EXHIBIT 4.18
GRANT PRIDECO
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT")
is dated as of March ___, 2004 and entered into by and among Grant Prideco,
L.P., a Delaware limited partnership, XL Systems, L.P., a Texas limited
partnership, Texas Arai, Inc., a Delaware corporation ("TEXAS ARAI, INC."),
Tube-Alloy Corporation, a Louisiana corporation, Xxxx-Hycalog, L.P., a Delaware
limited partnership, and Grant Prideco Canada Ltd., a corporation organized,
constituted and existing under the Alberta Business Corporations Act (each
individually referred to herein as a "BORROWER" and collectively as
"BORROWERS"), with Grant Prideco, Inc., a Delaware corporation ("GRANT PRIDECO")
as a guarantor, the financial institutions listed on the signature pages hereof
("LENDERS"), Deutsche Bank Trust Company Americas, acting in its capacity as
contractual representative for the US Lenders hereunder (in such capacity, the
"US AGENT") and Deutsche Bank AG, Canada Branch, acting in its capacity as
contractual representative of the Canadian Lenders hereunder (in such capacity,
"CANADIAN AGENT"). Reference is made to that certain Credit Agreement dated as
of December 19, 2002, by and among the Borrowers, the Lenders referenced
therein, Grant Prideco, US Agent and Canadian Agent, as amended by the First
Amendment to Credit Agreement dated as of August 8, 2003, by and among the
Borrowers, the Lenders referenced therein, Grant Prideco, US Agent and Canadian
Agent (as amended or otherwise modified up to the date hereof, the "CREDIT
AGREEMENT"). Capitalized terms used herein without definition shall have the
same meanings as set forth in the Credit Agreement.
RECITALS
WHEREAS, Grant Prideco is the parent company to the Borrowers
and desires to conduct an Asset Sale of *****., for $***** cash plus a working
capital adjustment to such purchase price ("*****SALE");
WHEREAS, Grant Prideco has informed the US Agent that (i) the
Borrowers have previously conducted Asset Sales of (a) the Rotator AS business
for $13,500,000 (subject to a working capital adjustment), (b) the Star
Operating Company business for $11,000,000 cash and a promissory note in the
original principal amount of $2,146,381, and (c) Petrodrive business for
$7,000,000 (each of the asset sales referred to in the foregoing clauses (a),
(b) and (c) are collectively referred to herein as the "PAST ASSET SALES"), (ii)
the proceeds of the Past Asset Sales were applied to prepay the Revolving Loans
and were or, within 180 days of the closing of each such transaction will be,
reinvested in Equipment or other productive assets as contemplated by Section
2.4(e) of the Credit Agreement such that no prepayment of Term Loans or
reductions of Revolving Loan Commitments were or will be required pursuant to
Section 2.4(h), and (iii) the Borrowers failed to provide the Lenders
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with the certificates required under Section 2.4(e) of the Credit Agreement in
connection with such Past Asset Sales;
WHEREAS, Borrowers have requested that the Credit Agreement be
amended as provided herein; and
WHEREAS, the Agent and the Lenders party hereto have agreed to
amend the Credit Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. SALE OF ASSETS
A. The undersigned Lenders, constituting Majority Lenders,
hereby agree that the proceeds of the ***** Sale (and any subsequent working
capital adjustment related to the ***** Sale) shall not apply against the
$40,000,000 limit on the disposition of assets contemplated by subsection 8.5(g)
of the Credit Agreement, provided that the gross consideration received does not
exceed the sum of $***** plus any working capital adjustment (such sum being
hereinafter referred to as the "***** PURCHASE PRICE").
B. In light of the $5,000,000 prepayment of Term Loans to be
made pursuant to paragraph 3.A. below, a $5,000,000 portion of the TA Purchase
Price will be exempt from the prepayment terms of Section 2.4 of the Credit
Agreement, and the balance of the TA Purchase Price will be subject to Section
2.4 of the Credit Agreement.
SECTION 2. WAIVER OF DEFAULT
A. The undersigned Lenders, constituting Majority Lenders,
hereby waive compliance with (and any Event of Default resulting from the
failure to comply with) the certificate requirement provisions of subsection
2.4(e) of the Credit Agreement to the extent, and only to the extent, that such
provisions relate to the Past Asset Sales.
B. The waiver set forth herein shall be limited precisely as
written and relates solely to the noncompliance by Borrowers with the
certificate requirement provisions of subsection 2.4(e) of the Credit Agreement
in the manner and to the extent described above, and nothing in this Amendment
shall be deemed to constitute a waiver of compliance by Grant Prideco or
Borrowers with respect to (i) subsection 2.4(e) of the Credit Agreement in any
other instance or (ii) any other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein.
