the
Non-Use Fee is due.
(c) US Borrower shall pay to Administrative Agent, for the
ratable benefit of Lenders, Letter of Credit fees equal to the Applicable L/C
Margin from time to time in effect and expenses, all as set forth in Schedule
B.
1.9 Cash Management Systems. (a) US Borrower has
established and will maintain until the Termination Date, the cash management
systems described on Schedule E. All available funds received each day in US
Borrower's depository accounts shall be swept to the Collection Account and
applied to outstanding Obligations in accordance with Section 1.11.
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(b) UK Borrower has established and will maintain until Term
Loan C has been paid in full, the cash management systems subject to a charge
in favor of Administrative Agent for the ratable benefit of Lenders. Unless
Administrative Agent shall elect to release such funds to UK Borrower, all
available funds received each day in UK Borrower's depository accounts shall be
swept to the Collection Account and applied against outstanding Obligations in
accordance with Section 1.11.
1.10 Receipt of Payments. Borrowers shall make each payment
under this Agreement not later than 12:00 noon (New York time) on the day when
due in lawful money of the United States of America in immediately available
funds to the Collection Account. For purposes of computing interest and fees
for either Borrower and for determining the amount of funds available for
borrowing by US Borrower pursuant to subsection 1.1(a), (a) all payments
(including cash sweeps) consisting of cash, wire or electronic transfers in
immediately available funds shall be deemed received on the date of deposit
thereof in the Collection Account and notice to Administrative Agent of such
deposit before the time specified above, and (b) all payments consisting of
checks, drafts, or similar non-cash items shall be deemed received on the day
of receipt of good funds following deposit of any such item of payment in the
Collection Account and notice to Administrative Agent of such deposit.
1.11 Application and Allocation of Payments. So long as any
Event of Default has occurred and is continuing, each Borrower irrevocably
waives the right to direct the application of any and all payments at any time
or times hereafter received from or on behalf of such Borrower and agrees that
Administrative Agent shall have the continuing exclusive right to apply any and
all such payments against the then due and payable Obligations of such Borrower
as the Requisite Lenders may deem advisable notwithstanding any previous entry
by Administrative Agent upon the Loan Account or any other books and records.
In the absence of a specific determination by the Requisite Lenders to the
contrary with respect to US Borrower, the same shall be applied in the
following order: (i) to then due and payable Fees and expenses; (ii) to then
due and payable interest payments; (iii) to then due and payable Obligations
other than Fees, expenses and interest and principal payments; and (iv) to the
principal balance of the Revolving Credit Loan. In the absence of a specific
determination by the Requisite Lenders to the contrary with respect to UK
Borrower, the same shall be applied in the following order: (i) to then due
and payable Fees and expenses; (ii) to then due and payable interest payments
on Term Loan C; (iii) to then due and payable Obligations other than Fees,
expenses and interest and principal payments; and (iv) to principal payments on
Term Loan C. Administrative Agent is authorized to, and at its option may,
charge to the Revolving Credit Loan balance on behalf of US Borrower amounts
equal to all Fees, expenses, Charges, costs or interest owing by US Borrower
under this Agreement or any of the other Loan Documents if and to the extent US
Borrower fails to promptly pay any such amounts as and when due, even if such
charges would cause total Revolving Credit Advances to exceed Borrowing
Availability or the Maximum Revolving Credit Loan amount. At Administrative
Agent's option and to the extent permitted by law, any charges so made shall
constitute part of the Revolving Credit Loan hereunder.
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1.12 Loan Account and Accounting. Administrative Agent shall
maintain a loan account (the "Loan Account") on its books to record: (a) all
Revolving Credit Advances and Term Loan C advances; (b) all payments made by
each Borrower, and (c) all other appropriate debits and credits as provided in
this Agreement with respect to the Revolving Credit Loan and Term Loan C or any
other Obligations. All entries in the Loan Account shall be made in accordance
with Administrative Agent's customary accounting practices as in effect from
time to time. Each Borrower shall pay all of its Obligations as such amounts
become due or are declared due pursuant to the terms of this Agreement.
The balance in the Loan Account, as recorded on Administrative
Agent's most recent printout or other written statement, shall be presumptive
evidence of the amounts due and owing to Administrative Agent and Lenders by
each Borrower; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect such Borrower's obligations to
pay its Obligations. Administrative Agent shall render to US Borrower a
monthly accounting of transactions under the Revolving Credit Loan and Term
Loan C setting forth the balance of the Loan Account. Each and every such
accounting shall (absent manifest error) be deemed final, binding and
conclusive upon each Borrower in all respects as to all matters reflected
therein, unless US Borrower, within thirty (30) days after the date any such
accounting is rendered, shall notify Administrative Agent in writing of any
objection which Borrowers may have to any such accounting, describing the basis
for such objection with specificity. In that event, only those items expressly
objected to in such notice shall be deemed to be disputed by Borrowers.
Administrative Agent's determination, based upon the facts available, of any
item objected to by Borrowers in such notice shall (absent manifest error) be
final, binding and conclusive on Borrowers.
1.13 Indemnity. (a) Borrowers shall, jointly and severally,
indemnify and hold Administrative Agent, Lenders, their respective Affiliates,
and each such Person's respective officers, directors, employees, partners,
attorneys, agents and representatives (each, an "Indemnified Person"), harmless
from and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including reasonable attorneys' fees and
disbursements and other costs of investigation or defense, including those
incurred upon any appeal) which may be instituted or asserted against or
incurred by any such Indemnified Person as the result of credit having been
extended under this Agreement and the other Loan Documents or in connection
with or arising out of the transactions contemplated hereunder and thereunder
or any actions or failures to act in connection therewith, including any and
all Environmental Liabilities and Costs (the "Indemnified Liabilities");
provided that neither Borrower shall be liable for any indemnification to such
Indemnified Person to the extent that any such suit, action, proceeding, claim,
damage, loss, liability or expense results solely from such Indemnified
Person's gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction after all possible appeals have been exhausted.
To the extent that either Borrower is strictly liable under any Environmental
Laws, Borrowers' obligations to indemnify under this subsection 1.13(a) shall
likewise be without regard to fault on the part of Borrowers and without regard
to the violation of law which results in liability to Borrowers. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in this
subsection 1.13(a) may be unenforceable because it is violative of any law or
public policy, Borrowers shall contribute the
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maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all indemnified liabilities incurred by the
Indemnified Persons or any of them. Borrowers also agree to reimburse the
Indemnified Persons periodically for any accrued and unpaid Indemnified
Liabilities. Notwithstanding any other provision of this Agreement to the
contrary, the provisions of and undertakings and indemnifications set forth in
this subsection 1.13(a) shall survive the satisfaction and payment of the
Obligations and the termination of this Agreement, and shall continue to be the
liability, obligation and indemnification of Borrowers. All of the foregoing
costs and expenses shall be part of the Obligations and shall be secured by the
Collateral. NONE OF ADMINISTRATIVE AGENT, ANY LENDER, OR ANY OTHER INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY HERETO, ANY SUCCESSOR,
ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN (OR HAVING NOT BEEN) EXTENDED OR TERMINATED UNDER THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
(b) Each Borrower hereby acknowledges and agrees that neither
Administrative Agent nor any Lender (i) is now, and has ever been, in control
of any of the Real Estate or any Borrower's or any Subsidiary's affairs, and
(ii) has the capacity through the provisions of the Loan Documents to influence
any Borrower's conduct with respect to the ownership, operation or management
of any of its Real Estate.
(c) Each Borrower understands that in connection with Lenders'
arranging to provide the LIBOR Rate interest option with respect to the
Revolving Credit Loan and Term Loan C from time to time at the option of either
Borrower on the terms provided herein, Lenders may enter into funding
arrangements with third parties ("Funding Arrangements") on terms and
conditions which could result in losses to such Lenders if such LIBOR Rate
funds do not remain outstanding at the interest rates provided herein for the
entire LIBOR Period with respect to which the LIBOR Rate has been fixed.
Consequently, in order to induce Lenders to provide such LIBOR Rate option on
the terms provided herein and in consideration of Lenders entering into such
Funding Arrangements from time to time, if any LIBOR Loans of a Borrower are
repaid in whole or in part prior to the last day of any such LIBOR Period
therefor (whether such repayment is made pursuant to any provision of this
Agreement or any other Loan Document or is the result of acceleration, by
operation of law or otherwise), such Borrower shall indemnify and hold harmless
each Lender from and against and in respect of any and all losses, costs and
expenses resulting from, or arising out of or imposed upon or incurred by such
Lender by reason of the liquidation or reemployment of funds acquired or
committed to be acquired by such Lender to fund such LIBOR Loans pursuant to
the Funding Arrangements. The amount of any losses, costs or expenses
resulting in an obligation of either Borrower to make a payment pursuant to the
foregoing sentence shall not include any losses attributable to lost profit to
Lenders but shall represent the excess, if any, of (A) such Lender's cost of
borrowing the LIBOR Rate funds pursuant to the Funding Arrangements over (B)
the return to such Lender on its reinvestment of such funds; provided that if
any Lender terminates any Funding
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Arrangements in respect of the LIBOR Loans, the amount of such losses, costs
and expenses shall include the cost to such Lender of such termination. In
reinvesting any funds borrowed by any Lender pursuant to the Funding
Arrangements, such Lender shall take into consideration the remaining maturity
of such borrowings. As promptly as practicable under the circumstances, each
Lender shall provide the applicable Borrower with its written calculation of
all amounts payable pursuant to the next preceding sentence, and such
calculation shall be final, conclusive and binding on the parties hereto absent
manifest error.
1.14 Access. (a) Each Borrower shall provide full access
during normal business hours, from time to time upon one (1) Business Day's
prior notice, to Administrative Agent and any of its officers, employees and
agents, as frequently as Administrative Agent determines, in its reasonable
discretion, to be appropriate (unless a Default or Event of Default shall have
occurred and be continuing, in which event Administrative Agent and its
officers, employees, designees, agents and representatives shall have access at
any and all times and without any advance notice), and to any Lender upon one
(1) Business Day's prior notice and the consent of such Borrower, which consent
shall not be unreasonably withheld, to the properties, facilities, books,
records, advisors and employees (including officers) of such Borrower and its
Subsidiaries, to its Collateral, to the accountants (including Ernst & Young)
of such Borrower and its Subsidiaries and to the work papers of such
accountants and, upon the occurrence of an Event of Default and during the
continuance thereof, suppliers and customers. Without limiting the generality
of the foregoing, each Borrower shall (i) permit Administrative Agent, and any
of its officers, employees, agents and representatives, to inspect, audit and
make extracts from all of such Borrower's and its Subsidiaries' corporate or
partnership records, files and books of account and (ii) permit Administrative
Agent, and any of its officers, employees, agents and representatives, to
inspect, review and evaluate the Accounts, Inventory at such Borrower's and its
Subsidiaries' locations and at premises not owned by or leased to such Borrower
or Subsidiary. Each Borrower shall make available to Administrative Agent and
its counsel, as quickly as is possible under the circumstances, originals or
copies of all books, records, board minutes, contracts, insurance policies,
environmental audits, business plans, files, financial statements (actual and
pro forma), filings with federal, state and local regulatory agencies, and
other instruments and documents which Administrative Agent may request. Each
Borrower shall deliver any document or instrument necessary for Administrative
Agent, as it may from time to time request, to obtain records from any service
bureau or other Person which maintains records for such Borrower, and shall
maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Borrower. Each Borrower shall instruct
their certified public accountants to make available to Administrative Agent
such information and records as Administrative Agent may request. So long as
no Event of Default shall have occurred and be continuing, Administrative Agent
will give notice to US Borrower of any such request promptly after such request
has been made; provided that the failure to give such notice shall not
invalidate Administrative Agent's request to the accountants.
(b) A fee of $650 per day per individual (plus all reasonable
out-of-pocket costs and expenses) in connection with Administrative Agent's
field examinations permitted under subsection 1.14(a) and subsection 4(c) of
the Security Agreement shall be charged against the
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21
Revolving Credit Loan in connection with each field audit conducted by
Administrative Agent after the Closing Date; provided that so long as no
Default or Event of Default shall have occurred and be continuing, Borrowers
shall not be responsible for reimbursing Administrative Agent for the cost of
more than one (1) field examination in any twelve (12) month period.
1.15 Taxes. (a) Any and all payments by either Borrower
hereunder or under the Amended Revolving Credit Notes or the Amended Term C
Notes shall be made in accordance with this Section 1.15, without set-off or
counterclaim and free and clear of and without deduction for any and all
present or future Taxes. If any Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under the Amended
Revolving Credit Notes or the Amended Term C Notes, (i) the sum payable shall
be increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 1.15) Administrative Agent or Lenders, as applicable, receive an
amount equal to the sum they would have received had no such deductions been
made, (ii) such Borrower shall make such deductions, and (iii) such Borrower
shall pay the full amount deducted to the relevant taxing or other authority in
accordance with applicable law.
(b) Each Borrower shall indemnify and pay, within thirty (30)
days of demand therefor, Administrative Agent and each Lender for the full
amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 1.15) paid by Administrative Agent or such Lender,
as appropriate, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted. Upon payment to Administrative Agent of the
full amount of such Taxes, Borrowers shall be entitled to contest such Taxes
and retain all refunds with respect thereto.
(c) Within thirty (30) days after the date of any payment of
Taxes pursuant to subsection 1.15(a), US Borrower shall furnish to
Administrative Agent, at its address referred to in Section 11.10, (i) with
respect to domestic Taxes, the original or a certified copy of a receipt
evidencing payment thereof and (ii) with respect to foreign Taxes, a certified
copy of the payment instrument and, within two(2) Business Days of receipt
thereof, the original or a certified copy of a receipt evidencing payment
thereof.
1.16 Capital Adequacy; Increased Costs; Illegality. (a) In the
event that any Lender shall have determined that the adoption after the Closing
Date of any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) from any central bank or governmental agency or
body having jurisdiction does or would have the effect of increasing the amount
of capital, reserves or other funds required to be maintained by such Lender or
any Person controlling such Lender and thereby reducing the rate of return on
such Person's capital as a consequence of its obligations hereunder, then
Borrowers shall from time to time within fifteen (15) days after notice and
demand on US Borrower by such Lender (together with
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the certificate referred to in the next sentence and with a copy to
Administrative Agent) pay to Administrative Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of such cost and showing the basis
of the computation of such cost submitted by such Lender to US Borrower and
Administrative Agent shall, absent manifest error, be final, conclusive and
binding for all purposes.
(b) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation 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 Lender of agreeing to make or the making, funding or maintaining of
any Loan, then Borrowers shall from time to time, upon demand by such Lender
(with a copy of such demand to Administrative Agent), pay to Administrative
Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to US Borrower and Administrative Agent by
such Lender, shall be conclusive and binding on Borrowers for all purposes,
absent manifest error. Each Lender agrees that, as promptly as practicable
after it becomes aware of any circumstances referred to in clause (i) or (ii)
above which would result in any such increased cost to such Lender, such Lender
shall, to the extent not inconsistent with such Lender's internal policies of
general application, use reasonable commercial efforts to minimize costs and
expenses incurred by it and payable to it by Borrowers pursuant to this
subsection 1.16(b).
(c) Notwithstanding anything to the contrary contained herein,
if the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender to agree to make or
to make or to continue to fund or maintain any LIBOR Loan, then, unless such
Lender is able to agree to make or to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of such Lender without, in
such Lender's opinion, adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrowers through Administrative Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Loans shall
terminate and (ii) each Borrower shall forthwith prepay in full all outstanding
LIBOR Loans, together with interest accrued thereon, of such Lender unless
Borrowers, within five (5) Business Days after the delivery of such notice and
demand, convert all such Loans into a Loan bearing interest based on the Index
Rate.
(d) Upon the Administrative Agent obtaining actual knowledge
of the occurrence of any of the events set forth in this Section 1.16,
Administrative Agent shall promptly notify US Borrower of the occurrence of
such event. Borrowers shall have the right within five (5) days of receipt of
such notice to convert any outstanding LIBOR Loans to Index Rate Loans;
provided that Borrowers shall be liable for breakage costs as provided in
subsection 1.13(c).
(e) Foreign Lenders. Each Lender organized under the laws of
a jurisdiction outside the United States (a "Foreign Lender") as to which
payments to be made under this Agreement or under the Notes are exempt from
United States withholding tax or are subject to
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United States withholding tax at a reduced rate under an applicable statute or
tax treaty shall provide to US Borrower and Administrative Agent a properly
completed and executed Internal Revenue Service Form 4224 or Form 1001 or other
applicable form, certificate or document prescribed by the Internal Revenue
Service or the United States certifying as to such Foreign Lender's entitlement
to such exemption or reduced rate of withholding with respect to payments to be
made to such Foreign Lender under this Agreement and under the Notes (a
"Certificate of Exemption"). Prior to becoming a Lender under this Agreement
and within fifteen (15) days after a reasonable written request of US Borrower
or Administrative Agent from time to time thereafter, each Foreign Lender that
becomes a Lender under this Agreement shall provide a Certificate of Exemption
to US Borrower and Administrative Agent. No Person may become a Lender
hereunder if such Person is unable to deliver a Certificate of Exemption.
If a Foreign Lender does not provide a Certificate of Exemption
to Borrowers and Administrative Agent within the time periods set forth in the
preceding paragraph, Borrowers shall withhold taxes from payments to such
Foreign Lender at the applicable statutory rate and Borrowers shall not be
required to pay any additional amounts as a result of such withholding;
provided that all such withholding shall cease upon delivery by such Foreign
Lender of a Certificate of Exemption to US Borrower and Administrative Agent.
1.17 Effect of Amendment and Restatement. This Agreement
amends and restates in its entirety the Prior Credit Agreement and upon the
effectiveness of this Agreement, the terms and provisions of the Prior Credit
Agreement shall be superseded hereby. The Obligations outstanding under the
Prior Credit Agreement that remain outstanding upon the effectiveness of this
Agreement shall constitute Obligations hereunder governed by the terms hereof
and shall continue to be secured by the Collateral. Such Obligations shall be
continuing in all respects, and this Agreement shall not be deemed to evidence
or result in a novation or repayment and re-borrowing of those Obligations.
All references to the "Credit Agreement" contained in the Loan Documents
delivered in connection with the Prior Credit Agreement shall be deemed to
refer to this Amended and Restated Credit Agreement without further amendment
of those Loan Documents.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Effectiveness of Agreement.
Notwithstanding any other provision of this Agreement and without
affecting in any manner the rights of Administrative Agent and Lenders
hereunder, this Agreement shall not become effective until the following
conditions have been satisfied, in Administrative Agent's sole discretion
(including the delivery of documents in form and substance satisfactory to the
Administrative Agent). If the Closing Date does not occur on or prior to
December 31, 1996, this Agreement shall be void ab initio and of no force or
effect and the Prior Credit Agreement shall continue to govern the Obligations
outstanding thereunder.
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(a) Credit Agreement. This Agreement or counterparts hereof
shall have been duly executed by, and delivered to, Borrowers, Administrative
Agent and Lenders.
(b) Loan Documents. Administrative Agent shall have received
such reaffirmations of guaranties, and other documents, instruments, agreements
and legal opinions as Administrative Agent shall request in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
including all reaffirmations of guaranties, and other documents, instruments,
agreements and legal opinions listed in the Schedule of Documents attached
hereto as Schedule F, each in form and substance satisfactory to the
Administrative Agents.
(c) IPO. The IPO shall have been consummated; all of the Net
Proceeds thereof shall have been contributed to the equity of US Borrower, and
US Borrower shall have used the Net Proceeds to pay Indebtedness and the costs,
fees and expenses of the Related Transactions.
(d) Term Loans A and B and Subordinated Loan. Term Loan A,
Term Loan B and the Subordinated Loan (as each such term is defined in the
Prior Credit Agreement), together with all interest, fees and expenses accrued
or payable with respect thereto, shall have been paid in full.
(e) Payment of Fees. US Borrower shall have paid to GE
Capital the fees required to be paid on the Closing Date in the respective
amounts specified in the GE Capital Fee Letter.
(f) Officer's Certificate. Administrative Agent shall have
received duly executed originals of a certificate of the Chief Executive
Officer, Chief Financial Officer or Treasurer of US Borrower, dated the Closing
Date, stating that since December 31, 1995, (i) there has been no material
adverse change in the aggregate in the business, assets, liabilities, results
of operations, financial or other condition or prospects of Borrowers taken as
a whole; (ii) no litigation has been commenced which, if successful, would have
a Material Adverse Effect or would challenge any of the transactions
contemplated by this Agreement and the other Loan Documents; (iii) there have
been no distributions to either of the Partners; and (iv) there has been no
material increase in liabilities, liquidated or contingent, and no material
decrease in assets of the Borrowers taken as a whole.
(g) Financial Condition. Borrowers shall have provided
Administrative Agent and Lenders with their current operating statements, a
consolidated and consolidating balance sheet and statement of cash flows,
projections and a Borrowing Base Certificate certified by each Borrower's Chief
Executive Officer, Chief Financial Officer or Treasurer, in each case in form
and substance satisfactory to the Administrative Agent, and the Administrative
Agent shall be satisfied, in their sole discretion, with all of the foregoing,
including:
(i) the Pro Forma as of the Closing Date in accordance with
Section 3.4 hereof;
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(ii) Projections in accordance with Section 3.4 hereof; and
(iii) a certificate of the Chief Executive Officer, Chief
Financial Officer or Treasurer of US Borrower, based on such Pro Forma
and Projections, to the effect that (A) the Pro Forma fairly presents
the financial condition of US Borrower and the Subsidiaries as of the
date thereof after giving effect to the transactions contemplated by
this Agreement; and (B) the Projections are reasonable estimates of the
future financial performance of US Borrower and the Subsidiaries
subsequent to the date thereof.
(h) Corporate Proceedings. All corporate, partnership and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Administrative Agent, and
Administrative Agent shall have received all information and copies of all
documents and papers which Administrative Agent or any Lender may have
requested in connection therewith, and such documents and papers, where
appropriate, shall be certified by proper corporate or partnership officers or
Governmental Authorities.
(i) Total Expenses. Total fees, costs and expenses of the
Related Transactions (excluding fees paid to Administrative Agent and Lenders
and underwriters' discounts and commissions paid to non-Affiliates) payable on
the Closing Date shall not exceed $1,000,000.
(j) Partnership Agreement. Administrative Agent shall have
received a copy, certified on the Closing Date by the Chief Executive Officer,
Chief Financial Officer or Treasurer of US Borrower, of the Partnership
Agreement.
2.2 Further Conditions to Each Revolving Credit Advance and
Term Loan C Advance. It shall be a further condition to the initial and each
subsequent Revolving Credit Advance and Term Loan C advance, as the case may
be, and to the incurrence of the initial and any subsequent Letter of Credit
Obligations that the following statements shall be true on the date of each
such advance or funding, as the case may be:
(a) All of Borrowers' representations and warranties contained
herein or in any of the other Loan Documents shall be true and correct on and
as of the Closing Date and the date on which each such Revolving Credit Advance
or Term Loan C advance is made (or such Letter of Credit Obligations are
incurred) as though made on and as of such date, except to the extent that any
such representation or warranty expressly relates to an earlier date and except
for changes therein expressly permitted or expressly contemplated by this
Agreement.
(b) No Material Adverse Effect shall have occurred since the
Closing Date.
(c) No event shall have occurred and be continuing, or would
result from the making of any Revolving Credit Advance (or the incurrence of
any Letter of Credit Obligations), which constitutes or would constitute a
Default or an Event of Default.
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(d) After giving effect to such Revolving Credit Advance, Term
Loan C advance or such Letter of Credit Obligations the aggregate principal
amount of the Revolving Credit Loan shall not exceed the maximum amount
permitted by subsection 1.3(a) without requiring that a payment be made to
Administrative Agent or any Lender.
The request and acceptance by US Borrower or UK Borrower of the proceeds of any
Revolving Credit Advance or Term Loan C advance, respectively, or the
incurrence of any Letter of Credit Obligations shall be deemed to constitute,
as of the date of such request or acceptance, (i) a representation and warranty
by Borrowers that the conditions in this Section 2.2 have been satisfied and
(ii) a reaffirmation by Borrowers of the granting and continuance of
Administrative Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make or continue the Revolving Credit Loan
and Term Loan C and to incur or continue Letter of Credit Obligations, each
Borrower makes the following representations and warranties to Administrative
Agent and each Lender as of and after the Closing Date (unless another date is
otherwise specifically referenced), each and all of which shall survive the
execution and delivery of this Agreement.
3.1 Existence and Standing; Compliance with Law. US Borrower
is a duly organized Delaware limited partnership, validly existing and in good
standing under the laws of Delaware and has been duly qualified to conduct
business and is in good standing in each jurisdiction where it owns or leases
Real Estate and in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification. Each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has been duly
qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification. UK Borrower is a corporation duly
organized and validly existing under the laws of its jurisdiction of
incorporation. Each Borrower and each Subsidiary (i) has the requisite power
and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under
lease and to conduct its business as now, heretofore and proposed to be
conducted; (ii) has all licenses, permits, consents or approvals from or by,
and has made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (iii) is in compliance with the Partnership Agreement or
its certificate or articles of incorporation and by-laws, or its Memorandum and
Articles of Association or comparable organizational documents, as applicable;
and (v) is in compliance with all applicable provisions of law where the
failure to comply could have a Material Adverse Effect.
3.2 Chief Executive Offices. The current location of each
Borrower's chief executive office and principal place of business is set forth
in Schedule 3.2.
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3.3 Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by Holdings, each Borrower and each
Subsidiary of the Loan Documents to which it is a party and all other
instruments and documents to be delivered by each such Person, and the creation
of all Liens provided for therein: (i) are within such Person's power; (ii)
have been duly authorized by all necessary or proper corporate or partnership
action, as applicable, and shareholder or partner approval, as applicable;
(iii) are not in contravention of any provision of the Partnership Agreement or
such Person's certificate or articles of incorporation or by-laws or its
memorandum and articles of association or comparable organizational documents,
as applicable; (iv) will not violate any law or regulation, or any order or
decree of any court or governmental instrumentality; (v) will not conflict with
or result in the breach or termination of, constitute a default under or
accelerate any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which such Person is a party or by
which such Person or any of its property is bound; (vi) will not result in the
creation or imposition of any Lien upon any of the property of such Person
other than those in favor of Administrative Agent, on behalf of itself and
Lenders, all pursuant to the Loan Documents; and (vii) do not require the
consent or approval of any Governmental Authority or any other Person. On or
prior to the Closing Date, each of the Loan Documents shall have been duly
executed and delivered for the benefit of or on behalf of Holdings, each
Borrower and each Subsidiary (as applicable) and each Loan Document shall then
constitute a legal, valid and binding obligation of Holdings, each Borrower and
such Subsidiary, to the extent it is a party thereto, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally or by application of general principles of equity.
3.4 Financial Statements and Projections. The financial
statements (the "Financial Statements"), except for the Projections, concerning
Holdings, Borrowers and the Subsidiaries which are referenced below have been
prepared in accordance with GAAP consistently applied throughout the periods
involved (except as disclosed therein and except, with respect to unaudited
financial statements, for the absence of footnotes and normal year-end audit
adjustments) and do present fairly in all material respects the financial
condition of the Persons covered thereby as at the dates thereof and the
results of their operations for the periods then ended:
(a) The unaudited balance sheet of Holdings on a consolidated
and consolidating basis as of August 31, 1996, delivered on the Closing Date
and attached hereto as Schedule 3.4(a).
(b) The Pro Forma delivered on the Closing Date and attached
hereto as Schedule 3.4(b) was prepared by US Borrower assuming the consummation
of the Related Transactions and based on the unaudited consolidated balance
sheet of Holdings dated August 31, 1996; the underlying balance sheet was
prepared in accordance with GAAP, with only such adjustments thereto as would
be required to reflect the Related Transactions.
(c) The Projections of Holdings and its Subsidiaries delivered
on the Closing Date and attached hereto as Schedule 3.4(c) for the period from
October 1, 1996 through December 31, 1996 and for the three Fiscal Years
thereafter, after giving effect to the Related Transactions.
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3.5 Collateral Reports. Borrowers have delivered the
Collateral Reports identified on Schedule H and each such Collateral Report
complies with the description thereof contained on Schedule H.
3.6 Material Adverse Effect. Since December 31, 1995,
Borrowers and the Subsidiaries, taken as a whole have not in the aggregate
incurred any obligations, contingent liabilities, liabilities for Charges,
long-term leases or unusual forward or long-term commitments which are not
reflected in the pro forma balance sheet of Borrowers and the Subsidiaries and
which could, alone or in the aggregate, have or result in a Material Adverse
Effect. No Material Adverse Effect has occurred between December 31, 1995 and
the Closing Date.
