EXHIBIT 10.1
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
BY
AND
AMONG
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT AND LENDER,
FOOTHILL CAPITAL CORPORATION,
AS DOCUMENTATION AGENT AND LENDER,
FLEET CAPITAL CORPORATION AND
THE CIT GROUP/EQUIPMENT FINANCE, INC.,
AS LENDERS,
XXXXXXXXX-UTI ENERGY, INC., UTICO, INC., UTICO HARD ROCK BORING, INC.,
INTERNATIONAL PETROLEUM SERVICE COMPANY,
NORTON DRILLING SERVICES, INC., XXXXXX XX, L.L.C., NORTON DRILLING
COMPANY MEXICO, INC., UTI DRILLING CANADA, INC., XXXXXXXXX (LP) LLC,
XXXXXXXXX (GP) LLC, XXXXXXXXX (GP2) LLC, XXXXXXXXX PETROLEUM LP, LLLP
AND
XXXXXXXXX PETROLEUM TRADING COMPANY LP, LLLP
AS THE GUARANTORS
AND
UTI DRILLING, L.P., NORTON DRILLING, L.P.,
UNIVERSAL WELL SERVICES, INC., UTI MANAGEMENT SERVICES, L.P.,
SUITS DRILLING COMPANY, XXXXXXXXX-UTI DRILLING COMPANY LP, LLLP,
XXXXXXXXX-UTI DRILLING COMPANY SOUTH LP, LLLP,
XXXXXXXXX-UTI DRILLING COMPANY WEST LP, LLLP, LONE STAR MUD LP, LLLP,
AND AMBAR DRILLING FLUIDS LP, LLLP
AS THE COMPANIES (AND BORROWERS)
DATED AS OF: JULY 26, 2002
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
TABLE OF CONTENTS
PAGE
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SECTION 1. Definitions..................................................................................1
SECTION 2. Conditions Precedent........................................................................29
SECTION 3. Revolving Loans.............................................................................32
SECTION 4. Acquisition Facility Loans and Permitted Acquisitions.......................................35
SECTION 5. Letters of Credit...........................................................................40
SECTION 6. Collateral..................................................................................42
SECTION 7. Representations, Warranties and Covenants...................................................47
SECTION 8. Interest, Fees and Expenses.................................................................69
SECTION 9. Powers......................................................................................71
SECTION 10. Events of Default and Remedies..............................................................72
SECTION 11. Termination.................................................................................76
SECTION 12. Miscellaneous...............................................................................77
SECTION 13. Agreement Between the Lenders...............................................................84
SECTION 14. Lenders.....................................................................................86
UTI - AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
(i)
EXHIBITS
Exhibit A - Form of Revolving Loan Promissory Note
Exhibit B - Form of Assignment and Transfer Agreement
SCHEDULES
Schedule 1 - Existing Liens
Schedule 7(1) - Collateral Locations and Chief Executive Office
Schedule 7(8)(b)(ii) - Rig Operations Report
Schedule 7(8)(b)(iii) - Receivables Aging Report
Schedule 7(10)(H)(iv) - Investments
Schedule 7(18)(d) - Other Lending Agreements
Schedule 7(18)(e)(i) - Real Property Owned or Leased
Schedule 7(18)(e)(iv) - Rigs and Other Equipment
Schedule 7(18)(f) - Litigation
Schedule 7(18)(k) - Environmental Matters
Schedule 7(18)(m) - Subsidiaries; Capital Stock
Schedule 7(18)(n) - Insurance Policies
Schedule 7(18)(o) - Indebtedness
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LOAN AND SECURITY AGREEMENT
(ii)
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THE CIT GROUP/BUSINESS CREDIT, INC., a
New York corporation
(hereinafter "CITBC") with offices located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Foothill Capital Corporation, a California corporation
("FCC"), Fleet Capital Corporation, a Rhode Island Corporation ("FLEET"), The
CIT Group/Equipment Finance, Inc., a Delaware corporation ("CITEF"), and any
other party hereafter becoming a Lender hereunder pursuant to Section 13,
Paragraph 9 hereof each individually sometimes referred to as a "LENDER" and
collectively the "LENDERS"), CITBC as Agent for the Lenders (hereinafter the
