EXHIBIT 4.7
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CREDIT AGREEMENT
Dated as of March 6, 1997
among
PRIDE PETROLEUM SERVICES, INC.,
as Borrower,
FIRST NATIONAL BANK OF COMMERCE,
as Arranger and Syndication Agent,
and
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
as Administrative and Documentation Agent
$100,000,000
OF CREDIT FACILITIES
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................1
Section 1.1 DEFINITIONS.............................................1
Section 1.2 OTHER DEFINITIONAL PROVISIONS..........................20
ARTICLE II ADVANCES........................................................20
Section 2.1 ADVANCES...............................................20
Section 2.2 NOTES..................................................20
Section 2.3 REPAYMENT OF ADVANCES..................................21
Section 2.4 INTEREST...............................................21
Section 2.5 BORROWING PROCEDURE....................................21
Section 2.6 CONVERSIONS AND CONTINUATIONS..........................22
Section 2.7 USE OF PROCEEDS........................................22
Section 2.8 COMMITMENT FEE.........................................23
Section 2.9 VOLUNTARY REDUCTION OR TERMINATION OF COMMITMENTS......23
Section 2.10 MANDATORY COMMITMENT REDUCTIONS AND PRINCIPAL PAYMENTS.23
Section 2.11 LENDERS' COMMITMENT REDUCTION..........................23
Section 2.12 ADMINISTRATIVE FEE.....................................24
ARTICLE III LETTERS OF CREDIT...............................................24
Section 3.1 LETTERS OF CREDIT......................................24
Section 3.2 PROCEDURE FOR ISSUING LETTERS OF CREDIT................24
Section 3.3 PARTICIPATION BY LENDERS...............................25
Section 3.4 PAYMENTS CONSTITUTE ADVANCES...........................25
Section 3.5 LETTER OF CREDIT FEE...................................25
Section 3.6 ISSUER'S RESPONSIBILITIES..............................25
Section 3.7 LETTER OF CREDIT DOCUMENTS.............................26
ARTICLE IV PAYMENTS........................................................26
Section 4.1 METHOD OF PAYMENT......................................26
Section 4.2 VOLUNTARY PREPAYMENT...................................26
Section 4.3 MANDATORY PREPAYMENT...................................27
Section 4.4 PRO RATA TREATMENT.....................................27
Section 4.5 NON-RECEIPT OF FUNDS...................................27
Section 4.6 WITHHOLDING TAXES......................................28
Section 4.7 WITHHOLDING TAX EXEMPTION..............................28
Section 4.8 AUTOMATIC PAYMENT......................................28
ARTICLE V YIELD PROTECTION; LIMITATIONS ON ADVANCES;
CAPITAL ADEQUACY.....................................29
Section 5.1 ADDITIONAL COSTS.......................................29
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TABLE OF CONTENTS
(continued)
PAGE
Section 5.2 LIMITATION ON TYPES OF ADVANCES........................30
Section 5.3 ILLEGALITY.............................................31
Section 5.4 SUBSTITUTE BASE RATE ADVANCES..........................31
Section 5.5 COMPENSATION...........................................31
Section 5.6 CAPITAL ADEQUACY.......................................32
Section 5.7 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT.......32
ARTICLE VI SECURITY........................................................33
Section 6.1 COLLATERAL.............................................33
Section 6.2 SETOFF.................................................34
Section 6.3 OTHER SUBSIDIARIES.....................................34
ARTICLE VII CONDITIONS PRECEDENT...................................35
Section 7.1 INITIAL EXTENSION OF CREDIT............................35
Section 7.2 ALL EXTENSIONS OF CREDIT...............................38
ARTICLE VIII REPRESENTATIONS AND WARRANTIES.........................38
Section 8.1 EXISTENCE AND AUTHORITY................................38
Section 8.2 FINANCIAL STATEMENTS...................................39
Section 8.3 CORPORATE ACTION; NO BREACH............................39
Section 8.4 OPERATION OF BUSINESS..................................39
Section 8.5 LITIGATION AND JUDGMENTS...............................40
Section 8.6 RIGHTS IN PROPERTIES; LIENS............................40
Section 8.7 ENFORCEABILITY.........................................40
Section 8.8 APPROVALS..............................................40
Section 8.9 DEBT...................................................40
Section 8.10 TAXES..................................................40
Section 8.11 USE OF PROCEEDS; MARGIN SECURITIES.....................41
Section 8.12 ERISA..................................................41
Section 8.13 DISCLOSURE.............................................41
Section 8.14 SUBSIDIARIES; FOREIGN AFFILIATES.......................41
Section 8.15 AGREEMENTS.............................................42
Section 8.16 COMPLIANCE WITH LAWS...................................42
Section 8.17 INVESTMENT COMPANY ACT.................................42
Section 8.18 PUBLIC UTILITY HOLDING COMPANY ACT.....................42
Section 8.19 ENVIRONMENTAL MATTERS..................................42
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IX AFFIRMATIVE COVENANTS...........................................42
Section 9.1 REPORTING REQUIREMENTS.................................43
Section 9.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS..........44
Section 9.3 MAINTENANCE OF PROPERTIES..............................45
Section 9.4 TAXES AND CLAIMS.......................................45
Section 9.5 INSURANCE..............................................45
Section 9.6 INSPECTION RIGHTS......................................45
Section 9.7 KEEPING BOOKS AND RECORDS..............................46
Section 9.8 COMPLIANCE WITH LAWS AND AGREEMENTS....................46
Section 9.9 FURTHER ASSURANCES.....................................46
Section 9.10 ERISA..................................................46
ARTICLE X NEGATIVE COVENANTS..............................................46
Section 10.1 DEBT...................................................46
Section 10.2 LIMITATION ON LIENS....................................47
Section 10.3 MERGERS, ACQUISITIONS, ETC.............................48
Section 10.4 RESTRICTED PAYMENTS....................................49
Section 10.5 LOANS AND INVESTMENTS..................................49
Section 10.6 TRANSACTIONS WITH AFFILIATES...........................50
Section 10.7 DISPOSITION OF ASSETS..................................50
Section 10.8 SALE AND LEASEBACK.....................................50
Section 10.9 NATURE OF BUSINESS.....................................50
Section 10.10 ENVIRONMENTAL PROTECTION...............................50
Section 10.11 ACCOUNTING.............................................51
ARTICLE XI FINANCIAL COVENANTS.............................................51
Section 11.1 FUNDED DEBT TO EBITDA..................................51
Section 11.2 FUNDED DEBT TO CAPITALIZATION..........................51
Section 11.3 COVERAGE RATIO.........................................51
Section 11.4 TANGIBLE NET WORTH.....................................51
ARTICLE XII DEFAULT................................................52
Section 12.1 EVENTS OF DEFAULT......................................52
Section 12.2 REMEDIES UPON DEFAULT..................................54
Section 12.3 CASH COLLATERAL........................................54
Section 12.4 PERFORMANCE BY THE ADMINISTRATIVE AGENT................55
ARTICLE XIII THE AGENTS.............................................55
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TABLE OF CONTENTS
(continued)
PAGE
Section 13.1 APPOINTMENT, POWERS AND IMMUNITIES.....................55
Section 13.2 RIGHTS OF AGENTS AS LENDERS............................57
Section 13.3 SHARING OF PAYMENTS, ETC...............................57
Section 13.4 INDEMNIFICATION........................................58
Section 13.5 INDEPENDENT CREDIT DECISIONS...........................58
Section 13.6 SEVERAL COMMITMENTS....................................59
Section 13.7 SUCCESSOR ADMINISTRATIVE AGENT.........................59
ARTICLE XIV MISCELLANEOUS..........................................59
Section 14.1 EXPENSES...............................................59
Section 14.2 INDEMNIFICATION........................................60
Section 14.3 LIMITATION OF LIABILITY................................61
Section 14.4 NO FIDUCIARY RELATIONSHIP..............................61
Section 14.5 NO WAIVER; CUMULATIVE REMEDIES.........................61
Section 14.6 SUCCESSORS AND ASSIGNS.................................61
Section 14.7 SURVIVAL...............................................64
Section 14.8 ENTIRE AGREEMENT.......................................64
Section 14.9 AMENDMENTS, ETC........................................65
Section 14.10 MAXIMUM INTEREST RATE..................................65
Section 14.11 NOTICES................................................66
Section 14.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS...............66
Section 14.13 COUNTERPARTS...........................................66
Section 14.14 SEVERABILITY...........................................67
Section 14.15 HEADINGS...............................................67
Section 14.16 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE.....67
Section 14.17 CONSTRUCTION...........................................67
Section 14.18 INDEPENDENCE OF COVENANTS..............................67
Section 14.19 WAIVER OF JURY TRIAL...................................67
Section 14.20 ARBITRATION............................................67
Section 14.21 SPECIAL PROVISION......................................69
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 6, 1997, is among PRIDE PETROLEUM
SERVICES, INC., a Louisiana corporation (the "Borrower"), each of the banks or
other lending institutions which is or may from time to time become a signatory
hereto or any successor or permitted assignee thereof (each a "Lender" and,
collectively, the "Lenders"), FIRST NATIONAL BANK OF COMMERCE, a national
banking association ("FNBC"), as arranger and syndication agent for the Lenders
(in such capacity, together with its successors in such capacity, the
"Syndication Agent"), and XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION, a
national banking association ("Xxxxx"), as administrative and documentation
agent for the Lenders and as issuer of Letters of Credit hereunder (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
R E C I T A L S:
The Borrower has requested the Lenders to extend credit to the Borrower in
the form of revolving credit advances and letters of credit not to exceed an
aggregate principal amount of $100,000,000 at any time outstanding. The Lenders
are willing to make such extensions of credit to the Borrower upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following terms
have the following meanings:
"AAA" has the meaning specified in Section 14.20(b).
"ACCEPTABLE COLLATERAL" means one or more marine or domestic assets
reasonably acceptable in all respects to the Administrative Agent using
its reasonable business judgment, having a fair market value (as
determined by an appraisal reasonably acceptable in form and substance to
the Administrative Agent) of not less than $40,000,000.
"ADDITIONAL COSTS" has the meaning specified in Section 5.1.
"ADMINISTRATIVE AGENT" has the meaning specified in the introductory
paragraph hereof.
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"ADVANCE" means an advance of funds by the Lenders or any one of
them to the Borrower pursuant to Article II or Section 3.4.
"ADVANCE REQUEST FORM" means a certificate, in substantially the
form of Exhibit "A" hereto, properly completed and signed by the Borrower
requesting an Advance.
"AFFILIATE" means, as to any Person, any other Person that directly
or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or
otherwise; PROVIDED, however, in no event shall any Agent or any Lender be
deemed an Affiliate of the Borrower, any of the Subsidiaries, or any of
the Foreign Affiliates.
"AGENTS" means, collectively, the Administrative Agent and the
Syndications Agent.
"APPLICABLE FOREIGN ADVANCE RATE" means the percentage of Eligible
Foreign Accounts to be included in the Borrowing Base, as determined in
accordance herewith and calculating the value of those not payable in
Dollars at their Dollar-equivalent using the applicable Exchange Rate.
From the date hereof until September 1, 1997, the Applicable Foreign
Advance Rate for each of the following types of Eligible Foreign Accounts
shall be the percentage indicated therefor in the table set forth below:
ELIGIBLE FOREIGN APPLICABLE FOREIGN
ACCOUNT ADVANCE RATE
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Majors/Nationals ................................................ 80%
Argentina Accounts .............................................. 50%
Venezuela Accounts .............................................. 40%
Colombia Accounts ............................................... 50%
Other Countries Accounts ........................................ 30%
On September 1, 1997 and on each March 1 and September 1 thereafter the
Administrative Agent shall have the right to adjust the Applicable Foreign
Advance Rates for the various types of Eligible Foreign Accounts and to
identify other categories of Eligible Foreign Accounts with different
Applicable Foreign Advance Rates. The adjustment and determination of the
Applicable Foreign Advance Rates shall be made by the Administrative Agent
using its reasonable business judgment, with the concurrence of the
Lenders taking into account such factors and criteria as Administrative
Agent shall reasonably deem relevant. The above-specified types of
Eligible Foreign Accounts are defined below:
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"MAJORS/NATIONALS" means accounts receivable of the Borrower
or a Subsidiary that are owing from foreign operations of major
United States petroleum companies, national oil companies of various
jurisdictions, other international oil companies and other major oil
companies that have been pre-approved by the Administrative Agent at
80% Foreign Advance Rate, all as identified by the Borrower on
Schedule 1.1, together with such other petroleum companies as the
Administrative Agent and the Lenders may approve in writing from
time to time.
"ARGENTINA ACCOUNTS" means accounts receivable of the Borrower
or a Subsidiary that originate or arise in Argentina or are owed by
an Argentina account debtor, other than Majors/Nationals.
"VENEZUELA ACCOUNTS" means accounts receivable of the Borrower
or a Subsidiary that originate or arise in Venezuela or are owed by
a Venezuela account debtor, other than Majors/Nationals.
"COLOMBIA ACCOUNTS" means accounts receivable of the Borrower
or a Subsidiary that originate or arise in Colombia or are owed by a
Colombia account debtor, other than Majors/Nationals.
"OTHER COUNTRIES ACCOUNTS" means accounts receivable the
Borrower or a Subsidiary that originate or arise in a country other
than the United States, Argentina, Venezuela and Colombia, or are
owed by an account debtor located or domiciled in such other
country, other than Majors/Nationals.
"APPLICABLE LENDING OFFICE" means for each Lender and each Type of
Advance, the lending office of such Lender (or of an Affiliate of such
Lender) designated for such Type of Advance below its name on the
signature pages hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to
the Borrower and the Administrative Agent as the office by which its
Advances of such Type are to be made and maintained.
"APPLICABLE MARGIN" means, for any day, (a) with respect to
Eurodollar Advances, the marginal interest rate over the Eurodollar Rate
that is applicable when any Applicable Rate based on the Eurodollar Rate
is determined under this Agreement, and (b) with respect to Base Rate
Advances, the marginal interest rate over the Base Rate that is applicable
when any Applicable Rate based on the Base Rate is determined under this
Agreement. The Applicable Margin shall be 2% for Eurodollar Advances and
0.50% for Base Rate Advances from the date hereof through December 31,
1997. Beginning January 1, 1998, the Applicable Margin is subject to
adjustment (upwards or downwards, as appropriate), as indicated in the
table and text set forth below:
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S&P/XXXXX'X
RATIO OF RATING OF BORROWER'S APPLICABLE MARGIN APPLICABLE MARGIN
FUNDED DEBT TO UNSECURED FOR EURODOLLAR FOR BASE
EBITDA SENIOR DEBT ADVANCES RATE ADVANCES
------ ----------- -------- -------------
Less than 1.50 to 1.00 BBB-/Baa3 or higher 1.25% 0.50%
Greater than or equal to 1.50 to BB to BB+/ 1.50% 0.50%
1.00, but less than 2.00 to 1.00 Ba2 to Ba3
Greater than or equal to 2.00 to BB-/Ba1 1.75% 0.50%
1.00, but less than 2.50 to 1.00
Greater than or equal to 2.50 to
1.00 B+/B1 2.00% 0.50%
On January 1, 1998 and on each Quarterly Payment Date thereafter, the
Applicable Margin shall be adjusted to reflect the Applicable Margin which
is the lower of (a) the Applicable Margin prescribed above for the ratio
of the Funded Debt to EBITDA for the most recently ended Rolling Period
demonstrated by the most recently delivered Compliance Certificate, or (b)
the Applicable Margin prescribed above for the S&P and Xxxxx'x rating of
the Borrower's unsecured senior debt as of such date as set forth in the
most recently published ratings by S&P and Xxxxx'x then publicly
available. In the event of a difference in rating between S&P and Xxxxx'x,
the lower rating shall be used, which may result in a higher Applicable
Margin. After each adjustment of the Applicable Margin in accordance
herewith, the new Applicable Margin shall apply to all Advances made or
outstanding thereafter until the next Quarterly Payment Date that another
Applicable Margin is applicable. Upon the request of the Administrative
Agent, the Borrower must demonstrate to the reasonable satisfaction of the
Administrative Agent the required applicable ratio in order to obtain an
adjustment to a lower Applicable Margin. If the Borrower fails to furnish
to the Administrative Agent any Compliance Certificate by the date
required by this Agreement, then the maximum Applicable Margin shall apply
at all times after such date for all Advances made or outstanding after
such date until the Borrower furnishes the required Compliance Certificate
to the Administrative Agent.
"APPLICABLE RATE" means: (i) during the period that an Advance is a
Base Rate Advance, the Base Rate plus the Applicable Margin; and (ii)
during the period that an Advance is a Eurodollar Advance, the Eurodollar
Rate plus the Applicable Margin.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and its assignee and accepted by the
Administrative Agent pursuant to Section 14.6, in substantially the form
of Exhibit "B" hereto.
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"BASE RATE" means as of any date of determination, a rate per annum
(rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to the
greater of (a) the Prime Rate in effect on such day, or (b) the sum of the
Federal Funds Effective Rate in effect on such day plus 0.5%. If for any
reason the Administrative Agent shall have determined (which determination
shall be PRIMA FACIE correct) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure
after diligent effort of the Administrative Agent to obtain sufficient
quotations in accordance with the definition of Federal Funds Effective
Rate, the Base Rate shall be determined without regard to clause (b) of
the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively, without
notice to the Borrower.
"BASE RATE ADVANCES" means Advances that bear interest based upon
the Base Rate.
"BORROWER" has the meaning specified in the introductory paragraph.
"BORROWER PLEDGE AGREEMENT" means the Pledge Agreement of the
Borrower in favor of the Administrative Agent in substantially the form of
Exhibit "C" hereto, as the same may be amended, supplemented, or modified
from time to time.
"BORROWER SECURITY AGREEMENT" means the Security Agreement of the
Borrower in favor of the Administrative Agent in substantially the form of
Exhibit "D" hereto, as the same may be amended, supplemented, or modified
from time to time.
"BORROWING BASE" means, at any time, an amount equal to the sum of
(a) 80% of Eligible Domestic Accounts, plus (b) the Applicable Foreign
Advance Rate of each Eligible Foreign Account, plus (c) the lesser of (i)
the amount equal to 40% of the aggregate amount of the Commitments or (ii)
70% of the fair market value of Eligible Acceptable Collateral.
"BUSINESS DAY" means (a) any day on which national banks in Houston,
Texas are open for the conduct of commercial banking business, and (b)
with respect to all borrowings, payments, Conversions, Continuations,
Interest Periods, and notices in connection with each Eurodollar Advance,
any day which is a Business Day described in clause (a) above and which is
also a day on which dealings in Dollar deposits are carried out in the
London eurodollar interbank market.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) real and/or personal property, which
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP. For purposes of this
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Agreement, the amount of such Capital Lease Obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"CAPITALIZATION" means the sum of Funded Debt plus Net Worth.
"CHANGE IN CONTROL" means the acquisition by any Person or two or
more Persons acting in concert of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, or any
successor provision thereto) of 50% or more of the voting stock and the
other voting equity interests of the Borrower.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"COLLATERAL" has the meaning specified in Section 6.1.