3.7 Ownership of Property; Liens. The real estate ("Real
Estate") listed on Schedule 3.7 constitutes all of the real property owned or
leased by Borrowers and the Material Subsidiaries or where any Collateral is
located (other than Inventory in transit). Each Borrower and each Material
Subsidiary (i) owns good and marketable fee simple title to all of its owned
Real Estate, and valid and marketable leasehold interests in all of its Leases
(both as lessor and lessee, sublessor and sublessee or assignee), all as
described on Schedule 3.7, and (ii) has, with respect to US Borrower, good and
marketable title to, or valid leasehold interests in, all of its other
properties and assets and, with respect to UK Borrower, beneficial ownership
with full title guarantee of all of its other properties and assets. Neither
General Partner nor Limited Partner owns any assets or property other than its
partnership interest in US Borrower, and on and after the Closing Date neither
will own any other assets or property. NOW International owns no assets or
property other than the capital stock of the Subsidiaries described on Schedule
3.10 and on and after the Closing Date will not own any other assets or
property. None of the properties and assets of Borrowers or any Material
Subsidiary are subject to any Liens, except Permitted Encumbrances; and each
Borrower or Subsidiary has received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents, and duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Borrower's or Subsidiary's,
right, title and interest in and to all such Real Estate and other assets or
property. The estimated fair market value of each parcel of owned Real Estate
is set forth on Schedule 3.7. Except as described on Schedule 3.7, (i) neither
of the Borrowers and no Material Subsidiary and no other party to any such
Lease described on Schedule 3.7 is in default of its obligations thereunder or
has delivered or received any notice of default under any such Lease (which has
not been waived or cured), and no event has occurred which, with the giving of
notice, the passage of time or both, would constitute a default under any such
Lease; (ii) neither of the Borrowers and no Material Subsidiary owns or holds
or is obligated under or a party to, any option, right of first refusal or any
other contractual right to purchase, acquire, sell, assign or dispose of any
Real Estate owned or leased by such Borrower or Subsidiary except as set forth
in Schedule 3.7; and (iii) no portion of any Real Estate owned or leased by
either Borrower or any Material Subsidiary has suffered any material damage by
fire or other casualty loss or a Release which has not heretofore been
completely repaired and restored to its original condition or is being
remedied. All material permits required to have been issued or appropriate to
enable the Real Estate owned or leased by such Borrower or Subsidiary to
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be lawfully occupied and used for all of the purposes for which they are
currently occupied and used, have been lawfully issued and are, as of Closing
Date, in full force and effect.
3.8 Restrictions; No Default. No contract, lease, agreement
or other instrument to which either Borrower or any Material Subsidiary is a
party or by which it or any of its properties or assets is bound or affected
and no provision of applicable law or governmental regulation has or results in
a Material Adverse Effect, or could have or result in a Material Adverse
Effect. Neither of the Borrowers and no Material Subsidiary is in default in
any material respect and, to such Borrower's knowledge, no third party is in
default, under or with respect to any material contract, agreement, lease or
other instrument to which it is a party.
3.9 Labor Matters. No strikes or other labor disputes against
either Borrower or any Material Subsidiary are pending or, to either Borrower's
knowledge, threatened. Hours worked by and payment made to employees of US
Borrower have not been in violation of the Fair Labor Standards Act. All
payments due from such Borrower or its Material Subsidiaries on account of
employee health and welfare insurance have been paid or accrued as a liability
on the books of such Person. Except as set forth in Schedule 3.9, neither of
the Borrowers and none of the Material Subsidiaries has any obligations under
any collective bargaining agreement or any employment agreement. There is no
organizing activity involving either Borrower or any Material Subsidiary
pending or, to either Borrower's knowledge, threatened by any labor union or
group of employees. Except as set forth in Schedule 3.9, there are no
representation proceedings pending or, to either Borrower's knowledge,
threatened with the National Labor Relations Board, and no labor organization
or group of employees of either Borrower or any Material Subsidiary has made a
pending demand for recognition. Except as set forth in Schedule 3.9, there are
no complaints or charges against any Borrower or any Material Subsidiary
pending or threatened to be filed with any federal, state, local or foreign
court, governmental agency or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment of any individual by any Borrower or any Material Subsidiary.
3.10 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness. Except as set forth in Schedule 3.10, neither Holdings nor
either Borrower has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person.
Other than the Material Subsidiaries, no Subsidiary of either Borrower has
assets with a value in excess of $500,000. All of the issued and outstanding
Stock of each Borrower and each Subsidiary is owned by each of the stockholders
named on Schedule 3.10. No Partner's interest in US Borrower is subject to any
option, warrant, interest, right to call or commitment of any kind or
character. Except as set forth in the Shareholders Agreement, there are no
outstanding rights to subscribe or purchase, options, warrants or similar
rights or agreements pursuant to which either Borrower or any Subsidiary may be
required to issue or sell any Stock or other equity security of itself or any
of its Subsidiaries. As of the Closing Date, all outstanding Indebtedness of
each Borrower and the Subsidiaries is described in Section 6.3 (including
Schedule 6.3).
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3.11 Government Regulation. Neither of the Borrowers and no
Material Subsidiary is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940 as amended. Neither of
the Borrowers and no Material Subsidiary is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, or any other
federal or state statute that restricts or limits its ability to incur
Indebtedness or to perform its obligations hereunder, and the making or
continuation of the Revolving Credit Advances and Term Loan C by Lenders, the
incurrence or continuation of the Letter of Credit Obligations, the application
of the proceeds thereof and repayment thereof by either Borrower and the
consummation of the transactions contemplated by this Agreement and the other
Loan Documents will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission.
3.12 Margin Regulations. Neither of the Borrowers and no
Material Subsidiary is engaged, nor will it engage, principally or as one of
its important activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin security" as such term is defined in
Regulation U or G of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") as now and from time to time hereafter in effect (such
securities being referred to herein as "Margin Stock"). Neither of the
Borrowers and no Material Subsidiary owns any Margin Stock, and the proceeds of
the Revolving Credit Advances and Term Loan C will not be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any Margin Stock or for any other purpose which might
cause any of the loans or other extensions of credit under this Agreement to be
considered a "purpose credit" within the meaning of Regulation G, T, U or X of
the Federal Reserve Board.
3.13 Taxes. Except as described on Schedule 3.13, all federal,
state, local and foreign tax returns, reports and statements, including, but
not limited to, information returns required to be filed by Holdings, each
Partner, each Borrower or any Material Subsidiary, have been filed with the
appropriate Governmental Authority and all Charges and other impositions shown
thereon to be due and payable have been paid prior to the date on which any
fine, penalty, interest or late charge may be added thereto for nonpayment
thereof (or any such fine, penalty, interest, late charge or loss has been
paid), and Holdings, each Partner, each Borrower and each Material Subsidiary
has paid when due and payable all Charges required to be paid by it excluding,
in each case, Charges or other amounts being contested in accordance with
Section 5.2(b). Proper and accurate amounts have been withheld by each
Borrower or each Material Subsidiary from its respective employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities. Schedule 3.13 sets forth as of the Closing Date
those taxable years for which Holdings', either Partner's, or US Borrower's tax
returns are currently being audited by the IRS or any other applicable
Governmental Authority and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described on Schedule 3.13, Holdings, the Partners and US Borrower have not
executed or filed with the IRS any agreement or other document extending, or
having the effect of extending, the
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period for assessment or collection of any Charges. Neither Holdings,
Borrowers, any Material Subsidiary nor the Acquired Companies are liable for
any Charges: (i) under any agreement (including, without limitation, any tax
sharing agreements) or (ii) to the best of each Borrower's or each Material
Subsidiary's knowledge, as a transferee other than as a result of the
transactions contemplated by the Purchase Agreement. As of the Closing Date,
none of Holdings, either Partner, US Borrower, any Material Subsidiary or the
Acquired Companies has agreed or been requested to make any adjustment under
IRC Section 481(a) by reason of a change in accounting method or otherwise
which would have a Material Adverse Effect.
3.14 ERISA. (a) Schedule 3.14 lists all Plans maintained or
contributed to by either Borrower or any Subsidiary and all Qualified Plans
maintained or contributed to by any ERISA Affiliate, and separately identifies
the Title IV Plans, Multiemployer Plans, any multiple employer plans subject to
Section 4064 of ERISA, unfunded Pension Plans, Welfare Plans and Retiree
Welfare Plans. Each Qualified Plan has been determined by the IRS to qualify
under Section 401 of the IRC, and the trusts created thereunder have been
determined to be exempt from tax under the provisions of Section 501 of the
IRC, and, except as set forth in Schedule 3.14, to the best knowledge of each
Borrower, nothing has occurred which would cause the loss of such qualification
or tax-exempt status. Each Plan is in compliance with the applicable
provisions of ERISA and the IRC, including the filing of reports required under
the IRC or ERISA except where a failure to comply would not have a Material
Adverse Effect, and with respect to each Plan, other than a Qualified Plan, all
required contributions and benefits have been paid in accordance with the
provisions of each such Plan. Neither of the Borrowers, and no Subsidiary or
ERISA Affiliate thereof, with respect to any Qualified Plan, has failed to make
any contribution or pay any amount due as required by Section 412 of the IRC or
Section 302 of ERISA or the terms of any such Plan. With respect to all
Retiree Welfare Plans, the present value of future anticipated expenses
pursuant to the latest actuarial projections of liabilities does not exceed
$4,000,000, and copies of such latest projections have been provided to
Administrative Agent; with respect to Pension Plans, other than Qualified
Plans, the present value of the liabilities for current participants thereunder
using PBGC interest assumptions does not exceed $1,000,000. Neither of the
Borrowers and no Subsidiary or ERISA Affiliate thereof has engaged in a
prohibited transaction, as defined in Section 4975 of the IRC or Section 406 of
ERISA, in connection with any Plan, which would subject either Borrower or any
Subsidiary (after giving effect to any exemption) to a material tax on
prohibited transactions imposed by Section 4975 of the IRC or any other
material liability.
(b) Except as set forth in Schedule 3.14: (i) no Title IV Plan
has any Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge
of US Borrower, threatened claims, actions or lawsuits (other than claims for
benefits in the normal course), asserted or instituted against (x) any Plan or
its assets, (y) any fiduciary with respect to any Plan or (z) either Borrower,
any Subsidiary or any ERISA Affiliate with respect to any Plan wherein the
amount at issue exceeds $100,000; (iv) neither US Borrower nor any ERISA
Affiliate thereof has incurred or reasonably expects to incur any withdrawal
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in
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such liability) under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan; (v) within the last five years
neither US Borrower, any Subsidiary nor any ERISA Affiliate thereof has engaged
in a transaction which resulted in a Title IV Plan with Unfunded Pension
Liabilities being transferred outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of any such entity; (vi) no Plan which
is a Retiree Welfare Plan provides for continuing benefits or coverage for any
participant or any beneficiary of a participant after such participant's
termination of employment (except as may be required by Section 4980B of the
IRC and at the sole expense of the participant or the beneficiary of the
participant); (vii) US Borrower, each Subsidiary and each ERISA Affiliate have
complied with the notice and continuation coverage requirements of Section
4980B of the IRC and the regulations thereunder except where the failure to
comply could not have or result in any Material Adverse Effect; and (viii) no
liability under any Plan of US Borrower has been funded, nor has such
obligation been satisfied, with the purchase of a contract from an insurance
company that is not rated AAA by the Standard & Poor's Corporation or the
equivalent by another nationally recognized rating agency. Schedule 3.14 lists
all pension plans maintained or contributed to by the Material Subsidiaries
(other than NOW International). Each such Plan is in compliance in all
material respects with all applicable laws, and, with respect to each such
Plan, all required contributions and benefits have been paid in accordance with
the provisions of such plans. No such Material Subsidiary has taken any action
or engaged in any transaction which would subject such Person to any material
liability with respect to any such plans.
3.15 No Litigation. Except as set forth in Schedule 3.15, no
action, claim or proceeding involving claims in excess of $250,000 is now
pending or, to the best knowledge of either Borrower, threatened in writing
against the Acquired Companies or against such Borrower or any Subsidiary,
before any court, board, commission, agency or instrumentality of any federal,
state, local or foreign government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators, nor, to the best knowledge of
either Borrower, does a state of facts exist which is reasonably likely to give
rise to such action, claim or proceedings. None of the actions, claims or
proceedings set forth in Schedule 3.15 (i) challenges such Borrower's or such
Subsidiary's right or power to enter into or perform any of its obligations
under the Loan Documents, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (ii) if determined adversely, would
have or result in a Material Adverse Effect. Schedule 3.15 sets forth
summaries of Holdings and its Subsidiaries' liability reserves taken in
accordance with GAAP as of June 1, 1996 for each of the following: (i) workers
compensation, (ii) vehicle accidents, (iii) general liability, (iv) product
liability, (v) domestic warranty claims and (vi) foreign warranty claims. To
the best of Borrowers' knowledge, the reserves on the books of Holdings and its
Subsidiaries are adequate to cover all litigation pending or threatened in
writing with respect to Holdings and its Subsidiaries as of the Closing Date.
3.16 Brokers. Except as set forth in Schedule 3.16, no broker
or finder acting on behalf of Holdings, either Borrower or any Subsidiary
brought about the obtaining, making or closing of the loans made pursuant to
this Agreement or the transactions contemplated by the Loan Documents and none
of Holdings, either Borrower or any Subsidiary has obligations to any Person in
respect of any finder's or brokerage fees in connection therewith.
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3.17 Employment Matters. Except as set forth in Schedule 3.17,
there are no consulting or management agreements binding upon either Borrower
or any Material Subsidiary in excess of $250,000 in any Fiscal Year which
cannot be canceled without liability or any employment contracts binding upon
either Borrower or any Material Subsidiary with any management employee or
Affiliate of Holdings. A true and complete copy of each such agreement has
been furnished to Administrative Agent.
3.18 Patents, Trademarks, Copyrights and Licenses. Except as
otherwise set forth in Schedule 3.18, each Borrower and each Material
Subsidiary owns all material licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications, and trade names
necessary to continue to conduct its business as heretofore conducted by it or
proposed to be conducted by it, each of which is listed, together with
Copyright Office or Patent and Trademark Office application or registration
numbers, where applicable, on Schedule 3.18. Schedule 3.18 also lists all
material tradenames or other names under which either Borrower or any Material
Subsidiary conducts business. Except as set forth in Schedule 3.18, to the
best of each Borrower's knowledge, neither the conduct of its business nor the
conduct of any Material Subsidiary's business infringes upon any intellectual
property right of any other Person.
3.19 Full Disclosure. No information contained in this
Agreement, any of the other Loan Documents, the Financial Statements, the
Collateral Reports or any written statement furnished by or on behalf of
Holdings, either Borrower, either Partner or any Subsidiary pursuant to the
terms of this Agreement, which has previously been delivered to Administrative
Agent, contained, contains or will contain any untrue statement of a material
fact or omitted, omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. There is no fact known to either
Borrower (other than matters of a general economic nature) that has had or will
have a Material Adverse Effect and that has not been disclosed herein or in
such other documents, certificates and statements furnished to Administrative
Agent or Lenders for use in connection with the transactions contemplated by
this Agreement.
3.20 Hazardous Materials. As of the Closing Date, except as
set forth in Schedule 3.20, (i)the Real Estate is free of contamination from
any Hazardous Material except for contamination which will not materially
impact the value of an individual parcel of Real Estate with a value of
$1,000,000 or more, and (ii) each Borrower, its Subsidiaries and the Real
Estate are in compliance in all material respects with the Environmental Laws.
To the best of Borrowers' knowledge the aggregate costs of remediation and
removal for all Environmental Liabilities and Costs will not exceed $1,000,000
in any of the next three (3) Fiscal Years. Neither of the Borrowers and no
Subsidiary has caused or suffered to occur any Release with respect to any
Hazardous Material at, under, above or upon any Real Estate which Release could
reasonably be expected to have a material adverse impact on the value of an
individual parcel of Real Estate with a value of $1,000,000 or more. As of the
Closing Date, neither of the Borrowers and no Subsidiary is involved in
operations that are likely to result in the imposition of any Lien on its
assets or any material liability being imposed on such Borrower or such
Subsidiary, under any Environmental Law, and
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neither of the Borrowers and no Subsidiary has permitted any tenant or occupant
of such premises to engage in any such activity. Borrowers have provided to
Administrative Agent copies of all existing environmental reports, reviews and
audits prepared within the past year and all reasonably available and current
written information pertaining to actual or potential Environmental Liabilities
and Costs, in each case relating to either Borrower or any Subsidiary.
3.21 Insurance Policies. Schedule 3.21 lists all liability and
casualty insurance of any nature (other than freight insurance and non-material
policies of insurance regarding foreign Subsidiaries) maintained for current
occurrences by either Borrower or any Material Subsidiary, as well as a summary
of the terms of such insurance.
3.22 Deposit and Disbursement Accounts. Schedule 3.22 lists
all banks and other financial institutions at which either Borrower or any
Material Subsidiary maintains deposits and/or other accounts, including any
disbursement accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number.
3.23 Government Contracts. Except as set forth in Schedule
3.23, none of the Accounts are subject to the Federal Assignment of Claims Act
(31 U.S.C. Section 3727).
3.24 Customer and Trade Relations. As of the Closing Date,
there exists no actual or threatened termination or cancellation of, or any
material adverse modification or change in: (a) the business relationship of
either Borrower or any Material Subsidiary with any customer or group of
customers whose purchases during the preceding twelve (12) months caused them
to be ranked among the ten largest customers of Borrowers and the Material
Subsidiaries taken as a whole; or (b) the business relationship of either
Borrower or any Material Subsidiary with any supplier material to the
operations of such Borrower or Subsidiary.
3.25 Agreements and Other Documents. As of the Closing Date,
Borrowers have provided or made available to Administrative Agent or its
counsel, on behalf of Lenders, accurate and complete copies (or summaries) of
all of the following agreements or documents to which either Borrower or any
Material Subsidiary is subject and each of which are listed on Schedule 3.25:
(a) Plans; (b) supply agreements with a term of one (1) year or more involving
receipts in excess of $1,000,000 not terminable by such Borrower or Subsidiary,
as appropriate, within sixty (60) days following written notice issued by such
Borrower or such Subsidiary; (c) purchase agreements with a term of one (1)
year or more involving payments of $1,000,000 or more and not terminable by
such Borrower or such Subsidiary, as appropriate, within 60 days following
written notice issued by such Borrower or such Subsidiary; (d) Leases involving
lease payments of more than $100,000 per annum; (e) any lease of equipment
having a remaining term of one year or longer involving lease payments of
$100,000 or more per annum; (f) all material licenses and permits necessary for
the conduct of such Borrower's or such Subsidiary's businesses; (g) instruments
or documents evidencing Indebtedness of such Borrower or such Subsidiary and
any security interest granted by such Borrower or such Subsidiary with respect
thereto; and (h) instruments and agreements evidencing
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the issuance of any equity securities, warrants, rights or options to purchase
equity securities of such Borrower or such Subsidiary.
3.26 Subordinated Debt. The subordination provisions of the
Sellers' Notes are enforceable against the holders of the Sellers' Notes by the
holder of any Notes. All Obligations, including the Obligations to pay
principal of and interest on the Loans and Letter of Credit Obligations,
constitute senior Indebtedness entitled to the benefits of subordination
created by the Sellers' Notes. The principal of and interest on the Notes, all
Letter of Credit Obligations and all other Obligations will constitute "senior
debt" as that or any similar term is or may be used in any other instrument
evidencing or applicable to any Subordinated Debt of US Borrower. The
consummation of the Related Transactions will not cause any principal or
interest to be due and payable with respect to the Sellers' Notes. Borrowers
acknowledge that the Administrative Agent and each Lender are entering into
this Agreement and are extending the Commitments in reliance upon the
subordination provisions of the Sellers' Notes and this Section 3.26.
3.27 Collateral. The Liens granted to Administrative Agent, on
behalf of itself and Lenders, pursuant to the Collateral Documents are fully
perfected first priority Liens in and to the Collateral described therein,
subject only to Liens set forth in Schedule 6.7 and the Liens granted to
Administrative Agent, on behalf of itself and Lenders, pursuant to the
Mortgages are fully perfected first priority Liens in and to the Mortgaged
Property described therein and Permitted Encumbrances. The amendment and
restatement of the Prior Credit Agreement in accordance herewith does not
affect the enforceability or priority of the Liens securing payment of the
Obligations.
3.28 FEIN. Schedule 3.28 lists the federal employer
identification number of US Borrower and each Subsidiary with such a number.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. (a) Borrowers each hereby covenant
and agree that from and after the Closing Date and until the Termination Date,
they shall deliver to Administrative Agent and/or Lenders, as required,
financial statements, notices and Projections at the times, to the Persons and
in the manner set forth in Schedule G.
(b) Borrowers each hereby covenant and agree that from and
after the Closing Date, they shall deliver to Administrative Agent and/or
Lenders, as required, the various Collateral Reports at the times, to the
Persons and in the manner set forth in Schedule H.
4.2 Communication with Accountants. Each Borrower authorizes
Administrative Agent and each Lender to communicate directly with its
independent certified public accountants, including Ernst & Young LLP, through
the partner in charge of Borrowers' account, and authorizes those accountants
and advisors to disclose to Administrative Agent and each Lender any and all
financial statements and other supporting financial documents and schedules
relating to any Borrower and its Subsidiaries (including, without limitation,
copies of any issued management
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letters) with respect to the business, financial condition and other affairs of
each Borrower and each Subsidiary. Each Borrower has obtained a letter from
such accountants, on which Administrative Agent is designated as a recipient,
acknowledging that such Borrower intends the financial statements certified by
such accountants to benefit or influence Lenders and that Lenders may rely upon
such certification.
5. AFFIRMATIVE COVENANTS
Borrowers each jointly and severally covenant and agree that,
without the prior written consent of Administrative Agent and the Requisite
Lenders, from and after the Closing Date and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each
Borrower shall, and shall cause each Material Subsidiary to: (a) do or cause to
be done all things necessary to preserve and keep in full force and effect its
partnership or corporate existence, as applicable, and its rights and
franchises; (b) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; (c) at all times maintain, preserve and
protect all of its material copyrights, patents, trademarks, trade names and
all other material intellectual property and rights as licensee or licensor
thereof and preserve all the remainder of its assets and properties, used or
useful in the conduct of its business, and keep the same in good repair,
working order and condition (taking into consideration ordinary wear and tear)
and from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with industry
practices; and (d) transact business only in such corporate, partnership and
trade names as are set forth in Schedule 5.1.
5.2 Payment of Obligations. (a) Subject to Section 5.2(b),
each Borrower shall, and shall cause each Subsidiary to, pay and discharge or
cause to be paid and discharged promptly all (A) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed), and (B)
lawful claims for labor, materials, supplies and services or otherwise, before
any thereof shall become past due.
(b) Each Borrower and any Subsidiary may in good faith
contest, by appropriate proceedings, the validity or amount of any Charges or
claims described in Section 5.2(a); provided that at the time of commencement
of any such action or proceeding, and during the pendency thereof (i) no
Default or Event of Default shall have occurred and be continuing, (ii)
adequate reserves with respect thereto are maintained on the books of such
Borrower or such Subsidiary, as the case may be, in accordance with GAAP, (iii)
such contest is maintained and prosecuted continuously and with diligence, (iv)
none of the Collateral becomes subject to forfeiture or loss as a result of
such Charges or claims, (v) no Lien shall be imposed to secure payment of such
Charges or claims other than inchoate tax liens, and (vi) such Borrower or such
Subsidiary, as the case may be, shall promptly pay or discharge such contested
Charges and all additional charges, interest, penalties and expenses, if any,
and such Borrower shall deliver to Administrative Agent evidence acceptable to
Administrative Agent of such compliance, payment or discharge, if such contest
is terminated or discontinued
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adversely to such Borrower or such Subsidiary, as the case may be, or the
conditions set forth in this Section 5.2(b) are no longer met.
5.3 Books and Records. Each Borrower shall keep adequate
records and books of account with respect to such Borrower's and the
Subsidiaries' business activities, in which proper entries, reflecting all
financial transactions, are made in accordance with GAAP and on a basis
consistent with the Financial Statements referred to in Schedule 3.4.
5.4 Litigation. Each Borrower shall notify Administrative
Agent in writing, promptly upon learning thereof, of any litigation commenced
or threatened against such Borrower or any Subsidiary, and of the institution
against it of any suit or administrative proceeding that (a) seeks damages of
$500,000 or more or (b) seeks injunctive relief.
5.5 Insurance. (a) Borrowers shall, at their sole cost and
expense, maintain existing or comparable policies of insurance described on
Schedule 3.21 (other than those, if any, designated as non-material on Schedule
3.21) in form and with insurers satisfactory to Administrative Agent. Such
policies shall be in such amounts as are set forth in Schedule 3.21. Borrowers
shall notify Administrative Agent promptly of any occurrence causing a material
loss or decline in value of either Borrower's or any Material Subsidiary's real
or personal property and the estimated (or actual, if available) amount of such
loss or decline. In the event either Borrower at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required
above or to pay any premium in whole or in part relating thereto,
Administrative Agent, without waiving or releasing any Obligations or Default
or Event of Default hereunder, may at any time or times thereafter (but shall
not be obligated to) obtain and maintain such policies of insurance and pay
such premiums and take any other action with respect thereto which
Administrative Agent deems advisable. All sums so disbursed, including
attorneys fees, court costs and other charges related thereto, shall be
payable, on demand, by Borrowers to Administrative Agent and shall be
additional Obligations hereunder secured by the Collateral; provided that, if
and to the extent Borrowers fail to promptly pay any of such sums upon demand
therefor, Administrative Agent is authorized to, and at its option may, make or
cause to be made Revolving Credit Advances on behalf of US Borrower for payment
thereof.
(b) Administrative Agent reserves the right at any time, upon
any change in either Borrower's risk profile (including, without limitation,
any change in the product mix maintained by either Borrower or any laws
affecting the potential liability of such Borrower), to require additional
forms and limits of insurance to, in Administrative Agent's reasonable opinion,
adequately protect both Administrative Agent and Lenders' interests in all or
any portion of the Collateral and to ensure that each Borrower and each
Subsidiary is protected by insurance in amounts and with coverage customary for
its industry. If requested by Administrative Agent, each Borrower shall
deliver to Administrative Agent from time to time a report of a reputable
insurance broker, satisfactory to Administrative Agent, with respect to its
insurance policies.
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(c) Borrowers shall deliver to Administrative Agent
certificates to (i) all "All Risk" and business interruption insurance naming
Administrative Agent, on behalf of itself and Lenders, as loss payee, and (ii)
all general liability and other liability policies (excluding directors' and
officers' insurance) naming Administrative Agent, on behalf of itself and
Lenders, as additional insured.
(d) Subject to the terms of this Section 5.5(d), so long as no
Default or Event of Default has occurred and is continuing, Borrowers are
hereby authorized by Administrative Agent and Lenders to settle, adjust or
compromise any claim up to $2,000,000 (i) under any property insurance required
to be carried by this Section 5.5 including the filing of appropriate
proceedings by Borrowers or their Subsidiaries and (ii) for the proceeds of any
award or payment with respect to any condemnation or other eminent domain
proceedings by any Governmental Authority. Borrowers or their Subsidiaries
shall have the right to use such proceeds to repair or replace the damaged or
destroyed property, provided that a Default or an Event of Default shall not
have occurred and be continuing at the time the proceeds are paid. If,
however, the proceeds of any such claim, award or payment, are greater than
$2,000,000 but not greater than $12,500,000, Borrowers shall settle, adjust or
compromise such claims subject to the reasonable approval of Administrative
Agent and all proceeds, awards and payments shall be paid directly to
Administrative Agent to be deposited in a cash collateral account as security
for the Obligations; provided that, so long as no Default or Event of Default
has occurred and is continuing at the time Administrative Agent receives such
amount, Administrative Agent shall release such funds to Borrowers to the
extent necessary to permit Borrowers to replace, repair, restore or rebuild
such property damaged, destroyed or taken (a "Restoration") in a diligent and
expeditious manner with materials and workmanship of equal or better quality as
existed before such damage, destruction or taking; provided further that if
such Restoration shall not have been initiated within forty-five (45) days of
receipt of such insurance proceeds, Administrative Agent may apply such
amounts, or any part thereof, to the Obligations as set forth in Section
5.5(e).
(e) Notwithstanding anything contained in Section 5.5(d) to
the contrary if (i) a Default or Event of Default shall have occurred and be
continuing at the time of making any such claim or at the time of receipt of
the proceeds of any such claim, award or payment, (ii) such proceeds are more
than $12,500,000 or (iii) the damage, destruction or taking giving rise to such
proceeds would have a Material Adverse Effect, Borrowers shall direct all
insurers under their "All Risk" policies of insurance and all Governmental
Authorities to pay all proceeds of such claims, awards or payments payable
thereunder directly to Administrative Agent, and Borrowers appoint
Administrative Agent (and all officers, employees or agents designated by
Administrative Agent) as Borrowers' true and lawful agent and attorney-in-fact
for the purpose of making, settling and adjusting all such claims under such
"All Risk" policies and condemnation and eminent domain proceedings and
endorsing the name of Borrowers on any check or other item of payment for the
proceeds therefrom, and all proceeds of any such claim, award or payment shall
be applied to the Obligations in accordance with subsection 1.3(c)(i) or
1.3(c)(ii), as applicable, unless the Requisite Lenders agree to permit part or
all of such proceeds to be used for the applicable Restoration.
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5.6 Compliance with Laws. Each Borrower shall, and shall
cause each Subsidiary to, comply in all material respects with all federal,
state, local and foreign laws and regulations applicable to it, including,
without limitation, those relating to licensing, ERISA, Environmental Laws and
labor matters.
5.7 Agreements. Each Borrower shall, and shall cause each
Subsidiary to, perform, within all required time periods (after giving effect
to any applicable grace periods), all of its obligations and enforce all of its
rights under each material agreement to which it is a party including, without
limitation, any lease or customer contract. Neither of the Borrowers and no
Subsidiary shall terminate or modify any term or provision of any agreement to
which it is a party which termination or modification could have a Material
Adverse Effect.
5.8 Supplemental Disclosure. At the request of Administrative
Agent (in the event that such information is not otherwise delivered by
Borrowers to Administrative Agent pursuant to this Agreement), so long as there
are Obligations outstanding hereunder, but not more frequently than quarterly
absent the occurrence and continuance of a Default or an Event of Default,
Borrowers will supplement each schedule or representation herein with respect
to any matter hereafter arising which, if existing or occurring on the Closing
Date, would have been required to be set forth or described in such schedule or
as an exception to such representation or which is necessary to correct any
information in such schedule or representation which has been rendered
inaccurate thereby; provided that such supplement to such schedule or
representation shall not be deemed an amendment thereof unless expressly
consented to in writing by Administrative Agent and Requisite Lenders, and no
such amendments, except as the same may be consented to in a writing which
expressly includes a waiver, shall be or be deemed a waiver of any Default or
Event of Default disclosed therein.