"AGENT"), are pleased to confirm the terms and conditions under which the
Lenders acting through the Agent shall make revolving loans and other financial
accommodations to UTI Drilling, L.P., a Texas limited partnership ("UTI"),
Norton Drilling, L.P., a Delaware limited partnership ("NDLP"), Universal Well
Services, Inc., a Delaware corporation ("UWSI"), UTI Management Services, L.P.,
a Texas limited partnership ("UTIMS"), Suits Drilling Company, an Oklahoma
corporation ("SDC") Xxxxxxxxx-UTI Drilling Company LP, LLLP, a Delaware limited
liability limited partnership ("PUDC"), Xxxxxxxxx-UTI Drilling Company South LP,
LLLP, a Delaware limited liability limited partnership ("PUDCS"), Xxxxxxxxx-UTI
Drilling Company West LP, LLLP, a Delaware limited liability limited partnership
("PUDCW"), Lone Star Mud LP, LLLP, a Delaware limited liability limited
partnership ("LSM"), and Ambar Drilling Fluids LP, LLLP, a Delaware limited
liability limited partnership ("ADF") (UTI, NDLP, UWSI, UTIMS, SDC, PUDC, PUDCS,
PUDCW, LSM, and ADF, together with any additional entities which may become a
Company hereunder from time to time, are referred to herein individually, as a
"COMPANY", and collectively, as the "COMPANIES"), each with its principal place
of business and chief executive office at 0000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx
00000, supported by the guaranties of Xxxxxxxxx-UTI Energy, Inc., a Delaware
corporation (the "PARENT"), UTICO, Inc., a Delaware corporation ("HOLDING"),
UTICO Hard Rock Boring, Inc., a Delaware corporation ("UHRB"), International
Petroleum Service Company, a Pennsylvania corporation ("IPSCO"), Norton Drilling
Services, Inc., a Delaware corporation ("NDS"), Xxxxxx XX, L.L.C., a Delaware
limited liability company ("XXXXXX XX"), Norton Drilling Company Mexico, Inc., a
Delaware corporation ("NDM"), UTI Drilling Canada, Inc., a Delaware corporation
("UTI CANADA"), Xxxxxxxxx (LP) LLC, a Delaware limited liability company
("XXXXXXXXX XX"), Xxxxxxxxx (GP) LLC, a Delaware limited liability company
("XXXXXXXXX XX"), Xxxxxxxxx (GP2) LLC, a Delaware limited liability company
("XXXXXXXXX GP2") Xxxxxxxxx Petroleum LP, LLLP, a Delaware limited liability
limited partnership ("PPLP"), and Xxxxxxxxx Petroleum Trading Company LP, LLLP,
a Delaware limited liability limited partnership ("PPTC"), (Parent, Holding,
UHRB, IPSCO, NDS, Xxxxxx XX, NDM UTI Canada, Xxxxxxxxx XX, Xxxxxxxxx XX,
Xxxxxxxxx GP2, PPLP and PPTC are referred to herein, individually, as a
"GUARANTOR", and collectively, as the "GUARANTORS"), with each Guarantor's
(other than Holding) principal place of business and chief executive office at
0000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000, and Holding's principal place of
business and chief executive office at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000.
SECTION 1. DEFINITIONS
"ACCOUNTS" shall mean all of each Company's now existing and future:
(a) accounts (as defined in the U.C.C.) and any and all other receivables
(whether or not specifically listed on schedules furnished to the Agent),
including, without limitation, all accounts created by or
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LOAN AND SECURITY AGREEMENT
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arising from all of each Company's sales of goods or rendition of services to
its customers, and all accounts arising from sales or rendition of services made
under any of such Company's trade names or styles, or through any of such
Company's divisions; (b) any and all instruments (as defined in the U.C.C.),
documents (as defined in the U.C.C.) and chattel paper (as defined in the
U.C.C.); (c) unpaid seller's rights (including rescission, replevin, reclamation
and stoppage in transit) relating to the foregoing or arising therefrom; (d)
rights to any goods represented by any of the foregoing, including rights to
returned or repossessed goods; (e) reserves and credit balances arising
hereunder; (f) guarantees or collateral for any of the foregoing; (g) insurance
policies or rights relating to any of the foregoing; (h) contract rights; and
(i) cash and non-cash proceeds of any and all the foregoing.