"COMMITMENT" means, as to each Lender, the obligation of such Lender
to make Advances pursuant to Section 2.1 and issue or participate in
Letters of Credit pursuant to Sections 3.1 and 3.3 in an aggregate
principal amount at any time outstanding up to but not exceeding the
amount set forth opposite the name of such Lender on the signature pages
hereto under the heading "Commitment", as such amount may be reduced
pursuant to Section 2.9, 2.10 or 2.11 or terminated pursuant to Section
2.9, Section 12.2 or Section 14.21.
"COMPLIANCE CERTIFICATE" means a certificate of the president, chief
executive officer, chief financial officer or corporate controller of the
Borrower, in the form of Exhibit "E" hereto, with appropriate completions.
"CONDITIONAL CONSENT" means the consent, at the request of the
Borrower or the Administrative Agent, of Lenders consisting of at least
the Required Lenders to a waiver or amendment of Sections 10.1 or 10.3, or
both.
"CONTINGENT LIABILITIES" means, as applied to any Person, those
direct or indirect liabilities of that Person (other than non-monetary
performance obligations) with respect to any Debt, lease, dividend, letter
of credit or other obligation (the "PRIMARY OBLIGATIONS") of another
Person (the "PRIMARY OBLIGOR"), including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary
obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, or (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the
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primary obligor to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof. The amount of any Contingent
Liabilities shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Liabilities are made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined
by the Borrower in good faith.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Advance as a
Eurodollar Advance from one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to Section 2.6 or Article V of one Type of Advance into another
Type of Advance.
"COVERAGE RATIO" means, as of any date, the ratio of (a) EBITDA for
the Rolling Period then most recently ended on such date, minus capital
expenditures that are not financed with Debt, cash income taxes paid,
dividends paid and treasury stock purchases of the Borrower and the
Subsidiaries on a consolidated basis paid during such period to (b)
interest expense of the Borrower and the Subsidiaries on a consolidated
basis for such period, plus the portion of long-term Debt of the Borrower
and the Subsidiaries on a consolidated basis that was scheduled for
repayment during such period.
"DEBT" means as to any Person at any time (without duplication): (a)
all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar
instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable of
such Person arising in the ordinary course of business (d) all Capital
Lease Obligations of such Person, (e) all Debt or other obligations of
others Guaranteed by such Person, (f) all obligations secured by a Lien
existing on property owned by such Person, whether or not the obligations
secured thereby have been assumed by such Person or are non-recourse to
the credit of such Person, (g) all Contingent Liabilities and
reimbursement obligations of such Person (whether contingent or otherwise)
in respect of letters of credit, bankers' acceptances, surety or other
bonds and similar instruments, and (h) all liabilities of such Person in
respect of unfunded vested benefits under any Plan.
"DEFAULT" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event
of Default.
"DEFAULT RATE" means the lesser of the Maximum Rate or the sum of
the Base Rate in effect from day to day plus 5%.
"DISPUTE" has the meaning specified in Section 14.20(a).
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"DOLLARS" and "$" mean lawful money of the United States of America.
"DOMESTIC ACCOUNTS" means all accounts receivable of the Borrower
and the Domestic Subsidiaries, or any of them, with respect to which the
account debtor is domiciled or doing business in the United States of
America.
"DOMESTIC SUBSIDIARY" means each Subsidiary other than the Foreign
Subsidiaries.
"EBITDA" means net income of the Borrower and the Subsidiaries on a
consolidated basis (less any non-cash income included in net income),
plus, to the extent that any of the following were deducted in calculating
such net income, interest expense, tax expenses, depreciation and
amortization but excluding all extraordinary items of income and loss.
"ELIGIBLE ACCEPTABLE COLLATERAL" means, at any time, all Acceptable
Collateral then owned by (and in the possession or under the control of)
the Borrower or any Domestic Subsidiary, in which the Administrative Agent
has a perfected, first priority security interest.
"ELIGIBLE ACCOUNTS" means, at any time, all Domestic Accounts and
Foreign Accounts created in the ordinary course of business that are
acceptable to the Administrative Agent using its reasonable business
judgment and satisfy the following conditions:
(a) The account complies with all applicable laws, rules, and
regulations, including, without limitation, usury laws, the Federal
Truth in Lending Act, and Regulation Z of the Board of Governors of
the Federal Reserve System;
(b) The account has been billed and has not been outstanding
for more than 90 days past the original date of invoice;
(c) The account was created in connection with (i) the sale of
goods by the Borrower or any Subsidiary in the ordinary course of
business and such sale has been consummated and such goods have been
shipped and delivered and received by the account debtor, or (ii)
the performance of services by the Borrower or any Subsidiary in the
ordinary course of business and the portion of such services billed
by the Borrower and its Subsidiaries have been completed and
accepted by the account debtor;
(d) The account arises from an enforceable contract, the
performance of which has been completed by the Borrower or any
Subsidiary for the portion billed;
(e) The account does not include any progress xxxxxxxx for
which xxxxxxxx the services have not been completed and accepted by
the account debtor;
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(f) The account does not arise from the sale of any good that
is on a xxxx-and-hold, guaranteed sale, sale-or-return, sale on
approval, consignment, or any other repurchase or return basis;
(g) The Borrower or any Subsidiary has good and indefeasible
title to the account and the account is not subject to any Lien
except Liens in favor of the Administrative Agent and Liens
permitted by Section 10.2;
(h) The account does not arise out of a contract with or order
from an account debtor that prohibits or makes void or unenforceable
the grant of a security interest by the Borrower or any Subsidiary
to the Administrative Agent in and to such account;
(i) The account is not subject to any setoff, counterclaim,
defense, dispute, recoupment, or adjustment other than normal
discounts for prompt payment or contra accounts as set forth below;
(j) The account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceeding and has not made an assignment
for the benefit of creditors, suspended normal business operations,
dissolved, liquidated, terminated its existence, ceased to pay its
debts as they become due, or suffered a receiver or trustee to be
appointed for any of its assets or affairs;
(k) The account is not evidenced by chattel paper or an
instrument;
(l) No payment default exists under the account by any party
thereto;
(m) The account debtor has not returned or refused to retain,
or otherwise notified the Borrower or any Subsidiary of any dispute
concerning, or claimed nonconformity of, any of the goods from the
sale of which the account arose;
(n) The account is not owed by an employee or Affiliate of the
Borrower or any Subsidiary;
(o) The account is payable in Dollars by the account debtor
(except with respect to Eligible Foreign Accounts);
(p) The account shall be ineligible if the account debtor is
domiciled in any country other than the United States of America,
unless the account is an Eligible Foreign Account;
(q) All accounts owed by any account debtor shall be
ineligible if more than 25% of the aggregate balances then
outstanding on accounts owed by such
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account debtor and its Affiliates to the Companies on a consolidated
basis have been outstanding for more than 90 days past the dates of
their original invoices;
(r) If the aggregate balances then outstanding on accounts
owed by any account debtor and its Affiliates to the Borrower and
the Subsidiaries on a consolidated basis constitute more than 15% of
the total accounts receivable of the Borrower and the Subsidiaries
on a consolidated basis, then the portion of the accounts owed by
such account debtor in excess of the 15% concentration limit shall
be ineligible;
(s) The account shall be ineligible if the account debtor is
the United States of America or any department, agency, or
instrumentality thereof subject to the Federal Assignment of Claims
Act of 1940, as amended ("FACA"), and the FACA shall not have been
complied with.
The amount of the Eligible Accounts owed by an account debtor to the
Borrower or any Subsidiary shall be reduced by the amount of all "contra
accounts," past due credits and other obligations which are owed by the
Borrower or any Subsidiary to such account debtor.
"ELIGIBLE ASSIGNEE" means any commercial bank, savings and loan
association, savings bank, finance company, insurance company, mutual
fund, or other financial institution (whether a corporation, partnership,
or other entity) acceptable to the Administrative Agent.
"ELIGIBLE DOMESTIC ACCOUNTS" means all Eligible Accounts that are
Domestic Accounts.
"ELIGIBLE FOREIGN ACCOUNTS" means all Eligible Accounts that are
Foreign Accounts that (a) constitute Eligible Accounts and (b) (i) are not
subject to an enforceable contractual restrictions of the rights to
assignment of the account thereunder, or (ii) the Borrower or a
Subsidiary, as applicable, has obtained written consent to the assignment
of the rights to payment thereunder from the account debtor.
"ENVIRONMENTAL LAWS" means any and all United States of America
federal, state, and local laws, regulations, and requirements pertaining
to health, safety, or the environment.
"ENVIRONMENTAL LIABILITIES" means all liabilities, obligations,
responsibilities, remedial actions, losses, damages, punitive damages,
consequential damages, treble damages, costs, expenses, fines, penalties,
sanctions, and interest arising from environmental, health or safety
conditions or the release or threatened release of a Hazardous Material
into the environment, resulting from the past, present, or future
operations of Borrower or any Subsidiary.
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"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which
is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower or any Guarantor or
is under common control (within the meaning of Section 414(c) of the Code)
with the Borrower or any Guarantor.
"EURODOLLAR ADVANCES" means Advances the interest rates on which are
determined on the basis of the rates referred to in the definition of
"Eurodollar Rate" in this Section 1.1.
"EURODOLLAR RATE" means, for any Eurodollar Advance for any Interest
Period therefor, an interest rate per annum determined by the
Administrative Agent by DIVIDING: (i) the rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) determined by the
Administrative Agent at or before 11:00 a.m. (London time) (or as soon
thereafter as practicable) two Business Days before the first day of such
Interest Period to be the rate of interest at which Dollar deposits in
immediately available funds having a term comparable to such Interest
Period and in an amount comparable to the principal amount of such
Eurodollar Advance are offered to Administrative Agent in the London
interbank eurodollar market for delivery on the first day of such Interest
Period; by (ii) Statutory Reserves.
"EXCHANGE RATE" means and refers to the nominal rate of exchange
available to Agent in a chosen foreign exchange market for the purchase by
the Administrative Agent at 11:00 a.m., Houston, Texas time, three
Business Days prior to any date of determination, expressed as the number
of units of such currency per one Dollar.
"EVENT OF DEFAULT" has the meaning specified in Section 12.1.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average of the rate on overnight Federal Funds transactions with members
of the Federal Reserve System arranged by Federal Funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, New York, or if such rate is not so published for any day
which is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent in its
sole discretion.
"FINAL CONSENT" means either (a) a written consent or reaffirmation
of the Required Lenders (without giving effect to the percentages held by
the Nonconsenting Lenders requesting an Opt-Out Request) to the request
for waiver or amendment granted in the Conditional Consent that is
provided after knowledge of the Nonconsenting Lenders under the
Conditional Consent, or (b) a Conditional Consent after which no Opt-Out
Request is made.
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"FNBC" has the meaning specified in the introductory paragraph
hereof.
"FORASOL" means Forasol-Foramer N.V., a Dutch corporation.
"FORASOL ACQUISITION" means the acquisition by the Borrower of all
of the outstanding capital stock of Forasub, pursuant to the Forasol
Purchase Agreement, for a total consideration of approximately
$281,000,000 plus assumption of approximately $93,000,000 of Debt, such
consideration to consist of $6.80 per share (approximately $113,222,000)
in cash and the issuance of 0.66 shares of stock of the Borrower for each
share of Forasol.
"FORASOL PURCHASE AGREEMENT" means that certain Purchase Agreement
dated as of December 16, 1996, among Forasol, certain shareholders of
Forasol and the Borrower.
"FORASUB" means Forasub B.V., a Dutch private limited company and a
wholly owned subsidiary of Forasol through which Forasol owns its
operating companies.
"FOREIGN ACCOUNTS" means all accounts receivable of the Borrower and
the Subsidiaries, or any of them, with respect to which the account debtor
is domiciled and operates in any country other than the United States of
America and all accounts receivable of any Foreign Subsidiary.
"FOREIGN AFFILIATE" means any Person in which the Borrower or any
Subsidiary has an equity or ownership interest equal to or less than 50%
and which is organized under the laws of any jurisdiction outside the
United States of America.
"FOREIGN SUBSIDIARY" means any Subsidiary which is organized under
the laws of any jurisdiction outside of the United States of America.
"FUNDED DEBT" means, at any particular time, the sum of the
following, calculated on a consolidated basis for the Borrower and the
Subsidiaries in accordance with GAAP:
(a) all obligations for borrowed money (whether as a direct
obligor on a promissory note, bond, debenture or other similar
instrument, as a reimbursement obligor with respect to an
issued letter of credit or similar instrument, as an obligor
under a Guarantee of borrowed money, or as any other type of
direct or contingent obligor), including but not limited to
senior bank debt, senior notes and subordinated debt PLUS (but
without duplication)
(b) all Capital Lease Obligations (other than the interest
component of such obligations).
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute
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of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board and/or their respective successors and which
are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material
respects to those accounting principles applied in a preceding period.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or
pertaining to government.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise)
or (b) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"GUARANTY" means the joint and several guaranty of Guarantors in
favor of the Agents and the Lenders, in substantially the form of Exhibit
"F" hereto, as the same may be amended, supplemented or modified from time
to time.
"GUARANTOR SECURITY AGREEMENT" means the security agreement of the
Guarantors in favor of the Administrative Agent, in substantially the form
of Exhibit "G" hereto, as the same may be amended, supplemented or
modified from time to time.
"GUARANTORS" means, collectively, each Subsidiary that at any time
executes a Guaranty in favor of the Agents and the Lenders.
"HAZARDOUS MATERIAL" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is
or becomes listed, regulated, or addressed under any Environmental Law,
including, without limitation, asbestos, petroleum, and polychlorinated
biphenyls.
"INTEREST PERIOD" means with respect to any Eurodollar Advances,
each period commencing on the date such Advances are made or Converted
from Base Rate Advances or, in the case of each subsequent, successive
Interest Period applicable to a Eurodollar Advance, the last day of the
next preceding Interest Period with respect to such Advance, and
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ending on the numerically corresponding day in the first, second, third or
sixth calendar month thereafter, as the Borrower may select as provided in
Section 2.5 or 2.6 hereof, except that each such Interest Period which
commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (a)
each Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or, if such
succeeding Business Day falls in the next succeeding calendar month, on
the next preceding Business Day); (b) any Interest Period which would
otherwise extend beyond the Termination Date shall end on the Termination
Date; (c) no more than five Interest Periods for Eurodollar Advances shall
be in effect at the same time; (d) no Interest Period for any Eurodollar
Advances shall have a duration of less than one month and, if the Interest
Period for any Eurodollar Advances would otherwise be a shorter period,
such Advances shall not be available hereunder; and (e) no Interest Period
may extend beyond a principal repayment date or Commitment reduction date
unless, after giving effect thereto, the aggregate principal amount of the
Eurodollar Advances having Interest Periods that end after such principal
repayment date or Commitment reduction date plus the aggregate principal
amount of Base Rate Advances shall be equal to or less than the Advances
to be outstanding hereunder after such principal payment date or
Commitment reduction date.
"L/C APPLICATION" has the meaning specified in Section 3.1.
"L/C DOCUMENTS" has the meaning specified in Section 3.1.
"LENDER" and "LENDERS" have the meanings specified in the
introductory paragraph hereof.
"LETTER OF CREDIT" means any letter of credit issued by the
Administrative Agent for the liability of the Borrower pursuant to Article
III.
"LETTER OF CREDIT LIABILITIES" means, at any time, the aggregate
face amounts of all outstanding Letters of Credit.
"LETTER OF CREDIT REQUEST FORM" means a certificate, in
substantially the form of Exhibit "H" hereto, properly completed and
signed by the Borrower requesting issuance of a Letter of Credit.
"LIEN" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law, or
otherwise.
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"LOAN DOCUMENTS" means this Agreement and all promissory notes,
security agreements, pledge agreements, assignments, letters of credit,
guaranties, L/C Documents, and other instruments, documents, and
agreements executed and delivered pursuant to or in connection with this
Agreement, as such instruments, documents, and agreements may be amended,
modified, renewed, extended, or supplemented from time to time.
"MATERIAL ADVERSE EFFECT" means (a) any material adverse effect on
(i) the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower and its Subsidiaries taken as a
whole, (ii) the ability of the Borrower and its Subsidiaries, taken as a
whole, to carry out its business, or (iii) the ability of the Borrower and
its Subsidiaries, taken as a whole, to perform the obligations under the
Notes, this Agreement and the other Loan Documents in accordance with
their respective obligations; or (b) an Event of Default hereunder.
"MAXIMUM RATE" means, at any time, the maximum rate of interest
under applicable law that the Lenders may charge the Borrower. The Maximum
Rate shall be calculated in a manner that takes into account any and all
fees, payments, and other charges in respect of the Loan Documents that
constitute interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a change in
the Maximum Rate shall take effect without notice to the Borrower at the
time of such change in the Maximum Rate. For purposes of determining the
Maximum Rate under Texas law, the applicable rate ceiling shall be the
indicated rate ceiling described in, and computed in accordance with,
Article 5069-1.04, Vernon's Texas Civil Statutes.
"MOODY'S" means Xxxxx'x Investors Service.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"NET PROCEEDS" from any issuance, sale or other disposition of any
shares of equity securities (or any securities convertible or exchangeable
for any such shares, or any rights, warrants, or options to subscribe for
or purchase any such shares) means the amount equal to (a) the aggregate
gross proceeds of such issuance, sale or other disposition, less (b) the
following: (i) placement agent fees, (ii) underwriting discounts and
commissions, (iii) bank and other lender fees, and (iv) reasonable legal
fees and other reasonable expenses payable by the issuer in connection
with such issuance, sale or other disposition. "NET PROCEEDS" from any
disposition of assets means the amount equal to (a) the aggregate gross
proceeds of such disposition, less (b) the following: (i) sales or other
similar taxes paid or payable by the seller in connection with such
disposition, (ii) reasonable broker fees in connection with such
disposition, (iii) reasonable legal fees and other reasonable expenses
payable by the seller in connection with such disposition and (iv) the
amount of any Debt secured by the
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assets that must be repaid in connection with such disposition so long as
it is a Debt permitted under this Agreement.
"NET WORTH" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as stockholder's equity on a
consolidated balance sheet of the Borrower and the Subsidiaries.
"NONCONSENTING LENDER" means a Lender that does not execute a
Conditional Consent.
"NON-RECOURSE DEBT" of a Person means Debt of such Person under the
terms of which no recourse may be had against such Person, any of its
Subsidiaries, or any of their assets (other than specified assets securing
such Debt) for the payment of the principal, interest or premium on such
Debt.
"NOTES" means promissory notes of the Borrower payable to the order
of the Lenders, in substantially the form of Exhibit "I" hereto, and all
extensions, renewals, and modifications thereof; "NOTE" means one of the
Notes.
"OBLIGATED PARTY" means any Guarantor or any other Person who is or
becomes party to any agreement that guarantees or secures payment and
performance of the Obligations or any part thereof.
"OBLIGATIONS" means all obligations, indebtedness, and liabilities
of the Borrower to the Agents and the Lenders, or any of them, arising
pursuant to any of the Loan Documents, now existing or hereafter arising,
whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several (including,
without limitation, all of the Borrower's contingent reimbursement
obligations in respect of Letters of Credit), and all interest accruing
thereon and all attorneys' fees and other expenses incurred in the
enforcement or collection thereof.