5.9 Employee Plans. Each Borrower shall notify Administrative
Agent of (i) all material claims, actions, or lawsuits asserted or instituted,
and of any threatened material litigation or claims, against such Borrower, any
Subsidiary or ERISA Affiliate thereof in connection with any Plan maintained,
at any time, by such Borrower, such Subsidiary or ERISA Affiliate, or to which
such Borrower, such Subsidiary or ERISA Affiliate has or had at any time any
obligation to contribute, or/and against any such Plan itself, or against any
fiduciary of or service provider to any such Plan and (ii) the occurrence of
any material "Reportable Event" with respect to any Pension Plan of such
Borrower or any Subsidiary or ERISA Affiliate thereof.
5.10 Environmental Matters. Each Borrower shall, and shall
cause each Subsidiary to, (i) comply in all material respects with the
Environmental Laws applicable to it, (ii) notify Administrative Agent promptly
after such Borrower or such Subsidiary becomes aware of any Release of a
reportable quantity of Hazardous Materials upon or at any premises owned or
occupied by it or of any other quantity of Hazardous Materials that may
materially impact the value of such premises, and (iii) promptly forward to
Administrative Agent a copy of any order, notice, permit, application, or any
communication or report received by such Borrower or such Subsidiary in
connection with any such Release or any other matter relating to the
Environmental Laws that may
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materially affect such premises or such Borrower or such Subsidiary. The
provisions of this Section 5.10 shall apply whether or not the Environmental
Protection Agency, any other federal agency or any state, local or foreign
environmental agency has taken or threatened any action in connection with any
Release or the presence of any Hazardous Materials. If an Event of Default
shall have occurred and be continuing, Administrative Agent may at its
discretion have access to properties owned or leased by either Borrower or the
Subsidiaries for the purpose of assessing compliance with applicable
Environmental Laws, including without limitation, the preparation of phase two
environmental audits. The applicable Borrower shall reimburse Administrative
Agent for all reasonable costs and expenses incurred in conducting such
assessments.
5.11 Landlords' Agreements, Bailee Letters and Mortgagee
Agreements. Each Borrower shall use its best efforts to obtain a landlord's
agreement in form and substance acceptable to Administrative Agent from the
lessor of each leased property currently being used by such Borrower or any
Subsidiary where Collateral is located in the United States or the United
Kingdom. Each Borrower shall use its best efforts to obtain a bailee letter in
form and substance acceptable to Administrative Agent and with respect to any
mill, processor, customer or toll manufacturing facility where Collateral is
located in the United States or the United Kingdom. Each Borrower shall use
its best efforts to obtain a mortgagee's agreement in form and substance
satisfactory to Administrative Agent from the mortgagee of each property owned
by such Borrower or any Subsidiary where Collateral is located in the United
States or the United Kingdom. With respect to mortgaged or leased premises or
premises under the control of third parties at which such Collateral is located
in the United States or the United Kingdom, if Borrowers are unable to obtain a
landlord or mortgagee agreement or bailee letter, all Inventory and Equipment
at that location shall automatically be deemed ineligible without further
action by Administrative Agent or any Lender for purposes of calculating (i)
Borrowing Availability and (ii) the amount permitted to be outstanding under
Term Loan C.
5.12 Consigned Inventory. With respect to consigned Inventory
at any location with an aggregate value in excess of $100,000, each Borrower
shall perfect its interest in such Inventory by filing and delivering notice to
the creditors of record of the consignee, all as provided in Section 9-114 of
the Code or other applicable domestic or foreign law, and in form and substance
satisfactory to Administrative Agent, and such Borrower shall execute and
deliver all financing statements, security agreements, amendments thereto, or
other documents (and pay the cost of filing or recording the same in all public
offices deemed necessary by Administrative Agent), as Administrative Agent may
request, in form and substance satisfactory to Administrative Agent, to perfect
and maintain the Liens on Collateral granted by such Borrower to Administrative
Agent.
5.13 Leased Locations of Collateral. Each Borrower shall, and
shall cause each Subsidiary to, timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located.
Borrowers shall promptly deliver to Administrative Agent copies of (i) any and
all default notices received under or with respect to any such leased location
or public warehouse, and (ii) such other notices or documents as Administrative
Agent may request in its reasonable discretion.
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6. NEGATIVE COVENANTS
Each Borrower jointly and severally covenants and agrees that,
without the prior written consent of Administrative Agent and the Requisite
Lenders, from and after the Closing Date until the Termination Date:
6.1 Mergers, Subsidiaries, Etc. Neither Borrower shall, or
shall cause or permit any Subsidiary to, directly or indirectly, by operation
of law or otherwise, (i) form or acquire any Subsidiary, or (ii) merge with,
consolidate with, acquire all or substantially all of the assets or Stock of,
or otherwise combine with, any Person except that any Subsidiary (other than
NOW Canada, Venezuela, UK Borrower, Singapore, Australia and the NOW
International) may merge into US Borrower; provided that US Borrower is the
surviving Person in such merger. Notwithstanding the foregoing, but subject to
all other provisions of this Agreement, US Borrower may acquire all or
substantially all of the assets of any Person (the "Target") (in each case, a
"Permitted Acquisition") or make Investments in newly formed Subsidiaries
subject to the satisfaction of the following conditions:
(i) Administrative Agent shall receive at least thirty (30)
days' prior written notice of the date upon which such proposed
Permitted Acquisition will be made, which notice shall include a
reasonably detailed description of such proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall only involve assets or
businesses located in the United States (which assets may be contributed
to a Subsidiary) or assets located in a foreign country (which assets
shall be contributed to a Subsidiary of NOW International) and
comprising, in each case, a business, or those assets of a business, of
the type engaged in by US Borrower as of the Closing Date, and which
business would not subject Administrative Agent or any Lender to
regulatory or third party approvals in connection with the exercise of
its rights and remedies under this Agreement or any other Loan Documents
other than approvals applicable to the exercise of such rights and
remedies with respect to US Borrower prior to such Permitted
Acquisition;
(iii) no additional Indebtedness, contingent obligations or
other liabilities shall be incurred, assumed or otherwise be reflected
on a consolidated balance sheet of US Borrower and Target after giving
effect to such Permitted Acquisition, except (A) Revolving Credit
Advances and (B) ordinary course trade payables and accrued expenses of
the Target to the extent no Default or Event of Default shall have
occurred and be continuing or would result after giving effect to such
Permitted Acquisition;
(iv) the assets acquired in such Permitted Acquisition shall be
free and clear of all Liens (other than Permitted Encumbrances);
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(v) except as provided in clause (ii) above with respect to a
Subsidiary of NOW International, such Subsidiary is incorporated under
the laws of a State in the United States and substantially all of its
assets are located in the United States;
(vi) at or prior to the closing of any Permitted Acquisition,
Administrative Agent will be granted a first priority perfected Lien (A)
by the newly formed Subsidiary of US Borrower on all assets of such
newly formed Subsidiary or by US Borrower on the assets acquired
directly by US Borrower, as applicable, subject, in each case, only to
Permitted Encumbrances, or (B) by NOW International, in the case of a
newly formed foreign Subsidiary, on sixty-five percent (65%) of the
capital stock of such foreign Subsidiary, and Holdings, NOW
International and US Borrower shall have executed such other documents
and taken such actions as may be required by Administrative Agent in
connection therewith;
(vii) each newly formed Subsidiary of US Borrower shall have
issued a guaranty of the Obligations to Administrative Agent for the
ratable benefit of the Lenders in form and substance satisfactory to
Administrative Agent;
(viii) Concurrently with delivery of the notice referred to in
clause (i) above, US Borrower shall have delivered to Administrative
Agent and Lenders, in form and substance satisfactory to Administrative
Agent:
(A) a pro forma consolidated balance sheet of Holdings
and its Subsidiaries (the "Acquisition Pro Forma"), based on
recent financial data, which shall be complete and shall
accurately and fairly represent the assets, liabilities,
financial condition and results of operations of Holdings and its
Subsidiaries in accordance with GAAP consistently applied, but
taking into account such Permitted Acquisition and the funding of
all Loans in connection therewith, and such Acquisition Pro Forma
shall reflect that (x) average daily unused Borrowing
Availability of US Borrower for the 90-day period preceding the
consummation of such Permitted Acquisition would have exceeded
$12,500,000 on a pro forma basis (giving effect to such Permitted
Acquisition and all Revolving Credit Loans funded in connection
therewith as if made on the first day of such period) and the
Acquisition Projections (as hereinafter defined) shall reflect
that such unused Borrowing Availability of $12,500,000 shall
continue for at least 90 days after the consummation of such
Permitted Acquisition, giving effect to the payment of all trade
payables and accrued expenses in the ordinary course of business,
and (y) on a pro forma basis, Borrowers would have been in
compliance with the financial covenants set forth in Schedule I
for the four quarter period reflected in the Compliance
Certificate most recently delivered to Administrative Agent
pursuant to Schedule G prior to the consummation of such
Permitted Acquisition (giving effect to such Permitted
Acquisition and all Revolving Credit Loans funded in connection
therewith as if made on the first day of such period);
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(B) updated versions of the most recently delivered
Projections covering the three (3) year period commencing on the
date of such Permitted Acquisition and otherwise prepared in
accordance with the Projections (the "Acquisition Projections")
and based upon historical financial data of a recent date
satisfactory to Administrative Agent, taking into account such
Permitted Acquisition; and
(C) a certificate of the Chief Financial Officer or
Treasurer of Holdings and US Borrower to the effect that: (x) US
Borrower will be Solvent upon the consummation of the Permitted
Acquisition; (y) the Acquisition Pro Forma fairly presents the
financial condition of Holdings and US Borrower (on a
consolidated basis) as of the date thereof after giving effect to
the Permitted Acquisition; and (z) the Acquisition Projections
are reasonable estimates of the future financial performance of
Holdings and its Subsidiaries subsequent to the date thereof
based upon the historical performance of Holdings, its
Subsidiaries and the Target and show that Holdings and Borrower
shall continue to be in compliance with the financial covenants
set forth in Schedule I for the three (3) year period thereafter;
(ix) at least seven (7) days prior to the date upon which such
Permitted Acquisition will be made, US Borrower shall have delivered to
Administrative Agent, in form and substance satisfactory to
Administrative Agent, a certificate of the Chief Financial Officer or
Treasurer of Holdings and US Borrower to the effect that Holdings and US
Borrower have completed their due diligence investigation with respect
to the Target and such Permitted Acquisition, which investigation was
conducted in a manner similar to that which would have been conducted by
a prudent purchaser of a comparable business and the results of which
investigation were delivered to Administrative Agent and Lenders;
(x) on or prior to the date of such Permitted Acquisition,
Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent, all opinions, certificates, lien
search results and other documents reasonably requested by
Administrative Agent; a pro forma Borrowing Base Certificate of US
Borrower giving effect to such Permitted Acquisition, accompanied by all
related financial and collateral information requested by Administrative
Agent (for which Administrative Agent reserves the right to audit any
such information);
(xi) after giving effect to any such Investment (other than with
respect to a Permitted Acquisition), US Borrower shall have Borrowing
Availability in an amount equal to or greater than its working capital
requirements for the next thirty (30) days, based upon US Borrower's
historical cash needs and taking into account all of its payment
obligations under the Loan Documents and under any of its other
Indebtedness; and
(xii) at the time of such transaction and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing.
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The Accounts, Inventory and Equipment purchased from the Target
and located in the United States shall be included in US Borrower's Borrowing
Base; provided that such Accounts, Inventory, and Equipment are of the same
types and quality as those owned by US Borrower and otherwise meet all of the
criteria for eligibility set forth herein and in Schedule C-1 and Schedule D-1
and the definition of Eligible Equipment, as applicable.
6.2 Investments; Loans and Advances. Except as otherwise
permitted by Section 6.1, 6.3, 6.4, or 6.22 neither Borrower shall, or shall
cause or permit any Subsidiary to, make any Investment except: (i) Investments
in Subsidiaries and other Investments, each as in existence on the Closing Date
and disclosed on Schedule 6.2, (ii) mergers or consolidations permitted by
Section 6.1, and (iii) demand deposit accounts maintained in the ordinary
course of business.
6.3 Indebtedness. Neither Borrower shall, or shall cause or
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except (i) Indebtedness secured by Liens permitted under
subsection 6.7(iii), (ii) the Revolving Credit Loan, Term Loan C and the other
Obligations, (iii) Indebtedness of US Borrower pursuant to the Sellers' Notes,
(iv) Indebtedness of NOW Canada pursuant to the NOW Canada Credit Agreement,
(v) Indebtedness for borrowed money incurred by Singapore; provided that the
aggregate principal amount of (x) Letter of Credit Obligations incurred by US
Borrower pursuant to Section 1.2 on behalf of Singapore, (y) Indebtedness
incurred by Singapore pursuant to this subsection 6.3(v) and (z) intercompany
Indebtedness incurred by Singapore pursuant to subsection 6.22(ii) at any one
time outstanding shall not exceed $2,000,000, (vi) Indebtedness for borrowed
money incurred by Australia; provided that the aggregate principal amount of
(x) Letter of Credit Obligations incurred by US Borrower pursuant to Section
1.2 on behalf of Australia, (y) Indebtedness incurred by Australia pursuant to
this subsection 6.3(vi) and (z) intercompany Indebtedness incurred by Australia
pursuant to subsection 6.22(iii) at any one time outstanding shall not exceed
$3,000,000, (vii) Indebtedness for borrowed money incurred by Venezuela;
provided that the aggregate principal amount of (x) Letter of Credit
Obligations incurred by US Borrower pursuant to Section 1.2 on behalf of
Venezuela; (y) Indebtedness incurred by Venezuela pursuant to this subsection
6.3(vii) and (z) intercompany Indebtedness incurred by Venezuela pursuant to
subsection 6.22(vii) at any one time outstanding shall not exceed $4,000,000,
(viii) other Indebtedness permitted by Section 6.22, (ix) obligations under or
in connection with Currency Agreements, (x) obligations under or in connection
with Interest Rate Agreements, (xi) deferred taxes, (xii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law; (xiii) Indebtedness
existing on the Closing Date and disclosed on Schedule 6.3; and (xiv) other
unsecured Indebtedness incurred by US Borrower not to exceed $1,000,000 in the
aggregate. Except as permitted by this Agreement with respect to the Loans,
neither Borrower shall, or shall cause or permit any Subsidiary to, directly or
indirectly voluntarily prepay, defease or in substance defease, purchase,
redeem, retire or otherwise acquire, any Indebtedness.
6.4 Employee Loans and Affiliate Transactions. (a) Except as
permitted by Sections 6.2, 6.14 and 6.22, neither Borrower shall, or shall
cause or permit any Subsidiary to, directly or indirectly, enter into or be a
party to any transaction with an Affiliate of either Borrower
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except in the ordinary course of and pursuant to the reasonable requirements of
such Borrower's or such Subsidiary's business and upon fair and reasonable
terms that shall be fully disclosed to Administrative Agent in advance to the
extent that any such transaction involves payments in excess of $250,000
(excluding purchases and sales of Inventory between US Borrower and its foreign
Subsidiaries solely in the ordinary course of business and between Borrowers
and operating companies in which DPI and First Reserve or funds under their
management are investors) in the aggregate and are no less favorable to such
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Borrower. All such
transactions existing as of the Closing Date are described on Schedule 6.4(a).
(b) Neither Borrower shall, or shall cause or permit any
Subsidiary to, enter into any lending or borrowing transaction with any of its
employees, except (i) loans to their respective employees on an arm's-length
basis in the ordinary course of business for travel advances and relocation
expenses up to $100,000 for any single employee and $500,000 in the aggregate
for all such employees at any one time outstanding and (ii) loans to members of
senior management of Borrowers or their respective Subsidiaries for the purpose
of purchasing capital stock of Holdings up to $200,000 for any single
individual and $500,000 in the aggregate for all such management personnel at
any one time outstanding.
6.5 Capital Structure and Business. Neither Borrower shall,
or shall cause or permit any Subsidiary to, (i) make any changes in any of its
business or operations which would in any way adversely affect the repayment of
the Revolving Credit Loan, Term Loan C or any of the other Obligations or could
have or result in a Material Adverse Effect, (ii) except as described on
Schedule 3.10, make any change in its capital structure (including the issuance
of any shares of Stock, warrants or other securities convertible into Stock or
any revision of the terms of its outstanding Stock), or (iii) amend, modify,
terminate or waive, nor suffer the amendment, modification, termination or
waiver of, any of the terms or provisions of the Partnership Agreement or amend
the certificate or articles of incorporation, bylaws (unless required by law),
or other constitutional documents of any Subsidiary in a manner which would
have a Material Adverse Effect. Neither of the Borrowers nor any Subsidiary
shall engage in any business other than the oilfield service industry or any
lines of business reasonably related thereto (excluding the wellhead
manufacturing business).
6.6 Guaranties. Neither Borrower shall, or shall cause or
permit any Subsidiary to, incur any Guaranties except (i) by endorsement of
instruments or items of payment for deposit or collection to the general
account of such Borrower or such Subsidiary, (ii) Guaranties of the
Obligations, (iii) the Holdings Subordinated Canada Guaranty, (iv) the US
Borrower Subordinated Canada Guaranty, (v) the NOW International Subordinated
Canada Guaranty, (vi) unsecured Guaranties of performance entered into in the
ordinary course of business for Holdings' foreign Subsidiaries in connection
with purchases and sales of Inventory; and (vii) Guaranties in existence on the
Closing Date and disclosed on Schedule 6.6. Neither US Borrower nor NOW
International shall change or amend any of the subordination provisions of the
US Borrower Subordinated Canada Guaranty or the NOW International Subordinated
Canada Guaranty, respectively.
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6.7 Liens. Neither Borrower shall, or shall cause or permit
any Subsidiary to, create, incur, assume or permit to exist any Lien on or with
respect to any of its properties or assets (including Accounts, instruments, or
chattel paper), whether now owned or hereafter acquired except (i) Permitted
Encumbrances, (ii) presently existing or hereinafter created Liens in favor of
Administrative Agent, on behalf of Lenders to secure the Obligations, (iii)
Liens granted pursuant to the Stock Pledge Agreements, (iv) Liens granted by
NOW International on the Stock of its Subsidiaries to secure its obligations
under the NOW International Subordinated Canada Guaranty, (v) Liens created by
conditional sale or other title retention agreements (including, without
limitation, Capital Leases) or in connection with purchase money indebtedness
with respect to Equipment acquired by such Borrower or any of its Subsidiaries
in the ordinary course of business, involving the incurrence of an aggregate
amount of purchase money indebtedness and Capital Lease Obligations of not more
than $2,000,000 outstanding at any one time for all such Liens (provided that
such Liens attach only to the assets subject to such purchase money debt and
such Indebtedness is incurred within twenty (20) days following such purchase
and does not exceed 100% of the purchase price of the subject assets), (vi)
Liens granted by Singapore on its assets to secure Indebtedness permitted by
Section 6.3(v), (vii) Liens granted by Australia on its assets to secure
Indebtedness permitted by Section 6.3(vi), (viii) Liens granted by Venezuela on
its assets to secure Indebtedness permitted by Section 6.3(vii), (ix) Liens
granted by NOW Canada on its assets to secure Indebtedness permitted by Section
6.3(iv), (x) Liens granted by US Borrower on its partnership interest in UNOC
to secure Indebtedness of UNOC; provided that neither Borrower nor any
Subsidiary has any additional or further obligation or liability with respect
to such Indebtedness, and (xi) Liens existing on the Closing Date and
disclosed on Schedule 6.7. Neither Borrower shall, or shall cause or permit
any Subsidiary to, directly or indirectly, enter into, assume or become bound
by any agreement, instrument, indenture or other obligation (other than this
Agreement, the other Loan Documents and the NOW Canada Credit Agreement) which
restricts, prohibits or requires the consent of any Person with respect to the
creation or assumption of any Lien upon its property or assets, whether now
owned or hereafter acquired, except leases or licenses which prohibit Liens on
the property subject thereto.
6.8 Sale of Assets. Neither Borrower shall, or shall cause or
permit any Subsidiary to, sell, transfer, lease, sublease, convey, assign or
otherwise dispose of or grant any Person an option to acquire, in one
transaction or a series of transactions, any of its properties or other assets,
including the capital stock of any such Subsidiary or such Borrower or any of
its Accounts, other than (i) the sale or lease of Inventory in the ordinary
course of business, (ii) the sale, transfer, conveyance or other disposition of
fixed assets having a value not exceeding $250,000 in any single transaction or
$750,000 in the aggregate in any Fiscal Year, (iii) the sale, transfer,
conveyance or other disposition of assets which are obsolete, worn-out or
otherwise not useable in such Borrower's or such Subsidiary's business (up to
$2,000,000 in sales proceeds in the aggregate for Borrowers and their
Subsidiaries in any Fiscal Year), and (iv) assets to be sold pursuant to the
Asset Sale Program as set forth on Schedule 6.8. Borrowers shall promptly
deliver to Administrative Agent all of the Net Proceeds of sales or
dispositions permitted under clauses (ii), (iii) and (iv) of this Section 6.8,
which proceeds shall be applied to the repayment of the Obligations in
accordance with Section 1.3. With respect to any disposition of assets or
other properties permitted pursuant to
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this Section 6.8, Administrative Agent agrees on reasonable prior written
notice to release its Lien on such assets or other properties in order to
permit Borrowers to effect such disposition and shall execute and deliver to
Borrowers, at Borrowers' expense, appropriate UCC-3 termination statements
and other releases as reasonably requested by Borrowers; provided that
Borrowers have delivered to Administrative Agent all Net Proceeds from such
disposition required to be delivered to Administrative Agent.
6.9 ERISA. Neither Borrower shall, or shall cause or permit
any Subsidiary or ERISA Affiliate thereof (without Administrative Agent's prior
written consent) to, (i) acquire any ERISA Affiliate that maintains or has an
obligation to contribute to a Pension Plan that has either an "accumulated
funding deficiency", as defined in Section 302 of ERISA, or any "unfunded
vested benefits", as defined in Section 4006(a)(3)(e)(iii) of ERISA, in the
case of any Plan other than a Multiemployer Plan, and in Section 4211 of ERISA
in the case of a Multiemployer Plan, in excess of $500,000, (ii) permit or
suffer any representation set forth in Schedule 3.14 to cease to be met and
satisfied at any time if the effect thereof would be a liability in excess of
$500,000, (iii) terminate any Pension Plan that is subject to Title IV of ERISA
where such termination could reasonably be anticipated to result in liability
in excess of $500,000, (iv) permit any accumulated funding deficiency, as
defined in Section 302(a)(2) of ERISA, to be incurred with respect to any
Pension Plan, in excess of $500,000, (v) fail to make any material
contributions or fail to pay any material amounts due and owing as required by
the terms of any Plan before such contributions or amounts become delinquent,
(vi) make a complete or partial withdrawal (within the meaning of Section 4201
of ERISA) from any Multiemployer Plan where such withdrawal could have a
Material Adverse Effect, or (vii) fail to promptly provide Administrative Agent
with copies of any Plan documents or governmental reports or filings, if
requested by Administrative Agent.
6.10 Financial Covenants. Borrowers shall not breach or fail
to comply with any of the Financial Covenants (the "Financial Covenants") set
forth in Schedule I.
6.11 Hazardous Materials. Neither Borrower shall, or shall
cause or permit any Subsidiary or any other Person within its control to, cause
or permit a Release or the presence, use, generation, manufacture, installation
or storage of any Hazardous Materials on, under, in, above or about any of its
real estate or the transportation of any Hazardous Materials to or from any of
its real estate that would violate in any material respect, or result in any
material liability under, any Environmental Laws. If a Default or Event of
Default shall have occurred and be continuing, each Borrower, at its own
expense, shall cause the performance of such environmental audits and
preparation of such environmental reports as Administrative Agent may from time
to time request as to any location at which Collateral is then located, by
reputable environmental consulting firms reasonably acceptable to
Administrative Agent, and in form and substance reasonably acceptable to
Administrative Agent.
6.12 Sale-Leasebacks. Neither Borrower shall, or shall cause
or permit any Subsidiary to, engage in any sale-leaseback or similar
transaction involving any of its assets; except that US Borrower may sell and
leaseback its Store Locations, subject to the following conditions;
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(i) aggregate sale proceeds shall be subject to the limitations
set forth in clause (ii) of Section 6.8
(ii) no such sale-leaseback transaction shall be entered into
with respect to the following locations: New Iberia, Louisiana
(Sugarmill Road); McAlester, Oklahoma; Kilgore, Texas; and Casper,
Wyoming;
(iii) the lease for each such location shall be on commercially
reasonable terms, disclosed to Administrative Agent in advance of the
execution thereof; and
(iv) each lessor of any such property shall have entered into a
landlord waiver in favor of Administrative Agent for the benefit of
Lenders satisfactory in form and substance to Administrative Agent.
6.13 Cancellation of Indebtedness. Neither Borrower shall, or
shall cause or permit any Subsidiary to, cancel any claim or debt owing to it,
except for reasonable consideration negotiated on an arm's-length basis and in
the ordinary course of its business consistent with past practices.
6.14 Restricted Payments. (a) Neither Borrower shall, or shall
cause or permit any Subsidiary to, make any Restricted Payment, other than (i)
distributions from Borrowers to Holdings in an amount necessary to enable
Holdings (x) to satisfy its Federal, state and local income tax obligations to
the extent such obligations are the result of the net consolidated income of US
Borrower and its Subsidiaries being attributed to Holdings for tax purposes;
provided that each Borrower's contribution shall not be greater than or paid
sooner than its ratable share of such income taxes then due and payable by
Holdings; provided further, that if either Borrower pays more to Holdings than
its ratable share of income taxes paid in cash by Holdings for any Fiscal Year,
as finally determined, it shall either demand and obtain reimbursement from
Holdings or set off the amount of such overpayment against other amounts owing
by such Borrower to Holdings, (y) to pay the necessary fees and expenses to
maintain its corporate existence and good standing and to pay the reasonable
costs of its directors' and officers' insurance, and (z) to pay legal and
accounting fees to the extent such fees relate to legal or accounting services
provided by entities which are not Affiliates of Borrowers and which services
are directly related to Borrowers or their Subsidiaries, (ii) intercompany
loans by US Borrower or a Subsidiary to the extent permitted by Section 6.22,
(iii) Restricted Payments consisting of reasonable compensation or
indemnification to Affiliates who are individuals and serve as directors,
officers or employees of a Borrower or any Subsidiary, (iv) so long as no
Default or Event of Default has occurred and is continuing, Restricted Payments
consisting of distributions of US Borrower to Holdings to enable Holdings to
make repurchases of its Stock from members of management pursuant to the terms
and conditions of the Stock Incentive Plan in effect as of the Closing Date in
form and substance satisfactory to Administrative Agent; provided that the
aggregate sum of distributions by US Borrower in any Fiscal Year in connection
with all such redemptions shall not exceed $1,000,000, and (v) redemption of
its Stock by NOW Canada permitted by the terms of the NOW Canada Credit
Agreement.
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(b) In addition to the foregoing but without duplication of
distributions under subsection 6.14(a), US Borrower may make distributions to
the Partners in an amount necessary to enable the Partners (x) to satisfy its
state and local income tax obligations to the extent such obligations are the
result of the net consolidated income of US Borrower and its Subsidiaries being
attributed to the Partners for tax purposes; provided that US Borrower's
contribution shall not be greater than or paid sooner than its ratable share of
such income taxes then due and payable by the Partners; provided further, that
if US Borrower pays more to the Partners than its ratable share of income taxes
paid in cash by each Partner for any Fiscal Year, as finally determined, it
shall either demand and obtain reimbursement from the Partners or set off the
amount of such overpayment against other amounts owing by US Borrower to the
Partners, (y) to pay the necessary fees and expenses to maintain its corporate
existence and good standing and to pay the reasonable costs of its directors'
and officers', and (z) to pay legal and accounting fees to the extent such fees
relate to legal or accounting services provided by entities which are not
Affiliates of US Borrower and which services are directly related to US
Borrower or its Subsidiaries.
(c) In addition to the foregoing, so long as no Event of Default
shall have occurred and be continuing and to the extent that no Event of
Default would result after giving effect to the payment thereof, US Borrower
may pay management or other fees in the amount of $300,000 on the Closing Date
to DPI and First Reserve and in the aggregate amount of $1,000,000 to DPI and
First Reserve in each Fiscal year in four quarterly installments of $250,000
each, payable in each year on the first day of each calendar quarter,
commencing with a payment on January 1, 1997.
6.15 Leases. (a) Neither Borrower shall, or shall cause or
permit any Subsidiary to, enter into any lease of real property or similar
agreement or arrangement if the aggregate of all such lease payments payable in
any Fiscal Year by Borrowers and their Subsidiaries would exceed $5,000,000.
(b) Neither Borrower shall, or shall cause or permit any
Subsidiary to, enter into any operating lease for equipment or personal
property, if the aggregate of all such operating lease payments payable in any
Fiscal Year for Borrowers and their Subsidiaries would exceed $7,500,000.
6.16 Fiscal Year. Neither Borrower shall, or shall cause or
permit any Subsidiary to, change its Fiscal Year.