SECTION 3. CONDITIONS TO EFFECTIVENESS
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This Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "SECOND
AMENDMENT EFFECTIVE DATE"):
A. APPLICATION OF PROCEEDS. On or before the Second Amendment
Effective Date, a $5,000,000 portion of the ***** Purchase Price shall be paid
to the US Agent and applied to permanently reduce the unpaid principal balance
of the Term Loans, such amount to be applied to the principal of the US Term
Loans and credited to the scheduled payments of principal with respect thereto
in inverse chronological order.
B. BORROWERS' DOCUMENTS. On or before the Second Amendment
Effective Date, Borrowers shall deliver to Agents for Lenders with sufficient
originally executed copies, where appropriate, the following, each, unless
otherwise noted, dated the Second Amendment Effective Date:
1. A certificate from the corporate secretary
or assistant secretary of each Borrower certifying the signature and
incumbency of the officers executing this Amendment; and
2. Executed originals of this Amendment.
C. EXECUTION OF AMENDMENT BY LENDERS. On or before the Second
Amendment Effective Date, US Agent and Majority Lenders shall have executed and
delivered copies of this Amendment to Agent.
D. OTHER PROCEEDINGS. On or before the Second Amendment
Effective Date, all corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Agents, acting on behalf
of Lenders, and their counsel shall be satisfactory in form and substance to
Agents and such counsel, and Agents and such counsel shall have received all
such counterpart originals or certified copies of such documents as Agents may
reasonably request.
E. REIMBURSEMENT OF EXPENSES. On or before the Second
Amendment Effective Date, the Borrowers shall have reimbursed or paid all
reasonable costs, fees and expenses of the Agents (including reasonable
attorneys fees and charges) incurred in connection with the Credit Agreement and
this Amendment.
SECTION 4. BORROWERS' REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, each Credit Party
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. NO CONFLICT. The execution, delivery and performance by
each Borrower of this Amendment and the performance by each Borrower of the
Amended Agreement: (a)
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are within its corporate power; (b) are duly authorized by all necessary action;
(c) do not violate any Requirement of Law or any indenture, contract, lease,
agreement, instrument or other commitment to which it is a party or by which it
or any of its properties are bound where such violation would reasonably be
expected to adversely affect the enforceability of any Credit Document or to
have a Material Adverse Effect; (d) do not violate any provision set forth in
any Governing Documents; (e) do not require the consent, registration or
approval of any Governmental Authority or any other Person (except such as have
been duly obtained, made or given, and are in full force and effect); and (f)
will not, except as contemplated herein, result in the imposition of any Liens
upon any of its properties.
B. BINDING OBLIGATION. This Amendment has been duly executed
and delivered by the Borrowers and this Amendment and the Amended Agreement are
the legally valid and binding obligations of the Borrowers, enforceable against
the Borrowers in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
C. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Article 6 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
D. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute a Default or an Event of Default.
E. RECITALS TRUE. The statements made in the recitals to this
Amendment are true and correct and not misleading in any material respect.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Borrowers, Grant Prideco, Inc. ("HOLDINGS"), and each of the
Subsidiaries (the "SUBSIDIARY GUARANTORS") listed on the signature pages hereto
are party to certain Collateral Documents as amended through the Second
Amendment Effective Date, pursuant to which Borrowers have created Liens in
favor of Agents on certain Collateral to secure the Obligations. Borrowers
hereby represent and warrant that the Subsidiary Guarantors listed on the
signatures pages hereto constitute all of the Domestic Subsidiaries. Each of the
Borrowers, Holdings and Subsidiary Guarantors (collectively, the "CREDIT SUPPORT
PARTIES") is a party to certain Guaranties pursuant to which such Credit Support
Party has (i) guarantied the Obligations and (ii) created Liens in favor of
Agent on certain Collateral to secure the obligations of such Credit Support
Party under such Guaranty of such Credit Support Party. The Guaranties and
Collateral Documents referred to above are collectively referred to herein as
the "CREDIT SUPPORT DOCUMENTS".
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Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement and the other Loan Documents
effected pursuant to this Amendment. Each Credit Support Party hereby
acknowledges and agrees that any Guaranty and Collateral Document (each, a
"CREDIT SUPPORT DOCUMENT") to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or secure, as the case
may be, to the fullest extent possible the payment and performance of all
"Obligations," "Guarantied Obligations" and "Secured Obligations," as the case
may be (in each case as such terms are defined in the applicable Credit Support
Document), including without limitation the payment and performance of all such
"Obligations," "Guarantied Obligations" or "Secured Obligations," as the case
may be, in respect of the Obligations of Borrowers now or hereafter existing
under or in respect of the Amended Agreement.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Second Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than Borrowers) acknowledges
and agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the Second Amendment Effective Date,
each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to
the Credit Agreement, and each reference in the other Credit Documents
to the "Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.