"ACCOUNTS RECEIVABLE ADVANCE PERCENTAGE" shall mean eighty percent
(80%).
"ACQUISITION" shall mean the purchase, lease (whether a capital lease,
an operating lease or otherwise) or other acquisition of any or all of the
following: (a) Rigs; (b) Rigs Accessories (other than (i) maintenance and
replacement components and parts (including installation) for existing Rigs and
Rigs acquired hereafter, and (ii) drill pipe for Rigs, in each case acquired in
the ordinary course of business or (iii) the purchase of tangible assets
pursuant to the reinvestment of casualty insurance proceeds); (c) more than 50%
of the voting common stock or capital stock of any Person; and (d) all or
substantially all of the assets of any Person.
"ACQUISITION AGREEMENTS" shall have the meaning assigned to such term
in Section 4 hereof.
"ACQUISITION FACILITY COMMITMENT" shall mean, with respect to any
Lender, a portion of the Revolving Loans which may be advanced as Acquisition
Facility Loans, evidencing the amount of its commitment to make Acquisition
Facility Loans (all such loans being Revolving Loans), as modified from time to
time pursuant to the terms hereof, not to exceed $80,000,000 in the aggregate.
"ACQUISITION FACILITY LOANS" shall have the meaning assigned to such
term in Section 4 hereof.
"ADMINISTRATIVE MANAGEMENT FEE" shall mean the sum of $100,000 per
annum which shall be paid to the Agent for its own account in accordance with
Section 8, Paragraph 8 hereof to offset the expenses and costs (excluding
Out-of-Pocket Expenses) of the Agent in connection with record keeping, periodic
examinations, analyzing and evaluating the Collateral.
"AGREEMENT" shall mean this Amended and Restated
Loan and Security
Agreement (as the same may be amended, modified or changed from time to time).
"ANNIVERSARY DATE" shall mean June 29, 2005 and the same date in every
year thereafter.
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"APPLICABLE MARGIN" means, with respect to any amount outstanding made
under any LIBOR Loans or Revolving Loans other than LIBOR Loans, as the case may
be, the rate of interest per annum determined as set forth below:
(a) during the period from the Closing Date through the
Financial Statement Delivery Date (as defined below) for the fiscal quarter
ending on June 30, 2002:
AS TO REVOLVING LOANS AS TO
OTHER THAN LIBOR LOANS LIBOR LOANS
---------------------- -----------
0.00% 1.75%
(b) during the period between any two Financial Statement
Delivery Dates for any Margin Period occurring after June 30, 2002, the rate
determined by reference to the pricing grid below as a function of the amount of
TTM EBITDA:
AS TO REVOLVING LOANS AS TO
TTM EBITDA OTHER THAN LIBOR LOANS LIBOR LOANS
------------------------------------------------- ------------------------------------ -----------------------
> or = to $55,000,000 0.00% 1.75%
<$55,000,000 and > or = to $45,000,000 0.00% 2.00%
<$45,000,000 and > or = to $35,000,000 0.25% 2.25%
<$35,000,000 and > or = to $30,000,000 0.50% 2.50%
<$30,000,000 0.75% 2.75%
As used herein, "FINANCIAL STATEMENT DELIVERY DATE" means the earlier of (i) the
last day on which the quarterly or annual financial statements of the Companies
are to be delivered to the Agent and the Lenders pursuant to Section 7,
Paragraph 8(a), or (ii) the date upon which such financial statements actually
are delivered to the Agent and the Lenders. As used herein, "MARGIN PERIOD"
means a period commencing on the most recent Financial Statement Delivery Date
and ending on the next Financial Statement Delivery Date. Each change in the
Applicable Margin shall become effective on the first day of the calendar month
next following the applicable Financial Statement Delivery Date.
"APPLICATION FOR LETTER OF CREDIT" shall mean an application for the
issuance of a Letter of Credit as prescribed by the bank or financial
institution issuing the same.
"APPRAISAL OF ORDERLY LIQUIDATION VALUE" shall mean a formal written
appraisal by an Approved Appraiser establishing Orderly Liquidation Value of an
asset or property as set forth in a report by such Approved Appraiser delivered
to the Agent, which appraisal and report shall be in form and substance
acceptable to the Agent.