"OPERATING LEASE" means any lease (other than a lease constituting a
Capital Lease Obligation) of real or personal property.
"OPT-OUT REQUEST" means a written request of a Nonconsenting Lender
received by the Borrower and the Administrative Agent not later than three
Business Days after the granting of a Conditional Consent that requests
that the Commitment of such Nonconsenting Lender be terminated on a date
not earlier than 45 Business Days thereafter and that all Loans of such
Nonconsenting Lender be paid in full on such date.
"PAYOR" has the meaning specified in Section 4.5.
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"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PERSON" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental Authority,
or other entity.
"PLAN" means any employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and which is covered by
Title IV of ERISA.
"PRIME RATE" means at any time the rate of interest most recently
announced within Xxxxx at its principal office in San Francisco as its
Prime Rate. The Borrower understands that the Prime Rate may not be the
best or lowest rate or a favored rate, and any statement, representation
or warranty to that effect is expressly disclaimed by the Agents and the
Lenders.
"PRINCIPAL OFFICE" means the principal office of the Administrative
Agent, presently located at 0000 Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxxx
00000.
"PROHIBITED TRANSACTION" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"QUARTERLY PAYMENT DATE" means the first day of each April, July,
October, and January of each year, the first of which shall be the first
such day after the date of this Agreement.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from
time to time.
"REGULATORY CHANGE" means, with respect to any Lender, any
implementation, adoption or change after the date of this Agreement of
United States federal, state, or foreign laws, rules or regulations
(including Regulation D) or the adoption or making after such date of any
interpretations, directives, or requests applying to a class of lenders
including such Lender of or under any United States federal or state, or
any foreign, laws or regulations (whether or not having the force of law)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"REGISTER" has the meaning specified in Section 14.6(d).
"REPORTABLE EVENT" means any of the events set forth in Section 4043
of ERISA.
"REQUIRED LENDERS" means, at any time while no Advances are
outstanding, two or more Lenders having at least 66-2/3% of the aggregate
amount of the Commitments and, at
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any time while Advances are outstanding, two or more Lenders holding at
least 66-2/3% of the outstanding aggregate principal amount of the
Advances.
"REQUIRED PAYMENT" has the meaning specified in Section 4.5.
"RESTRICTED PAYMENT" means, as to any Person, (a) the declaration or
payment of any dividends or any other payment or distribution (in cash,
property, or obligations) by a Person on account of such Person's capital
stock, other than dividends paid in stock, (b) the redemption, purchase,
retirement, or other acquisition by a Person of any of its capital stock,
or (c) the setting apart of any money for a sinking fund or other
analogous fund for any dividend or other distribution on such Person's
capital stock or for any redemption, purchase, retirement, or other
acquisition of any of such Person's capital stock.
"ROLLING PERIOD" means, for each fiscal quarter of the Borrower,
such quarter and the three preceding fiscal quarters.
"S&P" means Standard & Poor's Corporation.
"SALE-LEASEBACK DEBT" means, as to any particular lease entered into
in a Sale-Leaseback Transaction, at any date as of which the amount
thereof is to be determined, the total net amount of rent required to be
paid under such lease during the remaining term thereof, discounted from
the respective due dates thereof to such date at the rate per annum which
would then be used to determine the lease classification under GAAP. The
net amount of rent required to be paid under any such lease for any such
period shall be the aggregate amount of the rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water
rates, and similar charges.
"SALE-LEASEBACK TRANSACTION" means any sale by the Borrower or any
of the Subsidiaries to any Person (other than the Borrower or another of
the Subsidiaries) of any property owned by the Borrower or such Subsidiary
if, as part of the same transaction or series of transactions, the
Borrower or any of the Subsidiaries shall lease as lessee the same
property or other substantially equivalent property which it intends to
use for substantially the same purposes.
"SENIOR DEBT" means Funded Debt (other than Non-Recourse Debt,
Sale-Leaseback Debt and Guarantees) of the Borrower and the Subsidiaries,
or any of them, which is not subordinated to any other Debt.
"STATUTORY RESERVES" means the difference (expressed as a decimal)
of the number one minus the aggregate of the actual reserve percentages
(including, without limitation, any marginal, special, emergency, or
supplemental reserves) expressed as a decimal established by the Board of
Governors of the Federal Reserve System and any other banking authority
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to which the Administrative Agent is subject for Eurocurrency Liabilities
(as defined in Regulation D). Such reserve percentages shall include,
without limitation, those imposed under Regulation D. Eurodollar Advances
shall be deemed to constitute Eurocurrency Liabilities and as such shall
be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from
time to time to the Administrative Agent under Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date
of any change in any reserve percentage.
"SUBSIDIARY" means (a) any corporation of which at least a majority
of the outstanding shares of stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether or not 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 owned or
controlled, directly or indirectly, through one or more intermediaries, by
a Person, by one or more of the Subsidiaries of such Person, or by such
Person and the Subsidiaries, or both, and (b) any limited liability
company, partnership or other entity (i) of which at least a majority of
the ownership, equity or voting interests is at the time owned or
controlled, directly or indirectly, through one or more intermediaries, by
a Person, by one or more of the Subsidiaries of such Person, or by such
Person and one or more of its Subsidiaries, or both, and (ii) which is
treated as a subsidiary in accordance with GAAP.
"SUBSIDIARY PLEDGE AGREEMENT" means the Pledge Agreement of the
Domestic Subsidiaries in favor of the Administrative Agent in
substantially the form of Exhibit "J" hereto, and such other forms as may
be required by applicable law of the foreign jurisdiction in which a
Foreign Subsidiary may be incorporated or otherwise organized in order to
effectively create and perfect a Lien, as the same may be amended,
supplemented, or modified from time to time.
"SYNDICATION AGENT" has the meaning specified in the introductory
paragraph hereof.
"TANGIBLE NET WORTH" means Net Worth, less (a) any amount at which
shares of capital stock of any Person appear as an asset on the balance
sheet of such Person, (b) goodwill, including any amounts, however
designated, that represent the excess of the purchase price paid for
assets or stock over the value assigned thereto, (c) patents, trademarks,
trade names, and copyrights, (d) deferred expenses, (e) loans and advances
to or other obligations owing by any stockholder, director, officer,
partner, or employee of the Borrower, any Subsidiary, or any Affiliate of
the Borrower or any Subsidiary, and (f) all other assets which are
properly classified as intangible assets under GAAP.
"TERMINATION DATE" means 11:00 A.M. Houston, Texas time on (a) March
6, 2002 in the event Acceptable Collateral is provided in accordance with
Section 6.1(e) on or before the date specified therein, (b) March 6, 2000
in the event Acceptable Collateral is not so
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provided by such date, or (c) such earlier date on which the Commitments
terminate as provided in this Agreement.
"TYPE" means any type of Advance (i.e., Base Rate Advance or
Eurodollar Advance).
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas.
"XXXXX" has the meaning specified in the introductory paragraph
hereof.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Historical Forasol
financial results shall be included in the relevant Rolling Periods for use in
calculating compliance with the financial covenants hereunder. Compliance with
Sections 11.1, 11.2 and 11.3 will be tested quarterly commencing with the
quarter ending March 31, 1997. Unless otherwise specified, all Article and
Section references pertain to this Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC.
ARTICLE II
ADVANCES
Section 2.1 ADVANCES. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make one or more Advances to the
Borrower from time to time from the date hereof to and including the Termination
Date in an aggregate principal amount at any time outstanding up to but not
exceeding the amount of such Lender's Commitment as then in effect, PROVIDED
that the aggregate amount of all Advances at any time outstanding shall not
exceed, and the Lenders shall not be obligated to make any Advance which would
cause the aggregate amount of all outstanding Advances to exceed, the amount
equal to (a) the lesser of (i) the aggregate amount of the Commitments or (ii)
the Borrowing Base, minus (b) the Letter of Credit Liabilities. Subject to the
foregoing limitations, and the other terms and provisions of this Agreement, the
Borrower may borrow, repay, and reborrow hereunder. The Borrower may borrow
hereunder by means of Base Rate Advances or Eurodollar Advances and, until the
Termination Date, Borrower may Convert all or part of one Type of Advance into
another Type of Advance or Continue all or part of any Eurodollar Advance.
Advances of each Type made by each Lender shall be made and maintained at such
Lender's Applicable Lending Office for Advances of such Type.
Section 2.2 NOTES. The obligation of the Borrower to repay each Lender for
Advances made by such Lender and interest thereon shall be evidenced by a Note
executed by the Borrower, payable to the order of such Lender, in the principal
amount of such Lender's Commitment as in effect on the date hereof, and
initially dated the date hereof.
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Section 2.3 REPAYMENT OF ADVANCES. The Borrower shall repay the unpaid
principal amount of all Advances as provided in Sections 2.9, 2.10, 2.11 and 4.3
and on the Termination Date.
Section 2.4 INTEREST. The unpaid principal amount of the Advances shall
bear interest prior to maturity at a varying rate per annum equal from day to
day to the lesser of (a) the Maximum Rate, or (b) the Applicable Rate. Interest
shall be computed on the basis of a year of 360 days and the actual number of
days elapsed (including the first day but excluding the last day) unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be. If at
any time the Applicable Rate for any Advance shall exceed the Maximum Rate,
thereby causing the interest accruing on such Advance to be limited to the
Maximum Rate, then any subsequent reduction in the Applicable Rate for such
Advance shall not reduce the rate of interest on such Advance below the Maximum
Rate until the aggregate amount of interest accrued on such Advance equals the
aggregate amount of interest which would have accrued on such Advance if the
Applicable Rate had at all times been in effect. Accrued and unpaid interest on
the Advances shall be due and payable as follows:
(i) in the case of Base Rate Advances, on each Quarterly Payment
Date;
(ii) in the case of each Eurodollar Advance, on the last day of the
Interest Period with respect thereto and, in the case of an Interest
Period greater than three months, at three-month intervals after the first
day of such Interest Period;
(iii) upon the payment or prepayment of any Advance or the Conversion
of any Advance to an Advance of another Type (but only on the principal
amount so paid, prepaid, or Converted); and
(iv) on the Termination Date.
All past due principal and interest shall bear interest at the Default Rate.
Interest payable at the Default Rate shall be payable from time to time on
demand.
Section 2.5 BORROWING PROCEDURE. The Borrower shall give the
Administrative Agent notice of each requested Advance, by means of an Advance
Request Form, before 11:00 A.M. Houston, Texas time on the same Business Day as
the requested date of each Base Rate Advance and before 11:00 A.M. Houston,
Texas time at least three Business Days before the requested date of each
Eurodollar Advance, specifying: (i) the requested date of such Advance (which
shall be a Business Day), (ii) the amount of such Advance, (iii) the Type of the
Advance, and (iv) in the case of a Eurodollar Advance, the duration of the
Interest Period for such Advance. The Administrative Agent at its option may
accept telephonic requests for Advances, provided that such acceptance shall not
constitute a waiver of the Administrative Agent's right to delivery of an
Advance Request Form in connection with subsequent Advances. Any telephonic
request for an Advance by the Borrower shall be promptly confirmed by submission
of a properly completed Advance Request Form to the
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Administrative Agent. Each Advance shall be in a minimum principal amount of
$5,000,000 or such greater amount which is an integral multiple of $5,000,000.
The aggregate principal amount of Eurodollar Advances having the same Interest
Period shall be at least equal to $5,000,000. The Administrative Agent shall
notify each Lender of the contents of each such notice on the day such notice is
received by Administrative Agent if received by 11:00 a.m. Houston, Texas time
on a Business Day and otherwise on the next succeeding Business Day. Promptly on
the date specified for each Advance hereunder, each Lender will make available
to the Administrative Agent at the Principal Office in immediately available
funds, for the account of the Borrower, such Lender's pro rata share of each
Advance. After the Administrative Agent's receipt of such funds and subject to
the terms and conditions of this Agreement, the Administrative Agent will make
each Advance available to the Borrower by depositing the same, in immediately
available funds, in an account of the Borrower maintained with the
Administrative Agent designated by the Borrower or by wire transfer in
accordance with written instructions from the Borrower. All notices by the
Borrower to the Administrative Agent under this Section shall be irrevocable and
shall be given not later than the time specified above for such notice on the
day which is not less than the number of Business Days specified above for such
notice.
Section 2.6 CONVERSIONS AND CONTINUATIONS. The Borrower shall have the
right from time to time to Convert all or part of one Type of Advance into
another Type of Advance or to Continue all or part of any Eurodollar Advance by
giving the Administrative Agent written notice (by means of an Advance Request
Form) at least one Business Day before Conversion into a Base Rate Advance, and
at least three Business Days before Conversion into or Continuation of a
Eurodollar Advance, specifying: (i) the Conversion or Continuation date, (ii)
the amount of the Advance to be Converted or Continued, (iii) in the case of
Conversions, the Type of Advance to be Converted into, and (iv) in the case of a
Continuation of or Conversion into a Eurodollar Advance, the duration of the
Interest Period applicable thereto; provided that (a) Eurodollar Advances may
only be Converted on the last day of the Interest Period, (b) except for
Conversions to Base Rate Advances, no Conversions shall be made while a Default
has occurred and is continuing and no Continuations of any Eurodollar Advances
shall be made while a Default has occurred and is continuing, unless such
Conversion or Continuation has been approved by Required Lenders, and (c) the
aggregate principal amount of Eurodollar Advances having the same Interest
Period shall be at least equal to $5,000,000. All notices given under this
Section shall be irrevocable and shall be given not later than 11:00 A.M.
Houston, Texas time on the day which is not less than the number of Business
Days specified above for such notice. If the Borrower shall fail to give the
Administrative Agent the notice as specified above for Continuation or
Conversion of a Eurodollar Advance prior to the end of the Interest Period with
respect thereto, such Eurodollar Advance shall automatically be Converted into a
Base Rate Advance on the last day of the Interest Period for such Eurodollar
Advance.
Section 2.7 USE OF PROCEEDS. The proceeds of Advances shall be used by the
Borrower and its Subsidiaries for working capital in the ordinary course of
business, for general corporate purposes, to refinance existing Debt, and to
finance a portion of the purchase price for the Forasol Acquisition.
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Section 2.8 COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on the
daily average unused amount of such Lender's Commitment at the rate of 0.375%
per annum based on a 360 day year and the actual number of days elapsed. For the
purpose of calculating the commitment fee hereunder, the Commitments shall be
deemed utilized by the amount of all outstanding Advances and Letter of Credit
Liabilities. Accrued commitment fees shall be payable in arrears on each
Quarterly Payment Date and on the Termination Date.
Section 2.9 VOLUNTARY REDUCTION OR TERMINATION OF COMMITMENTS. The
Borrower shall have the right to terminate in whole or reduce in part to
$75,000,000 the unused portion of the Commitments upon at least five Business
Days prior notice (which notice shall be irrevocable) to the Administrative
Agent specifying the effective date thereof, whether a termination or reduction
is being made, and the amount of any partial reduction, provided that each
partial reduction shall be in a minimum amount of $5,000,000 or such greater
amount which is an integral multiple of $5,000,000 and the Borrower shall
simultaneously prepay the amount by which the unpaid principal amount of the
Advances exceeds the Commitments (after giving effect to such notice) plus
accrued and unpaid interest on the principal amount so prepaid. The Commitments
may not be reinstated after they have been terminated or reduced.
Section 2.10 MANDATORY COMMITMENT REDUCTIONS AND PRINCIPAL PAYMENTS.
(a) In the event the Termination Date has not sooner occurred, on
March 6, 2000 and March 6, 2001, (i) the Commitments shall automatically
reduce by the principal amount of $12,500,000 on each such date, and (ii)
the Borrower shall simultaneously prepay the amount by which the unpaid
principal amount of the Advances exceeds the Commitments (after giving
effect to such reduction) plus accrued and unpaid interest on the
principal amount so prepaid.
(b) On the date of each sale of assets (other than sales of
inventory in the ordinary course of business) by the Borrower or any
Subsidiary resulting in Net Proceeds which, when aggregated with the Net
Proceeds from all other such sales of assets in the same fiscal year,
exceed $5,000,000, (i) the Commitments shall automatically reduce by the
amount of the Net Proceeds from the sale of assets occurring on such date,
and (ii) the Borrower shall simultaneously prepay the amount by which the
unpaid principal amount of the Advances exceeds the Commitments (after
giving effect to such reduction) plus accrued and unpaid interest on the
principal amount so prepaid.
Section 2.11 LENDERS' COMMITMENT REDUCTION. In the event Acceptable
Collateral is not provided in accordance with Section 6.1(e) on or before the
date specified therein, the Commitments shall automatically reduce by
$25,000,000 effective on such date, unless all of the Lenders elect to waive
such reduction. If all of the Lenders elect to waive such reduction, notice of
such waiver shall be given to the Borrower in writing by the Administrative
Agent. In the event such notice is given after the date such reduction has
automatically occurred as provided herein, the Commitments shall
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be reinstated (with the concurrence of all of the Lenders) to the amount of such
Commitments immediately prior to such reduction, such reinstatement to be
effective as of the date specified in such notice to the Borrower. The election
by the Lenders to waive the reduction of Commitments provided for in this
Section shall be at the option of the Lenders in the exercise of their sole and
absolute discretion, and nothing herein shall be construed to require any such
waiver.
Section 2.12 ADMINISTRATIVE FEE. The Borrower shall pay to the
Administrative Agent, solely for its own account, an annual administrative fee
as separately agreed between the Borrower and the Administrative Agent.
ARTICLE III
LETTERS OF CREDIT
Section 3.1 LETTERS OF CREDIT. Subject to the terms and conditions of this
Agreement, the Administrative Agent agrees to issue one or more standby Letters
of Credit for the account of the Borrower from time to time from the date hereof
to and including the Termination Date; PROVIDED, HOWEVER, that the outstanding
Letter of Credit Liabilities shall not at any time exceed, and the
Administrative Agent shall not be obligated to issue any Letter of Credit which
would cause the outstanding Letter of Credit Liabilities to exceed, an amount
equal to (a) the least of (1) $25,000,000, (2) the aggregate amount of the
Commitments or (3) the Borrowing Base, minus (b) the outstanding Advances. Each
Letter of Credit may be issued for the account of or used by the Borrower or any
Subsidiary, but the Borrower shall have full liability for each Letter of
Credit. Each Letter of Credit shall have an expiration date that does not extend
beyond the Termination Date (which shall be deemed to exclude clause (b) of the
definition thereof unless Acceptable Collateral has been delivered to the
Administrative Agent by June 6, 1997), shall be payable in Dollars, shall have a
minimum face amount of $50,000, must support a transaction that is entered into
in the ordinary course of the Borrower's or its Subsidiaries' business, must
support a transaction or purpose approved by the Administrative Agent in the
exercise of its reasonable business judgment, must be reasonably satisfactory in
form and substance to the Administrative Agent, and shall be issued pursuant to
such documents and instruments (including, without limitation, the
Administrative Agent's standard application for issuance of standby letters of
credit, as the case may be, as then in effect [each an "L/C APPLICATION"]) as
the Administrative Agent may require (collectively, the "L/C DOCUMENTS"). A copy
of the form of L/C Application which is in effect as of the date hereof for
standby letters of credit is attached hereto as Exhibit "K". However, the form
of L/C Application may be changed by the Administrative Agent from time to time
without notice to the Borrower or the Lenders.