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(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Credit Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of Agents or any Lender under, the Credit Agreement or any of
the other Credit Documents.
B. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
C. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
D. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
E. FURTHER ASSURANCES. Borrowers agree that from time to time,
and at the expense of Borrowers, Borrowers will promptly execute and deliver any
additional amendments and related documents that Agent may reasonably request,
in order to effectuate this Amendment and the transactions contemplated
hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWERS:
GRANT PRIDECO, L.P., individually, as
a Borrower and as US Funds Administrator
By: Grant Prideco Holding, LLC, its general
partner
By: /s/ Xxx Xxxxxxxx
----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XL SYSTEMS, L.P.,
By: Grant Prideco Holding, LLC, its general
partner
By: /s/ Xxx Xxxxxxxx
----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
TEXAS ARAI, INC.,
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
TUBE-ALLOY CORPORATION,
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG, L.P.,
By: Xxxx-Hycalog, LLC, its general partner
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
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GRANT PRIDECO CANADA LTD., individually, as
a Borrower and as Canadian Funds
Administrator
By /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
GUARANTOR:
GRANT PRIDECO, INC.,
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
Title: Vice President
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CREDIT SUPPORT PARTIES:
GRANT PRIDECO HOLDING, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XL SYSTEMS INTERNATIONAL, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
PLEXUS DEEPWATER TECHNOLOGIES, LTD.
By: Grant Prideco Holding, LLC, its general
partner
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
TA INDUSTRIES, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
TUBE-ALLOY CAPITAL CORPORATION
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
GRANT PRIDECO PC COMPOSITES HOLDINGS, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
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GP EXPATRIATE SERVICES, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
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INTELLIPIPE, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
GRANT PRIDECO MARINE PRODUCTS AND SERVICES
INTERNATIONAL, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG COLOMBIA, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG INTERNATIONAL HOLDING, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX- /s/ Xxx Xxxxxxxx
--------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
GRANT PRIDECO FINANCE, LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
Title: Vice President
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GP USA HOLDING, LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
Title: Vice President
GRANT PRIDECO USA, LLC
By: /s/ Xxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx
Title: Vice President
GRANT PRIDECO EUROPEAN HOLDING, LLC
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx
Title: Vice President
XXXX-HYCALOG CIS, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG ARGENTINA, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
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XXXX-HYCALOG AZERBAIJAN, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG KAZAKHSTAN, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
XXXX-HYCALOG THAILAND, LLC
By: /s/ Xxx Xxxxxxxx
-----------------------------------------
Xxx Xxxxxxxx
Title: Treasurer
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DEUTSCHE BANK TRUST COMPANY
AMERICAS, as US Agent and as Lender
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------------------
Name:
Title:
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DEUTSCHE BANK AG, CANADA
BRANCH, as Lender
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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TRANSAMERICA BUSINESS CAPITAL
CORPORATION
as a Lender
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Senior Vice President
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XX XXXXXX CHASE BANK
as a Lender
By: /s/ Xxx Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Senior Vice President
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XXXXXXX XXXXX CAPITAL
as a Lender
By: /s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
Title: Director
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FLEET CAPITAL CORPORATION
as a Lender
By: /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
Title: Vice President
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CIT GROUP/BUSINESS CREDIT INC.
as a Lender
By: /s/ Xxxx Xxxxx
Xxxx Xxxxx
Title: Vice President
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U.S. BANK NATIONAL ASSOCIATION
as a Lender
By: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Title: Senior Vice President
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GMAC COMMERCIAL FINANCE, LLC
as a Lender
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Title: Director
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LASALLE BUSINESS CREDIT, INC.
as a Lender
By: A. Xxxxx Xxxxx, Jr.
A. Xxxxx Xxxxx, Jr.
Title: Vice President
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GE CAPITAL PUBLIC FINANCE, INC.
as a Lender
By: /s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
Title: Vice President
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WHITNEY NATIONAL BANK
as a Lender
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Title: Senior Vice President
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XXXXXXXXX XXXX XX XXXXX, N.A.
as a Lender
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Title: Senior Vice President
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XXXXX FARGO FOOTHILL, LLC
as a Lender
By: /s/Xxx Xxxx
Xxx Xxxx
Title: Vice President
***** Delineates information for which confidential treatment has been requested
pursuant to Rule 24b-2 of the 34 Act
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