"APPROVED APPRAISER" shall mean X.X.X. Valuations, Inc. or any other
appraiser acceptable to the Agent.
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3
"AVAILABILITY" shall mean, with respect to the Companies taken as a
whole, at any time the excess of (a) the lesser of (i) the Line of Credit or
(ii) the sum of (A) Eligible Accounts Receivable of such Companies multiplied by
the Accounts Receivable Advance Percentage, and (B) the lesser of (I) Net Book
Value multiplied by the Equipment Advance Percentage or (II) the aggregate value
of Eligible Equipment of the Companies multiplied by the Equipment Advance
Percentage, over (b) the sum of (i) the outstanding aggregate amount of all
Obligations, including, without limitation, all Obligations with respect to
Revolving Loans and outstanding undrawn balance of Letters of Credit outstanding
and (ii) the Availability Reserve.
"AVAILABILITY RESERVE" shall mean, with respect to the Companies, the
sum of (a) three (3) months rental payments on all leased premises (where Rigs
are stored from time to time) of the Companies for which the Companies have not
delivered to the Agent a landlord's waiver (in form and substance satisfactory
to Agent in the exercise of its reasonable business judgment), provided that
such amount shall be adjusted from time to time hereafter upon (i) delivery to
the Agent of any such acceptable waiver, (ii) the opening or closing of a
Collateral storage location and/or (iii) any change in rental payment and/or
storage charge, and (b) an amount equal to any and all past due storage charges
with respect to all warehouse locations at which Collateral may be located,
provided that the Companies shall promptly advise the Agent of all such amounts
and, upon request by the Agent, provide a report to the Agent with respect
thereto, and (c) such other reserves as the Agent reasonably determines are
appropriate under the circumstances, including, without limitation, reserves for
liens on Accounts or Equipment.
"AVERAGE LIFE" means, as of the date of determination, with reference
to any Indebtedness For Borrowed Money, the quotient obtained by dividing (a)
the sum of the products of the number of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness
For Borrowed Money multiplied by the amount of such principal payment by (b) the
sum of all such principal payments.
"ASSIGNMENT AND TRANSFER AGREEMENT" shall mean the Assignment and
Transfer Agreement in the form of Exhibit B hereto.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States (or any successor) and any other banking authority to which
the Lenders are subject for Eurocurrency Liabilities (within the meaning of
Regulation D of the Board as in effect from time to time) or any other category
of deposits or liabilities by reference to which the LIBOR Loan rate of interest
is determined.
"BUSINESS DAY" shall mean any day that the Agent and JPMorgan Chase
Bank are open for business in
New York,
New York, which is not (a) a Saturday,
Sunday or legal holiday in the State of
New York or (b) a day on which banking
institution chartered by the State of
New York or the United States are legally
required to close.
"CANADIAN ACQUISITION" means the Acquisition of a Person or business
unit whose principal place of business is in Canada, or an Acquisition of assets
by a Subsidiary, formed under Canadian law, of an Obligor.
UTI - AMENDED AND RESTATED
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"CANADIAN EXCHANGEABLE SHARES" means shares of Capital Stock of a
Canadian Operating Company issued to a Person in connection with a Permitted
Acquisition by such Canadian Operating Company, which Person is not an Obligor
or Subsidiary of an Obligor, and which shares of Capital Stock are (i) not
entitled to vote generally in the election of directors of such Canadian
Operating Company, (ii) are convertible at the option of the holder into shares
of common stock of the Parent and (iii) are subordinated (with respect to
dividends and preference in liquidation) to the Capital Stock of the Canadian
Operating Company which is pledged to the Agent.
"CANADIAN FINANCE COMPANY" shall mean a direct, wholly-owned Subsidiary
of an Obligor, which Subsidiary is organized under Canadian Law, with a limited
purpose of acquiring loans of, and/or making loans to a Canadian Operating
Company (which loans are secured by a Canadian First Priority Lien) and other
ministerial and incidental powers reasonably necessary or incident thereto, and
66% of the Capital Stock of which is pledged to the Agent.