Section 3.2 PROCEDURE FOR ISSUING LETTERS OF CREDIT. Each Letter of Credit
shall be issued on at least four Business Days prior notice from the Borrower to
the Administrative Agent by means of a Letter of Credit Request Form describing
the transaction proposed to be supported thereby and specifying (a) the
requested date of issuance (which shall be a Business Day), (b) the face amount
of the Letter of Credit, (c) the expiration date of the Letter of Credit, (d)
the name and address of the beneficiary, and (e) the name and address of the
account party (which shall be the Borrower or a
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Subsidiary of the Borrower), (f) the purpose for which such Letter of Credit
will be used, and (g) the form of the draft and any other documents required to
be presented at the time of any drawing (such notice to set forth the exact
wording of such documents or to attach copies thereof). The Administrative Agent
shall notify each Lender of the contents of each such notice on the day such
notice is received by Administrative Agent if received by 11:00 a.m. Houston,
Texas time on a Business Day and otherwise on the next succeeding Business Day.
Section 3.3 PARTICIPATION BY LENDERS. Immediately upon the Administrative
Agent's issuance of any Letter of Credit on or after the date hereof, the
Administrative Agent shall be deemed to have sold and transferred to each other
Lender and each other Lender shall be deemed irrevocably and unconditionally to
have purchased and received from the Administrative Agent, without recourse or
warranty, an undivided interest and participation (to the extent of such
Lender's pro rata share of the Commitments) in such Letter of Credit and all
applicable rights of the Administrative Agent in such Letter of Credit. The
Administrative Agent shall provide to each other Lender a copy of each Letter of
Credit issued on or after the date hereof, promptly after issuance.
Section 3.4 PAYMENTS CONSTITUTE ADVANCES. Each payment by the
Administrative Agent pursuant to a drawing under a Letter of Credit shall
constitute and be deemed a Base Rate Advance by each Lender to the Borrower
under such Lender's Note and this Agreement as of the day and time such payment
is made by the Administrative Agent and in the amount of such Lender's pro rata
share of such payment. Promptly on the date of each payment by the
Administrative Agent pursuant to a drawing under a Letter of Credit and after
receipt of notice from the Administrative Agent as to the amount of such
payment, each Lender will make available to the Administrative Agent at the
Principal Office in immediately available funds, such Lender's pro rata share of
such payment.
Section 3.5 LETTER OF CREDIT FEE. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a letter of credit fee in an
amount equal to 0.75% per annum on the undrawn amount of each Letter of Credit
based upon a year of 360 days for the period during which such Letter of Credit
is outstanding, payable quarterly in advance on a non-refundable basis on the
date each such Letter of Credit is issued and on each quarterly anniversary date
thereof while such Letter of Credit remains outstanding. The Borrower shall pay
to the Administrative Agent, solely for its own account, a nonrefundable
issuance and fronting fee for each Letter of Credit in an amount equal to 0.25%
per annum of the face amount of such Letter of Credit for the period during
which such Letter of Credit is outstanding, calculated on the basis of a year of
360 days and payable on the date each such Letter of Credit is issued. The
Borrower shall also pay to the Administrative Agent, solely for its own account
as issuer of Letters of Credit, such amendment, transfer, negotiation and other
fees as the Administrative Agent shall charge in accordance with its customary
practices.
Section 3.6 ISSUER'S RESPONSIBILITIES. The Administrative Agent agrees
with each Lender that it will exercise and give the same care and attention to
each Letter of Credit as it gives to its other letters of credit. Each Lender
and the Borrower agree that, in paying any draft or draw under any Letter of
Credit, the Administrative Agent has no responsibility to obtain any document
(other than any documents expressly required by the respective Letter of Credit)
or to ascertain or inquire
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as to any document's validity, enforceability, sufficiency, accuracy or
genuineness or the authority of any Person delivering it. Neither the
Administrative Agent nor any of its representatives, directors, officers,
employees, attorneys or agents shall be liable to any Lender, the Borrower or
any Subsidiary for any Letter of Credit's use or for any beneficiary's acts or
omissions. The Administrative Agent shall have no liability to the Borrower, any
Guarantor or any Lender for any action, inaction, error, delay or omission taken
or suffered by the Administrative Agent or any of its representatives,
directors, officers, employees, attorneys or agents in connection with any
Letter of Credit, applicable draws, drafts or documents, or the transmission,
dispatch or delivery of any related message or advice, if done, taken or made in
accordance with the L/C Documents.
Section 3.7 LETTER OF CREDIT DOCUMENTS. Certain additional provisions
regarding the obligations, liabilities, rights, remedies and agreements of the
Borrower and the Administrative Agent relative to the Letters of Credit shall be
set forth in the L/C Documents. The terms of this Agreement shall control any
express conflict between the terms of this Agreement and the terms of any L/C
Application. Omission of any term shall not be construed as an express conflict.
ARTICLE IV
PAYMENTS
Section 4.1 METHOD OF PAYMENT. All payments of principal, interest, and
other amounts to be made by the Borrower under this Agreement and the other Loan
Documents shall be made to the Administrative Agent at the Principal Office in
Dollars and immediately available funds, without setoff, deduction, or
counterclaim, not later than 11:00 A.M., Houston, Texas time on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). The Borrower shall, at the time of making each such payment, specify to
the Administrative Agent the sums payable by the Borrower under this Agreement
and the other Loan Documents to which such payment is to be applied (and in the
event the Borrower fails to so specify, or if an Event of Default has occurred
and is continuing, the Administrative Agent may apply such payment to the
Obligations in such order and manner as it may elect in its sole discretion,
subject to Section 4.4 hereof). Each payment received by the Administrative
Agent under this Agreement or any other Loan Document for the account of a
Lender shall be paid promptly to such Lender, in immediately available funds,
for the account of such Lender's Applicable Lending Office. Whenever any payment
under this Agreement or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment fee, as
the case may be.
Section 4.2 VOLUNTARY PREPAYMENT. The Borrower may, upon at least three
Business Days' prior notice to the Administrative Agent prepay the Advances in
whole at any time or from time to time in part without premium or penalty,
provided that Eurodollar Advances prepaid on other than the last day of the
Interest Period for such Advances must also be accompanied by payment to the
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Administrative Agent for the account of each Lender the amounts required under
Section 5.5 hereof. All notices under this Section shall be irrevocable and
shall be given not later than 11:00 A.M. Houston, Texas time on the day which is
not less than the number of Business Days specified above for such notice.
Section 4.3 MANDATORY PREPAYMENT. If at any time the amount equal to the
sum of (i) the outstanding principal amount of the Advances, plus (ii) the
Letter of Credit Liabilities exceeds the Borrowing Base, the Borrower shall
promptly prepay the outstanding Advances by the amount of the excess plus
accrued and unpaid interest on the amount so prepaid or, if no Advances are
outstanding, the Borrower shall immediately pledge to the Administrative Agent
cash or cash equivalent investments acceptable to the Administrative Agent in an
amount equal to the excess as security for the Obligations.
Section 4.4 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each Advance shall be made by the Lenders under Section 2.1 or
deemed made by the Lenders under Section 3.4, each payment of the commitment fee
under Section 2.8 and each letter of credit fee under Section 3.5 shall be made
for the account of the Lenders, each termination or reduction of the Commitments
under Sections 2.9, 2.10 and 2.11 shall be applied to the Commitments of the
Lenders, and each Letter of Credit shall be deemed participated in by the
Lenders, pro rata according to the amounts of their respective Commitments; (b)
the making, Conversion, and Continuation of Advances of a particular Type (other
than Conversions provided for by Section 5.4) shall be made pro rata among the
Lenders holding Advances of such Type according to the amounts of their
respective Commitments; (c) each payment and prepayment of principal of or
interest on Advances by the Borrower of a particular Type shall be made to the
Administrative Agent for the account of the Lenders holding Advances of such
Type pro rata in accordance with the respective unpaid principal amounts of such
Advances held by such Lenders; and (d) Interest Periods for Advances of a
particular Type shall be allocated among the Lenders holding Advances of such
Type pro rata according to the respective principal amounts held by such
Lenders.
Section 4.5 NON-RECEIPT OF FUNDS. Unless the Administrative Agent shall
have been notified by a Lender or the Borrower (the "PAYOR") prior to the date
on which such Lender is to make payment to the Administrative Agent of the
proceeds of an Advance to be made by it hereunder or the Borrower is to make a
payment to the Administrative Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Administrative Agent, the recipient
of such payment shall, on demand, pay to the Administrative Agent the amount
made available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at a rate per
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annum equal to (a) the Federal Funds Effective Rate for such period if the
recipient is a Lender or (b) the Applicable Rate for such period if the
recipient is the Borrower.
Section 4.6 WITHHOLDING TAXES. All payments by the Borrower of principal
of and interest on the Advances and of all fees and other amounts payable under
any Loan Document are payable without deduction for or on account of any present
or future taxes, duties or other charges levied or imposed by the United States
of America or by the government of any jurisdiction outside the United States of
America or by any political subdivision or taxing authority of or in any of the
foregoing through withholding or deduction with respect to any such payments. If
any such taxes, duties or other charges are so levied or imposed, the Borrower
will pay additional interest or will make additional payments in such amounts so
that every net payment of principal of and interest on the Advances and of all
other amounts payable by it under any Loan Document, after withholding or
deduction for or on account of any such present or future taxes, duties or other
charges, will not be less than the amount provided for herein or therein,
provided that the Borrower shall have no obligation to pay such additional
amounts to any Lender to the extent that such taxes, duties, or other charges
are levied or imposed by reason of the failure of such Lender to comply with the
provisions of Section 4.7. The Borrower shall furnish promptly to the
Administrative Agent for distribution to each affected Lender, as the case may
be, official receipts evidencing any such withholding or reduction.
Section 4.7 WITHHOLDING TAX EXEMPTION. Each Lender that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Administrative Agent two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in either case that such Lender is entitled to receive payments
from the Borrower under any Loan Document without deduction or withholding of
any United States federal income taxes. Each Lender which so delivers a Form
1001 or 4224 further undertakes to deliver to Borrower and the Administrative
Agent two additional copies of such form (or a successor form) on or before the
date such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments from the Borrower under any
Loan Document without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Borrower and the
Administrative Agent that it is not capable of receiving such payments without
any deduction or withholding of United States federal income tax.
Section 4.8 AUTOMATIC PAYMENT. In addition to the payment methods provided
in Article IV hereof, the Administrative Agent shall have the right to
automatically debit the account of the Borrower, Account No. 4439820788, for the
payment of principal, interest, fees and other amounts to be made by the
Borrower under this Agreement and the other Loan Documents. In the
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event such automatic debit results in an overdraft, such overdraft shall be
deemed to be an Advance, if available, under this Agreement, or if an Advance is
not made hereunder, the Borrower shall immediately deposit sufficient funds into
such operating account to cover such overdraft.
ARTICLE V
YIELD PROTECTION; LIMITATIONS ON ADVANCES; CAPITAL ADEQUACY
Section 5.1 ADDITIONAL COSTS.
(a) The Borrower shall pay directly to each Lender from time to time
such amounts as such Lender may determine to be necessary to compensate it
for any costs incurred by such Lender which such Lender determines are
attributable to its making or maintaining of any Eurodollar Advances
hereunder or its obligation to make such Advances hereunder, or any
reduction in any amount receivable by such Lender hereunder in respect of
any such Advances or such obligation (such increases in costs and
reductions in amounts receivable being herein called "ADDITIONAL COSTS"),
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Note in respect of any
Eurodollar Advances (other than taxes imposed on the overall net
income of such Lender or its Applicable Lending Office for any
Eurodollar Advances by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio, or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Lender (including any
Eurodollar Advances or any deposits referred to in the definition of
"Eurodollar Rate" in Section 1.1 hereof); or
(iii) imposes any other condition affecting this Agreement or
its Note or any of such extensions of credit or liabilities or
commitments.
Each Lender will notify the Borrower (with a copy to the Administrative
Agent) of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to this Section 5.1(a) as
promptly as practicable after it obtains knowledge thereof and determines
to request such compensation, and will designate a different Applicable
Lending Office for Eurodollar Advances if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
sole opinion of such Lender, violate any law, rule, or regulation or be in
any way disadvantageous to such Lender, provided that such Lender shall
have no obligation to so designate an Applicable Lending Office located
outside the United States of America. Each Lender will furnish to the
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Borrower, within 120 days after the occurrence of the event resulting in
Additional Costs, a certificate setting forth the basis and the amount of
each request of such Lender for compensation under this Section 5.1(a). If
any Lender requests compensation from the Borrower under this Section
5.1(a), the Borrower may, by notice to such Lender (with a copy to
Administrative Agent), suspend the obligation of such Lender to make or
Continue making, or Convert Advances into, Eurodollar Advances until the
Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.4 hereof shall be applicable) and
may convert any Eurodollar Advance into a Base Rate Advance, subject to
the provisions of Section 5.5.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.1, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or
other liabilities of such Lender which includes deposits by reference to
which the interest rate on Eurodollar Advances is determined as provided
in this Agreement or a category of extensions of credit or other assets of
such Lender which includes Eurodollar Advances or (ii) becomes subject to
restrictions on the amount of such a category of liabilities or assets
which it may hold, then, if such Lender so elects by notice to the
Borrower the obligation of such Lender to make or Continue making, or
Convert Advances into, Eurodollar Advances hereunder shall be suspended
until such Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.4 hereof shall be applicable).
(c) Determinations and allocations by any Lender for purposes of
this Section 5.1 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Advances or of making or maintaining
Advances or on amounts receivable by it in respect of Advances, and of the
additional amounts required to compensate such Lender in respect of any
Additional Costs, shall be conclusive, provided that such determinations
and allocations are made on a reasonable basis.
Section 5.2 LIMITATION ON TYPES OF ADVANCES. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Advances for any
Interest Period therefor:
(a) The Administrative Agent determines using its reasonable
business judgment (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Rate" in Section 1.1 hereof are not being
provided in the relative amounts or for the relative maturities for
purposes of determining the rate of interest for such Advances as provided
in this Agreement; or
(b) Required Lenders determine using their reasonable business
judgment (which determination shall be conclusive) that the relevant rates
of interest referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof on the basis of which the rate of interest for such Advances
for such Interest Period is to be determined do not accurately reflect the
cost to the Lenders of making or maintaining such Advances for such
Interest Period;
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then the Administrative Agent shall give the Borrower prompt notice thereof
specifying relevant amounts or periods, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make additional Eurodollar
Advances or to Convert Base Rate Advances into Eurodollar Advances and the
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Eurodollar Advances, either prepay such Eurodollar Advances or
Convert such Eurodollar Advances into Base Rate Advances in accordance with the
terms of this Agreement.
Section 5.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar
Advances hereunder or (b) maintain Eurodollar Advances hereunder, then such
Lender shall promptly notify the Borrower (with a copy to the Administrative
Agent) thereof and such Lender's obligation to make or maintain Eurodollar
Advances and to Convert Base Rate Advances into Eurodollar Advances hereunder
shall be suspended until such time as such Lender may again make and maintain
Eurodollar Advances (in which case the provisions of Section 5.4 hereof shall be
applicable).
Section 5.4 SUBSTITUTE BASE RATE ADVANCES. If the obligation of any Lender
to make Eurodollar Advances shall be suspended pursuant to Section 5.1 or 5.3
hereof, all Advances which would be otherwise made by such Lender as Eurodollar
Advances shall be made instead as Base Rate Advances and all Advances which
would otherwise be Converted into Eurodollar Advances shall be Converted instead
into (or shall remain as) Base Rate Advances (and, if an event referred to in
Section 5.1(b) or 5.3 hereof has occurred and such Lender so requests by notice
to the Borrower (with a copy to the Administrative Agent), all Eurodollar
Advances of such Lender then outstanding shall be automatically Converted into
Base Rate Advances on the date specified by such Lender in such notice) and, to
the extent that Eurodollar Advances are so made as (or Converted into) Base Rate
Advances, all payments and prepayments of principal which would otherwise be
applied to such Lender's Eurodollar Advances shall be applied instead to its
Base Rate Advances.
Section 5.5 COMPENSATION. The Borrower shall pay to the Administrative
Agent for the account of each Lender, upon the request of such Lender through
the Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any actual loss, cost,
or expense (other than loss of profit) incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Advance
for any reason (including, without limitation, the acceleration of
outstanding Advances pursuant to Section 12.2) on a date other than the
last day of an Interest Period for such Advance; or
(b) Any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article
VII to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar
Advance on the date for such borrowing, Conversion, Continuation, or
prepayment, specified in the relevant notice of borrowing, Conversion,
Continuation, or prepayment under this Agreement.
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Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid or Converted
or not borrowed for the period from the date of such payment, Conversion, or
failure to borrow to the last day of the Interest Period for such Advance (or,
in the case of a failure to borrow, the Interest Period for such Advance which
would have commenced on the date specified for such borrowing) at the applicable
rate of interest for such Advance provided for herein over (ii) the interest
component of the amount such Lender would have bid in the London interbank
market for Dollar deposits of leading lenders and amounts comparable to such
principal amount and with maturities comparable to such period.
Section 5.6 CAPITAL ADEQUACY. If after the date hereof, any Lender shall
have determined that any Regulatory Change or compliance by such Lender (or its
parent) with any guideline, request, or directive regarding capital adequacy
(whether or not having the force of law) of any such central bank or other
Governmental Authority, has or would have the effect of reducing the rate of
return on such Lender's (or its parent's) capital as a consequence of its
obligations hereunder or the transactions contemplated hereby to a level below
that which such Lender (or its parent) could have achieved but for such
Regulatory Change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within 10 Business Days after demand by
such Lender (with a copy to the Administrative Agent), the Borrower shall pay to
such Lender (or its parent) such additional amount or amounts as will compensate
such Lender for such reduction. Each Lender will furnish to the Borrower, within
120 days after such Lender actually incurs such reduction in its rate of return,
a certificate of such Lender claiming compensation under this Section and
setting forth the basis and the additional amount or amounts to be paid to it
hereunder. Each such certificate shall be conclusive, provided that the
determination of such amount or amounts is made on a reasonable basis. In
determining such amount or amounts, such Lender may use any reasonable averaging
and attribution methods.
Section 5.7 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. If as a
result of any Regulatory Change there shall be imposed, modified, or deemed
applicable any tax, reserve, special deposit, or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder or the Commitments to issue or participate in Letters of Credit
hereunder, and the result shall be to increase the cost to the Administrative
Agent or any Lender of issuing, maintaining or participating in any Letter of
Credit or its Commitment to issue or participate in Letters of Credit hereunder
or reduce any amount receivable by the Administrative Agent or any Lender
hereunder in respect of any Letter of Credit (which increase in cost, or
reduction in amount receivable, shall be the result of the Administrative
Agent's or such Lender's reasonable allocation of the aggregate of such
increases or reductions resulting from such event), then, upon demand by the
Administrative Agent or such Lender, the Borrower agrees to pay the
Administrative Agent or such Lender, as the case may be, from time to time as
specified by the Administrative Agent or such Lender, as the case may be, such
additional amounts as shall be sufficient to compensate the Administrative Agent
or such Lender for such increased costs or
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reductions in amount. Each Lender will furnish to the Borrower, within 180 days
after such Lender actually incurs such increase in cost or reduction in amount
receivable, a certificate of such Lender claiming compensation under this
Section and setting forth the basis and the additional amount or amounts to be
paid to it hereunder. Each such certificate shall be conclusive, provided that
the determination of such amount or amounts is made on a reasonable basis.