6.17 Change of Corporate Name or Location. (a) Neither
Borrower shall, or shall cause or permit any Material Subsidiary to, (i) change
its partnership or corporate name, as applicable, or (ii) change its chief
executive office, principal place of business, partnership or corporate offices
or the location of its records concerning the Collateral, or (iii) change any
existing or establish any additional warehouse or other Collateral location,
unless such Borrower has given Administrative Agent at least thirty (30) days'
prior written notice and Administrative Agent has delivered to such Borrower
its written acknowledgment that all reasonable actions requested by
Administrative Agent in connection therewith, including, without limitation, to
continue the perfection of any Liens in favor of Administrative Agent, on
behalf of Lenders, in any Collateral
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have been completed or taken; provided that any such new location with respect
to US Borrower shall be in the continental United States; and (b) in
furtherance of and without limiting the scope of clause (a) above, neither
Borrower shall, or shall permit any Subsidiary, to change its name, identity or
partnership or corporate structure, as applicable, in any manner which might
make any financing or continuation statement or similar filing filed in
connection herewith seriously misleading within the meaning of Section 9.402(7)
or any other then applicable provision of the Code or any other applicable
foreign law except upon prior written notice to Administrative Agent and
Lenders and after Administrative Agent's written acknowledgment that any
reasonable action requested by Administrative Agent in connection therewith,
including, without limitation, to continue the perfection of any Liens in favor
of Administrative Agent, on behalf of Lenders, in any Collateral has been
completed or taken. All Collateral located at any such new location shall
automatically be deemed ineligible without further action by Administrative
Agent or any Lender to constitute Eligible Accounts, Eligible Equipment or
Eligible Inventory, as applicable, until such Borrower shall have complied with
the requirements of this Section 6.17 and Section 5.11.
6.18 Sale of Stock. Neither Borrower shall, or shall cause or
permit any Subsidiary to, sell (whether in a public or private offering or
otherwise) any of its Stock.
6.19 Cash Management. Neither Borrower shall, or shall cause
or permit any Subsidiary to, accumulate or maintain cash in disbursement or
payroll accounts as of any date of determination more than $50,000 in the
aggregate in excess of checks outstanding against such accounts as of that date
and amounts necessary to meet minimum balance requirements.
6.20 No Impairment of Upstreaming. Neither Borrower shall, or
shall cause or permit any Subsidiary to, directly or indirectly, enter into,
assume or become bound by any agreement, instrument, indenture or other
obligation (other than this Agreement, the other Loan Documents and the NOW
Canada Credit Agreement) which could directly or indirectly restrict, prohibit
or require the consent of any Person with respect to the payment of dividends
or distributions or the making of intercompany loans by a Subsidiary of either
Borrower to either Borrower or between Borrowers.
6.21 Subordinated Debt. US Borrower shall not, nor shall it
cause or permit any Subsidiary to:
(a) pay any interest or principal on the Sellers' Notes prior
to the seventh anniversary of the date thereof; or
(b) prepay, defease, purchase, redeem, retire or otherwise
acquire any Subordinated Debt except that US Borrower may make voluntary and
mandatory prepayments in accordance with the terms of any Subordinated Debt
incurred pursuant to Section 6.22(ii); provided that in each such case (i) no
Default or Event of Default has occurred and is continuing or would result
after giving effect to any such prepayment, (ii) no mandatory prepayment of the
Revolving Credit Loan or Term Loan C is due and owing pursuant to Section
1.3(a) or Section 1.1(b), as
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applicable, and (iii) after giving effect to any such payment, US Borrower
shall have unused Borrowing Availability equal to at least ten percent (10%) of
the Borrowing Base of the US Borrower in effect at the time of such payment.
6.22 Intercompany Loans. Notwithstanding any provision
contained in this Section 6 to the contrary, US Borrower and the Subsidiaries
may create, incur or permit to exist intercompany loans as follows: (i)
Indebtedness existing on the Closing Date owing from a Subsidiary to US
Borrower and described on Schedule 6.22; provided that any payment or
prepayment of such Indebtedness shall not be reborrowed by such Subsidiary
except as permitted by clauses (iii), (iv), (v), (vi) and (vii) of this Section
6.22, (ii) Subordinated Debt incurred after the Closing Date by US Borrower in
the form of intercompany loans from a Subsidiary, (iii) additional loans to NOW
Canada from US Borrower or UK Borrower; provided that the principal amount of
(x) Letter of Credit Obligations incurred by US Borrower on behalf of NOW
Canada and (y) loans incurred by NOW Canada under this Section 6.22 at any one
time outstanding shall not in the aggregate exceed $3,000,000; (iv) additional
loans to UK Borrower from US Borrower in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000, (v) loans to Singapore from US
Borrower or UK Borrower; provided that the principal amount of (x) Letter of
Credit Obligations incurred by US Borrower on behalf of Singapore, (y)
Indebtedness incurred by Singapore pursuant to subsection 6.3(v), and (z) loans
incurred by Singapore under this Section 6.22 at any one time outstanding shall
not in the aggregate exceed $2,000,000; (vi) loans to Australia from US
Borrower or UK Borrower; provided that the principal amount of (x) Letter of
Credit Obligations incurred by US Borrower on behalf of Australia, (y)
Indebtedness incurred by Australia pursuant to subsection 6.3(vi), and (z)
loans incurred by Australia under this Section 6.22 at any one time outstanding
shall not in the aggregate exceed $3,000,000; (vii) loans to Venezuela from US
Borrower or UK Borrower; provided that the principal amount of (x) Letter of
Credit Obligations incurred by US Borrower on behalf of Venezuela, (y)
Indebtedness incurred by Venezuela pursuant to subsection 6.3(vii), and (z)
loans incurred by Venezuela under this Section 6.22 at any one time outstanding
shall not in the aggregate exceed $4,000,000; provided further that (a) all
such intercompany loans shall be unsecured and shall be payable upon demand;
(b) after giving effect to each such loan, both US Borrower or UK Borrower, as
applicable, and the Subsidiary receiving such intercompany loans shall be
Solvent; (c) the obligor of such loan shall use the proceeds thereof for its
own working capital requirements and general partnership or corporate purposes,
as applicable, arising in the ordinary course of its business; (d) after giving
effect to each such loan from US Borrower or UK Borrower, as applicable, US
Borrower or UK Borrower, as applicable, shall have Borrowing Availability in an
amount equal to or greater than its working capital requirements for the next
succeeding thirty (30) days, based upon its historical cash needs and taking
into account all of its payment obligations under the Loan Documents and under
any of its other Indebtedness; (e) US Borrower shall have delivered to
Administrative Agent a current list of intercompany loans outstanding in
accordance with clause (l) of Schedule G; and (f) all such intercompany loans
by US Borrower or UK Borrower to any Subsidiary shall be evidenced by
promissory notes satisfactory in form and substance to Administrative Agent and
pledged to Administrative Agent for the ratable benefit of Lenders.
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6.23 Inconsistent Agreements. Neither Borrower shall, or shall
cause or permit any Subsidiary to, become party to any agreement, note,
indenture, instrument or other arrangement, or take any other action, which,
directly or indirectly, (i) requires a sharing of any interest in the
Collateral or prohibits the creation of a Lien on any of its properties or
other assets in favor of Administrative Agent, on behalf of the Lenders, as
additional collateral for the Obligations, except operating leases, Capital
Leases or intellectual property licenses which prohibit Liens upon the assets
that are subject thereto and the documents granting Liens on the assets of
Australia and Singapore as permitted by Section 6.7; (ii) prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence of the Obligations, the
granting of Liens to secure the Obligations, amending the Loan Documents, or
(iii) contains any provision which would be violated or breached by the making
of the Revolving Credit Advances or by the performance by Borrowers or Holdings
or any Subsidiary of any of its obligations under any Loan Document.
6.24 Acquisition Documents. US Borrower shall not, nor shall
it cause or permit any Subsidiary to amend, waive or modify in any manner any
provision of any of the Acquisition Documents.
7. TERM
7.1 Termination. The Revolving Credit Loan shall be in effect
until the Commitment Termination Date, and the Revolving Credit Loan, Term Loan
C and all other Obligations related thereto shall be automatically due and
payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan
Documents, no termination or cancellation (regardless of cause or procedure) of
any financing arrangement under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of Borrowers or the rights of
Administrative Agent and Lenders relating to any unpaid portion of the
Revolving Credit Loan, Term Loan C or any other Obligation, due or not due,
liquidated, contingent or unliquidated or any transaction or event occurring
prior to such termination, or any transaction or event, the performance of
which is required after the Commitment Termination Date. Except as otherwise
expressly provided herein or in any other Loan Document, all undertakings,
agreements, covenants, warranties and representations of or binding upon
Holdings, Borrowers, the Subsidiaries and the Partners, and all rights of
Administrative Agent and each Lender, all as contained in the Loan Documents
shall not terminate or expire, but rather shall survive such termination or
cancellation and shall continue in full force and effect until such time as all
of the Obligations have been paid in full in accordance with the terms of the
Loan Documents creating such Obligations and the Commitments have been
terminated.
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8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:
(a) Either Borrower shall fail to make any payment of
principal of, or interest on, or any other amount owing by it in respect of,
the Revolving Credit Loan, Term Loan C or any Fees, costs or expenses payable
or reimbursable by it under this Agreement or under any other Loan Document or
any of the other Obligations when due and payable or declared due and payable.
(b) Either Borrower shall fail or neglect to perform, keep or
observe any of the provisions of (i) Sections 1.4, 1.9, 5.1, 5.2, 5.5 or 6, or
any of the provisions set forth in Schedules E, G (paragraph (f) only) or I,
respectively.
(c) Either Borrower shall fail or neglect to perform, keep or
observe any provisions set forth in Section 4 or Schedules G (other than
paragraph (f) thereof) or H, respectively, within twenty (20) days after the
earlier to occur of (i) US Borrower's receipt of written notice from
Administrative Agent or any Lender or (ii) actual knowledge of such failure by
the applicable Borrower.
(d) Either Borrower shall fail or neglect to perform, keep or
observe any other provision of this Agreement (other than any provision
embodied in or covered by any other clause of this Section 8.1) and the same
shall remain unremedied for thirty (30) days or more after the earlier to occur
of (i) US Borrower's receipt of written notice of any such failure from
Administrative Agent or any Lender or (ii) actual knowledge of such failure by
the applicable Borrower.
(e) Any Guarantor shall fail or neglect to perform, keep or
observe any provision of any Guaranty Agreement (other than any provision
embodied in or covered by any other clause of this Section 8.1) and the same
shall remain unremedied for ten (10) days or more after the earlier of (i) US
Borrower's receipt of written notice of any such failure from Administrative
Agent or any Lender or (ii) actual knowledge of such failure by US Borrower.
(f) A default or breach shall occur under any Loan Document
(other than this Agreement or the Notes) or the Acquisition Documents which
default or breach continues beyond any period of grace therein provided.
(g) A default or breach shall occur under any other agreement,
document or instrument to which Holdings, either Borrower or any Subsidiary is
a party and such default is not cured within any applicable grace period and
such default or breach (i) involves the failure to make any payment when due in
respect of any Indebtedness (other than the Obligations) of Holdings, either
Borrower or any Subsidiary in excess of $1,000,000 in the aggregate, or (ii)
causes such Indebtedness or a portion thereof in excess of $1,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or (iii) permits any holder of such Indebtedness or
a trustee to cause such Indebtedness or a portion thereof in excess of
$1,000,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly
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scheduled dates of payment, regardless of whether such right is exercised or
waived by such holder or trustee.
(h) Any representation or warranty herein or in any Loan
Document or in any written statement, report, financial statement or
certificate made or delivered to any Lender by or on behalf of Holdings, either
Borrower or any Subsidiary or either Partner shall be untrue or incorrect in
any material respect, as of the date when made or deemed made.
(i) Any representation or warranty in any Guaranty Agreement
or in any written statement pursuant thereto, or in any report, financial
statement or certificate made or delivered to any Lender by any Guarantor shall
be untrue or incorrect in any material respect, as of the date when made or
deemed made.
(j) Assets of Holdings, either Borrower or any Subsidiary or
either Partner with a fair market value of $500,000 or more shall be attached,
seized, levied upon or subjected to a writ or distress warrant, or come within
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors of Holdings, either Borrower or any Subsidiary and such condition
shall continue for thirty (30) days or more.
(k) A case or proceeding shall have been commenced against
Holdings, either Borrower or any Subsidiary or either Partner in a court having
competent jurisdiction seeking a decree or order in respect of Holdings, either
Borrower or any Subsidiary or either Partner (i) under Title 11 of the United
States Code, as now constituted or hereafter amended, the Insolvency Act of
1986, as now constituted or hereafter amended in the case of UK Borrower, or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) appointing a custodian, receiver, administrative receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for Holdings, either
Borrower or any Subsidiary or either Partner or of any substantial part of any
such Person's assets, or (iii) ordering the winding-up, dissolution, or
liquidation of the affairs of Holdings, either Borrower or any Subsidiary or
either Partner and such case or proceeding shall remain undismissed or unstayed
for sixty (60) days or more or such court shall enter a decree or order
granting the relief sought in such case or proceeding.
(l) Holdings, either Borrower or any Subsidiary or either
Partner shall (i) file a petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, the Insolvency Act of
1986, as now constituted or hereafter amended in the case of UK Borrower, or
any other applicable federal, State or foreign bankruptcy or other similar law,
(ii) consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a custodian,
receiver, administrative receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of Holdings, either Borrower or any
Subsidiary or either Partner or of any substantial part of any such Person's
assets, (iii) make an assignment for the benefit of creditors, or proposes or
enters into any composition of or other arrangement for the benefit of
creditors generally or any class of creditors, (iv) suspend payment of its
debts or become
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unable to pay its debts as they become due, or (v) take any partnership or
corporate action, as applicable, in furtherance of any such action.
(m) A final judgment or judgments for the payment of money in
excess of $750,000 in the aggregate shall be rendered against Holdings, either
Borrower or any Subsidiary or either Partner and the same shall not (i) be
fully covered by insurance in accordance with Section 5.5, or (ii) within
thirty (30) days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged prior to the
expiration of any such stay.
(n) With respect to any Plan: (i) either Borrower, any
Subsidiary or any ERISA Affiliate thereof or any other party-in-interest or
disqualified Person shall engage in any transactions which in the aggregate
result in a final assessment to either Borrower or any Subsidiary in excess of
$500,000 under Section 409 or 502 of ERISA or IRC Section 4975 which assessment
has not been paid within thirty (30) days of final assessment and which is not
being contested pursuant to subsections 6.2(b) or 6.2(c) hereof; (ii) either
Borrower, any Subsidiary or any ERISA Affiliate thereof shall incur any
accumulated funding deficiency, as defined in IRC Section 412, in the aggregate
in excess of $500,000, or request a funding waiver from the IRS for
contributions in the aggregate in excess of $500,000; (iii) either Borrower,
any Subsidiary or any ERISA Affiliate thereof shall not pay any withdrawal
liability which involves annual withdrawal liability payments which exceed
$500,000, as a result of a complete or partial withdrawal within the meaning of
Section 4203 or 4205 of ERISA, within 30 days after the date such payment
becomes due, unless such payment is being contested pursuant to subsections
6.2(b) or (c); (iv) either Borrower, any Subsidiary or any ERISA Affiliate
thereof shall fail to make a required contribution by the due date under
Section 412 of the IRC or Section 302 of ERISA which would result in the
imposition of a lien under Section 412 of the IRC or Section 302 of ERISA
within 30 days after the date such payment becomes due; or (v) an ERISA Event
(other than an event described in 29 CFR Section 2615.23) with respect to a
Pension Plan has occurred which could have a Material Adverse Effect, and
within thirty (30) days US Borrower has not contested such ERISA Event by
appropriate proceedings.
(o) Any material provision of any Loan Document shall for any
reason cease to be valid or enforceable in accordance with its terms or
Holdings, either Borrower or any Guarantor or any other Person (other than
Administrative Agent or any Lender) shall disavow its obligations thereunder or
shall deny that it has any or further obligations thereunder, or shall contest
the validity or enforceability of any thereof, or any Lien created under any
Loan Document shall cease to be a legal, valid and perfected first priority
Lien (except as otherwise permitted herein or therein) in any of the Collateral
purported to be covered thereby.
(p) Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of, all or
any substantial portion of the property of either Borrower or any Material
Subsidiary (other than Venezuela).
(q) A criminal or civil action, suit or proceeding is
commenced against any of Holdings, either Borrower or any Subsidiary or either
Partner under any federal or state racketeering
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statute (including, without limitation, the Racketeer Influenced and Corrupt
Organizations Act of 1970), which action, suit or proceeding could reasonably
be expected to result in a Material Adverse Effect.
(r) Any Change of Control shall occur.
(s) Any event shall occur that gives any holder of
Subordinated Debt a mandatory right of redemption or other right to prepayment
with respect thereto.
(t) Holdings or either Partner or NOW International shall
conduct or transact any business (other than being the owner of Stock held by
it as of the Closing Date) or incur any Indebtedness or other obligation or
liability or make any Investment or grant or suffer any Lien or issue any
Guaranties other than, in each case, pursuant to, or as permitted by, the Loan
Documents.
8.2 Remedies. (a) If any Default shall have occurred and be
continuing, Administrative Agent may (and at the written request of the
Requisite Lenders shall) terminate this facility with respect to further
Revolving Credit Advances or Term Loan C advances, whereupon any further
Revolving Credit Advances or Term Loan C advances, shall be made in the sole
discretion of Administrative Agent or the sole discretion of the Requisite
Lenders' (if termination occurred at the request of the Requisite Lenders);
provided that such further Revolving Credit Advance or Term Loan C advance
shall not cause the aggregate outstanding principal amount thereof to exceed
the Borrowing Availability or the UK Borrowing Base, respectively. Upon such
termination, Administrative Agent shall notify US Borrower of such action.
(b) If any Event of Default shall have occurred and be
continuing, Administrative Agent may (and at the written request of the
Requisite Lenders shall), without notice, (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder, (b) declare all or any
portion of the Obligations, including all or any portion of the Revolving
Credit Loan and/or Term Loan C, to be forthwith due and payable, and require
that the Letter of Credit Obligations be cash collateralized as provided on
Schedule B; (c) increase the Letter of Credit Fees and rates of interest
applicable to the Revolving Credit Loan and/or Term Loan C to the Default Rate,
as provided in subsection 1.5(d); and (d) exercise any rights and remedies
provided to Administrative Agent under the Loan Documents and/or at law or
equity, including all remedies provided under the Code; provided that upon the
occurrence of an Event of Default specified in subsections 8.1 (k) or (l), all
of the Obligations, including the Revolving Credit Loan, shall become
immediately due and payable without declaration, notice or demand by any
Person.
8.3 Waivers by Borrowers. Except as otherwise provided for in
this Agreement or by applicable law, each of the Borrowers waives: (i)
presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Administrative Agent on which either
Borrower may in any way be liable, and
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hereby ratifies and confirms whatever Administrative Agent may do in this
regard, (ii) all rights to notice and a hearing prior to Administrative Agent's
taking possession or control of, or to Administrative Agent's replevy,
attachment or levy upon, the Collateral or any part thereof or any bond or
security which might be required by any court prior to allowing Administrative
Agent to exercise any of its remedies, and (iii) the benefit of all valuation,
appraisal and exemption laws. Each of the Borrowers acknowledges that it has
been advised by counsel of its choice with respect to this Agreement, the other
Loan Documents and the transactions evidenced by this Agreement and the other
Loan Documents.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF ADMINISTRATIVE AGENT
9.1 Assignment and Participations. (a) Borrowers hereby
consent to Administrative Agent's and any Lender's sale of participations, and
to Administrative Agent's and any Lender's assignment, at any time or times, of
any of the Loan Documents, any Commitment or of any portion thereof or interest
therein, including, without limitation, Administrative Agent's and any Lender's
rights, title, interests, remedies, powers or duties thereunder, whether
evidenced by a writing or not; provided that any assignment by a Lender of all
or any part of its Commitment shall (i) require the consent of Administrative
Agent which consent shall not be unreasonably withheld and the execution of a
Lender Addition Agreement in form and substance satisfactory to Administrative
Agent; (ii) be conditioned on such assignee Lender representing to the
assigning Lender and the Administrative Agent that it is purchasing the
Revolving Credit Loans and/or Term Loan C to be assigned to it for its own
account, for investment purposes and not with a view to the distribution
thereof; provided that the foregoing shall not prohibit the sale of such Loans
to commercial banks, finance companies and investment funds; (iii) if a partial
assignment, be in an amount at least equal to $5,000,000 and, after giving
effect to any such partial assignment, the assigning Lender shall have retained
Commitments in an amount at least equal to $5,000,000; and (iv) include a
payment by the assigning Lender to the Administrative Agent of an assignment
fee of $3,500; provided further, that any participation by a Lender of all or
any part of its Commitments shall be made with the understanding that all
amounts payable by Borrowers hereunder shall be determined as if that Lender
had not sold such participation, and that the holder of any such participation
shall not be entitled to require such Lender to take or omit to take any action
hereunder, except actions directly affecting (i) any reduction in the principal
amount, interest rate or fees payable hereunder in which such holder
participates, (ii) any extension of the final scheduled maturity date of the
principal amount of the Revolving Credit Loan and/or Term Loan C in which such
holder participates, (iii) any release of all or substantially all of the
Collateral (other than in accordance with the terms of this Agreement or the
other Loan Documents) and (iv) any increase in the percentage advance rates set
forth in the definition of "Borrowing Base" or "UK Borrowing Base". Each
Borrower hereby acknowledges and agrees that any participation will give rise
to a direct obligation of Borrowers to the participant and the participant
shall for purposes of Sections 1.15, 1.16 and 9.8 be considered to be a
"Lender".
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(b) In the case of an assignment by a Lender under this
Section 9.1, the assignee shall have, to the extent of such assignment, the
same rights, benefits and obligations as it would if it were a Lender
hereunder. Except as provided in subsection 9.1(e),the assigning Lender shall
be relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof. Each Borrower hereby acknowledges and agrees that
any assignment will give rise to a direct obligation of Borrowers to the
assignee and that the assignee shall be considered to be a "Lender". In all
instances, each Lender's liability to make Loans hereunder shall be several and
not joint and shall be limited to such Lender's Pro Rata Share.
(c) Except as otherwise provided in this Section 9.1, no
Lender shall, as between any such Borrower and that Lender, be relieved of any
of its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the Loans,
the Notes or other Obligations owed to such Lender.
(d) Borrowers shall assist any Lender permitted to sell
assignments or participations under this Section 9.1 as reasonably required to
enable the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all agreements,
notes and other documents and instruments as shall be requested and the
preparation of informational materials for, and the participation of management
in meetings with, potential assignees or participants. Borrowers shall certify
the correctness, completeness and accuracy of all descriptions of Borrowers and
their affairs contained in any selling materials provided by Borrowers and all
other information provided by Borrowers and included in such materials, except
that any projections delivered by Borrowers shall only be certified by
Borrowers as having been prepared by Borrowers in good faith and based on
reasonable assumptions consistent with Borrowers' anticipated business plans.
(e) A Lender may furnish any information concerning Borrowers
in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Lender shall utilize commercially reasonable procedures to cause such
assignees or participants to maintain the confidentiality of confidential
information of Borrowers. In the event Administrative Agent or any Lender
assigns or otherwise transfers all or any part of a Note, Administrative Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Administrative Agent or such Lender, execute new Notes in exchange
for the Notes being assigned.
9.2 Appointment of Administrative Agent. GE Capital is hereby
appointed Administrative Agent to act on behalf of all Lenders as
Administrative Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Administrative
Agent and Lenders and neither Borrower, any Subsidiary nor any other Person
shall have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement and the
other Loan Documents, Administrative Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for either
Borrower, any Subsidiary
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or any other Person. Administrative Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Administrative Agent shall be mechanical
and administrative in nature and Administrative Agent shall not have, or be
deemed to have, by reason of this Agreement, any other Loan Document or
otherwise a fiduciary relationship in respect of any Lender. Neither
Administrative Agent nor any of its officers, directors, partners, employees,
agents or representatives shall be liable to any Lender for any action taken or
omitted to be taken by it hereunder or under any other Loan Document, or in
connection herewith or therewith, except for damages caused by its or their own
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction after all possible appeals have been exhausted.
If Administrative Agent shall request instructions from Lenders
with respect to any act or action (including failure to act) in connection with
this Agreement or any other Loan Document, then Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until
Administrative Agent shall have received instructions from Requisite Lenders,
and Administrative Agent shall not incur liability to any Person by reason of
so refraining. Administrative Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document (a) if
such action would, in the opinion of Administrative Agent, be contrary to law
or the terms of this Agreement or any other Loan Document or (b) if
Administrative Agent shall not first be indemnified to its satisfaction against
any and all liability and expense (including Environmental Liabilities and
Costs) which may be incurred by it by reason of taking or continuing to take
any such action. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or refraining from acting hereunder or under any
other Loan Document in accordance with the instructions of Requisite Lenders.
9.3 Administrative Agent's Reliance. Neither Administrative
Agent nor any of its directors, officers, partners, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for its or
their own gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction after all possible appeals have been exhausted.
Without limitation of the generality of the foregoing, Administrative Agent:
(i) may treat the payee of any Amended Revolving Credit Note or Term C Note as
the holder thereof until Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
Administrative Agent; (ii) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) 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 the other Loan Documents on
the part of Borrowers or to inspect the Collateral (including the books and
records) of Borrowers unless requested to do so by the Requisite Lenders; (v)
shall not be responsible to any
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Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (vi) shall
incur no liability under or in respect of this Agreement or the other Loan
Documents by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopy, telegram, cable or telex) believed by it
to be genuine and signed or sent by the proper party or parties.
9.4 Administrative Agent and Affiliates. With respect to its
commitment hereunder to make or continue Term Loan C advances and Revolving
Credit Advances, Administrative Agent shall have the same rights, powers and
obligations under this Agreement and the other Loan Documents as any other
Lender and may exercise the same as though it were not Administrative Agent;
and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include GE Capital in its individual capacity. GE Capital and its Affiliates
may lend money to, invest in, and generally engage in any kind of business
with, either Borrower, any of its Subsidiaries and Affiliates and any Person
who may do business with or own securities of either Borrower or any such
Subsidiary or Affiliate, all as if GE Capital were not Administrative Agent and
without any duty to account therefor to Lenders. GE Capital and its Affiliates
may accept fees and other consideration from either Borrower and any of the
Subsidiaries for services in connection with this Agreement or otherwise
without having to account for the same to Lenders. Each Lender acknowledges
the potential conflict of interest between GE Capital as Administrative Agent,
GE Capital as a stockholder of Holdings and GE Capital Canada as a lender under
the NOW Canada Credit Agreement.
9.5 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon Administrative Agent or any other
Lender and based on the financial statements referred to in Section 3.4 and
such other documents and information as it has deemed appropriate, made its own
credit and financial analysis of the Loans, the creditworthiness of Borrowers
and the Subsidiaries and the value and lien status of the Collateral and its
own decision to enter into this Agreement. Each Lender also acknowledges that
it will be responsible for making its own independent appraisal of the credit
and financial condition of, and all other matters concerning, the Borrowers and
will, independently and without reliance upon Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
9.6 Indemnification. Lenders agree to indemnify
Administrative Agent (to the extent required to be but not reimbursed by
Borrowers and without limiting the Obligations of Borrowers hereunder), ratably
according to their respective Pro Rata Shares, from and against any and all
liabilities (including Environmental Liabilities and Costs), obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against Administrative Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by Administrative Agent in connection therewith; provided that no
Lender shall be liable
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for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or wilful misconduct as finally
determined by a court of competent jurisdiction after all possible appeals have
been exhausted. Without limiting the foregoing, each Lender agrees to
reimburse Administrative Agent promptly after demand for its ratable share of
any out-of-pocket expenses (including counsel fees) incurred by Administrative
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 and each other Loan Document, to the
extent that Administrative Agent is required to be but not reimbursed for such
expenses by Borrowers.
9.7 Successor Administrative Agent. Administrative Agent may
resign at any time by giving not less than thirty (30) days' prior written
notice thereof to Lenders and US Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent which shall be reasonably acceptable to US Borrower. If no successor
Administrative Agent shall have been so appointed by the Requisite Lenders and
shall have accepted such appointment, within thirty (30) days after the
resigning Administrative Agent's giving notice of resignation then the
resigning Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a Lender, if a Lender is willing
to accept such appointment, or otherwise shall be a commercial bank or
financial institution organized under the laws of the United States of America
or of any State thereof having a combined capital and surplus of at least
$300,000,000, which is reasonably acceptable to US Borrower. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Administrative Agent, and the resigning Administrative Agent
shall be discharged from its duties and obligations under this Agreement and
the other Loan Documents, except that any indemnity rights or other rights in
favor of such resigning Administrative Agent shall continue. After any
resigning Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence and during the continuance of any Event of
Default, subject to subsection 9.10(f) each Lender and each holder of any Note
is hereby authorized at any time or from time to time, without notice to either
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all balances held by it at
any of its offices for the account of any Borrower (regardless of whether such
balances are then due to such Borrower) and any other properties or assets any
time held or owing by that Lender or that holder to or for the credit or for
the account of Borrowers against and on account of any of the Obligations which
are not paid when due. Any Lender or holder of any Note having a right to set
off shall, to the extent the amount of any such set off exceeds its Pro Rata
Share of the Obligations, purchase for cash (and the other Lenders
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or holders shall sell) such participations in each such other Lender's or
holder's Pro Rata Share of the Obligations as would be necessary to cause such
Lender to share such excess with each other Lender or holder in accordance with
their respective Pro Rata Shares. Each Borrower agrees, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and may sell participations in such excess to other Lenders and holders and (b)
any Lender or holders so purchasing a participation in the Revolving Credit
Advances or Term Loan C made or other Obligations held by other Lenders or
holders may exercise all rights of set-off, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of Revolving Credit Advances, Term Loan C and other
Obligations in the amount of such participation.