"CANADIAN FIRST PRIORITY LIEN" means a perfected, first priority lien
on all of the assets of a Canadian Operating Company or Canadian Finance Company
(other than automobiles, Real Estate and Intellectual Property), subject only to
(a) Permitted Liens, (b) prior liens of a Canadian Finance Company, (c) liens in
favor of an affiliate of the Agent and (d) any other lien which Agent, in its
sole discretion, approves in writing.
"CANADIAN OPERATING COMPANY" shall mean a direct, wholly-owned
Subsidiary of an Obligor (except to the extent of Canadian Exchangeable Shares),
which is organized under Canadian law, and 66% of the Capital Stock of which is
pledged to the Agent, provided that notwithstanding the foregoing, no Canadian
Exchangeable Shares of such Canadian Operating Company will be pledged to the
Agent.
"CAPITAL EXPENDITURES" for any period shall mean the aggregate of all
expenditures of each Company during such period that in conformity with GAAP are
required to be included in or reflected by the property, plant or equipment or
similar fixed asset account reflected in the consolidated balance sheet of such
Company.
"CAPITAL LEASE" shall mean any lease of property (whether real,
personal or mixed) which, in conformity with GAAP, is accounted for as a capital
lease or a Capital Expenditure on the balance sheet of each Company.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person's equity, including all common
stock and preferred stock, any limited or general partnership interest and any
limited liability company membership.
"CHASE BANK RATE" shall mean the rate of interest per annum announced
by JPMorgan Chase Bank from time to time as its prime rate in effect at its
principal office in the City of
New York. (The prime rate is not intended to be
the lowest rate of interest charged by JPMorgan Chase Bank to its borrowers).
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"CLOSING DATE" shall mean July 26, 2002.
"COLLATERAL" shall mean, with respect to all Obligors, all present and
future Accounts, Equipment, Inventory, Documents of Title, General Intangibles
(other than Intellectual Property except as set forth below) and Other
Collateral, whether now existing or hereafter arising, and cash and non-cash
proceeds thereof; and, following the occurrence of an Event of Default, and so
long as the same is continuing, Collateral shall also include in addition to the
foregoing such Real Estate, automobiles owned by any Obligor and Intellectual
Property of such Obligors as Agent shall have requested or obtained a lien or
security interest as contemplated in Xxxxxxxxx 0, Xxxxxxxxx 9 and/or Paragraph
10 of Section 6 of this Agreement, and cash and non-cash proceeds thereof.
"COLLECTIONS" shall have the meaning provided for in Section 3,
Paragraph 4 of this Agreement.
"CONSOLIDATED BALANCE SHEET" shall mean a consolidated balance sheet
for the Parent and the consolidated Subsidiaries thereof eliminating all
inter-company transactions and prepared in accordance with GAAP.
"CONSOLIDATING BALANCE SHEET" shall mean a Consolidated Balance Sheet
plus individual balance sheets for each Company, and the other Subsidiaries of
Parent, if any, each showing all eliminations of inter-company transactions and
prepared in accordance with GAAP.
"CONTRACT RATE" shall mean the applicable rate of interest computed as
set forth in Section 8, Paragraph 1(a) of this Agreement.
"CUSTOMARILY PERMITTED LIENS" shall mean:
(a) liens of local or state authorities (excluding federal tax
liens) for franchise or other like taxes (and interest and penalties thereon),
provided that the aggregate amounts of such taxes relating to such liens shall
not exceed $1,000,000 in the aggregate at any one time;
(b) statutory liens of landlords and liens of carriers,
warehousemen, mechanics, materialmen and other like liens imposed by law,
created in the ordinary course of business and for amounts not yet due (or which
are being contested in good faith by appropriate proceedings or other
appropriate actions which are sufficient to prevent imminent foreclosure of such
liens) and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(c) deposits made (and the liens thereon) in the ordinary
course of business (including, without limitation, security deposits for leases,
surety bonds and appeal bonds) in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to secure
the performance of tenders, bids, contracts (other than for the repayment or
guarantee of borrowed money or purchase money obligations), statutory
obligations and other government contracts, not to exceed $1,000,000 in the
aggregate outstanding at any one time.