ARTICLE VI
SECURITY
Section 6.1 COLLATERAL. To secure full and complete payment and
performance of the Obligations, the Borrower shall execute and deliver or cause
to be executed and delivered the documents described below covering the property
and collateral described in this Section 6.1 (which, together with any other
property and collateral which may now or hereafter secure the Obligations or any
part thereof, is sometimes herein called the "COLLATERAL"):
(a) The Borrower shall grant to the Administrative Agent, for the
pro rata benefit of the Lenders, a first priority security interest in all
of the Borrower's accounts, accounts receivable, inventory, chattel paper,
documents, instruments and general intangibles, whether now owned or
hereafter acquired, and all products and proceeds thereof, to the extent
provided in the Borrower Security Agreement.
(b) The Guarantors shall grant to the Administrative Agent, for the
pro rata benefit of the Lenders, a first priority security interest in all
accounts, accounts receivable, inventory, chattel paper, documents,
instruments and general intangibles of each Guarantor, whether now owned
or hereafter acquired, and all products and proceeds thereof, to the
extent provided in the Guarantor Security Agreement.
(c) The Borrower shall grant to the Administrative Agent, for the
pro rata benefit of the Lenders, a first priority security interest in (a)
all of the Borrower's shares of capital stock and other equity interests
of each Domestic Subsidiary, whether now owned or hereafter acquired by
the Borrower, and (b) 66% of the shares of voting stock and other voting
equity interests and all of the shares of non-voting preferred stock and
other non-voting equity interests of each direct Foreign Subsidiary,
whether now owned or hereafter acquired by the Borrower, pursuant to the
Borrower Pledge Agreement.
(d) Each Domestic Subsidiary shall grant to the Administrative
Agent, for the pro rata benefit of the Lenders, a first priority security
interest in (a) all of such Domestic Subsidiary's shares of capital stock
and other equity interests of each other Domestic Subsidiary, whether now
owned or hereafter acquired by such Domestic Subsidiary, and (b) 66% of
the shares of voting stock and other voting equity interests and all of
the shares of non-voting preferred stock and other non-voting equity
interests of each direct Foreign Subsidiary, whether now owned or
hereafter acquired by such Domestic Subsidiary, pursuant
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to the Subsidiary Pledge Agreement (a Subsidiary Pledge Agreement and
Netherlands notarial deed being due within 45 Business Days of the closing
of the Forasol Acquisition in the case of Forasub).
(e) On or before June 6, 1997, the Borrower or its Subsidiaries
shall grant or cause to be granted to the Administrative Agent, for the
pro rata benefit of the Lenders, a first priority security interest in
Acceptable Collateral, pursuant to such security agreements, assignments
and other documents as Administrative Agent may require; provided,
however, that the Borrower's failure to provide Acceptable Collateral in
accordance with this subsection shall not in and of itself be a Default or
Event of Default hereunder, but shall result in the other consequences
specified elsewhere herein.
(f) The Borrower and each Guarantor shall execute and cause to be
executed such further documents and instruments, including without
limitation Uniform Commercial Code financing statements, as the
Administrative Agent, in its sole discretion, deems necessary or desirable
to create, evidence, preserve, and perfect its liens and security interest
in the Collateral.
Section 6.2 SETOFF. If an Event of Default shall have occurred and be
continuing, each Lender shall have the right to set off and apply against the
Obligations in such manner as such Lender may determine, at any time and without
notice to the Borrower, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from such Lender to the Borrower whether or not the Obligations are then due.
Each Lender agrees to promptly notify the Administrative Agent after any such
setoff and application. The rights and remedies of the Lenders hereunder are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Lenders may have.
Section 6.3 OTHER SUBSIDIARIES. Within 10 Business Days of becoming a
Domestic Subsidiary, each Person which hereafter becomes a Domestic Subsidiary
shall execute and deliver to the Administrative Agent (a) a Guaranty in form and
substance satisfactory to the Administrative Agent, pursuant to which such
Domestic Subsidiary guaranties the prompt payment and performance in full of all
of the Obligations, (b) a Guarantor Security Agreement in form and substance
satisfactory to the Administrative Agent, pursuant to which such Domestic
Subsidiary grants to the Administrative Agent, for the pro rata benefit of the
Lenders, a first priority security interest in all of such Domestic Subsidiary's
personal property of the types described in Section 6.1(b), whether now owned or
hereafter acquired, and all products and proceeds thereof, and (c) a Subsidiary
Pledge Agreement in form and substance satisfactory to the Administrative Agent,
pursuant to which such Domestic Subsidiary grants to the Administrative Agent,
for the pro rata benefit of the Lenders, a first priority security interest in
(i) all of the capital stock and other equity interests of each other Domestic
Subsidiary, whether now owned or hereafter acquired by such Domestic Subsidiary,
and (ii) 66% of the shares of voting stock and other voting equity interests and
all of the shares of non-voting preferred stock and other non-voting equity
interests of each direct Foreign Subsidiary, whether now owned or hereafter
acquired by such Domestic Subsidiary, (d) such further documents
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and instruments (including without limitation Uniform Commercial Code financing
statements, stock certificates and stock powers) as the Administrative Agent in
its sole discretion deems necessary or desirable to create, evidence, preserve,
and perfect its Liens in the Collateral, and (e) such legal opinions, corporate
and partnership documents and certificates as Administrative Agent or its
counsel may require in connection with the documents executed and delivered
pursuant to this Section.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 INITIAL EXTENSION OF CREDIT. The obligation of the Lenders to
make the initial Advance or issue the initial Letter of Credit hereunder is
subject to the satisfaction in full of each of the following conditions
precedent:
(a) The Administrative Agent shall have received on or before the
day of such Advance or Letter of Credit all of the following, each dated
(unless otherwise indicated) the date hereof, in form and substance
satisfactory to the Administrative Agent:
(1) RESOLUTIONS. Resolutions of the Board of Directors of the
Borrower and each Domestic Subsidiary that is a corporation
certified by the Secretary or an Assistant Secretary of such Person
which authorize (i) the execution, delivery, and performance by the
Borrower of this Agreement and the other Loan Documents to which
such Person is or is to be a party, and (ii) the execution,
delivery, and performance by each such Domestic Subsidiary of the
Guaranty and other Loan Documents to which such Person is or is to
be a party;
(2) INCUMBENCY CERTIFICATE. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of the Borrower
and each Domestic Subsidiary that is a corporation, respectively,
certifying the names of (i) the officers of the Borrower authorized
to sign this Agreement and each of the other Loan Documents to which
the Borrower is or is to be a party (including the certificates
contemplated herein) together with specimen signatures of such
officers, and (ii) the officers of each such Domestic Subsidiary
authorized to sign the Guaranty and the other Loan Documents to
which such Person is or is to be a party (including the certificates
contemplated herein) together with specimen signatures of such
officers;
(3) ARTICLES OF INCORPORATION. The articles or certificate of
incorporation of the Borrower and each Domestic Subsidiary that is a
corporation, respectively, certified by the Secretary or Assistant
Secretary of such Person;
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(4) BYLAWS. The bylaws of the Borrower and each Domestic
Subsidiary that is a corporation certified by the Secretary or an
Assistant Secretary of such Person;
(5) GOVERNMENTAL CERTIFICATES. Certificates of the appropriate
governmental officials of the respective states of incorporation of
the Borrower and each Domestic Subsidiary that is a corporation as
to the existence and good standing of such Persons and certificates
of the appropriate governmental officials of each state where any
such Persons own property, conduct business or employ any Persons as
to the qualification and good standing of such Persons,
respectively, in such jurisdictions, each dated within 10 days prior
to the date hereof.
(6) NOTES. The Note of each Lender executed by the Borrower;
(7) BORROWER SECURITY AGREEMENT. The Borrower Security
Agreement executed by the Borrower;
(8) GUARANTOR SECURITY AGREEMENT. The Guarantor Security
Agreement executed by the Domestic Subsidiaries;
(9) BORROWER PLEDGE AGREEMENT. The Borrower Pledge Agreement
executed by the Borrower;
(10) FINANCING STATEMENTS. Uniform Commercial Code financing
statements executed by the Borrower and the Domestic Subsidiaries
and covering such Collateral as the Administrative Agent may
request;
(11) STOCK CERTIFICATES. Original certificates representing
all shares of stock of Domestic Subsidiaries pledged pursuant to the
Borrower Pledge Agreement and the Subsidiary Pledge Agreement,
together with original stock powers duly executed in blank;
(12) GUARANTIES. The Guaranties executed by the Domestic
Subsidiaries;
(13) CONTRIBUTION AND INDEMNIFICATION AGREEMENT. A
Contribution and Indemnification Agreement in the form of Exhibit
"L" hereto, executed by Borrower and the Domestic Subsidiaries;
(14) L/C DOCUMENTS. With respect to issuance of any Letter of
Credit, all applicable L/C Documents, if any, as required by Section
3.1;
(15) INSURANCE POLICIES. Copies of certificate of insurance
with respect to all insurance policies required by Section 9.5;
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(16) UCC SEARCHES. The results of Uniform Commercial Code
searches showing all financing statements and other documents or
instruments on file against the Borrower and the Domestic
Subsidiaries in the office of the Secretary of State of the State of
Texas and such other jurisdictions as the Administrative Agent may
request, each such search to be as of a date no more than 10 days
prior to the date hereof, with copies of results from prior Uniform
Commercial Code searches to be as of a date no more than 30 days
prior to the date hereof;
(17) OPINION OF COUNSEL. A favorable opinion of legal counsel
to the Borrower and the Subsidiaries, as to the matters set forth in
Exhibit "M" hereto, and such other matters as the Administrative
Agent may reasonably request;
(18) AGENTS' FEES. Evidence that all fees due to the Agents in
accordance with a fee letter of even date shall have been paid in
full by the Borrower;
(19) COMPLIANCE CERTIFICATE. An initial short-form Compliance
Certificate as of March 6, 1997, based on a pro forma post-closing
balance sheet, executed by the president, chief executive officer,
chief financial officer or corporate controller of the Borrower;
(20) BORROWING BASE REPORT. A Borrowing Base Report as of
March 6, 1997, based on a pro forma post-closing balance sheet, in
substantially the form of Exhibit "N" hereto, certified by the
president, chief financial officer or corporate controller of the
Borrower;
(21) SOLVENCY CERTIFICATE. A certificate, in form and
substance satisfactory to the Agent, executed by the chief financial
officer of Borrower as to the solvency of the Borrower and each of
the Guarantors;
(22) FORASOL PURCHASE AGREEMENT. A true, correct and complete
copy of the Forasol Purchase Agreement; and
(23) FORASOL ACQUISITION. Evidence that each and every
material condition to the Forasol Acquisition has been completed,
except payment of the purchase price.
(b) DUE DILIGENCE. The due diligence review of the Borrower and the
Subsidiaries by the Lenders and the Agents shall have been completed and
the results thereof shall be satisfactory to the Agents and the Lenders in
all respects, such review to include without limitation a review of and
satisfaction with five-year financial projections, a pro-forma
post-closing balance sheet, insurance coverage, contingent liabilities,
material contracts and corporate legal structure.
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(c) REPAYMENT OF DEBT AND RELEASE OF LIENS. Provision satisfactory
to the Agents shall have been made for the payment and refinancing of all
Debt of the Borrower and the Subsidiaries and termination of commitments
described on Schedule 8.9, subject only to making available the proceeds
of the Advances for such payment and refinancing and all Liens identified
on Schedule 10.2 shall have been released or documentation providing for
the release of all such Liens shall have been duly executed by all
necessary Persons and provision satisfactory to the Agents shall have been
made for delivery thereof to the Administrative Agent upon payment of the
Debt of the Borrower and the Subsidiaries described on Schedule 8.9.
Section 7.2 ALL EXTENSIONS OF CREDIT. The obligation of the Lenders to
make any Advance or issue any Letter of Credit (including the initial Advance
and the initial Letter of Credit) is subject to the following additional
conditions precedent:
(a) REQUEST FOR ADVANCE OR LETTER OF CREDIT. The Administrative
Agent shall have received in accordance with Section 2.5 or 3.2, as the
case may be, an Advance Request Form or Letter of Credit Request Form
dated the date of such Advance or Letter of Credit and executed by an
authorized officer of the Borrower;
(b) L/C DOCUMENTS. With respect to any Letter of Credit,
Administrative Agent shall have received all applicable L/C Documents as
required by Section 3.1;
(c) NO DEFAULT. No Default shall have occurred and be continuing, or
would result from such Advance or Letter of Credit; and
(d) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties contained in Article VIII hereof and in the other Loan
Documents shall be true and correct in all material aspects on and as of
the date of such Advance with the same force and effect as if such
representations and warranties had been made on and as of such date.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement, the
Borrower represents and warrants to the Agents and the Lenders (which
representations and warranties made by the Borrower as of the date hereof or as
of the date of the initial Advance hereunder shall also be true and correct
after the Forasol Acquisition has occurred) that:
Section 8.1 EXISTENCE AND AUTHORITY. The Borrower and each Subsidiary (a)
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation or is a limited partnership
duly organized and validly existing under the laws of
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the jurisdiction of its organization; (b) has all requisite power and authority
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in which the
nature of its business makes such qualification necessary and where failure to
so qualify would have a material adverse effect on its business, condition
(financial or otherwise), operations, prospects, or properties. The Borrower and
each Guarantor each has the power and authority to execute, deliver, and perform
its obligations under this Agreement and the other Loan Documents to which it is
or may become a party.
Section 8.2 FINANCIAL STATEMENTS. The Borrower has delivered to the
Administrative Agent audited consolidated financial statements of the Borrower
and its Subsidiaries as at and for the fiscal year ended December 31, 1995 and
unaudited consolidated financial statements of the Borrower and its Subsidiaries
for the nine-month period ended September 30, 1996. Such financial statements
are true and correct, have been prepared in accordance with GAAP, and fairly and
accurately present, on a consolidated basis, the financial condition of the
Borrower and the Subsidiaries as of the respective dates indicated therein and
the results of operations for the respective periods indicated therein. Neither
the Borrower nor any of the Subsidiaries has any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or unrealized
or anticipated losses from any unfavorable commitments that are material with
respect to the Borrower or the Subsidiaries taken as a whole, except as referred
to or reflected in such financial statements. There has been no material adverse
change in the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower or any of the Subsidiaries since the
effective date of the most recent consolidated financial statements referred to
in this Section.
Section 8.3 CORPORATE ACTION; NO BREACH. The execution, delivery, and
performance by the Borrower of this Agreement and by the Borrower and each
Guarantor of the other Loan Documents to which they are party and compliance
with the terms and provisions hereof and thereof, have been duly authorized by
all requisite corporate and partnership action on the part of each such Person
and do not and will not (a) violate or conflict with, or result in a breach of,
or require any consent under (i) the articles of incorporation, certificate of
incorporation, bylaws, partnership agreement or other organizational documents
of any such Person, (ii) any applicable law, rule, or regulation or any order,
writ, injunction, or decree of any Governmental Authority or arbitrator, or
(iii) any material agreement or instrument to which any such Person is a party
or by which any of them or any of their property is bound or subject, or (b)
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien (except as provided in Article VI) upon any
of the revenues or assets of any such Person.
Section 8.4 OPERATION OF BUSINESS. The Borrower and each of the
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and none of the Borrower or the Subsidiaries is in violation of
any valid rights of others with respect to any of the foregoing, the violation
of which could have a Material Adverse Effect.
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Section 8.5 LITIGATION AND JUDGMENTS. Except as disclosed on Schedule 8.5
hereto, there is no action, suit, investigation, or proceeding before or by any
Governmental Authority or arbitrator pending, or to the knowledge of the
Borrower, threatened against or affecting the Borrower, any Subsidiary, or any
Foreign Affiliate that would, if adversely determined, have a material adverse
effect on the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower and the Subsidiaries taken as a whole
or the ability of the Borrower or any Guarantor to pay and perform the
Obligations. On the date hereof, there are no outstanding judgments against the
Borrower or any Subsidiary.
Section 8.6 RIGHTS IN PROPERTIES; LIENS. The Borrower and each Subsidiary
have good and marketable title to or valid leasehold interests in their
respective properties and assets, real and personal, including the properties,
assets, and leasehold interests reflected in the financial statements described
in Section 8.2, and none of the properties, assets, or leasehold interests of
the Borrower or any Subsidiary is subject to any Lien, except as permitted by
Section 10.2.
Section 8.7 ENFORCEABILITY. This Agreement constitutes, and the other Loan
Documents when delivered, shall constitute legal, valid, and binding obligations
of the Borrower and each Guarantor, respectively, which are party thereto,
enforceable against such Persons, respectively, in accordance with their
respective terms, except as limited by (i) bankruptcy, insolvency, or other laws
of general application relating to the enforcement of creditors' rights, and
(ii) general principles of equity, whether applied in a proceeding in equity or
at law.
Section 8.8 APPROVALS. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower or
any Guarantor of this Agreement and the other Loan Documents to which the
Borrower or the Guarantors, respectively, is or may become a party or the
validity or enforceability thereof, except for authorizations, approvals,
consents, filings and registrations which have been made or obtained and for
filing of any financing statements or similar instruments in connection with any
of the Collateral.
Section 8.9 DEBT. The Borrower and the Subsidiaries have no Debt, except
as disclosed on Schedule 8.9 hereto or otherwise permitted by Section 10.1
hereof.
Section 8.10TAXES. The Borrower and each Subsidiary have filed all tax
returns (federal, state, and local) required to be filed, including all income,
franchise, employment, property, and sales tax returns, except for any state or
local tax returns the nonfiling of which will not have a material adverse effect
on the business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower or any Subsidiary. The Borrower and each Subsidiary
have paid all of their respective liabilities for taxes, assessments,
governmental charges, and other levies that are due and payable, except for any
state or local taxes, assessments, governmental charges and levies which are not
known by Borrower or any Subsidiary to be due and payable if the nonpayment
thereof will not have a material adverse effect on the business, condition
(financial or otherwise), operations, prospects, or properties of the Borrower
or any Subsidiary. The Borrower knows of no pending
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investigation of the Borrower or any Subsidiary by any taxing authority or of
any pending but unassessed tax liability of the Borrower or any Subsidiary that
could reasonably be expected to have a Material Adverse Effect.
Section 8.11 USE OF PROCEEDS; MARGIN SECURITIES. None of the Borrower or
the Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations G, T, U, or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Advance will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying margin stock.