9.9 Disbursement of Funds. Administrative Agent may, on
behalf of Lenders, disburse funds to US Borrower for Revolving Credit Advances
and Term Loan C advances requested. Each Lender with a Revolving Credit Loan
Commitment or a Term Loan C Commitment shall reimburse Administrative Agent on
demand for all such funds disbursed on its behalf by Administrative Agent, or
if Administrative Agent so requests, such Lender will remit to Administrative
Agent its Pro Rata Share of any Revolving Credit Advance or any Term Loan C
advance before Administrative Agent disburses same to the applicable Borrower.
If any Lender fails to pay the amount of its Pro Rata Share forthwith upon
Administrative Agent's demand, Administrative Agent shall promptly notify the
applicable Borrower and such Borrower shall immediately repay such amount to
Administrative Agent. Nothing in this Section 9.9 or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Administrative
Agent to advance funds on behalf of any Lender or to relieve any Lender from
its obligation to fulfill its Revolving Credit Loan Commitment or Term Loan C
Commitment, as applicable, hereunder or to prejudice any rights that Borrowers
may have against any such Lender as a result of any default by such Lender
hereunder.
9.10 Advances; Payments; Information; Non-Funding Lenders.
(a) Revolving Credit Advances; Term Loan C Advances; Payments;
Fee Payments.
(i) The Revolving Credit Loan and the Term Loan C balances may
fluctuate from day to day through Administrative Agent's disbursement of
funds to, and receipt of funds from, Borrowers. In order to minimize
the frequency of transfers of funds between Administrative Agent and
each Lender, Revolving Credit Advances and Term Loan C advances and
payments in respect thereof will be settled according to the procedures
described in subsections 9.10(a)(ii) and 9.10(a)(iii). Notwithstanding
these procedures, each Lender's obligation to fund its portion of any
advances made by Administrative Agent to either Borrower will commence
on the date such advances are made by Administrative Agent. Such
payments will be made by each Lender without setoff, counterclaim or
reduction of any kind.
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(ii) Not later than 12:00 noon (New York time) on the second
(2nd) Business Day of each week, or more frequently (including daily) if
Administrative Agent so elects or if US Borrower has requested a
Revolving Credit Advance in excess of $5,000,000 (each such day being a
"Settlement Date"), Administrative Agent will advise each Lender by
telephone, telex or telecopy of the amount of such Lender's Pro Rata
Share of the Revolving Credit Loan or Term Loan C balance, as
applicable, as of the close of business on the first (1st) Business Day
immediately preceding the Settlement Date. In the event that payments
are necessary to adjust the amount of such Lender's portion of the
Revolving Credit Loan or Term Loan C to such Lender's Pro Rata Share of
the Revolving Credit Loan or Term Loan C as of any Settlement Date, the
party from which such payment is due will pay the other, in same day
funds, by wire transfer to the other's account not later than 2:00 p.m.
(Chicago time) on the Settlement Date (excluding amounts charged to the
Revolving Loan Account pursuant to Section 1.11, and which do not
constitute Revolving Credit Advances). Notwithstanding the foregoing,
if Administrative Agent so elects, Administrative Agent may require that
each Lender make its Pro Rata Share of any requested Revolving Credit
Advance or Term Loan C advance, as applicable, available to
Administrative Agent for disbursement prior to the funding of such
Revolving Credit Advance or Term Loan C advance. If Administrative
Agent elects to require that such funds be so made available,
Administrative Agent shall advise each Lender by telephone, telex or
telecopy of the amount of such Lender's Pro Rata Share of such Loan no
later than 12:00 noon (New York time) on the date of funding thereof,
and each such Lender shall pay Administrative Agent such Lender's Pro
Rata Share of such requested Revolving Credit Advance or Term Loan C
advance, in same day funds, by wire transfer to the Administrative
Agent's account not later than 2:00 p.m. (New York time) on the date of
funding such Loan.
(iii) For purposes of this subsection 9.10(a)(iii), the
following terms and conditions will have the following meanings:
(A) "Daily Loan Balance" means, with respect to the
Revolving Credit Loan or Term Loan C, an amount calculated as of
the end of each calendar day by subtracting (i) the cumulative
principal amount paid by Administrative Agent to a Lender with
respect to such Loan from the Funding Date through and including
such calendar day, from (ii) the cumulative principal amount of
such Loan advanced by such Lender to Administrative Agent from
the Funding Date through and including such calendar day.
(B) "Daily Interest Rate" means, with respect to the
Revolving Credit Loan or Term Loan C, an amount calculated by
dividing the interest rate payable to a Lender on such Loan (as
set forth in Section 1.5) as of each calendar day by three
hundred sixty (360) days.
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(C) "Daily Interest Amount" means, with respect to the
Revolving Credit Loan or Term Loan C, an amount calculated by
multiplying the Daily Loan Balance of such Loan by the associated
Daily Interest Rate applicable to such Loan.
(D) "Interest Ratio" means, with respect to the Revolving
Credit Loan or Term Loan C, a number calculated by dividing the
total amount of interest on such Loan received by Administrative
Agent during the immediately preceding month by the total amount
of interest on such Loan due from Borrowers during the
immediately preceding month.
On the first (1st) Business Day of each calendar month (an "Interest Settlement
Date"), Administrative Agent will advise each Lender by telephone, telex or
telecopy of the amount of such Lender's Pro Rata Share of principal, interest
and Fees paid for the benefit of Lenders on the Revolving Credit Loan and Term
Loan C as of the end of the last day of the immediately preceding month.
Provided that such Lender has made all payments required to be made by it under
this Agreement and the other Loan Documents, Administrative Agent will pay to
such Lender, by wire transfer to such Lender's account (as specified by such
Lender on Schedule K or the applicable Lender Addition Agreement, as amended by
such Lender from time to time after the Closing Date pursuant to the notice
provisions contained herein or in the applicable Lender Addition Agreement) not
later than 11:00 a.m. (New York time) on the next Business Day following the
Interest Settlement Date, such Lender's Pro Rata Share of principal, interest
and Fees paid for the benefit of Lenders on the Revolving Credit Loan and Term
Loan C, as applicable. Such Lender's Pro Rata Share of interest on the
Revolving Credit Loan and the Term Loan C, as applicable, will be calculated by
adding together the Daily Interest Amounts for each calendar day of the prior
month for such Loan and multiplying the total thereof by the Interest Ratio for
such Loan.
(b) Availability of Lender's Pro Rata Share.
(i) Administrative Agent may assume that each Lender will make
its Pro Rata Share of each Revolving Credit Advance or Term Loan C
advance, as applicable, available to Administrative Agent on the first
(1st) Business Day following each Settlement Date. If such Pro Rata
Share is not, in fact, paid to Administrative Agent by such Lender when
due, Administrative Agent will be entitled to recover such amount on
demand from such Lender without set-off, counterclaim or deduction of
any kind.
(ii) Nothing contained in this subsection 9.10(b) will be
deemed to relieve any Lender of its obligation to fulfill its
Commitments or to prejudice any rights Administrative Agent or Borrowers
may have against any Lender as a result of any default by such Lender
under this Agreement.
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(c) Return of Payments.
(i) If Administrative Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has
been or will be received by Administrative Agent from either Borrower
and such related payment is not received by Administrative Agent, then
Administrative Agent will be entitled to recover such amount from such
Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If Administrative Agent determines at any time that any
amount received by it under this Agreement must be returned to either
Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, Administrative Agent will not be
required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Administrative Agent on demand any portion of
such amount that Administrative Agent has distributed to such Lender,
together with interest at such rate, if any, as Administrative Agent is
required to pay to either Borrower or such other Person, without
set-off, counterclaim or deduction of any kind.
(d) Dissemination of Information. Administrative Agent will
use reasonable efforts to provide Lenders with any information received by
Administrative Agent from any Borrower which is required to be provided to
Lenders hereunder, with any notice of Default or Event of Default received by
Administrative Agent from either Borrower, with any notice of Default or Event
of Default delivered by Administrative Agent to Borrowers, with notice of any
Default or Event of Default of which Administrative Agent has actually become
aware and with notice of any action taken by Administrative Agent following any
Default or Event of Default; provided that Administrative Agent shall not be
liable to any Lender for any failure to do so, except to the extent that such
failure is attributable to Administrative Agent's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction after all
possible appeals have been exhausted.
(e) Non-Funding Lenders. The failure of any Lender with a
Revolving Credit Loan Commitment or Term Loan C Commitment (such Lender, a
"Non-Funding Lender") to make any Revolving Credit Advance or Term Loan C
advance to be made by it on the date specified therefor shall not relieve any
other applicable Lender (each such other Lender, an "Other Lender") of its
obligations to make its Revolving Credit Advance or Term Loan C advance on such
date, but neither any Other Lender nor Administrative Agent shall be
responsible for the failure of any Non-Funding Lender to make a Revolving
Credit Advance or Term Loan C advance to be made by such Non-Funding Lender,
and no Non-Funding Lender shall have any obligation to Administrative Agent or
any Other Lender for the failure by such Non-Funding Lender. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Loan Document or
constitute a "Lender" (or be included in the calculation of "Requisite Lenders"
hereunder) for any voting or consent rights under, or with respect to, any Loan
Document.
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(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including, without limitation, exercising any
rights of set-off) without first obtaining the prior written consent of
Administrative Agent or Requisite Lenders, it being the intent of Lenders that
any such action to protect or enforce rights under this Agreement and the Notes
shall be taken in concert and at the direction of Administrative Agent.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of Borrowers,
Administrative Agent, Lenders and their respective successors and assigns,
except as otherwise provided herein or therein. A Borrower's successors and
assigns shall include, without limitation, any trustee, receiver or debtor in
possession of or for such Borrower. Neither Borrower may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents without the prior express
written consent of Administrative Agent and all Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by either Borrower
without the prior express written consent of Administrative Agent and the
Lenders shall be void. The terms and provisions of this Agreement are for the
purpose of defining the relative rights and obligations of Borrowers,
Administrative Agent and Lenders with respect to the transactions contemplated
hereby and there shall be no third party beneficiaries of any of the terms and
provisions of this Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except
as set forth in Section 11.2. As of the Closing Date, any letter of interest
or commitment letter and/or fee letter (other than the GE Capital Fee Letter)
between either Borrower and Administrative Agent or any of their respective
affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 Amendments and Waivers. (a) Except as otherwise provided
herein, no amendment, modification, termination or waiver of any provision of
this Agreement or any of the Notes or consent to any departure by either
Borrower or any of the Subsidiaries therefrom, shall in any event be effective
unless the same shall be in writing and signed by Administrative Agent,
Requisite Lenders and Borrowers.
(b) Notwithstanding the foregoing, no amendment, modification,
termination or waiver shall, unless in writing and signed by Administrative
Agent and each affected Lender, do any of the following: (i) increase the
principal amount of the Commitment of any affected Lender; (ii)
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reduce the principal of, rate of interest on or Fees payable with respect to
any Revolving Credit Advance or Letter of Credit Obligations or Term Loan C;
(iii) extend the final scheduled maturity date of any Loan or any scheduled
installment or mandatory prepayment of the principal amount of any Loan; (iv)
increase the percentage advance rates above that set forth on the Closing Date
in the definition of "Borrowing Base" or "UK Borrowing Base"; (v) waive,
forgive, defer, extend or postpone any payment of Obligations including
interest or Fees required hereunder; (vi) release any Guaranty Agreement; (vii)
except as otherwise contemplated herein or in one of the other Loan Documents,
release all or any material portion of the Collateral; (viii) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Loans which shall be required for Lenders or any of them to take any action
hereunder; and (ix) amend or waive Section 10.1 or this Section 11.2 or the
definitions of the terms used in this Section 11.2 insofar as the definitions
affect the substance of this Section 11.2 or subordinate the Obligations to any
other Indebtedness; and provided further that no amendment, modification,
termination or waiver affecting the rights or duties of an Administrative Agent
under this Agreement or any other Loan Document shall in any event be
effective, unless in writing and signed by such Administrative Agent, in
addition to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Administrative Agent
to take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No
notice to or demand on either Borrower in any case shall entitle either
Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
(c) Upon indefeasible payment in full of all of the
Obligations, other than Indemnified Liabilities under Section 1.13 hereof and
termination of the Commitments; provided that no suits, actions, proceedings,
or claims are pending or threatened against any Indemnified Person asserting
any damages, losses or liabilities that are Indemnified Liabilities,
Administrative Agent shall deliver to Borrowers termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3 Fees and Expenses. Borrowers shall jointly and severally
reimburse Administrative Agent for all reasonable out-of-pocket expenses
incurred in connection with (a) the preparation of the Loan Documents
(including the reasonable fees and expenses of all of its special loan counsel,
advisors, consultants and auditors retained in connection with the Loan
Documents and the transactions contemplated thereby and advice in connection
therewith), and (b) wire transfers to the account of Borrowers. Borrowers
shall reimburse Administrative Agent (and, with respect to clauses (iii), (iv)
and (v) below, each Lender) for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel or other advisors (including
environmental and management consultants) for advice, assistance, or other
representation in connection with:
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(i) the forwarding to either Borrower or any other Person on
behalf of either Borrower by Administrative Agent of the proceeds of the
Revolving Credit Advances and Term Loan C advances;
(ii) consent with respect to, any of the Loan Documents or
advice in connection with the administration of the loans made pursuant
hereto or its rights hereunder or thereunder;
(iii) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Administrative Agent, any Lender, either
Borrower or any other Person) in any way relating to the Collateral, any
of the Loan Documents or any other agreement to be executed or delivered
in connection therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection
with a case commenced by or against any or all of the Borrowers or any
other Person that may be obligated to Administrative Agent by virtue of
the Loan Documents;
(iv) any attempt to enforce any rights of Administrative Agent
or any Lender against any or all of the Borrowers or any other Person
that may be obligated to Administrative Agent or any Lender by virtue of
any of the Loan Documents;
(v) any refinancing or restructuring of the credit arrangements
provided under the Loan Documents, whether in the nature of a "workout"
or in connection with any insolvency or bankruptcy proceeding;
(vi) efforts to (A) monitor the Loans or any of the other
Obligations, (B) evaluate, observe, assess any or all of the Borrowers,
any Subsidiary thereof or their respective affairs, and (C) verify,
protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral;
including, without limitation, all the attorneys' and other professional and
service providers' fees arising from such services, including those in
connection with any appellate proceedings; and all expenses, costs, charges and
other fees incurred by such counsel and others in any way or respect arising in
connection with or relating to any of the events or actions described in this
Section 11.3 shall be payable, on demand, by Borrowers to Administrative Agent.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram charges; secretarial overtime charges; and expenses
for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services.
11.4 No Waiver. Administrative Agent's or any Lender's
failure, at any time or times, to require strict performance by Borrowers of
any provision of this Agreement and any of the
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other Loan Documents shall not waive, affect or diminish any right of
Administrative Agent or such Lender thereafter to demand strict compliance and
performance therewith. Any suspension or waiver of an Event of Default under
this Agreement or any of the other Loan Documents shall not suspend, waive or
affect any other Event of Default under this Agreement and any of the other
Loan Documents whether the same is prior or subsequent thereto and whether of
the same or of a different type. None of the undertakings, agreements,
warranties, covenants and representations of either Borrower contained in this
Agreement or any of the other Loan Documents and no Default or Event of Default
by either Borrower under this Agreement and no defaults by either Borrower
under any of the other Loan Documents shall be deemed to have been suspended or
waived by Administrative Agent or any Lender, unless such waiver or suspension
is by an instrument in writing signed by an officer of or other authorized
employee of Administrative Agent and Requisite Lenders and directed to
Borrowers specifying such suspension or waiver.
11.5 Remedies. Administrative Agent's and Lenders' rights and
remedies under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies which Administrative Agent or any Lender may have under any
other agreement, including the other Loan Documents, by operation of law or
otherwise. Recourse to the Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of
the other Loan Documents, the provision contained in this Agreement shall
govern and control.
11.8 Authorized Signature. Until Administrative Agent shall be
notified by the applicable Borrower to the contrary, the signature upon any
document or instrument delivered pursuant hereto of an officer of such Borrower
listed on Schedule 11.8 shall bind such Borrower and be deemed to be the act of
such Borrower affixed pursuant to and in accordance with resolutions duly
adopted by such Borrower's Board of Directors.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. EACH BORROWER
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HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE CITY
OF NEW YORK, NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY CLAIMS OR DISPUTES BETWEEN BORROWERS, ADMINISTRATIVE AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS; PROVIDED THAT ADMINISTRATIVE AGENT, LENDERS AND BORROWERS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE CITY OF NEW YORK, NEW YORK; AND PROVIDED FURTHER THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ADMINISTRATIVE AGENT. EACH
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH BORROWER HEREBY WAIVES ANY
OBJECTION WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF
SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH IN SCHEDULE
J AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH
BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon any other party any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been
validly served, given or delivered (i) upon the earlier of actual receipt and
three (3) Business Days after deposit in the United States Mail, registered or
certified mail, return receipt requested, with proper postage prepaid, (ii)
upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States Mail as otherwise provided in this
Section 11.10), (iii) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid or (iv) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated on Schedule J or
to such other address (or facsimile number) as may be substituted by notice
given as
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herein provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrowers or
Administrative Agent) designated on Schedule J to receive copies shall in no
way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and
separately constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE
PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG ADMINISTRATIVE
AGENT, LENDERS AND BORROWERS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.
11.14 Press Releases and Public Announcements. Each Borrower
hereby agrees that neither it nor its Subsidiaries is on the Closing Date
issuing any press releases or other public announcements with respect to this
Agreement or the Related Transactions which mentions or uses the name of GE
Capital or any of its affiliates. Each Borrower further agrees that neither it
nor its Subsidiaries will make in the future any press releases or other public
announcements using the name of GE Capital or any of its affiliates referring
to this Agreement without their prior written consent unless such Borrower or
such Subsidiary is required to do so under law and then, in any event, such
Borrower or such Subsidiary will consult with GE Capital before issuing such
press release or other public announcements.
11.15 Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Borrower for liquidation or reorganization, should any Borrower
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any
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Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any office or lending installation of such
Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 11.16 would, at the
time of such transfer, result in increased costs under Section 1.16 from those
being charged by the respective Lender prior to such transfer, then no Borrower
shall be obligated to pay such increased costs (although each Borrower shall be
obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective transfer).
11.17 Judgment Currency. If for the purposes of obtaining
judgment against either Borrower in any court in any jurisdiction with respect
to this Agreement, it becomes necessary to convert into the currency of such
jurisdiction (herein called the "Judgment Currency") any amount due hereunder
in Dollars, then conversion shall be made at the rate of exchange prevailing on
the Business Day before the day on which judgment is given. For this purpose,
"rate of exchange" means the rate at which Administrative Agent would, on the
relevant date at or about 12:00 noon (Chicago time), be prepared to sell a
similar amount of Dollars in Chicago against the Judgment Currency. In the
event that there is a change in the rate of exchange prevailing between the
Business Day before the day on which the judgment is given and the date of
payment of the amount due, such Borrower will, on the date of payment, pay such
additional amounts (if any) as may be necessary to ensure that the amount paid
on such date is the amount in the Judgment Currency which, when converted at
the rate of exchange prevailing on the date of payment, is the amount then due
under this Agreement in Dollars. Any additional amount due from such Borrower
under this Section 11.17 will be due as a separate debt and shall not be
affected by judgment being obtained for any other sums due under or in respect
of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered October 23, 1996.
NATIONAL-OILWELL, L.P.
By: NOW OILFIELD SERVICES, INC.
its general partner
By:
------------------------------
Title:
---------------------------
NATIONAL OILWELL (U.K.) LIMITED
By:
------------------------------
Title:
---------------------------
Revolving Credit Loan GENERAL ELECTRIC CAPITAL
Commitment: CORPORATION,
$41,517,000 as Administrative Agent and Lender
Term Loan C
Commitment:
$1,977,000 By:
------------------------------
Title:
---------------------------
Revolving Credit Loan THE BANK OF NEW YORK COMMERCIAL
Commitment: CORPORATION
$17,493,000
Term Loan C By:
Commitment: ------------------------------
$833,000 Title:
---------------------------
74
Revolving Credit Loan BTM CAPITAL CORPORATION
Commitment:
$20,002,500 By:
Term Loan C ------------------------------
Commitment: Title:
$952,500 ---------------------------
Revolving Credit Loan THE MITSUBISHI TRUST AND BANKING
Commitment: CORPORATION
$8,494,500
Term Loan C By:
Commitment: ------------------------------
$404,500 Title:
---------------------------
Revolving Credit Loan SANWA BUSINESS CREDIT CORPORATION
Commitment:
$17,493,000 By:
Term Loan C ------------------------------
Commitment: Title:
$833,000 ---------------------------
75
SCHEDULE A
to
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Agreement shall have (unless
otherwise provided elsewhere in the Agreement) the following respective
meanings and all section references in the following definitions shall refer to
Sections of the Agreement:
"Account Debtor" shall mean any Person who may become obligated
under, with respect to, or on account of, an Account.
"Accounts" shall mean, as to any Person, all "accounts," as such
term is defined in the Code, now owned or hereafter acquired by such Person
and, in any event, including (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by chattel paper, documents or instruments) now owned or hereafter
received or acquired by or belonging or owing to such Person, whether arising
out of goods sold or services rendered by it or from any other transaction
(including any such obligations which may be characterized as an account or
contract right under the Code), (b) all of such Person's rights in, to and
under all purchase orders or receipts now owned or hereafter acquired by it for
goods or services, (c) all of such Person's rights to any goods represented by
any of the foregoing (including unpaid sellers' rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (d) all monies due or to become due to such Person, under
all purchase orders and contracts for the sale of goods or the performance of
services or both by such Person or in connection with any other transaction
(whether or not yet earned by performance on the part of such Person, as
appropriate) now or hereafter in existence, including the right to receive the
proceeds of said purchase orders and contracts, and (e) all collateral security
and guarantees of any kind, now or hereafter in existence, given by any Person
with respect to any of the foregoing.
"Acquired Companies" shall mean, collectively, Australia,
Singapore and National-Oilwell and its Subsidiaries.
"Acquisition" shall mean the acquisition by US Borrower of all of
the issued and outstanding Partnership Interests and Purchased Stock pursuant
to the Purchase Agreement.
"Acquisition Documents" shall mean the Purchase Agreement, the
Sellers' Notes, the Shareholders Agreement and all other documents, agreements
and certificates executed in connection therewith excluding, however, all Loan
Documents.
"Administrative Agent" shall mean GE Capital in its capacity as
administrative agent and not in its individual capacity, or its successor
appointed pursuant to Section 9.2.
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"Affiliate" shall mean, with respect to any Person, (i) each
Person that, directly or indirectly, owns or controls, whether beneficially, or
as a trustee, guardian or other fiduciary, five percent (5%) or more of any
class of the Stock or other equity interests of such Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management of such Person, whether through ownership of Stock or other equity
interests, by contract or otherwise, (ii) each Person that controls, is
controlled by or is under common control with such Person or any Affiliate of
such Person or (iii) each of such Person's employees, officers, directors,
joint venturers and partners. For the purposes of this definition, "control"
of a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise; provided that,
when used in reference to US Borrower or any Subsidiary, the term "Affiliate"
shall specifically exclude Administrative Agent, Documentation Agent and each
Lender.
"Agreement" shall mean the Amended and Restated Credit Agreement
by and among Borrowers, GE Capital, as Administrative Agent and Lender, and the
other Lenders signatory from time to time to the Agreement, dated as of October
23, 1996, and shall include all restatements and modifications thereof and
amendments and supplements thereto from time to time and any appendices,
exhibits or schedules to any of the foregoing, and shall refer to the Agreement
as the same may be in effect at any and all times such reference becomes
operative.
"Amended Revolving Credit Note" shall have the meaning assigned
thereto in Section 1.1(a)(ii) and shall be substantially in the form of Exhibit
A.
"Amended Term C Note" shall have the meaning assigned thereto in
Section 1.1(b) and shall be substantially in the form of Exhibit B.
"Applicable Index Margin" shall mean the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate,
as determined by reference to Section 1.5(a).
"Applicable L/C Margin" shall mean the per annum fee, from time
to time in effect, payable with respect to outstanding Letter of Credit
Obligations as determined by reference to Section 1.5(a).
"Applicable LIBOR Margin" shall mean the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate, as
determined by reference to Section 1.5(a).
"Applicable Line Margin" shall mean the per annum fee, from time
to time in effect, payable with respect to the unused portion of the total
Revolving Credit Commitment as determined by reference to Section 1.5(a).
"Applicable Margins" shall mean collectively the Applicable L/C
Margin, the Applicable Line Margin, the Applicable Index Margin, and the
Applicable LIBOR Margin.
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"Asset Sale Program" shall mean the planned sale by US Borrower
of the assets listed on Schedule 6.8 subject to the terms and conditions set
forth in Schedule 6.8, which terms and conditions shall be satisfactory to
Administrative Agent.
"Australia" shall have the meaning assigned thereto in the
Recitals to the Agreement.
"Borrowers" shall mean UK Borrower and US Borrower, collectively.
"Borrower Representative" shall mean National-Oilwell, L.P. in
its capacity as Borrower Representative pursuant to the provisions of
subsection 1.1(c).
"Borrowing Availability" shall have the meaning assigned thereto
in subsection 1.1(a).
"Borrowing Base" shall mean, as of any date of determination by
Administrative Agent, in its reasonable discretion from time to time, an amount
equal to the sum at such time of:
(a) eighty-five percent (85%) of US Borrower's Eligible
Accounts, less reserves established by Administrative Agent from time to
time in accordance with the Agreement; plus
(b) sixty percent (60%) of the book value of US Borrower's
Eligible Inventory valued on a first-in, first-out basis (at the lower
of cost or market), less reserves established by Administrative Agent
from time to time in accordance with the Agreement; plus
(c) the lesser of $5,000,000 or fifty percent (50%) of the
book value of Eligible On-Lease Inventory; plus
(d) the lesser of $15,000,000 or the sum of:
(i) 80% of the orderly liquidation value of Eligible
Equipment owned as of the Closing Date based upon appraisals
provided to Administrative Agent pursuant to the Prior Credit
Agreement, subject to reserves established by Administrative
Agent from time to time in accordance with the Agreement; plus
(ii) 50% of the net book value (not to exceed fair
market value) of Eligible Equipment acquired after the Closing
Date, including Equipment acquired as part of Permitted
Acquisitions, subject to reserves established by Administrative
Agent from time to time in accordance with the Agreement; plus
(iii) 50% of the fair market value of Eligible Real
Estate owned as of the Closing Date based upon appraisals
provided to Administrative Agent
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pursuant to the Prior Credit Agreement, subject to reserves
established by Administrative Agent from time to time in
accordance with the Agreement.
"Borrowing Base Certificate" shall mean a certificate of US
Borrower or UK Borrower in form and substance satisfactory to the
Administrative Agent.
"Borrowing Notice" shall mean a notice in form and substance
satisfactory to Administrative Agent specifying therein (i) the requested date
of a Loan, (ii) the amount and type of advance, conversion or continuation, as
applicable, (iii) in the case of a Revolving Credit Advance or a Term Loan C
advance at the LIBOR Rate, or a conversion into, or continuation of, a LIBOR
Loan, the duration of the LIBOR Period applicable thereto, and (iv) such other
information as may be required by Administrative Agent.
"Business Day" shall mean (a) any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of Illinois or the State of New York, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR
Rate or LIBOR Loans, any day that is a Business Day pursuant to clause (a)
above and that is also a day on which banks in the city of London are generally
open for interbank or foreign exchange transactions.
"Capital Expenditures" shall mean expenditures (whether paid in
cash or property or accrued as liabilities and including the principal portion
of payments under Capital Leases, installment purchase agreements and other
similar purchase money financing arrangements) for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and that are required to be capitalized
under GAAP, excluding expenditures of insurance proceeds in accordance with the
terms of this Agreement to rebuild or replace any asset after a casualty loss.
"Capital Lease" shall mean, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, either would be required to be classified and
accounted for as a capital lease on a balance sheet of such Person or otherwise
be disclosed as such in a note to such balance sheet, other than any such lease
under which such Person is the lessor.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease or otherwise be disclosed in a note to such balance
sheet.
"Certificate of Exemption" shall have the meaning assigned
thereto in subsection 1.16(e).
"Change of Control" shall mean (i) relative to the Partners, the
failure of Holdings at all times to own, beneficially and of record, with full
voting and economic rights associated with
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ownership of 100% of the issued and outstanding Voting Stock of all classes of
the Partners, (ii) relative to US Borrower, the failure of the Partners at all
times to own 100% of the partnership interests of US Borrower and the economic
benefits associated therewith, (iii) relative to Holdings, any Person or group
of Persons (within the meaning of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act")) other than DPI and/or First Reserve shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of 30% or more of the issued and outstanding Stock of Holdings.
"Charges" shall mean, as to any Person, all federal, state,
county, city, municipal, local, foreign or other governmental taxes (including,
without limitation, taxes owed to the PBGC at the time due and payable),
levies, assessments, charges, liens, claims or encumbrances upon or relating to
(i) the Collateral, (ii) the Obligations, (iii) the employees, payroll, income
or gross receipts of such Person, (iv) such Person's ownership or use of any
properties or other assets, or (v) any other aspect of such Person's business.
"Chattel Paper" shall mean, as to any Person, any "chattel
paper," as such term is defined in the Code, now owned or hereafter acquired by
such Person, wherever located.
"Closing Date" shall mean the effective date of the Amended and
Restated Credit Agreement which shall be any date prior to December 31, 1996 on
which the conditions precedent to effectiveness thereof have been met or waived
by Administrative Agent.
"Code" shall mean the Uniform Commercial Code as the same may,
from time to time, be in effect in the State of New York; provided, however, in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Administrative Agent's or any Lender's
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term
"Code" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction solely for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
"Collateral" shall mean the property covered by the Security
Agreement, the Mortgages and the other Collateral Documents and any other
property, real or personal, tangible or intangible, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of Administrative Agent, on behalf of itself and Lenders, to
secure the Obligations.