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(d) easements (including, without limitation, reciprocal
easement agreements and utility agreements), encroachments, rights of way, minor
defects or irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate and which in
the aggregate do not materially interfere with the occupation, use or enjoyment
by each Company in its business of the property so encumbered;
(e) liens for taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings, provided that (i) adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP, and (ii) such liens secure liabilities not
exceeding $1,000,000;
(f) judgment and attachment liens not giving rise to an Event
of Default or liens created by or existing from any litigation or legal
proceeding that are being contested in good faith by appropriate proceedings,
promptly instituted and diligently conducted, and for which adequate reserves
have been made to the extent required by GAAP, provided that (i) such liens are
junior and inferior to those of the Agent, (ii) the judgment or attachment
amount does not exceed $1,000,000, and (iii) an Availability Reserve has been
established with respect thereto;
(g) liens created pursuant to this Agreement or any of the
Loan Documents executed in connection herewith in favor of the Agent;
(h) leases or subleases of Real Estate or Rigs granted to
others not interfering in any material respect with the business of the Parent
or any of the Obligors; provided that leases or subleases of Rigs shall be
subordinated to in writing (in form and substance reasonably satisfactory to the
Agent) to the liens arising under Loan Documents and otherwise permitted
hereunder; and
(i) liens in favor of collecting or payor banks having a right
of setoff, revocation, refund or chargeback in favor of collecting or payor
banks with respect to money or instruments of the Parent or any of its
Subsidiaries on deposit with or in possession of such bank.
(j) with respect of the assets of PPLP and PPTC, (i) liens
reserved in customary oil, gas and/or mineral leases for bonus or rental
payments and for compliance with the terms of such leases and liens reserved in
customary operating agreements, farm out and farm in agreements, exploration
agreements, development agreements and other similar agreements for compliance
with the terms of such agreements, (ii) liens or charges reserved for royalties,
overriding royalties, revenue interests, net revenue interests and advance
payment obligations, (iii) any lien or charge securing indebtedness neither
assumed nor guaranteed by PPLP or PPTC nor on which either customarily pays
interest, existing upon real estate or rights in or relating to real estate
acquired by PPLP or PPTC for substation, metering station, pump station, storage
gathering line, transmission line, transportation line, distribution line or for
right of way purposes, and (iv) liens and charges arising out of all presently
existing and future division and transfer orders, advance payment agreements,
processing contracts, gas processing plant agreements, operating agreements, gas
balancing or deferred production agreements, pooling,
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unitization or communitization agreements, pipeline, gathering or transportation
agreements, platform agreements, drilling contracts, injection or repressuring
agreements, cycling agreements, construction agreements, salt water or other
disposal agreements, leases or rental agreements, farm out and farm in
agreements, exploration and development agreements, and any and all other
contracts or agreements covering, arising out of, used or useful in connection
with or pertaining to the exploration, development, operation, production, sale,
use, purchase, exchange, storage, separation, dehydration, treatment,
compression, gathering, transportation, processing, improvement, marketing,
disposal or handling of any property of by PPLP or PPTC, provided that such
agreements are entered into in the ordinary course of business on terms
customary in the industry.
"DATED LIABILITIES" shall have the meaning assigned to such term in
Section 12, Paragraph 12 hereof.
"DATED ASSETS" shall have the meaning assigned to such term in Section
12, Paragraph 12 hereof.
"DEFAULT" shall mean any event specified in Section 10 hereof, which,
after the giving of notice, the lapse of time, or both, or any other condition,
event or act, has been satisfied, would constitute an Event of Default.
"DEFAULT RATE OF INTEREST" shall mean a rate of interest per annum
equal to the lesser of (a) the Maximum Legal Rate or (b) the sum of (i) two
percent (2%) and (ii) the applicable contract rate of interest based upon the
applicable increment over the Chase Bank Rate as determined under Section 8
hereof, which the Agent on behalf of the Lenders shall be entitled to charge
each Company on all Obligations to the extent provided in Section 10, Paragraph
2(ii) of this Agreement.
"DEPOSITORY ACCOUNTS" shall have the meaning specified in Section 3,
Paragraph 4 hereof.