Section 8.12 ERISA. The Borrower and each Subsidiary are in compliance in
all material respects with all applicable provisions of ERISA and the
non-compliance with which could reasonably be expected to have a Material
Adverse Effect. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. No notice of intent to terminate a
Plan has been filed, nor has any Plan been terminated that could reasonably be
expected to have a Material Adverse Effect. No circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings. Neither the Borrower nor any Guarantor nor any ERISA Affiliate has
completely or partially withdrawn from a Multiemployer Plan. The Borrower, each
Guarantor and each ERISA Affiliate have met their minimum funding requirements
under ERISA with respect to all of their Plans, and the present value of all
vested benefits under each Plan do not exceed the fair market value of all Plan
assets allocable to such benefits, as determined on the most recent valuation
date of the Plan and in accordance with ERISA. Neither the Borrower nor any
Guarantor nor any ERISA Affiliate has incurred any liability to the PBGC under
ERISA that could reasonably be expected to have a Material Adverse Effect.
Section 8.13 DISCLOSURE. No written statement, information, report,
representation, or warranty made by the Borrower or any Guarantor in this
Agreement or in any other Loan Document or furnished to any Agent or any Lender
in connection with this Agreement or any of the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not materially
misleading. There is no fact known to the Borrower or any Guarantor (other than
matters of a economic nature affecting business generally) which has a Material
Adverse Effect, or which is likely to in the future have a Material Adverse
Effect that has not been disclosed in writing to the Administrative Agent.
Section 8.14 SUBSIDIARIES; FOREIGN AFFILIATES. On the date hereof, the
Borrower has no Subsidiaries other than those listed on Schedule 8.14 hereto,
and Schedule 8.14 (a) sets forth the jurisdiction of incorporation or
organization of each Subsidiary, (b) sets forth the percentage of the Borrower's
or any Subsidiary's ownership of the outstanding voting stock or other ownership
or equity interests of each Subsidiary, and (c) designates the Foreign
Subsidiaries. All of the outstanding capital stock of each Subsidiary has been
validly issued, is fully paid, and is
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nonassessable. Borrower shall, from time to time as necessary, deliver to the
Administrative Agent an updated Schedule 8.14 to this Agreement, together with a
certificate of an authorized officer of Borrower certifying that the information
set forth in such schedule is true, correct, and complete as of such date.
Section 8.15 AGREEMENTS. None of the Borrower or the Subsidiaries is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a material adverse effect on the business, condition (financial
or otherwise), operations, prospects, or properties of the Borrower or any
Subsidiary, or the ability of the Borrower or any Guarantor to pay and perform
their respective obligations under the Loan Documents. None of the Borrower or
the Subsidiaries is in default in any material respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which it is
a party.
Section 8.16 COMPLIANCE WITH LAWS. None of the Borrower, the Subsidiaries
or, to the best of the Borrower's knowledge, the Foreign Affiliates is in
violation in any material respect of any law, rule, regulation, order, or decree
of any Governmental Authority or arbitrator, except to the extent that the
failure to comply therewith will not have a material adverse effect on the
business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower, any Subsidiary, or any Foreign Affiliate.
Section 8.17 INVESTMENT COMPANY ACT. None of the Borrower or the
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.18 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Borrower or
the Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 8.19 ENVIRONMENTAL MATTERS. Except as disclosed on Schedule 8.19
hereto, (a) there are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of the Borrower
or any Subsidiary that could reasonably be expected to give rise to any
Environmental Liabilities of the Borrower or any Subsidiary which could
reasonably be expected to have a Material Adverse Effect, and (b) no Lien
arising under any Environmental Law has attached to any property or revenues of
the Borrower or any Subsidiary.
ARTICLE IX
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, the
Borrower will perform and observe
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the following affirmative covenants, unless the Required Lenders (or the
Administrative Agent with the consent of the Required Lenders) shall otherwise
consent in writing:
Section 9.1 REPORTING REQUIREMENTS. The Borrower will furnish to the
Administrative Agent and each Lender:
(a) ANNUAL CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS. As
soon as available, and in any event within 90 days after the end of each
fiscal year of the Borrower, beginning with the fiscal year ending
December 31, 1996, (i) a copy of the Borrower's annual report on Form 10-K
as filed with the Securities and Exchange Commission and a copy of the
annual audited financial report of the Borrower and the Subsidiaries for
such fiscal year containing, on a consolidated basis, balance sheets and
statements of operations, stockholders' equity, and cash flows as at the
end of such fiscal year and for the 12-month period ending immediately
before such date, in each case setting forth in comparative form the
figures for the preceding fiscal year, all in reasonable detail and
audited and certified by, and accompanied by the unqualified opinion of,
independent certified public accountants of recognized standing acceptable
to the Administrative Agent, to the effect that such report has been
prepared in accordance with GAAP and presents fairly the consolidated
financial condition and results of operations of the Borrower and the
Subsidiaries at the date and for the periods indicated therein, and (ii)
consolidating financial statements of the Borrower and the Subsidiaries,
containing a balance sheet and statement of operations, all in reasonable
detail;
(b) QUARTERLY CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS.
As soon as available, and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Borrower, (i)
a copy of an unaudited financial report of the Borrower and the
Subsidiaries as of the end of such fiscal quarter and for the portion of
the fiscal year then ended on Form 10-Q as filed with the Securities and
Exchange Commission, containing, on a consolidated basis, balance sheets
and statements of operations and cash flows, in each case setting forth in
comparative form the figures for the corresponding period of the preceding
fiscal year, all in reasonable detail and certified by the chief financial
officer or corporate controller of the Borrower to have been prepared in
accordance with GAAP and to fairly and accurately present (subject to
year-end audit adjustments) the financial condition and results of
operations of the Borrower and the Subsidiaries, on a consolidated basis,
at the date and for the periods indicated therein, and (ii) consolidating
financial statements of the Borrower and the Subsidiaries, containing a
balance sheet and statement of operations, all in reasonable detail;
(c) COMPLIANCE CERTIFICATE. Concurrently with the delivery of each
of the financial statements referred to in subsections 9.1(a) and (b), a
Compliance Certificate;
(d) NOTICE OF LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any Governmental
Authority or arbitrator affecting the
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Borrower, any Subsidiary or any Foreign Affiliate which, if determined
adversely to the Borrower, such Subsidiary, or such Foreign Affiliate
which could have a Material Adverse Effect;
(e) NOTICE OF DEFAULT. As soon as possible and in any event within
five days after the Borrower, any Subsidiary or any Foreign Affiliate
obtains knowledge or becomes aware of the occurrence of any Default, a
written notice setting forth the details of such Default and the action
that the Borrower and such other Person have taken and propose to take
with respect thereto;
(f) NOTICE OF MATERIAL ADVERSE CHANGE. As soon as possible and in
any event within five days after the Borrower, any Subsidiary or any
Foreign Affiliate obtains knowledge or becomes aware of the occurrence of
any matter that could have a Material Adverse Effect, written notice of
such matter;
(g) NOTICE OF CHANGE IN REPRESENTATION OR WARRANTY. As soon as
possible and in any event within five days after the Borrower, any
Subsidiary or any Foreign Affiliate obtains knowledge or becomes aware of
any change in any material fact or circumstance represented or warranted
in any of the Loan Documents, written notice of such change;
(h) BORROWING BASE REPORT. As soon as available, and in any event
within 45 days after the end of each calendar month, a Borrowing Base
Report, in substantially the form of Exhibit "N" hereto, certified by the
president, chief executive officer, chief financial officer or corporate
controller of the Borrower, together with an accounts receivable aging
report in form and detail satisfactory to the Administrative Agent showing
all accounts receivable of the Borrower and the Subsidiaries divided into
domestic and international categories and aged in 30-day intervals; and
(i) UPDATED APPRAISALS. By June 6, 1997 and on the last day of each
18-month period thereafter, updated rig and equipment appraisals for the
Borrower's rigs and equipment (including any Acceptable Collateral
provided in accordance with Section 6.1(e))(the cost of which shall be
borne by the Borrower).
(j) GENERAL INFORMATION. Promptly, such other information concerning
the Borrower, any Subsidiary or any Foreign Affiliate as any Agent or any
Lender may from time to time reasonably request.
All financial statements and reports, including Borrowing Base Reports, required
to be delivered under this Section shall be due on the Business Day immediately
following the specified due date if the specified due date is not a Business
Day.
Section 9.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. The Borrower
will preserve and maintain, and will cause each Subsidiary to preserve and
maintain, its corporate or partnership
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existence and all of its leases, privileges, licenses, permits, franchises,
qualifications, agreements and rights that are necessary or desirable in the
ordinary conduct of its business. The Borrower will conduct, and will cause each
Subsidiary, and will use its best efforts to cause each Foreign Affiliate to
conduct, its business in an orderly and efficient manner in accordance with good
business practices.
Section 9.3 MAINTENANCE OF PROPERTIES. The Borrower will maintain, keep,
and preserve, and cause each Subsidiary, and will use its best efforts to cause
each Foreign Affiliate to maintain, keep, and preserve, in good working order
and condition, all of its properties (tangible and intangible) which are useful
in any material respect in the proper conduct of its business or are necessary
in the proper conduct of its business.
Section 9.4 TAXES AND CLAIMS. The Borrower will pay or discharge, and will
cause each Subsidiary to pay or discharge, at or before the date on which
penalties attach the following which, if unpaid, would become a Lien on its
Property: (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; PROVIDED, however, that none of the Borrower or the
Subsidiaries shall be required to pay or discharge any tax, levy, assessment, or
governmental charge or any claim for labor, material, or supplies which is being
contested in good faith by appropriate proceedings diligently pursued, and for
which adequate reserves have been established.
Section 9.5 INSURANCE. The Borrower will maintain, and will cause each of
the Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies in such amounts and covering such risks as is usually
carried by corporations engaged in similar businesses and owning similar
properties in the same general geographic areas in which the Borrower and the
Subsidiaries operate, provided that in any event the Borrower will maintain and
cause each Subsidiary to maintain workmen's compensation insurance, property
insurance, comprehensive general liability insurance, and products liability
insurance reasonably satisfactory to the Administrative Agent. Each insurance
policy covering Collateral shall name the Administrative Agent as loss payee and
shall provide that such policy will not be cancelled or reduced without 15 days
prior written notice to the Administrative Agent.
Section 9.6 INSPECTION RIGHTS. At any reasonable time during normal
business hours and from time to time, the Borrower each will permit, and will
cause each Subsidiary, and will use its best efforts to cause each Foreign
Affiliate to permit, representatives of the Administrative Agent and each Lender
to examine, copy, and make extracts from its books and records, to visit and
inspect its properties, and to discuss its business, operations, and financial
condition with its officers, employees, and independent certified public
accountants. Without in any way limiting the foregoing, the Administrative Agent
may conduct (or cause a third party to conduct) annual audits of the Collateral
and appraisals of equipment collateral at the expense of the Borrower. Such
audits may be performed by the Administrative Agent's in-house audit and asset
management review staff. The Borrower agrees to pay to the Administrative Agent
on demand all fees, charges and
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out-of-pocket expenses of the Administrative Agent in connection with each such
audit. Notwithstanding the foregoing, the cost of equipment and rig appraisals
more frequently than every 18-months (provided no Default then exists) will be
borne by the Lenders.
Section 9.7 KEEPING BOOKS AND RECORDS. The Borrower will maintain, and
will cause each Subsidiary, and will use its best efforts to cause each Foreign
Affiliate to maintain, proper books of record and account in which full, true,
and correct entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its business and activities; provided, however, that
the Foreign Subsidiaries and the Foreign Affiliates shall be permitted to
maintain day-to-day books of record and account in accordance with local
statutory accounting practices rather than GAAP.
Section 9.8 COMPLIANCE WITH LAWS AND AGREEMENTS. The Borrower will comply,
and will cause each Subsidiary to comply, in all material respects with all
applicable laws, rules, regulations, orders, and decrees of any Governmental
Authority or arbitrator and all material agreements, contracts, and instruments
binding on it or affecting its properties or business.
Section 9.9 FURTHER ASSURANCES. The Borrower will, and will cause each
Subsidiary, and will use its best efforts to cause each Foreign Affiliate to,
execute and deliver such further agreements and instruments and take such
further action as may be reasonably requested by the Administrative Agent to
carry out the provisions and purposes of this Agreement and the other Loan
Documents and to create, preserve, and perfect the Liens of the Administrative
Agent in the Collateral.
Section 9.10ERISA. The Borrower will comply, and will cause each
Subsidiary to comply, with all minimum funding requirements, and all other
material requirements, of ERISA, if applicable, so as not to give rise to any
liability for failure to comply with the requirements of ERISA.
ARTICLE X
NEGATIVE COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, the
Borrower will perform and observe the following negative covenants, unless the
Required Lenders (or the Administrative Agent with the consent of the Required
Lenders) shall otherwise consent in writing:
Section 10.1DEBT. The Borrower will not incur, create, assume, or permit
to exist, or permit any Subsidiary to incur, create, assume, or permit to exist,
any Debt, except:
(a) Debt to the Lenders hereunder;
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(b) Debt existing on the date hereof and described on Schedule 8.9
hereto, provided that any such Debt indicated on Schedule 8.9 as "Debt to
be Repaid" shall have been repaid on or before the date of the initial
Advance hereunder;
(c) Demand intercompany Debt among the Borrower and its
Subsidiaries;
(d) Senior Debt (other than Debt described in subsections (a)
through (c) above) in an amount (i) not to exceed $20,000,000 in the
aggregate at any time outstanding and (ii) which when added to the amount
of outstanding Non-Recourse Debt and Sale-Leaseback Debt of the Borrower
and the Subsidiaries, or any of them, shall not exceed $75,000,000 in the
aggregate at any time outstanding;
(e) Non-Recourse Debt (other than the Non-Recourse Debt described in
subsection (d) above) and Sale-Leaseback Debt of the Borrower and the
Subsidiaries, or any of them, in an amount which when added to the amount
of outstanding Senior Debt (other than Debt described in subsections (a)
through (c) above) shall not exceed $75,000,000 in the aggregate at any
time outstanding; and
(f) Guarantees by the Borrower and the Subsidiaries existing on the
date hereof and described on Schedule 8.9 hereto, and Guarantees by the
Borrower and the Subsidiaries, or any of them, in an amount not to exceed
$5,000,000 in the aggregate at any time.
Section 10.2 LIMITATION ON LIENS. The Borrower will not incur, create,
assume, or permit to exist, or permit any Subsidiary to incur, create, assume,
or permit to exist, any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except:
(a) Liens in favor of the Administrative Agent pursuant to the Loan
Documents;
(b) Liens disclosed on Schedule 10.2 hereto, provided that any such
Liens indicated on Schedule 10.2 as a "Lien to be Released" shall have
been released or provision satisfactory to the Agents for the release of
such Liens shall have been made on or before the date of the initial
Advance hereunder;
(c) Encumbrances consisting of minor easements, zoning restrictions,
or other restrictions on the use of real property that do not
(individually or in the aggregate) materially affect the value of the
assets encumbered thereby or materially impair the ability of the Borrower
or the Subsidiaries to use such assets in their respective businesses, and
none of which is violated in any material respect by existing or proposed
structures or land use;
(d) Liens for taxes, assessments, or other governmental charges
which are not delinquent or which are being contested in good faith and
for which adequate reserves have been established;
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(e) Liens of landlords (for any location where a landlord's waiver
is not required under the Loan Documents), mechanics, materialmen,
warehousemen, carriers, or other similar statutory Liens securing
obligations that (i) are not yet due and are incurred in the ordinary
course of business or (ii) are being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate
reserves have been established;
(f) Liens resulting from good faith deposits to secure payments of
workmen's compensation, unemployment insurance or other social security
programs or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, or contracts (other than for payment of
Debt), or leases made in the ordinary course of business, or arising from
litigation which are effectively stayed from execution and would not
otherwise constitute a Default or cause an Event of Default;
(g) Liens on specified assets securing any Non-Recourse Debt
permitted by Section 10.1(e);
(h) Liens on any assets which are the subject of a Sale-Leaseback
Transaction, securing the Sale-Leaseback Debt resulting therefrom,
provided such Sale-Leaseback Debt is permitted by Section 10.1(e); and
(i) Liens securing any purchase money Senior Debt permitted by
Section 10.1(d), provided that such Liens do not encumber any property
other than the property for which such purchase money was incurred.
Section 10.3 MERGERS, ACQUISITIONS, ETC. The Borrower will not, and will
not permit any Subsidiary to, become a party to a merger or consolidation, or
purchase or otherwise acquire all or substantially all of the assets of any
Person or any shares or other evidence of beneficial ownership of any Person, or
wind-up, dissolve, or liquidate; provided, however, that (a) the Forasol
Acquisition shall be permitted so long as no Default is then existing or will
result therefrom, and (b) the Borrower or any Subsidiary shall be permitted to
become a party to a merger or consolidation or acquire all or any part of the
assets of any Person or any shares or other beneficial ownership of any Person
(in addition to the Forasol Acquisition), so long as (i) no Default is existing
or would result therefrom, (ii) the Borrower has given the Administrative Agent
at least 20 days prior notice of such merger, consolidation or acquisition,
(iii) the Borrower has provided to the Lenders calculations demonstrating the
pro forma compliance with all financial and other covenants contained herein,
after giving effect to such merger, consolidation or acquisition, based on the
most recently delivered financial statements, (iv) the total cash and non-cash
consideration paid and Debt assumed or incurred by the Borrower or any
Subsidiary in connection with all such mergers, consolidations or acquisitions
shall not exceed $50,000,000 in the aggregate for any fiscal year, and (v) the
Borrower or such Subsidiary, as the case may be, is the surviving corporation in
such merger or consolidation.
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Section 10.4 RESTRICTED PAYMENTS. The Borrower will not make and will not
permit any Subsidiary to make, any Restricted Payment; provided, however, that
the Subsidiaries shall be permitted to declare and pay dividends to the Borrower
or any Guarantor.
Section 10.5 LOANS AND INVESTMENTS. The Borrower will not make, and will
not permit any Subsidiary to make, any advance, loan, extension of credit, or
capital contribution to or investment in, or purchase, or permit any Subsidiary
to purchase, any stock, bonds, notes, debentures, or other securities of, any
Person, except:
(a) readily marketable direct obligations of the United States of
America or any agency thereof with maturities of one year or less from the
date of acquisition;
(b) certificates of deposit with maturities of one year or less from
the date of acquisition issued by any commercial bank operating in the
United States of America having capital and surplus in excess of
$50,000,000;
(c) commercial paper of a domestic issuer if at the time of purchase
such paper is rated in one of the two highest rating categories of S&P or
Xxxxx'x;
(d) debt securities which shall have one of the two highest ratings
from S&P or Xxxxx'x and which mature within one year from the date of
acquisition;
(e) investments in eurodollars placed through any financial
institution having combined capital, surplus, and undivided profits of not
less than $100,000,000;
(f) repurchase agreements with any financial institution having
combined capital, surplus, and undivided profits of not less than
$100,000,000 for U.S. Government obligations maturing in less than 10
days;
(g) investments in daily money market mutual funds having assets
greater than $200,000,000 and limited in holdings to assets of the types
described in subsections (a), (b) and (c) of this Section;
(h) equity contributions, loans, and advances among the Borrower, it
Subsidiaries, and its Foreign Affiliates; provided that the aggregate
outstanding amount of equity contributions, loans, and advances to its
Foreign Affiliates does not exceed the amount outstanding on the date of
this Agreement plus $5,000,000;
(i) payroll advances made in the ordinary course of business;
(j) accounts receivable in the ordinary course of business;
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(k) loans and advances made by the Borrower, any Subsidiary or any
Foreign Affiliate to their respective officers and employees in the
ordinary course of business not to exceed $1,000,000 in the aggregate
outstanding at any time;
(l) demand deposits at Xxxxx Brothers Xxxxxxxx & Co. or banks with
capital surplus and undivided profits of at least $100,000,000 and whose
deposits are insured by the Federal Deposit Insurance Corporation,
maintained by the Borrower or any Subsidiary in the ordinary course of
business for the purpose of paying operating expenses; and
(m) short-term investments made in accordance with the investment
guideline policy dated effective April 24, 1990 and revised through the
date hereof, a true and correct copy of which has been delivered to the
Administrative Agent.