"Collateral Documents" shall mean the Security Agreement, the
Guaranty Agreements, the Partner Assignment, the Stock Pledge Agreements, the
Mortgages, the Intellectual Property Security Agreements, the Pledge and
Security Agreement, and all similar agreements entered into guarantying payment
of, or granting a Lien upon property as security for payment of, the
Obligations.
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"Collateral Reports" shall mean the reports with respect to the
Collateral referred to in Schedule H.
"Collection Account" shall mean that certain account of
Administrative Agent, account number 00-000-000 in the name of Administrative
Agent at Bankers Trust Company in New York, New York.
"Commitment Termination Date" shall mean the earliest of (i) the
fifth (5th) anniversary of the Closing Date, (ii) the date of termination of
Lenders' obligation to make Revolving Credit Advances and Term Loan C advances
pursuant to Section 8.2(b), and (iii) the date of indefeasible prepayment in
full by US Borrower and UK Borrower of the Obligations, and the termination of
the Revolving Credit Loan Commitment and Term Loan C Commitment.
"Commitments" shall mean (a) as to any Lender, the aggregate
commitment of such Lender to make Revolving Credit Advances and Term Loan C
advances as set forth on the signature page to the Agreement or in the most
recent Lender Addition Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances and Term Loan C advances, which aggregate commitment shall be One
Hundred Five Million Dollars ($105,000,000) on the Closing Date as such amount
may be adjusted, if at all, from time to time in accordance with the Agreement.
"Concentration Account" shall have the meaning assigned thereto
in Schedule E.
"Contracts" shall mean, as to any Person, all "contracts," as
such term is defined in the Code, now owned or hereafter acquired by such
Person, and, in any event, including all contracts, undertakings, or agreements
(other than rights evidenced by Chattel Paper, Documents or Instruments) in or
under which such Person may now or hereafter have any right, title or interest,
including any agreement relating to the terms of payment or the terms of
performance of any Account.
"Copyright License" shall mean, as to any Person, any and all
rights now owned or hereafter acquired by such Person under any written
agreement granting any right to use any Copyright or Copyright registration.
"Currency Agreement" shall mean, as to any Person, any foreign
exchange contract, currency swap agreement, futures contract, option contract,
synthetic cap or other similar agreement designed to protect such Person
entering into same against fluctuations in currency values.
"Debt Service" shall mean, for any period, an amount equal to the
sum of (i) the Interest Charges for such period plus (ii) the scheduled or
mandatory payments of any outstanding Indebtedness during such period.
"Debt Service Coverage Ratio" shall mean, for any period, the
ratio of EBITDA to Debt Service.
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"Default" shall mean any event which, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned thereto in
subsection 1.5(d).
"Documents" shall mean, as to any Person, any "documents," as
such term is defined in the Code, now owned or hereafter acquired by such
Person, wherever located.
"DOL" shall mean the United States Department of Labor or any
successor thereto.
"Dollars or $" shall mean lawful currency of the United States
of America.
"DPI" shall mean Duff & Xxxxxx/Inverness L.L.C., a Connecticut
limited liability company.
"EBIT" shall mean, for any period, Holdings' consolidated net
income from operations (before interest and income taxes) all as determined in
accordance with GAAP.
"EBITDA" shall mean, for any period, Holdings' consolidated net
income from operations (before interest, taxes, depreciation, amortization and
management fees paid, and expenses and costs directly incurred, in connection
with the Acquisition and the consummation of the transactions contemplated by
the Loan Documents), all as determined in accordance with GAAP.
"Eligible Accounts" shall have the meaning assigned thereto (i)
in Schedule C-1 with respect to US Borrower and (ii) in Schedule C-2 with
respect to UK Borrower.
"Eligible Equipment" shall mean Equipment (i) owned by US
Borrower; (ii) located in the United States; (iii) in which Administrative
Agent has a first and prior perfected security interest, subject to no other
Liens, except Permitted Encumbrances as described in clauses (i) and (v) of the
definition of that term; (iv) which is not a Fixture; (v) which, if located at
leased premises, is covered by a landlord waiver acceptable to Administrative
Agent; (vi) is in good operating condition; and (vii) is at a location where
the aggregate fair market value of all Eligible Equipment and Eligible
Inventory exceeds $100,000.
"Eligible Inventory" shall have the meaning assigned thereto (i)
in Schedule D-1 with respect to US Borrower and (ii) in Schedule D-2 with
respect to UK Borrower.
"Eligible On-Lease Inventory" shall mean Inventory consisting of
power swivels, mud pumps or drawworks leased by U.S. Borrower to its customers
as to which (i) Administrative Agent shall have a first and prior perfected
security interest on the chattel paper constituting the underlying equipment
leases, subject to no other Liens or Permitted Encumbrances; (ii) each of the
original copies of the leases of such Inventory shall reflect the following
legend on the cover page and signature page thereof: "This lease constitutes
chattel paper in which National-Oilwell, L.P. has granted a security interest
to General Electric Capital Corporation, as agent."; (iii) copies of each of
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those leases shall have been provided to Administrative Agent; (iv) the
lessee's headquarters and the location at which such leased Inventory is used
are in the United States; (v) US Borrower has perfected its interest in such
leased Inventory by filing under the Code (which filings designate
Administrative Agent as assignee); (vi) US Borrower has obtained casualty
insurance in the fair value of such leased Inventory naming US Borrower and
Administrative Agent as loss payees; and (vii) the lease payments from time to
time owing by the lessee would qualify as Eligible Accounts, if permitted to be
included therein.
"Eligible Real Estate" shall mean Real Estate (i) fee simple
title to which is held by US Borrower; (ii) located in the United States; (iii)
in which Administrative Agent has a first mortgage Lien, subject to no other
Liens, except Permitted Encumbrances as described in clauses (i), (v), (viii)
and (ix) of the definition of that term; and (iv) as to which all material
buildings and improvements are structurally sound and no material casualty
event has occurred since the Closing Date which has not been repaired.
"Environmental Laws" shall mean all federal, state, local and
foreign laws, statutes, ordinances and regulations, now or hereafter in effect,
and in each case as amended or supplemented from time to time, and any
applicable judicial or administrative interpretation thereof, including any
applicable judicial or administrative order, consent decree or judgment,
relative to the applicable real estate, and any permit, license or
authorization relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include, but are not
limited to, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.)
("CERCLA"); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Sections 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide
Act, as amended (7 U.S.C. Sections 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Sections 6901 et seq.) ("RCRA"); the Toxic
Substance Control Act, as amended (15 U.S.C. Sections 2601 et seq.); the Clean
Air Act, as amended (42 U.S.C. Sections 740 et seq.); the Federal Water
Pollution Control Act, as amended (33 U.S.C. Sections 1251 et seq.); the
Occupational Safety and Health Act, as amended (29 U.S.C. Sections 651 et
seq.) ("OSHA"); and the Safe Drinking Water Act, as amended (42 U.S.C. Sections
300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities and Costs" shall mean all liabilities,
obligations, responsibilities, remedial actions, removal actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim, suit,
action or demand by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or common law
(including any thereof arising under any Environmental Law, permit, order or
agreement with any Governmental Authority) and which relate to the environment,
health and safety as regulated under any Environmental Law or in connection
with any other environmental matter or
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Release, threatened Release or the presence of a Hazardous Material or
threatened Release of a Hazardous Material.
"Equipment" shall mean, as to any Person, all "equipment," as
such term is defined in the Code, now owned or hereafter acquired by such
Person, wherever located and, in any event, including all of such Person's
machinery and equipment, including processing equipment, conveyors, machine
tools, data processing and computer equipment with software and peripheral
equipment (other than software constituting part of the Accounts), and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, all whether now
owned or hereafter acquired, and wherever situated, together with all additions
and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time, and
any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any plan subject to
Section 412 of the IRC or any obligation arising under Section 4980B of the
IRC, any trade or business (whether or not incorporated) under common control
with any Borrower or any Subsidiary thereof, and which, together with such
Borrower or such Subsidiary, are treated as a single employer within the
meaning of Sections 414(b), (c), (m) or (o) of the IRC and with respect to any
plan subject to Title IV of ERISA, any trade or business (whether or not
incorporated) under common control with any Borrower or any Subsidiary, and
which, together with such Borrower or such Subsidiary is required to be
aggregated under Section 4001 of ERISA.
"ERISA Event" shall mean, with respect to any of the Borrowers,
any Subsidiary or any ERISA Affiliate, (i) a Reportable Event with respect to a
Title IV Plan or a Multiemployer Plan; (ii) the withdrawal of any Borrower or
any Subsidiary or ERISA Affiliate thereof from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (iii) the complete or
partial withdrawal of any Borrower, or any Subsidiary or ERISA Affiliate
thereof from any Multiemployer Plan; (iv) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (v) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (vi) the failure to make
required contributions to a Qualified Plan; or (vii) any other event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA.
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"Event of Default" shall have the meaning assigned thereto in
Section 8.1.
"Federal Reserve Board" shall have the meaning assigned thereto
in Section 3.11.
"Fees" shall mean any and all fees payable to Administrative
Agent or any Lender pursuant to the Agreement or any of the other Loan
Documents.
"Financial Statements" shall have the meaning assigned thereto in
Section 3.4.
"First Reserve" shall mean First Reserve Corporation, a Delaware
corporation.
"Fiscal Month" shall mean any of the monthly accounting periods
of Holdings.
"Fiscal Quarter" shall mean any of the quarterly accounting
periods of Holdings.
"Fiscal Year" shall mean, as to any Person, any of the annual
accounting periods of such Person ending on December 31 of each year.
"Fixtures" shall mean, as to any Person, any "fixtures" as such
term is defined in the Code, now owned or hereafter acquired by such Person.
"Foreign Lender" shall have the meaning assigned thereto in
Section 1.16(e).
"Funded Debt" shall mean, with respect to Holdings and its
Subsidiaries, on a consolidated and consolidating basis, all of its
Indebtedness which by the terms of the agreement governing or instrument
evidencing such Indebtedness matures more than one year from, or is directly or
indirectly renewable or extendible at its option under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of more than one year from the date of creation thereof, including
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and shall also include,
without limitation, the Revolving Credit Loan, Term Loan C and the other
Obligations.
"Funded Debt/EBIT Ratio" shall mean , as of the last day of any
Fiscal Quarter, the ratio of Funded Debt as of such date to EBIT for the four
Fiscal Quarters ending on such date.
"Funding Arrangements" shall have the meaning assigned thereto in
Section 1.13(c).
"Funding Date" shall mean January 17, 1996, which is the date on
which the initial Revolving Credit Advances and Loans were made under the Prior
Credit Agreement.
"GAAP" shall mean (a) with respect to US Borrower, generally
accepted accounting principles in the United States of America as in effect on
the Closing Date, consistently applied and (b) with respect to UK Borrower,
generally accepted accounting principles in the United Kingdom as in effect on
the Closing Date, consistently applied(subject, in each case, to Accounting
Changes
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agreed to in accordance with the provisions set forth in the first paragraph
under the heading "Other Definitional Provisions" in this Schedule A).
"GE Capital" shall mean General Electric Capital Corporation, a
New York corporation, in its individual capacity and not as Administrative
Agent hereunder.
"GE Capital Fee Letter" shall mean that certain fee letter
between GE Capital and US Borrower dated October 1, 1996.
"General Intangibles" shall mean, as to any Person, any "general
intangibles," as such term is defined in the Code, now owned or hereafter
acquired by such Person, and, in any event, including, without limitation, all
right, title and interest which such Person may now or hereafter have in or
under any Contract, all customer lists, Copyrights, Trademarks, Patents,
service marks, trade names, business names, corporate names, trade styles,
logos and other source or business identifiers, and all applications therefor
and reissues, extensions or renewals thereof, rights in intellectual property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark license), all
rights and claims in or under insurance policies (including insurance for fire,
damage, loss and casualty, whether covering personal property, real property,
tangible rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
chooses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments and rights of indemnification.
"General Partner" shall mean NOW Oilfield Services, Inc. f/k/a
National-Oilwell, Inc., a Delaware corporation, in its capacity as the general
partner of US Borrower, and its successors and assigns.
"Goods" shall mean, as to any Person, all "goods" as such term is
defined in the Code, now owned or hereafter acquired by such Person, wherever
located.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantors" shall mean Holdings, US Borrower, each Partner, NOW
International, and each other Person, if any, which executes a Guaranty in
favor of Administrative Agent, for the benefit of the Lenders, in connection
with the transactions contemplated by the Agreement and the other Loan
Documents.
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"Guaranty" shall mean, as to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner, including any obligation or arrangement of such Person (i) to purchase
or repurchase any such primary obligation, (ii) to advance or supply funds (a)
for the purchase or payment of any such primary obligation or (b) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, or
(iv) to indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranty at any time shall be deemed to be an
amount equal to the lesser at such time of (y) the stated or determinable
amount of the primary obligation in respect of which such Guaranty is made or
(z) the maximum amount for which such Person may be liable pursuant to the
terms of the instrument embodying such Guaranty; or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"Guaranty Agreements" shall mean the Holdings Senior Guaranty,
the Holdings Subordinated UK Guaranty, the US Borrower Subordinated UK
Guaranty, the NOW Guaranty, the National Guaranty, the NOW International Senior
Guaranty, the NOW International Subordinated UK Guaranty and any other guaranty
or support agreement or similar agreement made in favor of Administrative
Agent, for the benefit of Lenders, in form and substance satisfactory to
Administrative Agent, together with all amendments, modifications and
supplements thereto consented to in writing by Administrative Agent (subject to
Section 11.2(b) of the Agreement), and shall refer to any such Guaranty as the
same may be in effect at the time such reference becomes operative.
"Hazardous Material" shall mean any substance, material or waste,
the generation, handling, storage, treatment or disposal of which is regulated
by or forms the basis of liability now or hereafter under, any Environmental
Law in any jurisdiction in which any Borrower or any Subsidiary has owned,
leased, or operated real property or disposed of hazardous waste or currently
owns, leases or operates real property or disposes of hazardous waste
including, without limitation, any material or substance which is (i) defined
as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or "restricted hazardous waste" or
other similar term or phrase under any Environmental Laws, (ii) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls
(PCB's), any radioactive substance emitting radiation in excess of prevailing
background conditions, methane, volative organic compounds or any industrial
solvent, (iii) designated as a "hazardous substance" pursuant to Section 311 of
the Clean Water Act, 33 U.S.C. Sections 1251 et seq. (33 U.S.C. Sections 1321)
or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section
1317), (iv) defined as a "hazardous waste" pursuant to Section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. (42
U.S.C. Section 6903), or (v) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601).
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"Holdings" shall have the meaning assigned thereto in the
Recitals to the Agreement.
"Holdings Senior Guaranty" shall mean the Guaranty dated as of
the Funding Date executed by Holdings in favor of Administrative Agent, on
behalf of itself and Lenders, guarantying the Obligations of US Borrower,
together with all amendments, modifications and supplements thereto consented
to by Administrative Agent in writing (subject to Section 11.2(b)).
"Holdings Senior Stock Pledge Agreement" shall mean the stock
pledge agreement dated as of the Funding Date executed by Holdings in favor of
Administrative Agent, on behalf of itself and Lenders, together with all
amendments, modifications and supplements thereto consented to by
Administrative Agent in writing (subject to Section 11.2(b)).
"Holdings Subordinated Acquisition Guaranty" shall mean the
Guaranty dated as of the Funding Date executed by Holdings in favor of Sellers,
guarantying the obligations of US Borrower under the Sellers' Notes, together
with all amendments, modifications and supplements thereto consented to by
Administrative Agent in writing.
"Holdings Subordinated Canada Guaranty" shall mean the Guaranty
dated as of the Funding Date executed by Holdings in favor of General Electric
Capital Canada Inc., on behalf of itself and the lenders party to the NOW
Canada Credit Agreement, guarantying the obligations of NOW Canada under the
NOW Canada Credit Agreement, together with all amendments, modifications and
supplements thereto consented to by Administrative Agent in writing.
"Holdings Subordinated Canada Stock Pledge Agreement" shall mean
the stock pledge agreement dated as of the Funding Date executed by Holdings in
favor of General Electric Capital Canada Inc., on behalf of itself and the
lenders party to the NOW Canada Credit Agreement, together with all amendments,
modifications and supplements thereto consented to by Administrative Agent in
writing.
"Holdings Subordinated UK Guaranty" shall mean the Guaranty dated
as of the Funding Date executed by Holdings in favor of Administrative Agent,
on behalf of itself and Lenders, guarantying the obligations of UK Borrower,
together with all amendments, modifications and supplements thereto consented
to by Administrative Agent in writing (subject to Section 11.2(b)).
"Holdings Subordinated UK Stock Pledge Agreement" shall mean the
stock pledge agreement dated as of the Funding Date executed by Holdings in
favor of Administrative Agent, on behalf of itself and Lenders, together with
all amendments, modifications and supplements thereto consented to by
Administrative Agent in writing (subject to Section 11.2(b)).
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all obligations of such Person for borrowed money or for the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (ii) reimbursement and all other obligations with respect to letters of
credit,
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bankers' acceptances and surety bonds, whether or not matured, (iii) all
obligations evidenced by notes, bonds, debentures or similar instruments, (iv)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (v)
all Capital Lease Obligations, (vi) all obligations of such Person under
Interest Rate Agreements, Currency Agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
arrangements, (vii) all Indebtedness referred to in clause (i), (ii), (iii),
(iv), (v) or (vi) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (viii) the Obligations.
"Indemnified Liabilities" shall have the meaning assigned thereto
in subsection 1.13(a).
"Index Rate" shall mean, for any day, a fluctuating rate equal to
the higher of (i) the highest of the most recently published or announced
prime, corporate base, reference or similar benchmark rate announced by the
five largest member banks of the New York Clearing House Association, or (ii)
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
most recently published by the Federal Reserve Bank of New York plus one half
of one percent (0.5%) per annum.
"Index Rate Loan" shall mean a Revolving Credit Advance and/or
portion of Term Loan C bearing interest by reference to the Index Rate.
"Instruments" shall mean, as to any Person, any "instrument," as
such term is defined in the Code, now owned or hereafter acquired by such
Person, wherever located, and, in any event, including all certificated
securities, all certificates of deposit, and all notes and other, without
limitation, evidences of indebtedness, other than instruments that constitute,
or are a part of a group of writings that constitute, Chattel Paper.
"Intellectual Property Security Agreements" shall mean,
collectively, the Patent Security Agreement and the Trademark Security
Agreement.
"Interest Charges" shall mean, for any period, the aggregate of
all interest paid in cash by Holdings and its Subsidiaries on a consolidated
basis including the interest portion of any Capital Lease Obligation and all
Non-use Fees and Letter of Credit fees and expenses payable pursuant to
Schedule B but excluding interest on any intercompany Indebtedness permitted by
Section 6.22, all as determined in accordance with GAAP for the relevant
period.
"Interest Coverage Ratio" shall mean, for any period, the ratio
of EBITDA to Interest Charges.
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"Interest Payment Date" shall mean (a) as to any Index Rate Loan,
the first Business Day of each month to occur while such Loan is outstanding,
and (b) as to any LIBOR Loan, the last day of the LIBOR Period applicable
thereto and, in the case of a LIBOR Period of six months, on the last day of
each three-month interval during such LIBOR Period; provided that, in addition
to the foregoing, each of (x) the date upon which both the Commitments have
been terminated and the Loans have been paid in full; and (y) the Commitment
Termination Date shall be deemed to be an "Interest Payment Date" with respect
to any interest which is then accrued hereunder.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate futures contract, interest rate option contract or other similar
agreement or arrangement to which any Borrower is a party, designed to protect
such Borrower against fluctuations in interest rates.
"Inventory" shall mean, as to any Person, any "inventory," as
such term is defined in the Code, now or hereafter owned or acquired by, such
Person, wherever located, and, in any event, including inventory, merchandise,
goods and other personal property which are held by or on behalf of such
Person, for sale or lease or are furnished or are to be furnished under a
contract of service or which constitute raw materials, work in process or
materials used or consumed or to be used or consumed in such Person's business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including other supplies.
"Investments" shall mean, as to any Person, any loan, advance
(other than commission, travel and similar advances to officers and employees
made in the ordinary course of business), extension of credit (other than
Investments consisting of accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or contribution of
capital by such Person to any other Person or any investment in, or purchase or
other acquisition of, the Stock, notes, debentures or other securities of any
other Person made by such Person.
"IPO" means an initial public offering of common stock on Form S-
1 by Holdings pursuant to a firm commitment underwriting by nationally
recognized underwriters pursuant to which Holdings shall receive at least $45
million of Net Proceeds.
"IRC" shall mean the Internal Revenue Code of 1986, as amended,
and any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"L/C Issuer" shall have the meaning assigned thereto in Schedule
B.
"Leases" shall mean all leasehold estates in Real Estate now
owned or hereafter acquired by either Borrower or any Subsidiary thereof, as
lessee.
"Lender Addition Agreement" shall mean an agreement in form and
substance satisfactory to, and acknowledged by, Administrative Agent, whereby a
portion of the Revolving
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Credit Loan Commitment or Term Loan C Commitment is assigned to a Lender after
the Closing Date.
"Lenders" shall mean GE Capital, the other Lenders named on the
signature pages of the Agreement, and, if any such Lender shall assign all or
any portion of the Obligations in accordance with the terms of the Agreement,
such term shall include such assignee.
"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Administrative Agent and Lenders at the request of US
Borrower, whether direct or indirect, contingent or otherwise, due or not due,
in connection with the issuance of a reimbursement agreement or a guaranty by
Administrative Agent and Lenders with respect to or of Letters of Credit issued
by the L/C Issuers. The amount of such Letter of Credit Obligations shall
equal the maximum amount which may be payable by Administrative Agent or
another Lender thereupon or pursuant thereto.
"Letters of Credit" shall mean commercial or standby letters of
credit issued at the request and for the account of US Borrower, and bankers'
acceptances issued by US Borrower, for which Administrative Agent or another
Lender has incurred Letter of Credit Obligations pursuant hereto.
"LIBOR Lending Office" shall mean, as to any Lender, the first
office of such Lender specified as its "LIBOR Lending Office" opposite its name
on Schedule J or on the signature page of the applicable Lender Addition
Agreement (or, if no such office is specified, its domestic lending office) or
such other office of such Lender as such Lender may from time to time specify
to Borrowers and the Administrative Agent.
"LIBOR Loan" shall mean a Loan bearing interest by reference to
the LIBOR Rate.
"LIBOR Period" shall mean, as to any LIBOR Loan, each period
commencing on a Business Day selected by either Borrower pursuant to this
Agreement and ending one, two, three or six months thereafter, as selected by
such Borrower's irrevocable Borrowing Notice to Administrative Agent as set
forth in subsection 1.5(e); provided that the foregoing provision relating to
LIBOR Periods is subject to the following:
(1) if any LIBOR Period pertaining to a LIBOR Loan would
otherwise end on a day that is not a Business Day, such LIBOR Period
shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such LIBOR Period into another
calendar month in which event such LIBOR Period shall end on the
immediately preceding Business Day;
(2) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date with respect to the Revolving Credit Loan or
the date of the last scheduled principal installment payment date of
Term Loan C shall end two (2) Business Days prior to such date;
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(3) any LIBOR Period pertaining to a LIBOR 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 LIBOR Period) shall end on the last Business Day of a calendar
month;
(4) Such Borrower shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period
for such Loan; and
(5) Such Borrower shall select LIBOR Periods so that there shall
be no more than five (5) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" shall mean for each LIBOR Loan for the relevant
LIBOR Period, a rate of interest determined by Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the
second full Business Day next preceding the first day of each LIBOR
Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used) for the applicable LIBOR Period
and in an amount approximately equal to the amount of the LIBOR Loan;
divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) Business Days prior
to the beginning of such LIBOR Period (including, without limitation,
basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve system or
other governmental authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of
such Board), which are required to be maintained by a member bank of the
Federal Reserve System.
If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable
to Administrative Agent and Borrowers.
"License" shall mean, as to any Person, any Copyright License,
Patent License, Trademark License or other license of rights or interests now
held or hereafter acquired by such Person.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).
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"Limited Partner" shall mean Natoil, Inc. (f/k/a NOW, Inc. and
National-Oilwell, Inc.), a Delaware corporation in its capacity as the limited
partner of US Borrower, and its successors and assigns.
"Loan Account" shall have the meaning assigned thereto in Section
1.12.
"Loan Documents" shall mean the Agreement, the Amended Revolving
Credit Notes, the Amended Term C Note, the Security Agreements, the Mortgages,
the other Collateral Documents, all other agreements, instruments, documents
and certificates identified in the Schedule of Documents in favor of
Administrative Agent and/or Lenders all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other agreements,
instruments, documents, certificates and other written matter whether
heretofore executed in connection with the Prior Credit Agreement, now or
hereafter executed by or on behalf of any Borrower or any of its Affiliates, or
any employee of any Borrower, or any of its Affiliates, and delivered to
Administrative Agent or any Lender in connection with the Agreement or the
transactions contemplated hereby, in each case as the same may have been
heretofore or may hereafter be amended, modified or supplemented from time to
time.
"Loans" shall mean the Revolving Credit Loan and Term Loan C.
"Lock Box Account" shall have the meaning assigned thereto on
Schedule E.
"Margin Stock" shall have the meaning assigned thereto in Section
3.12.
"Material Adverse Effect" shall mean a material adverse effect on
(i) the business, properties, assets, operations, prospects or financial or
other condition of Holdings and its Subsidiaries considered as a whole, (ii)
the industry in which Holdings or any of its Subsidiaries operates, (iii)
Borrowers' ability to perform their Obligations under the Loan Documents, (iv)
the Collateral or Administrative Agent's Liens, on behalf of itself and
Lenders, on the Collateral or the priority of any such Lien, or (v)
Administrative Agent's or any Lender's rights and remedies under the Agreement
and the other Loan Documents. In determining whether any individual event
would result in a Material Adverse Effect, notwithstanding that such event does
not of itself have such effect, a Material Adverse Effect shall be deemed to
have occurred if the cumulative effect of such event and all other then
existing events would result in a Material Adverse Effect.
"Material Subsidiaries" shall mean, collectively, NOW Canada, UK
Borrower, Australia, Singapore, Venezuela and NOW International.
"Maximum Lawful Rate" shall have the meaning assigned to it in
subsection 1.5(g).
"Maximum Revolving Credit Loan" shall mean, at any particular
time, an amount equal to the Revolving Credit Loan Commitment of all Lenders.
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"Mortgages" shall mean each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents delivered by Borrowers to
Administrative Agent, with respect to the Mortgaged Properties, all in form and
substance satisfactory to Administrative Agent.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, and to which any Borrower, or any Subsidiaries
or any ERISA Affiliate is making, is obligated to make, has made or been
obligated to make, contributions on behalf of participants who are or were
employed by any of them.
"National Guaranty" shall mean the Guaranty dated as of the
Funding Date executed by the General Partner in favor of Administrative Agent,
on behalf of itself and Lenders, guarantying the Obligations of US Borrower,
together with all amendments, modifications and supplements thereto consented
to by Administrative Agent in writing (subject to Section 11.2(b)).
"National-Oilwell" shall have the meaning assigned thereto in the
Recitals to the Agreement.
"Net Proceeds" shall mean (a) with respect to any asset
disposition permitted by subsections 6.8(ii), (iii) or (iv) ("Asset
Disposition"), the sum of cash or readily marketable cash equivalents received
(including by way of a cash generating sale or discounting of a note or
receivable, but excluding any other consideration received in the form of
assumption by the acquiring Person of debt or other obligations relating to the
assets so disposed of or received in any other non-cash form) therefrom,
whether at the time of such disposition or subsequent thereto, or (b) with
respect to any sale or issuance of any Stock of Holdings or any of its
Subsidiaries after the Funding Date, cash or readily marketable cash
equivalents received (but excluding any other non-cash form) therefrom, whether
at the time of such disposition or subsequent thereto, net, in either case, of
all legal, title and recording tax expenses, underwriting discounts,
commissions and other reasonable fees, costs and expenses incurred and all
federal, state, local and other taxes required to be accrued as a liability as
a consequence of such transactions and, in the case of an Asset Disposition,
net of all payments made on any Indebtedness which is secured by such assets
pursuant to a permitted Lien upon or with respect to such assets or which must
by the terms of such Lien, or in order to obtain a necessary consent to such
Asset Disposition, or by applicable law be repaid out of the proceeds from such
Asset Disposition.
"Net Worth" shall mean the book value of the assets of Holdings
and its Subsidiaries on a consolidated basis (inclusive of goodwill, patents,
trademarks, tradenames, copyrights, organization expenses, treasury stock, debt
discount and expense, deferred charges and other like intangibles), minus (i)
reserves applicable thereto, and (ii) all liabilities of Holdings and its
Subsidiaries on a consolidated basis (including accrued and deferred income
taxes), all as determined in accordance with GAAP, but excluding Net Proceeds
of the IPO and extraordinary items incurred as of the Closing Date..
"Non-Use Fee" shall have the meaning assigned to it in Section
1.8(b).
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"Notes" shall mean, collectively, the Amended Revolving Credit
Notes and the Amended Term C Note.
"Notice of Revolving Credit Advance" shall have the meaning
assigned thereto in Section 1.1.
"NOW Canada" shall mean National-Oilwell Canada Ltd., a British
Columbia corporation.
"NOW Canada Credit Agreement" shall mean that certain Credit
Agreement dated as of the Funding Date between General Electric Capital Canada
Inc. and NOW Canada, as the same may be amended, restated, modified or
otherwise supplemented from time to time in accordance with the terms thereof
and the terms of the Agreement.