"DESIGNATED MERGER" shall mean the merger or consolidation on or before
December 31, 1999 of (a) NDS, IPSCO and Xxxxxx Corporation (and no other
entities) in a transaction in which NDS or IPSCO is the sole surviving entity,
and (b) NDC with and into UTI (and no other entities) in a transaction in which
UTI is the sole surviving entity; provided that in each case (i) there has not
occurred and Event of Default that is continuing which has not been waived in
writing by the Agent and no Default or Event of Default would occur or exist
after giving effect thereto, and (ii) no Person receives any consideration which
would not be permitted to be paid to such Person at such time as a Restricted
Payment (and in such case such consideration shall constitute a Restricted
Payment for all purposes of this Agreement).
"DISQUALIFIED STOCK" means, any Capital Stock of an Obligor or any
Subsidiary thereof that, by its terms (or by the terms of any security into
which it is convertible or for which it is exercisable, redeemable or
exchangeable), or upon the happening of any event or with the passage of time,
matures, or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, in each case
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on, or prior to, the Anniversary Date, or is convertible into or is exchangeable
for debt securities of the Obligor or any Subsidiary thereof, except to the
extent that such exchange or conversion rights cannot be exercised prior to the
Anniversary Date; provided, however, that solely for purposes of determining
which Capital Stock is Disqualified Stock, the Anniversary Date shall mean the
Maturity Date and each subsequent Anniversary Date that arises by virtue of a
renewal that actually occurs pursuant to Section 11 of this Agreement; provided
further, however, that Qualified Capital Stock, which becomes Disqualified
Capital Stock (whether or not in connection with the failure of any party hereto
to terminate this Agreement pursuant to Section 11), shall not constitute
Disqualified Capital Stock if the payment, conversion or other rights in respect
thereof are subordinated in writing (in form and substance reasonably
satisfactory to the Agent) to the full payment and performance of all
Obligations to the Lenders and the Agent under the Loan Documents on or before
the effective date of such recharacterization hereunder. For the purpose of this
Agreement the determination that Qualified Capital Stock shall be treated as
Disqualified Capital Stock shall only apply prospectively (and not apply
retroactively) from and after the date on which Qualified Capital Stock actually
becomes Disqualified Capital Stock under the foregoing definition.
"DOCUMENTATION FEE" shall mean the cost and expenses to compensate the
Agent for such use of inside counsel for completion of post-closing matters,
modifications, waivers, releases, amendments or additional collateral with
respect to the Loan Documents, the Collateral and/or the Obligations.
"DOCUMENTS OF TITLE" shall mean all present and future documents (as
defined in the U.C.C.) including, without limitation, all warehouse receipts,
bills of lading, shipping documents, chattel paper, instruments and similar
documents, all whether negotiable or not and all goods and Equipment relating
thereto and all cash and non-cash proceeds of the foregoing.
"DOMESTIC" shall mean (a) with respect to a Person, a Person formed
under the laws of the United States or any state thereof, and (b) with respect
to assets, that (i) such assets are located in the continental United States,
Alaska or Hawaii or (ii) an acquisition of such assets by a Subsidiary formed
under laws of a state of the United States of America.
"DOMESTIC ACQUISITION" shall mean the acquisition of a Person or
business whose principal place of business and chief executive office is in the
United States of America.
"DOMESTIC RIGS" shall mean Rigs owned by each Company which are located
in the 50 states of the United States of America.
"EARLY TERMINATION DATE" shall mean the date on which the Companies
terminate this Agreement or the Line of Credit which date is prior to an
Anniversary Date.
"EARLY TERMINATION FEE" shall: (a) mean the fee the Agent on behalf of
the Lenders is entitled to charge the Companies if the Companies terminate the
Line of Credit or this Agreement on a date prior to June 29, 2005; and (b) be
determined by multiplying the Line of Credit by (i) seven-tenths of one percent
(0.70%) if the Early Termination Date occurs on or prior to June 29, 2002, (ii)
one-half of one percent (0.50%) if the Early Termination Date occurs
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
9
after June 29, 2002 but on or prior to June 29, 2003, (iii) three-tenths of one
percent (0.30%) if the Early Termination Date occurs after June 29, 2003 but on
or prior to June 29, 2004; and (iv) two-tenths of one percent (0.20%) if the
Early Termination Date occurs after June 29, 2004 but prior to June 29, 2005.