Section 10.6 TRANSACTIONS WITH AFFILIATES. The Borrower will not enter
into, and will not permit any Subsidiary and will use its best efforts to not
permit any Foreign Affiliate to enter into, any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of the Borrower, such Subsidiary or such Foreign
Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's, such Subsidiary's or such Foreign Affiliate's
business and upon fair and reasonable terms no less favorable to the Borrower,
such Subsidiary or such Foreign Affiliate than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate of the Borrower, such
Subsidiary or such Foreign Affiliate.
Section 10.7 DISPOSITION OF ASSETS. The Borrower will not sell, lease,
assign, transfer, or otherwise dispose of any of its assets, and will not permit
any Subsidiary to do so with any of its assets, except (a) dispositions of
inventory in the ordinary course of business, and (b) dispositions of equipment
and fixtures having a fair market value not to exceed $50,000,000 in the
aggregate during any fiscal year of the Borrower.
Section 10.8 SALE AND LEASEBACK. The Borrower will not enter into, and
will not permit any Subsidiary to enter into, any Sale-Leaseback Transaction
unless the amount of Sale-Leaseback Debt resulting therefrom, plus the aggregate
of all other Sale-Leaseback Debt then existing, does not exceed the amount
permitted by Section 10.1(e).
Section 10.9 NATURE OF BUSINESS. The Borrower will not, and will not
permit any Subsidiary to, engage in any business substantially different than
the businesses in which they are engaged as of the date hereof.
Section 10.10 ENVIRONMENTAL PROTECTION. The Borrower will not, and will
not permit any Subsidiary to, (a) use (or permit any tenant to use) any of their
respective properties or assets for the handling, processing, storage,
transportation, or disposal of any Hazardous Material in violation of any
Environmental Law that the violation of which could reasonably be expected to
have a Material Adverse Effect, (b) generate any Hazardous Material in violation
of any Environmental Law that the
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violation of which could reasonably be expected to have a Material Adverse
Effect, (c) conduct any activity that causes a release or threatened release of
any Hazardous Material that could reasonably be expected to have a Material
Adverse Effect, or (d) otherwise conduct any activity or use any of their
respective properties or assets in any manner that is likely to violate any
Environmental Law that the violation of which could reasonably be expected to
have a Material Adverse Effect or create any Environmental Liabilities for which
the Borrower or any Subsidiary would be responsible that could reasonably be
expected to have a Material Adverse Effect.
Section 10.11 ACCOUNTING. The Borrower will not, and will not permit any
Subsidiary to, change its fiscal year or make any change (a) in accounting
treatment or reporting practices, except as required by GAAP and disclosed to
the Administrative Agent, or (b) in tax reporting treatment, except as required
by law and disclosed to the Administrative Agent.
ARTICLE XI
FINANCIAL COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, the
Borrower will observe and perform the following financial covenants, unless the
Required Lenders (or the Administrative Agent with the consent of the Required
Lenders) shall otherwise consent in writing:
Section 11.1 FUNDED DEBT TO EBITDA. The Borrower will not permit the ratio
of its Funded Debt, as of the date hereof and as of each fiscal quarter
thereafter, to EBITDA, for the most recent Rolling Period then ended, to exceed
(a) 3.50 to 1.00 for each determination made during the period from and
including the date hereof to and including the fiscal quarter ending December
31, 2000, and (b) 3.00 to 1.00 for each fiscal quarter ending thereafter.
Section 11.2 FUNDED DEBT TO CAPITALIZATION. The Borrower will not permit
the ratio of Funded Debt to Capitalization, as of the end of each fiscal
quarter, for the most recent Rolling Period, to exceed (a) 0.55 for each
determination made during the period from and including the date hereof to and
including September 30, 1997, (b) 0.50 for each determination made during the
period from and including October 1, 1997 to and including the fiscal quarter
ending December 31, 2000, and (c) 0.40 for each fiscal quarter ending
thereafter.
Section 11.3 COVERAGE RATIO. The Borrower will maintain, at all times
(measured at the end of each fiscal quarter), a Coverage Ratio of not less than
1.50 to 1.00.
Section 11.4 TANGIBLE NET WORTH. The Borrower will at all times maintain
or cause to be maintained Tangible Net Worth in an amount not less than the sum
of (a) $189,415,000, plus (b) the increase in Tangible Net Worth resulting from
the Forasol Acquisition, plus (c) 75% of net income, after provision for income
taxes, of the Borrower and the Subsidiaries (without any deduction for losses),
for each fiscal quarter of the Borrower ended through the date of determination
beginning
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with the fiscal quarter ended December 31, 1996, plus (d) 100% of the Net
Proceeds received by the Borrower or any Subsidiary from any issuance, sale or
other disposition of any shares of capital stock or other equity securities of
the Borrower of any class (or any securities convertible or exchangeable for any
such shares, or any rights, warrants, or options to subscribe for or purchase
any such shares).
ARTICLE XII
DEFAULT
Section 12.1 EVENTS OF DEFAULT. Each of the following shall be deemed an
"Event of Default":
(a) The Borrower shall fail to pay any installment of principal or
interest on any of the Notes, any fees, or any other portion of the
Obligations when due.
(b) Any representation or warranty made or deemed made by the
Borrower or any Obligated Party (or any of their respective officers) in
any Loan Document or in any certificate, report, notice, or financial
statement furnished at any time in connection with this Agreement shall be
false, misleading, or erroneous in any material respect when made or
deemed to have been made.
(c) The Borrower or any Obligated Party shall (i) fail to perform,
observe, or comply with any of the affirmative covenants contained in
Article IX hereof (other than those in Sections 9.1(e) and 9.1(f)) and
such failure shall remain unremedied for 15 days after its occurrence, or
(ii) fail to perform, observe, or comply with any other covenants
contained in this Agreement.
(d) The Borrower or any Obligated Party shall fail to perform,
observe, or comply with any (i) affirmative covenant, agreement, or term
contained in any other Loan Document (except those described in
subsections (a) and (c) of this Section) and such failure shall remain
unremedied for 15 days after its occurrence, or (ii) negative or
prohibitive covenant, agreement, or term contained in any other Loan
Document.
(e) The Borrower, any Subsidiary, or any Obligated Party shall
commence a voluntary proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other
similar official of it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it or shall make a general assignment for the benefit of
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creditors or shall generally fail to pay its debts as they become due or
shall take any corporate action to authorize any of the foregoing.
(f) An involuntary proceeding shall be commenced against the
Borrower, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian, or
other similar official for it or a substantial part of its property, and
such involuntary proceeding shall remain undismissed and unstayed for a
period of 60 days.
(g) The Borrower, any Subsidiary, or any Obligated Party shall fail
to discharge or stay within a period of 30 days after the commencement
thereof any attachment, sequestration, or similar proceeding or
proceedings involving an aggregate amount in excess of $5,000,000 against
any of its assets or properties.
(h) A final judgment or judgments for the payment of money in excess
of $2,500,000 in the aggregate shall be rendered by a court or courts
against the Borrower, any Subsidiary, or any Obligated Party and the same
shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and the Borrower, the relevant
Subsidiary, or the relevant Obligated Party shall not, within said period
of 30 days, or such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
(i) (i) The Borrower, any Subsidiary, or any Obligated Party shall
fail to pay when due, after any applicable grace periods, any principal of
or interest on any Debt in excess of $1,000,000 in the aggregate (other
than the Obligations), or (ii) the maturity of any such Debt shall have
been accelerated, or (iii) any such Debt shall have been required to be
prepaid prior to the stated maturity thereof, or (iv) any event shall have
occurred that permits (or, with the giving of notice or lapse of time or
both, would permit) any holder or holders of such Debt or any Person
acting on behalf of such holder or holders to accelerate the maturity
thereof or require any such prepayment.
(j) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the validity
or enforceability thereof shall be contested or challenged by the
Borrower, any Subsidiary, any Obligated Party or any of their respective
shareholders, or the Borrower, any Subsidiary, or any Obligated Party
shall deny that it has any further liability or obligation under any of
the Loan Documents, or any lien or security interest created by the Loan
Documents shall for any reason cease to be a valid, first priority
perfected security interest in and lien upon any of the Collateral
purported to be covered thereby.
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(k) Any of the following events shall occur or exist with respect to
the Borrower, any Obligated Party or any ERISA Affiliate: (i) any
Prohibited Transaction involving any Plan; (ii) any Reportable Event with
respect to any Plan; (iii) filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any Plan; (iv) any
event or circumstance that might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the termination of,
or for the appointment of a trustee to administer, any Plan, or the
institution by the PBGC of any such proceedings; or (v) complete or
partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of
any Multiemployer Plan; and in each case above, such event or condition,
together with all other events or conditions, if any, have subjected or
could in the reasonable opinion of the Required Lenders subject the
Borrower or any Obligated Party to any tax, penalty, or other liability to
a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate could reasonably be expected to have a
Material Adverse Effect.
(l) Any Change in Control shall occur.
(m) The Borrower, any Subsidiary, or any Obligated Party, or any of
their properties, revenues, or assets in excess of $1,000,000 in the
aggregate, shall become subject to an order of forfeiture, seizure, or
divestiture and the same shall not have been discharged within 30 days
from the date of entry thereof.
Section 12.2 REMEDIES UPON DEFAULT. If any Event of Default shall occur
and be continuing, the Administrative Agent may, with the consent of the
Required Lenders (and if directed by the Required Lenders, shall), do any one or
more of the following: (a) declare, upon written notice to the Borrower, the
Obligations or any part thereof to be immediately due and payable, and the same
shall thereupon become immediately due and payable, without demand, presentment,
notice of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, protest, or other formalities of any kind, all of
which are hereby expressly waived by the Borrower, (b) terminate, upon written
notice to the Borrower, the Commitments, but without notice to any Subsidiary or
any other Obligated Party, (c) reduce any claim to judgment, (d) foreclose or
otherwise enforce any Lien granted to the Administrative Agent for the benefit
of itself and the Lenders to secure payment and performance of the Obligations,
and (e) exercise any and all rights and remedies afforded by the laws of the
State of Texas or any other jurisdiction, by any of the Loan Documents, by
equity, or otherwise; provided, however, that upon the occurrence of an Event of
Default under Section 12.1(e) or Section 12.1(f), the Commitments of the Lenders
shall automatically terminate, and the Obligations shall become immediately due
and payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
Section 12.3 CASH COLLATERAL. If any Event of Default shall occur and be
continuing, the Borrower agrees to, if requested by the Administrative Agent or
the Required Lenders, immediately
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deposit with and pledge to the Administrative Agent cash or cash equivalent
investments satisfactory to the Administrative Agent in its sole and absolute
discretion in an amount equal to the outstanding Letter of Credit Liabilities as
security for the Obligations, and the Administrative Agent may retain, as
additional Collateral for the payment of the Obligations with respect to the
Letters of Credit, any amounts received upon foreclosure, or in lieu of
foreclosure, through offset, as proceeds of any Collateral or otherwise.
Section 12.4 PERFORMANCE BY THE ADMINISTRATIVE AGENT. If the Borrower
shall fail to perform any covenant or agreement contained in any of the Loan
Documents, the Administrative Agent may perform or attempt to perform such
covenant or agreement on behalf of the Borrower. In such event, the Borrower
agrees to, at the request of the Administrative Agent, promptly pay any amount
expended by the Administrative Agent in connection with such performance or
attempted performance to the Administrative Agent, together with interest
thereon at the Default Rate from and including the date of such expenditure to
but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Administrative Agent nor any
Lender shall have any liability or responsibility for the performance of any
obligation of the Borrower under this Agreement or any other Loan Document.
ARTICLE XIII
THE AGENTS
Section 13.1 APPOINTMENT, POWERS AND IMMUNITIES. In order to expedite the
various transactions contemplated by this Agreement, the Lenders hereby
irrevocably appoint and authorize (1) Xxxxx to act as their Administrative Agent
hereunder and under each of the other Loan Documents and (2) FNBC to act as
their Syndication Agent hereunder. Xxxxx consents to such appointment and agrees
to perform the duties of the Administrative Agent as specified herein. FNBC
consents to such appointment and the Agents agree, in consultation with the
Borrower, to select a syndicate of Lenders to participate in the Commitments.
The Lenders authorize and direct the Administrative Agent to take such action in
their name and on their behalf under the terms and provisions of the Loan
Documents and to exercise such rights and powers thereunder as are specifically
delegated to or required of the Administrative Agent for the Lenders, together
with such rights and powers as are reasonably incidental thereto. The
Administrative Agent is hereby expressly authorized to act as the Administrative
Agent on behalf of itself and the other Lenders:
(a) To receive on behalf of each of the Lenders any payment of
principal, interest, fees or other amounts paid pursuant to this Agreement
and the Notes and to distribute to each Lender its pro rata share of all
payments so received as provided in this Agreement;
(b) To receive all documents and items to be furnished under the
Loan Documents;
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(c) To act as nominee for and on behalf of the Lenders in and under
the Loan Documents;
(d) To arrange for the means whereby the funds of the Lenders are to
be made available to the Borrower;
(e) To distribute to the Lenders information, requests, notices,
payments, prepayments, documents and other items received from the
Borrower, the other Obligated Parties, and other Persons;
(f) To execute and deliver to the Borrower, the other Obligated
Parties, and other Persons, all requests, demands, approvals, notices, and
consents received from the Lenders;
(g) To the extent permitted by the Loan Documents, to exercise on
behalf of each Lender all rights and remedies of Lenders upon the
occurrence of any Event of Default;
(h) To accept, execute, and deliver the Borrower Security Agreement,
the Guarantor Security Agreement, the Borrower Pledge Agreement, the
Subsidiary Pledge Agreement, and any other security documents as the
secured party; and
(i) To take such other actions as may be requested by Required
Lenders.
Neither the Administrative Agent nor any of its Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
this Agreement or any of the other Loan Documents except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Administrative Agent (i) may treat the payee of any Note
as the holder thereof until the Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to the Administrative Agent; (ii) shall have no duties or responsibilities
except those expressly set forth in this Agreement and the other Loan Documents,
and shall not by reason of this Agreement or any other Loan Document be a
trustee or fiduciary for any Lender; (iii) shall not be required to initiate any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by Required Lenders; (iv) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, enforceability, or sufficiency of this Agreement or any
other Loan Document or any other document referred to or provided for herein or
therein or for any failure by any Person to perform any of its obligations
hereunder or thereunder; (v) may consult with legal counsel (including counsel
for the Borrower), 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; and (vi) shall incur no
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liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by this Agreement, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by Required Lenders, and such instructions
of Required Lenders and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders; PROVIDED, however, that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or any other Loan Document or applicable law.
Section 13.2 RIGHTS OF AGENTS AS LENDERS. With respect to its Commitment,
the Advances made by it and the Note issued to it, Xxxxx in its capacity as a
Lender hereunder and FNBC in its capacity as a Lender hereunder shall each have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Administrative Agent or the
Syndications Agent, as the case may be, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the Administrative Agent
and the Syndications Agent, each in its individual capacity. Each Agent and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, act as trustee under indentures of, provide
merchant banking services to, and generally engage in any kind of business with
the Borrower, any of its Subsidiaries, any other Obligated Party, and any other
Person who may do business with or own securities of the Borrower, any
Subsidiary, or any other Obligated Party, all as if it were not acting as the
Administrative Agent or the Syndications Agent and without any duty to account
therefor to the Lenders.
Section 13.3 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment of any principal of or interest on any Advance made by it under this
Agreement or payment of any other obligation under the Loan Documents then owed
by the Borrower or any other Obligated Party to such Lender, whether voluntary,
involuntary, through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share,
such Lender shall promptly purchase from the other Lenders participations in the
Advances held by them hereunder in such amounts, and make such other adjustments
from time to time as shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of the other Lenders in accordance with its
pro rata portion thereof. To such end, all of the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Lender so purchasing a
participation in the Advances made by the other Lenders may exercise all rights
of setoff, banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Advances to the
Borrower in the amount of such participation. Nothing contained herein shall
require any Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
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SECTION 13.4 INDEMNIFICATION. THE LENDERS HEREBY AGREE TO INDEMNIFY EACH
AGENT FROM AND HOLD EACH AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED
UNDER SECTIONS 14.1 AND 14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
BORROWER UNDER SECTIONS 14.1 AND 14.2), RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENTS, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY
BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH AGENT IN ANY WAY RELATING
TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO
BE TAKEN BY SUCH AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS;
PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE
FOREGOING TO THE EXTENT CAUSED BY SUCH AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF
THE LENDERS THAT EACH AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD
HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF ANY
AGENT. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH LENDER AGREES
TO REIMBURSE EACH AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED
ON THE BASIS OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES
(INCLUDING ATTORNEYS' FEES) INCURRED BY SUCH 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, THE LOAN
DOCUMENTS, TO THE EXTENT THAT SUCH AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY
THE BORROWER OR ANY OTHER OBLIGATED PARTY.
Section 13.5 INDEPENDENT CREDIT DECISIONS. Each Lender agrees that it has
independently and without reliance on any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and the Guarantors and decision to enter into
this Agreement and that it will, independently and without reliance upon any
Agent or any other Lender, and based upon such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. Neither of the Agents shall be required to keep itself
informed as to the performance or observance by the Borrower or any Obligated
Party of this Agreement or any other Loan Document or to inspect the properties
or books of the Borrower or any Obligated Party. Except for notices, reports and
other documents and
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information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or under the other Loan Documents, neither of the
Agents shall have any duty or responsibility to provide any Lender with any
credit or other financial information concerning the affairs, financial
condition or business of the Borrower or any Obligated Party (or any of their
Affiliates) which may come into the possession of any Agent or any of its
Affiliates.
Section 13.6 SEVERAL COMMITMENTS. The Commitments and other obligations of
the Lenders under this Agreement are several. The default by any Lender in
making an Advance in accordance with its Commitment shall not relieve the other
Lenders of their obligations under this Agreement. In the event of any default
by any Lender in making any Advance, each nondefaulting Lender shall be
obligated to make its Advance but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event shall
any Lender be required to advance an amount or amounts which shall in the
aggregate exceed such Lender's Commitment. No Lender shall be responsible for
any act or omission of any other Lender.