"NOW Guaranty" shall mean the Guaranty dated as of the Funding
Date executed by the Limited Partner in favor of Administrative Agent, on
behalf of itself and Lenders, guarantying the Obligations of US Borrower,
together with all amendments, modifications and supplements thereto consented
to by Administrative Agent in writing (subject to Section 11.2(b)).
"NOW International" shall mean NOW International, Inc., a
Delaware corporation.
"NOW International Senior Guaranty" shall mean the Guaranty dated
as of the Funding Date executed by NOW International in favor of Administrative
Agent, on behalf of itself and Lenders, guarantying the Obligations of US
Borrower, together with all amendments, modifications and supplements thereto
consented to by Administrative Agent in writing (subject to Section 11.2(b)).
"NOW International Senior Stock Pledge Agreement" shall mean the
stock pledge agreement dated as of the Funding Date executed by NOW
International in favor of Administrative Agent, on behalf of itself and
Lenders, together with all amendments, modifications and supplements thereto
consented to by Administrative Agent in writing (subject to Section 11.2(b)).
"NOW International Senior (Australia) Stock Pledge Agreement"
shall mean the stock pledge agreement dated as of the Funding Date executed by
NOW International in favor of Administrative Agent, on behalf of itself and
Lenders, together with all amendments, modifications and supplements thereto
consented to by Administrative Agent in writing (subject to Section 11.2(b)).
"NOW International Subordinated Canada Guaranty" shall mean the
Guaranty dated as of the Funding Date executed by NOW International in favor of
General Electric Capital Canada Inc., on behalf of itself and the lenders party
to the NOW Canada Credit Agreement, guarantying the Obligations of NOW Canada
under the NOW Canada Credit Agreement, together with all amendments,
modification and supplements thereto consented to by Administrative Agent in
writing.
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"NOW International Subordinated Canada Stock Pledge Agreement"
shall mean the stock pledge agreement dated as of the Funding Date executed by
NOW International in favor of General Electric Capital Canada Inc., on behalf
of itself and the lenders party to the NOW Canada Credit Agreement, together
with all amendments, modifications and supplements thereto consented to by
Administrative Agent in writing.
"NOW International Subordinated (Australia) Canada Stock Pledge
Agreement" shall mean the stock pledge agreement dated as of the Funding Date
executed by NOW International in favor of General Electric Capital Canada Inc.,
on behalf of itself and the lenders party to the NOW Canada Credit Agreement,
together with all amendments, modifications and supplements thereto consented
to by Administrative Agent in writing.
"NOW International Subordinated UK Guaranty" shall mean the
Guaranty dated as of the Funding Date executed by NOW International in favor of
Administrative Agent, on behalf of itself and Lenders, guarantying the
Obligations of UK Borrower, together with all amendments, modifications and
supplements thereto consented to by Administrative Agent in writing (subject to
Section 11.2).
"NOW International Subordinated UK Stock Pledge Agreement" shall
mean the stock pledge agreement dated as of the Funding Date executed by NOW
International in favor of Administrative Agent, on behalf of itself and
Lenders, together with all amendments, modifications and supplements thereto
consented to by Administrative Agent in writing (subject to Section 11.2(b)).
"NOW International Subordinated (Australia) UK Stock Pledge
Agreement" shall mean the stock pledge agreement dated as of the Funding Date
executed by NOW International in favor of Administrative Agent, on behalf of
itself and Lenders, together with all amendments, modifications and supplements
thereto consented to by Administrative Agent in writing (subject to Section
11.2(b)).
"Obligations" shall mean all loans, advances, debts, liabilities
and obligations (including any obligations to cash collateralize Letter of
Credit Obligations), for the performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such performance is then required
or contingent, or amounts are liquidated or determinable) owing by either
Borrower or any Subsidiary thereof to Administrative Agent or any Lender, and
all covenants and duties regarding such amounts, of any kind or nature, present
or future, whether or not evidenced by any note, agreement or other instrument,
arising under the Prior Credit Agreement, the Agreement or any of the other
Loan Documents. This term includes all principal, interest (including, without
limitation, all interest which accrues after the commencement of any case or
proceeds in bankruptcy after the insolvency of, or for the reorganization of,
either Borrower or any Subsidiary thereof, whether or not allowed in such
proceeding), Letter of Credit Obligations, Fees, Charges, expenses,
indemnification obligations, attorneys' fees and any other sum chargeable to
any Borrower or Subsidiary thereof under the Agreement or any of the other Loan
Documents.
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"Other Taxes" shall have the meaning assigned thereto in Section
1.15.
"Partner Assignment" shall mean that certain Collateral
Assignment of Partnership Interests dated as of the Funding Date entered into
by Administrative Agent, on behalf of itself and Lenders, and the Partners,
including all amendments, restatements, modifications and supplements thereto.
"Partners" shall mean, collectively, the General Partner and the
Limited Partner.
"Partnership Agreement" shall mean that certain Amended and
Restated Partnership Agreement, dated the Funding Date, among the Partners, as
the same may hereafter be amended, modified or supplemented from time to time
in accordance with the terms of the Agreement.
"Partnership Interests" shall have the meaning assigned thereto
in the Recitals to the Agreement.
"Patent License" shall mean, as to any Person, rights under any
written agreement now owned or hereafter acquired by such Person granting any
right with respect to any invention on which a Patent is in existence.
"Patent Security Agreement" shall mean that certain Patent
Security Agreement dated as of the Funding Date entered into by Administrative
Agent, on behalf of itself and Lenders, and U.S. Borrower, including all
amendments, restatements, modifications and supplements thereto.
"Patents" shall mean, as to any Person, all of the following in
which such Person now holds or hereafter acquires any interest: (i) all letters
patent of the United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country, and (ii) all reissues, continuations, continuations-in-part or
extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" shall mean an employee pension benefit plan, as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan), which is
not an individual account plan, as defined in Section 3(34) of ERISA, and which
either of the Borrowers or any Subsidiary thereof or, if a Title IV Plan, any
ERISA Affiliate maintains, contributes to or has an obligation to contribute to
on behalf of participants who are or were employed by any of them.
"Permitted Acquisitions" shall have the meaning ascribed thereto
in Section 6.1.
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"Permitted Encumbrances" shall mean the following encumbrances:
(i) Liens for taxes or assessments or other governmental Charges or levies, not
yet due and payable; (ii) pledges or deposits securing obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation; (iii) pledges or deposits securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Borrower or any Subsidiary is a party as lessee made in the ordinary
course of business; (iv) deposits securing statutory obligations of any
Borrower or any Subsidiary; (v) inchoate and unperfected workers', mechanics',
suppliers' or similar liens arising in the ordinary course of business; (vi)
carriers', warehousemen's or other similar possessory liens arising in the
ordinary course of business of any Borrower or the applicable Subsidiary and
securing liabilities (which are not overdue) in an outstanding aggregate amount
not in excess of $25,000 at any time; (vii) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which any Borrower or any
Subsidiary is a party; (viii) any attachment or judgment lien, unless the
judgment it secures shall not, within 30 days after the entry thereof, have
been discharged or execution thereof stayed pending appeal, or shall not have
been discharged within 30 days after the expiration of any such stay; and (ix)
zoning restrictions, easements, licenses, or other restrictions on the use of
real property or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such real property, lease or leasehold estate.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit
corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean, with respect to any Borrower or any Subsidiary
or ERISA Affiliate thereof at any time, an employee benefit plan, as defined in
Section 3(3) of ERISA, which any Borrower or any Subsidiary thereof maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Pledge and Security Agreement" shall mean that certain Pledge
and Security Agreement dated as of the Funding Date entered into between
Administrative Agent, on behalf of itself and Lenders, and the Partners,
including all amendments, restatements, modifications and supplements thereto
(subject to Section 11.2(b)).
"Prior Credit Agreement" shall have the meaning assigned thereto
in the Recitals to the Agreement.
"Pro Forma" shall mean the unaudited consolidated balance sheet
of Holdings and its Subsidiaries and the balance sheets of US Borrower, UK
Borrower and NOW Canada, each as of September 30, 1996 after giving effect to
the IPO, and the payment of the Subordinated Loan, Term Loan A and Term Loan B,
as such terms are defined in the Prior Credit Agreement.
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"Proceeds" shall mean, as to any Person, "proceeds," as such term
is defined in the Code and, in any event, shall include (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to such
Person from time to time with respect to any of the Collateral, (ii) any and
all payments (in any form whatsoever) made or due and payable to such Person
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person acting under
color of governmental authority), (iii) any claim of such Person against third
parties (a) for past, present or future infringement of any Patent or Patent
License, (b) for past, present or future infringement or dilution of any
Copyright or Copyright License or (c) for past, present or future infringement
or dilution of any Trademark or Trademark License or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark licensed
under any Trademark License, (iv) any recoveries by such Person against third
parties with respect to any litigation or dispute concerning any of the
Collateral, and (v) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral, upon disposition or
otherwise.
"Projections" shall mean Holdings' forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash
flow statements; and (d) capitalization statements, all prepared on a
subsidiary by subsidiary or division by division basis, if applicable, and
otherwise consistent with the historical financial statements of the Acquired
Companies, together with appropriate supporting details and a statement of
underlying assumptions.
"Pro Rata Share" shall mean with respect to all matters relating
to any Lender (a) with respect to the Revolving Credit Loan, the percentage (to
the third decimal point) obtained by dividing (i) the Revolving Credit Loan
Commitment of that Lender by (ii) the aggregate Revolving Credit Loan
Commitments of all Lenders, and, (b) with respect to Term Loan C, the
percentage obtained by dividing (i) the Term Loan C Commitment of that Lender
by (ii) the aggregate Term Loan C Commitments of all Lenders, as all such
percentages may be adjusted by assignments permitted pursuant to Section 9.1.
"Purchase Agreement" shall have the meaning assigned thereto in
the Recitals to the Agreement.
"Purchased Stock" shall have the meaning assigned thereto in the
Recitals to the Agreement.
"Qualified Plan" shall mean an employee pension benefit plan, as
defined in Section 3(2) of ERISA, which is intended to be tax-qualified under
Section 401(a) of the IRC, and which any Borrower or any Subsidiary or ERISA
Affiliate thereof maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them.
"Real Estate" shall have the meaning assigned to it in Section
3.7.
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"Related Transactions" shall mean the IPO, each borrowing under
the Revolving Credit Loan and Term Loan C on the Closing Date, the repayment of
the Subordinated Loan and Term Loan A and Term Loan B (as such terms are
defined in the Prior Credit Agreement), the payment of all fees, costs and
expenses associated with all of the foregoing and the execution and delivery of
all agreements and documents necessary to consummate all such transactions.
"Release" shall mean, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials in the indoor or outdoor
environment by such Person, including the movement of Hazardous Materials
through or in the air, soil, surface water, ground water or property.
"Reportable Event" shall mean any of the events described in
Section 4043(b)(1),(2),(3),(5),(6),(8) or (9) of ERISA except to the extent the
reporting requirements have been waived or are not required.
"Requisite Lenders" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Commitments of all Lenders,
or (b) if the Commitments have been terminated, more than sixty-six and two-
thirds percent (66 2/3%) of the aggregate outstanding principal amount of the
outstanding Loans and Letter of Credit Obligations.
"Restricted Payment" shall mean, as to any Person, (i) the
declaration or payment of any dividend or other distribution of cash or other
property or assets or the incurrence of any liability to make any payment or
distribution of cash or other property or assets in respect of such Person's
Stock, (ii) any payment on account of the purchase, prepayment, conversion,
exchange, surrender, redemption, defeasance or other retirement of such
Person's Stock or any other payment or distribution made in respect thereof,
either directly or indirectly, (iii) any payment, loan, contribution, or other
transfer of funds or other property to any stockholder, partner or other equity
owner or Affiliate of such Person, either directly or indirectly, (iv) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Stock of any class of such Person now or hereafter outstanding, either directly
or indirectly, and (v) any payment or prepayment of principal or premium, if
any, or interest on, fees with respect to, redemption, conversion, exchange,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to Subordinated Debt of such Person.
"Retiree Welfare Plan" shall mean any Welfare Plan providing for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" shall have the meaning assigned
thereto in Section 1.1(a)(i).
"Revolving Credit Loan" shall mean, as the context may require,
the aggregate amount of Revolving Credit Advances outstanding at any time to US
Borrower.
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"Revolving Credit Loan Commitment" shall mean (a) as to any
Lender, the aggregate commitment of such Lender to make Revolving Credit
Advances as set forth in the signature page to the Agreement or in the most
recent Lender Addition Agreement executed by such Lender and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Revolving Credit
Advances, which aggregate commitment shall be in an amount equal to One Hundred
Five Million Dollars ($105,000,000), as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement minus the outstanding
balance of Term Loan C from time to time.
"Schedule of Documents" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Schedule F.
"Security Agreements" shall mean those Security Agreements dated
as of the Funding Date entered into between Administrative Agent, on behalf of
itself and Lenders, and the respective Borrowers including all amendments,
restatements, modifications and supplements thereto.
"Sellers" shall have the meaning assigned thereto in the Recitals
to the Agreement.
"Sellers' Notes" shall mean those certain Subordinated Promissory
Notes, dated as of the Funding Date, each in the original principal amount of
$10,000,000 executed by US Borrower in favor of the Sellers, respectively, as
the same may be amended, restated, modified or otherwise supplemented from time
to time as permitted hereunder.
"Shareholders Agreement" shall mean that certain Shareholder
Agreement dated as of the Funding Date among the shareholders of Holdings, in
form and substance satisfactory to Administrative Agent.
"Singapore" shall have the meaning assigned thereto in the
Recitals to the Agreement.
"Solvent" shall mean, with respect to any Person, that (i) the
fair salable value of its assets exceeds the fair present value of its
liabilities (including all liabilities whether reflected on a balance sheet
prepared in accordance with GAAP or otherwise and whether direct, indirect,
fixed, contingent, disputed or undisputed); (ii) such Person is able to pay its
debts when due; and (iii) such Person has capital sufficient to carry on its
current business and all businesses in which it is about to engage. "Solvency"
shall have a correlative meaning.
"Stock" shall mean all shares, options, warrants, limited
liability company units, participations, general or limited partnership
interests or other equivalents (regardless of how designated) of or in a
corporation, partnership or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other "equity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended), and all agreements, instruments and documents convertible,
in whole or in part, into any one or more of the foregoing.
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"Stock Incentive Plan" shall mean that certain stock incentive
plan of Holdings in form and substance satisfactory to Administrative Agent.
"Stock Pledge Agreements" shall mean the Holdings Senior Stock
Pledge Agreement, the Holdings Subordinated UK Stock Pledge Agreement, the NOW
International Senior Stock Pledge Agreement the NOW International Senior
(Australia) Stock Pledge Agreement, the NOW International Subordinated UK Stock
Pledge Agreement, the NOW International Subordinated (Australia) UK Stock
Pledge Agreement and any other stock pledge agreement made in favor of
Administrative Agent, on behalf of itself and Lenders, in form and substance
satisfactory to Administrative Agent, together with all amendments,
modifications and supplements thereto consented to in writing by Administrative
Agent (subject to Section 11.2(b)), and shall refer to any such Stock Pledge
Agreement as the same may be in effect at the time such reference becomes
operative.
"Store Locations" shall mean those owned or leased locations at
which US Borrower maintains inventories for sale to its customers and at which
no manufacturing activities occur.
"Subordinated Debt" shall mean any Indebtedness (a) the payment
of which is subordinated to the payment of the Obligations and (b) which is
incurred pursuant to terms, conditions and documentation in form and substance
satisfactory to the Lenders. Subordinated Debt shall include, without
limitation, the Indebtedness of US Borrower in respect of the Sellers' Notes.
"Subsidiary" shall mean, with respect to any Person, (i) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether, at the time, Stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned legally or beneficially by such Person and/or one
or more Subsidiaries of such Person, or with respect to which any such Person
has the right to vote or designate the vote of fifty percent (50%) or more of
such Stock whether by proxy, agreement, operation of law or otherwise and (ii)
any partnership, association, trust, joint venture or similar business
organization in which such Person and/or one or more Subsidiaries of such
Person shall have an interest (whether in the form of voting or participation
in profits or capital contribution) of more than fifty percent (50%) or of
which any such Person is a general partner or may exercise the powers of a
general partner. Notwithstanding the fact that NOW International is a direct
wholly-owned Subsidiary of Holdings and each of the foreign Subsidiaries are
direct wholly-owned Subsidiaries of NOW International, all of such Persons
shall be deemed to be Subsidiaries of US Borrower for purposes of the
representations, warranties and covenants of US Borrower as set forth in the
Agreement.
"Taxes" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Administrative Agent or a Lender by the
jurisdictions under the laws of which Administrative Agent and Lenders are
organized or any political subdivision thereof.
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"Term Loan C" shall mean the aggregate amount of Term Loan C
advances outstanding at any time to UK Borrower pursuant to Section 1.1(b).
"Term Loan C Commitment" shall mean (a) as to any Lender with a
Term Loan C Commitment, the aggregate commitment of such Lender to make Term
Loan C as set forth on the signature page to the Agreement, and (b) as to all
Lenders, the aggregate commitment of all Lenders to make Term Loan C advances,
which aggregate commitment shall be in an amount equal to Five Million Dollars
($5,000,000), as such amount may be adjusted, if at all, from time to time in
accordance with the Agreement.
"Termination Date" shall mean the date on which the Revolving
Credit Loan and the Term Loans have been repaid in full in cash and all other
Obligations under this Agreement and the other Loan Documents have been
completely discharged and none of the Borrowers shall not have any further
right to borrow any monies thereunder and the Lenders shall not have any
further obligation to make any credit extensions or financial accommodations
hereunder.
"Title IV Plan" shall mean a Pension Plan, other than a
Multiemployer Plan, which is covered by Title IV of ERISA.
"Trademark License" shall mean rights under any written agreement
now owned or hereafter acquired by any Borrower or any of its Subsidiaries
granting any right to use any Trademark or Trademark registration.
"Trademark Security Agreement" shall mean that certain Trademark
Security Agreement dated as of the Funding Date entered into by Administrative
Agent, on behalf of itself and Lenders, and U.S. Borrower, including all
amendments, restatements, modifications and supplements thereto.
"Trademarks" shall mean all of the following now owned or
hereafter acquired by any Borrower or any of its Subsidiaries: (i) all
trademarks, trade names, corporate names, business names, trade styles, service
marks, logos, other source or business identifiers, prints and labels on which
any of the foregoing have appeared or appear, designs and general intangibles
of like nature (whether registered or unregistered), now owned or existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, including registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state or territory thereof,
or any other country or any political subdivision thereof; and (ii) all
reissues, extensions or renewals thereof.
"UK Borrower" shall mean National Oilwell (U.K.) Limited, an
English corporation, and its successors and assigns.
"UK Borrowing Base" shall mean, as any date of determination by
Administrative Agent, in its reasonable discretion from time to time, an amount
equal to the sum at such time of:
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a) eighty-five percent (85%) of UK Borrower's Eligible
Accounts, less reserves established by Administrative Agent from time to
time in accordance with the Agreement; plus
b) sixty percent (60%) of the book value of UK Borrower's
Eligible Inventory valued on a first-in, first-out basis (at the lower
of cost or market), less reserves established by Administrative Agent
from time to time in accordance with the Agreement.
"UK Eligible Accounts" shall have the meaning assigned thereto on
Schedule C-2.
"UK Eligible Inventory" shall have the meaning assigned thereto
on Schedule D-2.
"UNOC" shall mean UNOC Equipment and Supply, L.L.C., a Delaware
limited liability company, in which US Borrower holds a thirty percent (30%)
interest.
"Unfunded Pension Liability" shall mean, at any time, the
aggregate amount, if any, of the sum of (i) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions in
effect under such Title IV Plan, and (ii) for a period of five (5) years
following a transaction reasonably likely to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Borrower, any Subsidiary thereof or any ERISA Affiliate as a result of such
transaction.
"US Borrower" shall mean National-Oilwell, L.P., a Delaware
limited partnership, and its permitted successors and assigns.
"US Borrower Accounts" shall have the meaning assigned thereto in
Schedule E.
"US Borrower Subordinated Canada Guaranty" shall mean the
Guaranty dated as of the Funding Date executed by US Borrower in favor of
General Electric Capital Canada Inc., on behalf of itself and the lenders party
to the NOW Canada Credit Agreement, guarantying the obligations of NOW Canada
under the NOW Canada Credit Agreement, together with all amendments,
modifications and supplements thereto consented to by Administrative Agent in
writing.
"US Borrower Subordinated UK Guaranty" shall mean the Guaranty
dated as of the Funding Date executed by US Borrower in favor of Administrative
Agent, on behalf of itself and Lenders, guarantying the Obligations of UK
Borrower, together with all amendments, modifications and supplements thereto
consented to by Administrative Agent in writing (subject to Section 11.2(b)).
"US Disbursement Account" shall have the meaning assigned thereto
in Schedule E.
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"Venezuela" shall mean National-Oilwell de Venezuela, C.A., a
Venezuelan corporation.
"Voting Stock" shall mean, as to any Person, Stock of such Person
of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of members of the board of
directors (or Persons performing similar functions) of such Person.
"Welfare Plans" shall mean any welfare plan, as defined in
Section 3(1) of ERISA, which is maintained or contributed to by either of the
Borrowers, any Subsidiary thereof or ERISA Affiliate thereof.
"Withdrawal Liability" shall mean, at any time, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA, and any
increase in contributions pursuant to Section 4243 of ERISA with respect to all
Multiemployer Plans.
OTHER DEFINITIONAL PROVISIONS
Any accounting term used in the Agreement shall have, unless
otherwise specifically provided herein, the meaning customarily given such term
in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with
GAAP consistently applied. That certain items or computations are explicitly
modified by the phrase "in accordance with GAAP" shall in no way be construed
to limit the foregoing. In the event that any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Administrative Agent and Lenders agree to enter into
negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Holdings and its Subsidiaries' financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, that the agreement of Requisite Lenders to any
required amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (a) (i) with respect to US Borrower, changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successor thereto or any
agency with similar functions) and (ii) with respect to UK Borrower, changes in
accounting principles or standards required by the promulgation of any rule,
regulation, pronouncement or opinion by the Accounting Standards Board of the
United Kingdom (or successor thereto or any agency with similar functions) or
(b) changes in accounting principles concurred in by Holdings' certified public
accountants. In the event, if any, that Administrative Agent, Borrowers and
Requisite Lenders shall have agreed upon the required amendments, then after
such agreement has been evidenced in writing and the underlying Accounting
Change with respect thereto has been implemented, any reference to GAAP
contained in the Agreement or in any other Loan Document shall, only to the
extent of such Accounting Change, refer to GAAP, consistently applied after
giving effect to the implementation of such Accounting Change. If
Administrative Agent, Borrowers and
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105
Requisite Lenders cannot agree upon the required amendments within thirty (30)
days following the date of implementation of any Accounting Change, then all
financial statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the
underlying Accounting Change.
All other undefined terms contained in the Agreement or any of
the other Loan Documents shall, unless the context indicates otherwise, have
the meanings provided for by the Code as in effect in the State of New York to
the extent the same are used or defined therein. The words "herein," "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole, including the Exhibits and Schedules hereto, as the same may from time
to time be amended, modified or supplemented, and not to any particular
section, subsection or clause contained in the Agreement.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. Unless otherwise expressly
provided or the context requires otherwise, all references in the Agreement to
Sections, subsections, clauses, Schedules and Exhibits shall mean and refer to
Sections, subsections, clauses, Schedules and Exhibits of this Agreement. The
words "including", "includes" and "include" shall be deemed to be followed by
the words "without limitation"; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations.
X-00
000
000
SCHEDULE B (Section 1.2)
to
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, the Revolving Credit Loan Commitment may, in addition to Revolving
Credit Loan Advances, be utilized, upon the request of US Borrower, for the
issuance of Letters of Credit by any bank (including any bank that is a Lender)
or the issuance of reimbursement agreements with respect thereto by
Administrative Agent so long as GE Capital is Administrative Agent, on behalf
of each Lender (severally and not jointly) according to such Lender's Pro Rata
Share of the Revolving Credit Loan Commitment to guaranty payment to banks
(whether or not such banks are Lenders) which issue (or have previously issued
prior to the Funding Date) Letters of Credit for the account of US Borrower or
any Subsidiary. The aggregate amount of all Letter of Credit Obligations
incurred by Administrative Agent and the Lenders pursuant to this paragraph (a)
shall not at any time exceed Twenty-Five Million Dollars ($25,000,000) and (1)
no such Letter of Credit shall have an expiry date which is more than two years
following the date of issuance thereof and (2) Administrative Agent and the
Lenders shall be under no obligation to incur Letter of Credit Obligations in
respect of any Letter of Credit having an expiry date which is later than the
Commitment Termination Date. It is understood that the selection of the bank
or other legally authorized Person (including any Lender) which shall issue any
Letter of Credit contemplated by this paragraph (a) shall be made by
Administrative Agent, in its sole discretion.
(b) Advances Automatic. In the event that Administrative
Agent or any Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, to satisfy its reimbursement obligation US Borrower hereby
authorizes and directs Administrative Agent to make a Revolving Credit Advance
under Section 1.1(a) in the amount of such payment regardless of whether a
Default or Event of Default shall have occurred and be continuing.
(c) Cash Collateral. In the event that any Letter of Credit
Obligation, whether or not then due and payable, shall for any reason be
outstanding on the Commitment Termination Date including upon termination of
the Commitments pursuant to Section 8.2(b), US Borrower will pay to
Administrative Agent for the benefit of the Lenders cash or cash equivalents
acceptable to Administrative Agent ("Cash Equivalents") in an amount equal to
the maximum amount then available to be drawn under the applicable Letter of
Credit. Such funds or Cash Equivalents shall be held by Administrative Agent
in a cash collateral account (the "Cash Collateral Account") maintained at a
bank or financial institution acceptable to Administrative Agent. The Cash
Collateral Account shall be in the name of Administrative Agent (as a cash
collateral account), and shall be under the sole dominion and control of
Administrative Agent and subject to the terms of this Schedule B. US Borrower
hereby pledges, and grants to Administrative Agent, on behalf of Lenders, a
security interest in all such funds and Cash Equivalents held in the Cash
Collateral Account from time to time and all proceeds thereof, as security for
the payment of all amounts due in respect of the
B-1
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Letter of Credit Obligations, whether or not then due. The Agreement,
including this Schedule B, shall constitute a security agreement under
applicable law.
From time to time after funds are deposited in the Cash
Collateral Account, Administrative Agent may apply such funds or Cash
Equivalents then held in the Cash Collateral Account to the payment of any
amounts, in such order as Administrative Agent may elect, as shall be or shall
become due and payable by US Borrower to the Lenders with respect to such
Letter of Credit Obligations, or, if all Letter of Credit Obligations have been
satisfied, to other Obligations then due.
Neither US Borrower nor any Person claiming on behalf of or
through US Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon indefeasible
payment in full of all the Obligations, any funds remaining in the Cash
Collateral Account shall be returned to US Borrower or as otherwise required by
law.
Administrative Agent shall at the direction of US Borrower invest
the funds in the Cash Collateral Account in short term investments guaranteed
by the United States government or an agency thereof, and to the extent not
necessary to satisfy the Obligations, interest and earnings thereon, if any,
shall be the property of US Borrower.
(d) Fees and Expenses. In the event that the Lenders shall
incur any Letter of Credit Obligation pursuant hereto at the request or on
behalf of US Borrower, US Borrower agrees to pay (I) to Administrative Agent
for the benefit of the Lenders, as compensation to the Lenders for such Letter
of Credit Obligation, (i) all reasonable costs and expenses incurred by
Administrative Agent or any Lender on account of such Letter of Credit
Obligation, (ii) commencing with the month in which such Letter of Credit
Obligation is incurred by the Lenders and monthly thereafter for each month
during which such Letter of Credit Obligation shall remain outstanding, a fee
in an amount equal to the Applicable L/C Margin per annum from time to time in
effect multiplied by the maximum amount available from time to time to be drawn
under the applicable Letter of Credit, and (II) to any issuer of a Letter of
Credit, if not Administrative Agent (the "L/C Issuer"), on demand, such fees
(including, without limitation, all per annum fees), charges and expenses of
the L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to
the application and related documentation under which such Letter of Credit is
issued. All fees due under this paragraph (d) shall be calculated on the basis
of a 360-day year and the actual number of days elapsed and shall be paid to
Administrative Agent for the benefit of the Lenders or the L/C Issuer, as the
case may be, in arrears, on the first day of each month.
(e) Request for Lender Guaranty Agreements. US Borrower shall
give Administrative Agent at least two (2) Business Days prior written notice
as to the issuance of a Letter of Credit or a reimbursement agreement with
respect thereto, specifying the date such Letter of Credit or reimbursement
agreement is to be issued, identifying the beneficiary and describing the
nature of the transactions proposed to be supported thereby. The notice shall
be accompanied by the form of the Letter of Credit acceptable to the L/C Issuer
to be guarantied or issued.