Section 13.7 SUCCESSOR ADMINISTRATIVE AGENT. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower and the Administrative Agent may be removed at any time
with or without cause by Required Lenders. Upon any such resignation or removal,
Required Lenders will have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or any State thereof and having combined capital
and surplus of at least $100,000,000. Upon the acceptance of its appointment as
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all rights, powers, privileges,
immunities, and duties of the resigning or removed Administrative Agent, and the
resigning or removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement and the other Loan Documents. After any
Administrative Agent's resignation or removal as Administrative Agent, the
provisions of this Article XIII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Administrative Agent.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 EXPENSES. The Borrower hereby agrees to pay on demand: (a)
all reasonable costs and out-of-pocket expenses of the Agents in connection with
the preparation, negotiation, execution, and delivery of this Agreement and the
other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including,
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without limitation, the reasonable fees and expenses of legal counsel for the
Agents, (b) all reasonable costs and out-of-pocket expenses of the Agents and
the Lenders, or any of them in connection with any Default and the enforcement
of this Agreement or any other Loan Document, including, without limitation, the
reasonable fees and expenses of legal counsel for the Agents and the Lenders, or
any of them, (c) all transfer, stamp, documentary, or other similar taxes,
assessments, or charges levied by any Governmental Authority in respect of this
Agreement or any of the other Loan Documents, (d) all reasonable costs,
out-of-pocket expenses, assessments, and other charges incurred in connection
with any filing, registration, recording, or perfection of any security interest
or Lien contemplated by this Agreement or any other Loan Document, and (e) all
other reasonable costs and out-of-pocket expenses incurred by the Agents in
connection with this Agreement or any other Loan Document, including, without
limitation, all fees, costs, out-of-pocket expenses, and other charges incurred
in connection with performing or obtaining any audit or appraisal in respect of
the Collateral.
SECTION 14.2 INDEMNIFICATION. THE BORROWER HEREBY AGREES TO INDEMNIFY EACH
AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE PARTNERS,
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, AND PARTICIPANTS FROM, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, INTEREST, EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES), AND AMOUNTS PAID IN SETTLEMENT TO WHICH
ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE
TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY THE BORROWER OR ANY
GUARANTOR OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR
ANY SUBSIDIARY, (E) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND
ALL TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON ANY AGENT OR ANY LENDER OR
ANY OF THEIR RESPECTIVE CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR
(G) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
RELATING TO ANY OF THE FOREGOING; PROVIDED, HOWEVER THAT NO PERSON TO BE
INDEMNIFIED HEREUNDER SHALL HAVE THE RIGHT TO BE INDEMNIFIED FOR ITS OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF THIS
AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED
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UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND
ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM
THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 14.3 LIMITATION OF LIABILITY. None of the Agents, Lenders, or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and the Borrower hereby waives, releases, and
agrees not to xxx any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by the Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. The Borrower hereby waives,
releases, and agrees not to xxx any Agent or any Lender or any of their
respective Affiliates, partners, officers, directors, employees, attorneys, or
agents for punitive damages in respect of any claim in connection with, arising
out of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 14.4 NO FIDUCIARY RELATIONSHIP. The relationship between the
Borrower and each Lender with respect to the Loan Documents and the transactions
governed thereby is solely that of debtor and creditor, and neither any Agent
nor any Lender has any fiduciary or other special relationship with the Borrower
with respect to the Loan Documents and the transactions governed thereby, and no
term or condition of any of the Loan Documents shall be construed so as to deem
the relationship between the Borrower and any Lender with respect to the Loan
Documents and the transactions governed thereby to be other than that of debtor
and creditor.
Section 14.5 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of any
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement and the other
Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.
Section 14.6 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The
Borrower shall not be permitted to assign or transfer any of its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all of the Lenders. Any Lender may sell
participations to one or more banks or other institutions in or to all or
a portion of its rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, all or a portion of its
Commitments, the Advances owing to it and its share of Letter of Credit
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Liabilities); PROVIDED, however, that (i) such Lender's obligations under
this Agreement and the other Loan Documents (including, without
limitation, its Commitment) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the Borrower for the performance of such
obligations, (iii) such Lender shall remain the holder of its Note for all
purposes of this Agreement, (iv) the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents,
and (v) such Lender shall not sell a participation that conveys to the
participant the right to vote or give or withhold consents under this
Agreement or any other Loan Document, other than the right to vote upon or
consent to (A) any increase of such Lender's Commitment, (B) any reduction
of the principal amount of, or interest to be paid on, the Advances of
such Lender, (C) any reduction of any commitment fee or other amount
payable to such Lender under any Loan Document, (D) any postponement of
any date for the payment of any amount payable in respect of the Advances
of such Lender, or (E) any material release of Collateral other than
releases contemplated in the Loan Documents as in effect on the date
hereof and releases upon full payment and performance of the Obligations
and termination of the Commitments. Such participants shall have no rights
under the Loan Documents, other than certain voting rights as provided
above. Subject to the following, each Lender may obtain (on behalf of its
participants) the benefits of Article V with respect to all participations
in its part of the Obligations outstanding from time to time. If a
participant is entitled to the benefits of Article V or a Lender grants
rights to its participants to vote or give or withhold consents respecting
the matters described above, then that Lender must include a voting
mechanism in the relevant participation agreement whereby a majority of
its portion of the Obligations (whether held by it or participated) shall
control the vote for all of that Lender's portion of the Obligations.
Except in the case of the sale of a participating interest to another
Lender, the relevant participation agreement shall prohibit the
participant from transferring, pledging, assigning, selling participations
in, or otherwise encumbering its portion of the Obligations.
(b) The Borrower and each of the Lenders agree that any Lender may
at any time assign to one or more Eligible Assignees all, or a
proportionate part of all, of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, its
Commitment, Advances and Letter of Credit Liabilities); PROVIDED, however,
that (i) each such assignment shall be of a consistent, and not a varying,
percentage of all of the assigning Lender's rights and obligations under
this Agreement and the other Loan Documents, (ii) except in the case of an
assignment of all of a Lender's rights and obligations under this
Agreement and the other Loan Documents, the amount of the Commitment of
the assigning Lender being assigned pursuant to each assignment
(determined as of the date of the Assignment and Acceptance with respect
to such assignment) shall in no event be less than $5,000,000, and the
amount of the Commitment of the assigning Lender remaining after each such
assignment shall in no event be less than $5,000,000, and (iii) the
parties to each such assignment shall execute and deliver to the
Administrative Agent for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with the Note
subject to such assignment, and a processing and recordation fee of
$3,500. Upon
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such execution, delivery, acceptance, and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least 10 Business Days after the execution
thereof, or, if so specified in such Assignment and Acceptance, the date
of acceptance thereof by the Administrative Agent, (x) the assignee
thereunder shall be a party hereto as a "Lender" and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and under the Loan Documents and (y) the Lender that is an
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement and the other Loan Documents (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a
Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party thereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender that is an assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties, or representations made in or
in connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency, or value of the Loan
Documents or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
or any Obligated Party or the performance or observance by the Borrower or
any Obligated Party of its obligations under the Loan Documents; (iii)
such assignee confirms that it has received a copy of the other Loan
Documents, together with copies of the financial statements referred to in
Section 8.2 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon any Agent or such assignor and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its
behalf and exercise such powers under the Loan Documents as are delegated
to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
(d) The Administrative Agent may maintain at its Principal Office a
copy of each Assignment and Acceptance delivered to and accepted by it and
a register for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Advances owing to, each
Lender from time to time (the "REGISTER"). The
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entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agents, and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes under the Loan Documents. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and assignee representing that it is an Eligible
Assignee, together with any Note subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit "B" hereto and all
requirements set forth in this Section have been satisfied, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register, if any, and (iii) give prompt written notice
thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note a new Note payable to the order
of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment, a new Note payable to the order of the
assigning Lender in an amount equal to the Commitment retained by it
hereunder (each such promissory note shall constitute a "Note" for
purposes of the Loan Documents). Such new Notes shall be in an aggregate
face amount of the surrendered Note, shall be dated the effective date of
such Assignment and Acceptance, and shall otherwise be in substantially
the form of Exhibit "I" hereto.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section, disclose to the assignee or participant or proposed assignee or
participant, subject to the confidentiality agreements between the
Borrower and the Lenders, any information relating to the Borrower, the
Subsidiaries or the Foreign Affiliates furnished to such Lender by or on
behalf of the Borrower, the Subsidiaries or the Foreign Affiliates.
Section 14.7 SURVIVAL. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by any Agent or any Lender or any closing shall affect the
representations and warranties or the right of any Agent or any Lender to rely
upon them. Without prejudice to the survival of any other obligation of the
Borrower hereunder, the obligations of the Borrower under Sections 14.1, and
14.2 shall survive repayment of the Notes and termination of the Commitments and
the Letters of Credit.
Section 14.8 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS,
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WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO.
Section 14.9 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Loan Document to which the Borrower is a
party, nor any consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to in writing by
Required Lenders (or Administrative Agent with the consent of Required Lenders)
and the Borrower, and each such waiver, amendment, or consent shall be effective
only in the specific instance and for the specific purpose for which given;
PROVIDED, that no amendment, waiver, or consent shall, unless in writing and
signed by all of the Lenders and the Borrower, do any of the following: (a)
increase or reinstate Commitments of the Lenders or subject the Lenders to any
additional obligations; (b) reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder (except any fees payable to any
Agent solely for its account as specified herein or in any other document); (c)
change the Borrowing Base or the Termination Date or postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder (except any fees payable to any Agent solely for its
account as specified herein or in any other document); (d) waive any of the
conditions specified in Article VII; (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes or the
number of Lenders which shall be required for the Lenders or any of them to take
any action under this Agreement; (f) change any provision contained in this
Section 14.9; or (g) release any Collateral, except for dispositions permitted
herein. Notwithstanding anything to the contrary contained in this Section, no
amendment, waiver, or consent shall be made with respect to Article XIII hereof
without the prior written consent of the Administrative Agent.
Section 14.10 MAXIMUM INTEREST RATE. No provision of this Agreement or any
other Loan Document shall require the payment or the collection of interest in
excess of the maximum amount permitted by applicable law. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
the Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event any Lender ever receives, collects, or applies as
interest any such sum, such amount which would be in excess of the maximum
amount permitted by applicable law shall be applied as a payment and reduction
of the principal of the indebtedness; and, if the principal has been paid in
full, any remaining excess shall forthwith be paid to the Borrower. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, the Borrower and each Lender shall, to the extent permitted by applicable
law, (a) characterize any non-principal payment as an expense, fee, or premium
rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the
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total amount of interest throughout the entire contemplated term of the
indebtedness evidenced by the Notes so that interest for the entire term does
not exceed the Maximum Rate.
Section 14.11 NOTICES. All notices and other communications provided for
in this Agreement and the other Loan Documents shall be given in writing and
telecopied, mailed by certified mail return receipt requested, or delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof; or, as to any party at such other address as shall
be designated by such party in a notice to the other party given in accordance
with this Section. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, when duly deposited in the mails,
in each case given or addressed as aforesaid; PROVIDED, however, notices to the
Administrative Agent pursuant to Article II and Article III shall not be
effective until received by the Administrative Agent.
Section 14.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN XXXXXX COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN XXXXXX COUNTY, TEXAS. ANY ACTION OR PROCEEDING AGAINST THE
BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT IN XXXXXX COUNTY, TEXAS. THE BORROWER HEREBY
IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS
SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 14.11.
NOTHING HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF
ANY AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST THE BORROWER OR WITH RESPECT TO ANY OF THEIR RESPECTIVE
PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE
BORROWER AGAINST ANY AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN A COURT
LOCATED IN XXXXXX COUNTY, TEXAS.
Section 14.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Section 14.14 SEVERABILITY. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 14.15 HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 14.16 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil
Statutes, Article 5069-15) are specifically declared by the parties hereto not
to be applicable to this Agreement or any of the other Loan Documents or to the
transactions contemplated hereby.
Section 14.17 CONSTRUCTION. The Borrower, each Agent and each Lender
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Section 14.18 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 14.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF ANY AGENT
OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section 14.20 ARBITRATION. Upon the demand of any party, any Dispute shall
be resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including without limitation, any of
the foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Loan Documents. Any party may
by summary proceedings bring an action in court to compel arbitration of a
Dispute. Any party who fails or refuses to submit to arbitration
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following a lawful demand by any other party shall bear all costs and expenses
incurred by such other party in compelling arbitration of any Dispute.
(a) GOVERNING RULES. Arbitration proceedings shall be administered by the
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in Texas selected by
the AAA or other administrator. If there is any inconsistency between the terms
hereof and any such rules, the terms and procedures set forth herein shall
control. All statutes of limitation applicable to any Dispute shall apply to any
arbitration proceeding. All discovery activities shall be expressly limited to
matters directly relevant to the Dispute being arbitrated. Judgment upon any
award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. ss.91 or any similar applicable state law.
(b) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration hereunder.
(c) ARBITRATOR QUALIFICATIONS AND POWERS AWARDS. Arbitrators must be
active members of the Texas State Bar with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of Texas, (ii) may grant any
remedy or relief that a court of the state of Texas could order or grant within
the scope hereof and such ancillary relief as is necessary to make effective any
award, and (iii) shall have the power to award recovery of all costs and fees,
to impose sanctions and to take such other actions as they deem necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Texas Rules of Civil Procedure or other applicable law. Any Dispute in which the
amount in controversy is $5,000,000 or less shall be decided by a single
arbitrator who shall not render an award of greater than $5,000,000 (including
damages, costs, fees and expenses). By submission to a single arbitrator, each
party expressly waives any right or claim to recover more than $5,000,000. Any
Dispute in which the amount in controversy exceeds $5,000,000 shall be decided
by majority vote of a panel of three arbitrators; provided however, that all
three arbitrators must actively participate in all hearings and deliberations.
(d) JUDICIAL REVIEW. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make
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specific, written findings of fact and conclusions of law. In such arbitrations
(i) the arbitrators shall not have the power to make any award which is not
supported by substantial evidence or which is based on legal error, (ii) an
award shall not be binding upon the parties unless the findings of fact are
supported by substantial evidence and the conclusions of law are not erroneous
under the substantive law of the state of Texas, and (iii) the parties shall
have in addition to the grounds referred to in the Federal Arbitration Act for
vacating, modifying or correcting an award the right to judicial review of (A)
whether the findings of fact rendered by the arbitrators are supported by
substantial evidence, and (B) whether the conclusions of law are erroneous under
the substantive law of the state of Texas. Judgment confirming an award in such
a proceeding may be entered only if a court determines the award is supported by
substantial evidence and not based on legal error under the substantive law of
the state of Texas.
(e) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceedings within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulations, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provisions most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
Section 14.21 SPECIAL PROVISION. Notwithstanding any other provision in
this Agreement, no waiver or amendment to Sections 10.1 or 10.3, or both, shall
be effective until both a Conditional Consent and a Final Consent related
thereto are received, it being understood and agreed that each Lender (other
than any Nonconsenting Lender that has given an Opt-Out Request) shall be
entitled to give or withhold its consent to the Final Consent that is the
subject of a Conditional Consent and that the result may be that consent is not
given for the requested waiver or amendment of Sections 10.1 or 10.3, or both.
Failure of the Administrative Agent to receive a Conditional Consent or a Final
Consent within 10 Business Days of requesting the same shall be deemed a
rejection of the request and any Opt-Out Request shall be deemed revoked. If a
Final Consent is given after one or more Opt-Out Requests, the Borrower agrees
to, and the Lenders consent to, terminate the Commitment of each Nonconsenting
Lender and repay its Loans in full as required in the Opt-Out Request, but
without premium, penalty or breakage costs, and on the date its Commitment is
terminated and its Loan are paid in full, each Nonconsenting Lender that
provided an Opt-Out Request shall no longer be a "Lender" hereunder, and the
participation in all Letters of Credit shall be redistributed among all of the
remaining Lenders in accordance with the remaining Commitments.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
PRIDE PETROLEUM SERVICES, INC.
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
Vice President, General Counsel and Secretary
Address for Notices:
0000 Xxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Treasurer
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AGENTS AND LENDERS:
FIRST NATIONAL BANK OF COMMERCE,
as Syndication Agent and as a Lender
COMMITMENT By: /S/ XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxxxx
$30,000,000 Relationship Manager - Energy Group
Address for Notices:
X.X. Xxx 00000
000 Xx. Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
Principal Office and Applicable Lending
Office for Base Rate Advances and
Eurodollar Advances:
X.X. Xxx 00000
000 Xx. Xxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
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XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, as Administrative
Agent and a Lender
COMMITMENT By: /S/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
$30,000,000 Vice President
Address for Notices and Applicable Lending
Office for Base Rate Advances and Eurodollar
Advances:
0000 Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
Principal Office for interest rate
determinations:
0000 Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
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HIBERNIA NATIONAL BANK
COMMITMENT By: /S/ XXXXXXX XXXX
Xxxxxxx Xxxx
$15,000,000 Senior Vice President
Address for Notices and Applicable Lending
Office for Base Rate Advances and Eurodollar
Advances:
X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxxx
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THE FUJI BANK, LIMITED -HOUSTON
AGENCY
COMMITMENT By: /S/ XXXX XXXXXXXX
Xxxx Xxxxxxxx
$15,000,000 Vice President & Joint Manager
Address for Notices:
Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
0000 XxXxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Lending Office for Base Rate Advances and
Eurodollar Rate Advances:
One Houston Center, Suite 4100
0000 XxXxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxxxxxx
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per pro XXXXX BROTHERS XXXXXXXX & CO.
COMMITMENT By: /S/ X. XXXXXX XXXXXXXX III
X. Xxxxxx Xxxxxxxx III
$10,000,000 Senior Manager
Address for Notices and Applicable Lending
Office for Base Rate Advances and Eurodollar
Advances:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT SECTION
"A" Advance Request Form 1.1; 2.5
"B" Assignment and Acceptance 1.1; 14.6
"C" Borrower Pledge Agreement 1.1; 6.1(c)
"D" Borrower Security Agreement 1.1; 6.1(a)
"E" Compliance Certificate 1.1; 9.1(c)
"F" Guaranty 1.1; 7.1(a)(14)
"G" Guarantor Security Agreement 1.1; 6.1(b)
"H" Letter of Credit Request Form 1.1; 3.2
"I" Form of Note 1.1; 2.2
"J" Subsidiary Pledge Agreement 1.1; 6.1(d)
"K" L/C Application for Standby Letters of Credit 1.1; 3.1
"L" Contribution and Indemnification Agreement 7.1(a)(15)
"M" Matters to be Addressed in Opinion of Counsel 7.1(a)(20)
"N" Borrowing Base Report 9.1(h)
INDEX TO SCHEDULES
SCHEDULE DESCRIPTION OF EXHIBIT SECTION
1.1 Approved Majors/Nationals for Borrowing
Base Purposes 1.1
8.5 Existing Litigation 8.5
8.9 Existing Debt (including Contingent Liabilities
and Guaranties) 8.9
8.14 Subsidiaries and Foreign Affiliates 8.14
8.19 Environmental Matters 8.19
10.2 Existing Liens 10.2
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