B-2
109
(f) Obligation Absolute. US Borrower shall be irrevocably and
unconditionally obligated without presentment, demand, protest or other
formalities of any kind, to reimburse Administrative Agent and Lenders for any
amounts paid by Administrative Agent or any Lender with respect to Letter of
Credit Obligations including, without limitation, all amounts paid under any
draw with respect to a Letter of Credit, any guaranty or reimbursement
obligation paid upon any draw of a Letter of Credit and all fees, costs and
expenses paid by Administrative Agent or any Lender to any L/C Issuer. The
obligation of US Borrower to reimburse Administrative Agent and Lenders for
payments made with respect to any Letter of Credit Obligation shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms hereof under all circumstances including the following circumstances:
(1) any lack of validity or enforceability of any Letter of
Credit or any other agreement;
(2) the existence of any claim, set-off, defense or other
right which US Borrower or any of its Affiliates or any Lender may at any time
have against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any Lender, or any other
Person, whether in connection with the Agreement, the transactions contemplated
herein or therein or any unrelated transaction (including any underlying
transaction between US Borrower or any of its Affiliates and the beneficiary
for which the Letter of Credit was procured);
(3) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(4) payment by Administrative Agent, any Lender, or the L/C
Issuer under or in connection with any Letter of Credit against presentation of
a demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit; provided that, in the case of any payment by
Administrative Agent or any Lender under or in connection with any Letter of
Credit, Administrative Agent or such Lender has not acted with gross negligence
or willful misconduct (as finally determined by a court of competent
jurisdiction after all possible appeals have been exhausted) in determining
that the demand for payment under such Letter of Credit or guaranty thereof
complies on its face with any applicable requirements for a demand for payment
under such Letter of Credit or guaranty thereof;
(5) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(6) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) Indemnification; Nature of Lenders' Duties. In addition
to amounts payable as elsewhere provided in the Agreement, US Borrower hereby
agrees to pay, and to protect, indemnify and save harmless each Agent, each
Lender and any L/C Issuer from and against any and
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110
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal counsel)
which such Agent, Lender or L/C Issuer may incur or be subject to as a
consequence, direct or indirect, of (1) the issuance of any Letter of Credit or
guaranty thereof, other than primarily as a result of the gross negligence or
willful misconduct of the Agent, Lender or L/C Issuer seeking indemnification
(as finally determined by a court of competent jurisdiction after all possible
appeals have been exhausted) or (2) the failure of any Agent, any Lender or any
L/C Issuer to honor a demand for payment under or in connection with any Letter
of Credit or guaranty thereof as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government
or Governmental Authority.
As among Administrative Agent, any Lender and any L/C Issuer and
US Borrower, US Borrower assumes all risks of the acts and omissions of, or
misuse of any Letter of Credit by beneficiaries of any Letter of Credit. In
furtherance and not in limitation of the foregoing, to the fullest extent
permitted by law neither Administrative Agent, any L/C Issuer nor any Lender
shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of any Letter of Credit to comply fully
with conditions required in order to demand payment under such Letter of
Credit; provided that, in the case of any payment by Administrative Agent, any
Lender or any L/C Issuer under or in connection with any Letter of Credit or
guaranty thereof, Administrative Agent or any L/C Issuer has not acted with
gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction after all possible appeals have been exhausted) in
determining that the demand for payment under such Letter of Credit or guaranty
thereof complies on its face with any applicable requirements for a demand for
payment under such Letter of Credit or guaranty thereof; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) for errors in interpretation of technical terms; (vi) for any loss
or delay in the transmission or otherwise of any document required in order to
make a payment under any Letter of Credit or guaranty thereof or of the
proceeds thereof; (vii) for the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (viii) for any consequences arising
from causes beyond the control of Administrative Agent, any Lender or any L/C
Issuer. None of the above shall affect, impair, or prevent the vesting of any
of Administrative Agent's, any L/C Issuer's or any Lender's rights or powers
hereunder or under the Agreement.
B-4
111
SCHEDULE C-1 (Section 1.6)
to
CREDIT AGREEMENT
ELIGIBLE ACCOUNTS
Eligible Accounts shall include all Accounts of US Borrower,
except any Account:
(a) which does not arise from the sale of goods or the
performance of services by US Borrower in the ordinary course of its business
or which constitutes payments receivable under leases for Eligible On-Lease
Inventory;
(b) upon which (i) US Borrower's right to receive payment is
not absolute or is contingent upon the fulfillment of any condition whatsoever
or (ii) US Borrower is not able to bring suit or otherwise enforce its remedies
against the Account Debtor through judicial process;
(c) against which is asserted any defense, counterclaim,
setoff or dispute;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the Account Debtor obligated upon such
Account;
(e) with respect to which an invoice, acceptable to
Administrative Agent in form and substance, has not been sent;
(f) that (i) is not owned by US Borrower or (ii) is subject to
any right, claim, security interest or other interest of any other Person,
other than the Lien in favor of Administrative Agent, on behalf of itself and
Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of US Borrower or any Subsidiary (other than operating
companies in which First Reserve or DPI is an investor so long as the same
arise in the ordinary course on an arm's-length basis);
(h) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, unless
Administrative Agent, in its sole discretion, has agreed to the contrary in
writing and the US Borrower, if necessary or desirable, has complied with the
Federal Assignment of Claims Act of 1940, and any amendments thereto, with
respect to such obligation;
(i) that is the obligation of an Account Debtor not located in
the United States or Canada (other than the provinces of Xxxxxx Xxxxxx Island,
Newfoundland and Nova Scotia and the Northwest Territories) unless such Account
Debtor has supplied the US Borrower with an irrevocable letter of credit
denominated in U.S. Dollars in form and substance satisfactory to the
C-1-1
112
Administrative Agent, issued by a financial institution satisfactory to the
Administrative Agent, sufficient to cover the applicable Account and without
right to setoff;
(j) that is the obligation of an Account Debtor to whom US
Borrower or any Subsidiary is liable for goods sold or services rendered by the
Account Debtor to US Borrower or any Subsidiary (but such Account shall be
ineligible only to the extent of such liability);
(k) that arises with respect to goods which are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may
be conditional;
(l) that is in default; provided that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier of: sixty (60)
days following its due date or ninety (90) days following its original
invoice date;
(ii) if any Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or
fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership,
insolvency relief or other law or laws for the relief of debtors;
(m) which is the obligation of an Account Debtor that is in
default (as defined in subparagraph (l)(i) above) on fifty percent (50%) or
more of the dollar amount of Accounts upon which such Account Debtor is
obligated;
(n) as to which Administrative Agent's security interest, on
behalf of itself and Lenders, therein is not a first priority perfected
security interest or as to which any other Person has a security interest;
(o) as to which any of the representations or warranties
pertaining to Accounts set forth in the Agreement or any of the other Loan
Documents is untrue;
(p) to the extent such Account exceeds any credit limit
established by Administrative Agent in its reasonable discretion;
(q) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper; or
(r) which is otherwise unacceptable to Administrative Agent in
its reasonable discretion.
C-1-2
113
SCHEDULE C-2 (Section 1.6)
to
CREDIT AGREEMENT
ELIGIBLE ACCOUNTS
Eligible Accounts shall include all Accounts of UK Borrower,
except any Account:
(a) which does not arise from the sale of goods or the
performance of services by UK Borrower in the ordinary course of its business;
(b) upon which (i) UK Borrower's right to receive payment is
not absolute or is contingent upon the fulfillment of any condition whatsoever
or (ii) UK Borrower is not able to bring suit or otherwise enforce its remedies
against the Account Debtor through judicial process;
(c) against which is asserted any defense, counterclaim,
setoff or dispute;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the Account Debtor obligated upon such
Account;
(e) with respect to which an invoice, acceptable to
Administrative Agent in form and substance, has not been sent;
(f) that (i) is not owned by UK Borrower or (ii) is subject to
any right, claim, security interest or other interest of any other Person,
other than the Lien in favor of Administrative Agent, on behalf of itself and
Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of UK Borrower, US Borrower or any Subsidiary (other than
operating companies in which First Reserve or DPI is an investor so long as the
same arise in the ordinary course on an arm's-length basis);
(h) that is the obligation of an Account Debtor not located in
England unless such Account Debtor has supplied UK Borrower with an irrevocable
letter of credit denominated in U.S. Dollars in form and substance satisfactory
to the Administrative Agent, issued by a financial institution satisfactory to
the Administrative Agent, sufficient to cover the applicable Account and
without right to setoff;
(i) that is the obligation of an Account Debtor to whom UK
Borrower, US Borrower or any Subsidiary is liable for goods sold or services
rendered by the Account Debtor to UK Borrower, US Borrower or any Subsidiary
(but such Account shall be ineligible only to the extent of such liability);
C-2-1
114
(j) that arises with respect to goods which are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may
be conditional;
(k) that is in default; provided that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier of: sixty (60)
days following its due date or ninety (90) days following its original
invoice date;
(ii) if any Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or
fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other
foreign (including any provincial) receivership, insolvency relief or
other law or laws for the relief of debtors;
(l) which is the obligation of an Account Debtor that is in
default (as defined in subparagraph (l)(i) above) on fifty percent (50%) or
more of the dollar amount of Accounts upon which such Account Debtor is
obligated;
(m) as to which Administrative Agent's security interest, on
behalf of itself and Lenders, therein is not a first priority perfected
security interest or as to which any other Person has a security interest;
(n) as to which any of the representations or warranties
pertaining to Accounts set forth in the Agreement or any of the other Loan
Documents is untrue;
(o) to the extent such Account exceeds any credit limit
established by Administrative Agent in its reasonable discretion;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper; or
(q) which is otherwise unacceptable to Administrative Agent in
its reasonable discretion.
X-0-0
000
XXXXXXXX X-0 (Section 1.7)
to
CREDIT AGREEMENT
ELIGIBLE INVENTORY
Eligible Inventory shall include all Inventory of US Borrower, except
any Inventory which:
(a) is not owned by US Borrower free and clear of all Liens
and rights of any other Person, except the Liens in favor of Administrative
Agent, on behalf of itself and Lenders;
(b) is not (i) located on premises owned, leased or operated
by US Borrower or its Subsidiaries or (ii) stored with a bailee, warehouseman
or similar person, with Administrative Agent's prior consent and, except as
provided in Section 5.11, as to which a satisfactory landlord or bailee letter
has been delivered to Administrative Agent;
(c) is placed on consignment (unless such Inventory otherwise
meets the criteria herein set forth and unless the Administrative Agent shall
otherwise consent), in transit or is otherwise not located on premises owned or
leased by US Borrower;
(d) is covered by a negotiable document of title, unless such
document and evidence of acceptable insurance covering such Inventory have been
delivered to Administrative Agent;
(e) in Administrative Agent's reasonable determination, is
excess, obsolete, unsalable, shopworn, seconds, damaged or unfit for sale;
(f) consists of display items or packing or shipping
materials, work-in-process Inventory or replacement parts for Equipment;
(g) consists of goods which have been returned by the buyer if
defective or otherwise not salable;
(h) is not of a type held for sale in the ordinary course of
US Borrower's business;
(i) as to which Administrative Agent's interest, on behalf of
itself and Lenders, therein is not a first priority perfected security
interest;
(j) as to which any of the representations or warranties
pertaining to Inventory set forth in the Agreement or any of the other Loan
Documents is untrue;
(k) inventory consisting of any costs associated with
"freight-in" charges other than the initial transportation thereof to a
location under US Borrower's control;
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116
(l) is Eligible On-Lease Inventory; or
(m) is otherwise unacceptable to Administrative Agent in its
reasonable discretion.
In addition, Eligible Inventory shall be subject to the reserve
provisions set forth in Section 5.11.
X-0-0
000
XXXXXXXX X-0 (Section 1.7)
to
CREDIT AGREEMENT
ELIGIBLE INVENTORY
Eligible Inventory shall include all Inventory of UK Borrower, except
any Inventory which:
(a) is not owned by UK Borrower free and clear of all Liens
and rights of any other Person, except the Liens in favor of Administrative
Agent, on behalf of itself and Lenders;
(b) is not (i) located on premises owned, leased or operated
by UK Borrower or its Subsidiaries or (ii) stored with a bailee, warehouseman
or similar person, with Administrative Agent's prior consent and, except as
provided in Section 5.11, as to which a satisfactory landlord or bailee letter
has been delivered to Administrative Agent;
(c) is placed on consignment (unless such Inventory otherwise
meets the criteria herein set forth and unless the Administrative Agent shall
otherwise consent), in transit or is otherwise not located on premises owned or
leased by UK Borrower;
(d) is covered by a negotiable document of title, unless such
document and evidence of acceptable insurance covering such Inventory have been
delivered to Administrative Agent;
(e) in Administrative Agent's reasonable determination, is
excess, obsolete, unsalable, shopworn, seconds, damaged or unfit for sale;
(f) consists of display items or packing or shipping
materials, work-in-process Inventory or replacement parts for Equipment;
(g) consists of goods which have been returned by the buyer if
defective or otherwise not salable;
(h) is not of a type held for sale in the ordinary course of
UK Borrower's business;
(i) as to which Administrative Agent's interest, on behalf of
itself and Lenders, therein is not a first priority perfected security
interest;
(j) as to which any of the representations or warranties
pertaining to Inventory set forth in the Agreement or any of the other Loan
Documents is untrue;
(k) inventory consisting of any costs associated with
"freight-in" charges other than the initial transportation thereof to a
location under UK Borrower's control; or
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118
(l) is otherwise unacceptable to Administrative Agent in its
reasonable discretion.
In addition, Eligible Inventory shall be subject to the reserve
provisions set forth in Section 5.11.
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119
SCHEDULE E (Section 1.9)
to
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
US Borrower shall establish and maintain the Cash Management Systems
described below:
(a) On or before the Closing Date and for so long as the
Revolving Credit Loan or any other Obligations are outstanding, US Borrower
shall (i) establish lock boxes ("Lock Boxes") at one or more of the banks set
forth on Schedule 3.22 (each, a "Relationship Bank"), and shall request in
writing and otherwise take such reasonable steps to ensure that all Account
Debtors forward payment directly to such Lock Boxes, and (ii) deposit or cause
to be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any
and all Collateral (whether or not otherwise delivered to a Lock Box) into bank
accounts in US Borrower's name (collectively, the "Borrower Accounts") at
Relationship Banks. On or before the Closing Date, the US Borrower shall have
established a concentration account in US Borrower's name (the "Concentration
Account") at the bank which shall be designated as the Concentration Account
bank on Schedule 3.22 (the "Concentration Account Bank"), in accordance with a
blocked account agreement in form and substance and with such bank as shall be
satisfactory to Administrative Agent, in its sole discretion.
(b) On or before the Closing Date, the Concentration Account
Bank, the bank where the Disbursement Account (as hereinafter defined) is
located and all Relationship Banks, shall have entered into tri-party blocked
account agreements with Administrative Agent, for the benefit of itself and
Lenders, and US Borrower, in form and substance acceptable to Administrative
Agent, which shall become operative on or prior to the Closing Date at the
applicable banks at which accounts are maintained. Each such blocked account
agreement shall provide, among other things, that (i) all items of payment
deposited in such account and proceeds thereof deposited in such Concentration
Account are held by such bank as agent or bailee-in-possession for
Administrative Agent, on behalf of itself and Lenders, (ii) the bank executing
such agreement has no rights of setoff or recoupment or any other claim against
such account, as the case may be, other than for payment of its service fees
and other charges directly related to the administration of such account and
for returned checks or other items of payment, and (iii) from and after the
Closing Date (A) with respect to banks at which a Borrower Account is located,
such bank agrees to forward immediately all amounts in each Borrower Account to
the Concentration Account Bank and to commence the process of daily sweeps from
such Borrower Account into the Concentration Account and (B) with respect to
the Concentration Account Bank, such bank agrees to forward immediately all
amounts received in the Concentration Account to the Collection Account through
daily sweeps from such Concentration Account into the Collection Account.
E-1
120
(c) US Borrower shall cause each Relationship Bank at which
any Borrower Account and Lock Box is located to (i) deposit any checks, drafts
or other similar items of payment received in any Lock Box directly into a
Borrower Account, (ii) forward immediately, and in no event less frequently
than once each Business Day, all amounts in the Borrower Accounts at such bank
to the Concentration Account and (iii) commence, and continue each Business
Day, the process of daily sweeps from each Borrower Account into the
Concentration Account. From and after the Closing Date, US Borrower shall
cause the Concentration Account Bank to forward immediately all amounts
received in the Concentration Account to the Collection Account through daily
sweeps from such Concentration Account into the Collection Account.
(d) So long as no Default or Event of Default has occurred and
is continuing, US Borrower may amend Schedule 3.22 to add or replace a Lock Box
or Borrower Account or to replace the Concentration Account; provided that (i)
Administrative Agent shall have consented in writing to the opening of such
Borrower Account or Lock Box or replacement of the Concentration Account with
the relevant bank and (ii) prior to the time of the opening of such US Borrower
Account or Lock Box or replacement of the Concentration Account, US Borrower
and such bank shall have executed and delivered to Administrative Agent a tri-
party blocked account agreement, in form and substance satisfactory to
Administrative Agent.
(e) The Lock Boxes, Borrower Accounts, Disbursement Account
and the Concentration Account shall be cash collateral accounts, with all cash,
checks and other similar items of payment in such accounts securing payment of
the Loans and all other Obligations, and in which US Borrower shall have
granted a Lien to Administrative Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be
deemed received by Administrative Agent in accordance with Section 1.10 of the
Agreement and shall be applied (and allocated) by Administrative Agent in
accordance with Section 1.11 of the Agreement. In no event shall any amount be
so applied unless and until such amount shall have been credited in immediately
available funds to the Collection Account.
(g) US Borrower may maintain, in its name, an account (the
"Disbursement Account") at a bank acceptable to Administrative Agent into
which, Administrative Agent shall, from time to time, deposit proceeds of
Revolving Credit Advances made pursuant to Section 1.1 for use by US Borrower
solely in accordance with the provisions of Section 1.4.
(h) US Borrower shall (i) hold in trust for the Administrative
Agent, for the benefit of itself and Lenders, all checks, cash and other items
of payment received by US Borrower, and (ii) within one (1) Business Day after
receipt by US Borrower of any checks, cash or other items or payment, deposit
the same into a Borrower Account. US Borrower acknowledges and agrees that all
cash, checks or items of payment constituting proceeds of Collateral are the
property of Administrative Agent and Lenders. All proceeds of the sale or
other disposition of any Collateral, shall be deposited directly into the
Borrower Accounts.
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121
(i) Notwithstanding the foregoing, US Borrower may maintain a
local store cash deposit account at First Xxxxxxx National Bank, X.X. Xxx 00,
Xxxxxx, Xxxxx 00000-0000 (Account No. 00000000) (the "First Xxxxxxx Bank
Account") into which not more than one thousand five hundred dollars ($1,500)
shall be deposited each month and as to which no tri-party blocked account
agreements shall be required; provided that not more than five thousand dollars
($5,000) shall be accumulated at any time in the First Xxxxxxx Bank Account.
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SCHEDULE G (Section 4.1(a))
to
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
US Borrower shall deliver or cause to be delivered to
Administrative Agent or to Administrative Agent and Lenders, as indicated, the
following:
(a) Monthly Financials. To Administrative Agent and Lenders,
within twenty-five (25) days after the end of each Fiscal Month, financial
information regarding Holdings and its Subsidiaries, certified by the Chief
Financial Officer of US Borrower, consisting of consolidated (and consolidating
as to US Borrower, NOW Canada and UK Borrower only) unaudited balance sheets
and statements of income and cash flow for such Fiscal Month and for the period
from the beginning of the then current Fiscal Year to the end of such Fiscal
Month, setting forth in each case, in comparative form, the figures for the
corresponding periods in the preceding Fiscal Year and a comparison to budget
for such Fiscal Year, all prepared in accordance with GAAP (subject to normal
year-end adjustments), with all of such financial information for the last
Fiscal Month of each Fiscal Quarter to be accompanied by a statement in
reasonable detail showing the calculations used in determining compliance with
the financial covenants set forth on Schedule I and a management discussion and
analysis which includes a comparison to budget for that Fiscal Quarter and a
comparison of performance for that period to the corresponding period in the
preceding Fiscal Year.
All of such financial information shall be accompanied by the
certification of the Chief Financial Officer of US Borrower that (i) such
financial information presents fairly in accordance with GAAP (subject to
normal year-end adjustments) the financial position, results of operations and
statements of cash flows of Holdings and its Subsidiaries, on both a
consolidated and consolidating basis, in each case as at the end of such Fiscal
Month and for the period then ended and (ii) any other information presented is
true, correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;
(b) Operating Plan. To Administrative Agent and Lenders, as
soon as available, but not later than thirty (30) days after the end of each
Fiscal Year, an annual operating plan, approved by the Board of Directors of
Holdings, for the following year, which will include a statement of all of the
material assumptions on which such plan is based, will include monthly balance
sheets and a monthly budget for the following year and will integrate sales,
gross profits, operating expenses, operating profit, cash flow projections and
borrowing availability projections, all prepared on the same basis and in
similar detail as that on which operating results are reported (and, in the
case of cash flow projections, representing management's good faith estimates
of future financial performance based on historical performance), and plans for
personnel, Capital Expenditures and facilities;
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123
(c) Annual Audited Financials. To Administrative Agent and
Lenders, within ninety (90) days after the end of each Fiscal Year, audited
financial statements, for Holdings and its Subsidiaries on a consolidated (and
consolidating as to US Borrower, NOW Canada and UK Borrower only) basis,
consisting of balance sheets and statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the figures for the
previous Fiscal Year, which financial statements shall be prepared in
accordance with GAAP, certified without qualification by an independent
certified public accounting firm of national standing or otherwise acceptable
to Administrative Agent, and accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the financial covenants set forth on Schedule I, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that
a Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Administrative Agent, on behalf of itself
and Lenders, in form and substance reasonably satisfactory to Administrative
Agent and subject to standard qualifications taken by nationally recognized
accounting firms, signed by such accounting firm acknowledging that
Administrative Agent and Lenders are entitled to rely upon such accounting
firm's certification of such audited financial statements, (iv) the annual
letters to such accountants in connection with their audit examination
detailing contingent liabilities and material litigation matters and (v) the
certification of the Chief Executive Officer or Chief Financial Officer of US
Borrower that all such financial statements present fairly in accordance with
GAAP the financial position, results of operations and statements of cash flows
of Holdings and its Subsidiaries on a consolidated and consolidating basis, as
at the end of such year and for the period then ended, and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;
(e) Management Letters. To Administrative Agent and Lenders,
within ten (10) Business Days after receipt thereof by Holdings or US Borrower,
copies of all management letters, exception reports or similar letters or
reports from its independent certified public accountants;
(f) Default Notices. To Administrative Agent and Lenders, as
soon as practicable, and in any event within ten (10) Business Days after an
executive officer of US Borrower has actual knowledge of the existence of any
Default, Event of Default or the existence of any other event which has had a
Material Adverse Effect, telephonic or telecopied notice specifying the nature
of such Default or Event of Default or other event including the anticipated
effect thereof, which notice, if given telephonically, shall be promptly
confirmed in writing on the next Business Day;
(g) SEC Filings and Press Releases. To Administrative Agent
and Lenders, promptly upon their becoming available, copies of: (1) all
financial statements, reports, notices and proxy statements made publicly
available by Holdings, US Borrower or any of their respective Subsidiaries to
its security holders; (2) all regular and periodic reports and all registration
statements
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124
and prospectuses, if any, filed by Holdings, US Borrower or any of their
respective Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority or private regulatory
authority; and (3) all press releases and other statements made available by
Holdings, US Borrower or any of their respective Subsidiaries to the public
concerning material adverse changes or developments in the business of any such
Person;
(h) Subordinated Debt and Equity Notices. To Administrative
Agent and Lenders, as soon as practicable, copies of all material written
notices given or received by Holdings, US Borrower or any of their respective
Subsidiaries with respect to any of the Subordinated Debt or Stock of such
Person, and US Borrower shall notify Administrative Agent within two (2)
Business Days after US Borrower obtains knowledge of any matured or unmatured
event of default with respect to the Sellers' Notes or any other Subordinated
Debt;
(i) Supplemental Schedules. To Administrative Agent,
supplemental disclosures, if any, required by Section 5.8.
(j) Insurance Notices. To Administrative Agent, disclosure of
losses or casualties required by Section 5.5;
(k) Claims under Purchase Agreement. To Administrative Agent,
as soon as practicable, and in any event within ten (10) business days after
Holdings or US Borrower makes any indemnity claim or demand under the Purchase
Agreement in excess of $100,000 individually or together with related claims, a
copy of each such claim or demand, together with any other documents of a
material nature delivered to or sent by it in any way relating to such claim or
demand; and
(l) Other Documents. To Administrative Agent and Lenders,
such other financial and other information respecting US Borrower's or any
Subsidiary's businesses, financial condition as Administrative Agent or any
Lender shall, from time to time, request.
Administrative Agent shall deliver copies of materials received
pursuant to paragraphs (i) through (k) above to any Lender requesting copies
thereof in writing.
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125
SCHEDULE H (Section 4.1(b))
to
CREDIT AGREEMENT
COLLATERAL REPORTS
(a) To Administrative Agent and each Lender, upon its request,
and in no event less frequently than fifteen (15) days after the end of each
Fiscal Month, each of the following:
(i) a Borrowing Base Certificate, in each case accompanied by
such supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion;
(ii) a summary of Inventory by location and type with a
supporting perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as shall be requested by
Administrative Agent in its reasonable discretion;
(iii) a monthly trial balance showing Accounts outstanding aged
from invoice due date as follows: 1 to 30 days, 31 to 60 days, 61 to 90
days and 90 days or more, accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its
reasonable discretion; and
(iv) upon the request of Administrative Agent from time to time
(together with a copy of all or any part of such delivery requested by
any Lender in writing after the Closing Date), collateral reports
including all additions and reductions (cash and non-cash) with respect
to Accounts, in each case accompanied by such supporting detail and
documentation as shall be requested by Administrative Agent in its
reasonable discretion;
(b) To Administrative Agent, at the time of delivery of each
of the monthly financial statements delivered pursuant to Schedule G, a
reconciliation of the Accounts trial balance and month-end Inventory reports to
the applicable Borrower's general ledger and monthly financial statements
delivered pursuant to such Schedule G, in each case accompanied by such
supporting detail and documentation as shall be requested by Administrative
Agent in its reasonable discretion;
(c) To Administrative Agent, at the time of delivery of the
financial statements for the last Fiscal Month of each Fiscal Quarter delivered
pursuant to Schedule G, a listing, as to US Borrower only, of government
contracts subject to the Federal Assignment of Claims Act of 1940;
(d) Each Borrower, at its own expense, shall deliver to
Administrative Agent the results of each physical verification, if any, which
such Borrower may in its discretion have made, or caused any other Person to
have made on its behalf, of all or any portion of its Inventory; and
H-1
126
(e) Such other reports, statements and reconciliations with
respect to the Borrowing Base or Collateral as Administrative Agent shall from
time to time request in its reasonable discretion.
H-2
127
SCHEDULE I (Section 6.10)
to
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrowers and their
Subsidiaries on a consolidated basis shall not make Capital Expenditures
(other than Capital Expenditures incurred as part of a Permitted
Acquisition) during the following periods that exceed in the aggregate
the amounts set forth opposite each of such periods:
Period Maximum Capital
------ ---------------
Expenditures per Period
-----------------------
Fiscal Year 1996 $ 6,000,000
---------------------
Fiscal Year 1997 $ 8,000,000
---------------------
Fiscal Year 1998 $ 8,000,000
---------------------
Fiscal Year 1999
and each Fiscal Year thereafter $ 10,000,000
---------------------
(b) Minimum Net Worth. Borrowers and their Subsidiaries on a
consolidated basis shall maintain at all times during each of the Fiscal
Years set forth below, a minimum Net Worth equal to or greater than the
following:
Period Minimum Net Worth
------ -----------------
per Period
----------
Fiscal Year 1997 $ 40,000,000
----------------
Fiscal Year 1998 $ 51,300,000
----------------
Fiscal Year 1999 $ 64,700,000
----------------
Fiscal Year 2000 $ 79,700,000
----------------
Fiscal Year 2001 $ 85,000,000
----------------
(c) Minimum Interest Coverage Ratio. Borrowers and their
Subsidiaries on a consolidated basis shall have at the end of each
Fiscal Quarter set forth below, an Interest Coverage Ratio for the 12-
month period then ended, of not less than the following:
3.5 to 1 for the Fiscal Quarter ending December 31, 1996;
4.1 to 1 for each Fiscal Quarter ending during Fiscal Year 1997;
4.5 to 1 for each Fiscal Quarter ending during Fiscal Year 1998
and for each Fiscal Quarter ending thereafter.
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128
SCHEDULE J (Section 11.10)
to
CREDIT AGREEMENT
(a) If to Administrative Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxx Xxxxxxx Xxxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: National-Oilwell Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) If to any Lender (copies should also be sent
in accordance with paragraph (a) above)
BTM Capital Corporation
Xxxxxxx Xxxx Xxxxxx
Xxxxx 0000
0000 Xxxx Xxxxxx
X.X. 101
Xxxxxx, Xxxxx 00000
Attention: H. Xxxxxx Xxxx, Vice President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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129
BNY Commercial Corporation
1290 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx, Vice President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Mitsubishi Trust
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Le Fevre, Vice President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Sanwa Business Credit
000 Xxxxxxxxxx Xxxxxx Xxxx
0xx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(c) If to either Borrower, at
National-Oilwell
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
National-Oilwell
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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130
SCHEDULE K (Section 9.10(a)(iii))
to
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
1. For The Bank of New York Commercial Corporation:
The Bank of New York
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Account No.: 0000016608
ABA No.: 000000000
Re: National-Oilwell
Attn: Guardatt Xxxxxxxx
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
2. For Sanwa Business Credit Corporation:
Xxxxxx Bank & Trust Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Account No.: 000-000-0
ABA No.: 000-000-000
Re: National-Oilwell
Attn: Xxxxxx Xxxxxx, Operations Supervisor
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
3. For BTM Capital Corporation:
Bank of Boston
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Account No.: 521-11235
ABA No.: 000-000-000
Attn: Xxx Xxxxxxx
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
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131
4. For The Mitsubishi Trust and Banking Corporation:
Bankers Trust
0 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Account No.: MTBC, New York
MTBC Account No.: 00000000
ABA No.: 0000-0000-0
Ref.: SL-840 National-Oilwell
Attn: Loan Administration
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
K-2