"EBITDA" shall mean, in any period, all earnings before all (a)
interest and tax obligations, (b) depreciation and depletion and (c)
amortization for said period, all determined in accordance with GAAP on a basis
consistent with the latest audited financial statements of the Companies, the
Parent and their respective consolidated Subsidiaries but excluding for any such
period (i) the effect of extraordinary and non-reoccurring gains or losses and
non-cash compensation expense, (ii) restructure charges arising in connection
with the Merger, (iii) other charges related to (A) the Merger or (B) changes to
indebtedness for borrowed money arising in connection with the Merger, (iv)
write downs and write offs of deferred finance charges as a result of the
reduction in total committed credit facilities, and (v) charges related to
financing costs associated with this Agreement (but excluding accruals for
interest expense); provided, however, the aggregate amount of the items in
clauses (ii) through (v) above shall not exceed $20,000,000.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean, with respect to all
Companies, the gross amount of the Companies' Trade Accounts Receivable that are
subject to a valid, first priority and fully perfected lien and security
interest in favor of the Agent on behalf of the Lenders and which conform to the
warranties contained herein less, without duplication, the sum of (a) any
returns, discounts, claims, credits and allowances of any nature (whether
issued, owing, granted or outstanding); (b) reserves for: (i) sales to the
government of the United States of America or to any agency, department or
division thereof; (ii) foreign sales other than sales (x) secured by stand-by
letters of credit (in form and substance satisfactory to the Agent) issued or
confirmed by, and payable at, banks having a place of business in the United
States of America and payable in United States currency, or (y) to customers
residing in Canada, provided that such sales otherwise comply with all of the
other criteria for eligibility hereunder and are payable in United States or
Canadian currency; (iii) accounts that remain unpaid more than ninety (90) days
from invoice date; (iv) contra accounts with respect to accounts receivable; (v)
sales to Parent, any Subsidiary thereof, or to any company affiliated with
Parent or any Company in any way; (vi) xxxx and hold (deferred shipment) or
consignment sales; (vii) sales to any customer which is (w) insolvent, (x) a
debtor in any bankruptcy, insolvency, arrangement, reorganization, receivership
or similar proceedings under any federal or state law, (y) negotiating, or has
called a meeting of its creditors for purposes of negotiating, a compromise of
its debts or (z) financially unacceptable to the Agent or has a credit rating
unacceptable to the Agent in the exercise of its reasonable credit judgement;
(viii) all sales to any customer if fifty percent (50%) or more of either (x)
all outstanding invoices of such customer or (y) the aggregate dollar amount of
all outstanding invoices of such customer, are unpaid more than ninety (90) days
from invoice date; any other reasons deemed necessary by the Agent in its
reasonable business judgment and which are customary either in the commercial
finance industry; and (x) an amount representing probable returns, discounts,
claims, credits, offsets and allowances (including, but not limited to, any of
the foregoing attributable to Liens for the benefit of unpaid subcontractors of
any Company) and; (c) accounts due from an account debtor to the extent that
such accounts exceed, in the aggregate, thirty percent (30%) of the aggregate of
all accounts as of the date of determination.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
10
As used in this definition, "sales" means the sale of goods or the charges for
the performance of services. Eligible Accounts Receivable do not include any
Accounts for which the Agent shall not have received monthly reports as the
Agent shall require pursuant to Section 3, Paragraph 2 (but in any event reports
shall be required to be provided pursuant to Xxxxxxx 0, Xxxxxxxxx 0(x)(xxx)(X)
hereof).
"ELIGIBLE ASSIGNEE" means (a) any Lender, (b) a commercial bank or
financial institution organized or licensed under the laws of the United States,
or a state thereof, and having total assets in excess of $500,000,000, or an
asset based lender affiliated therewith, (c) a commercial bank organized under
the laws of the OECD, or a political subdivision of any such country, and having
total assets in excess of $500,000,000; provided that such bank is acting
through a branch or agency located in the country in which it is organized, or
another country which is also a member of the OECD; and (d) any other bank or
financial institution approved by both the Agent and the Parent.
"ELIGIBLE EQUIPMENT" shall mean, with respect to the Companies taken as
a whole, the Orderly Liquidation Value (with Orderly Liquidation Value being
based upon the then most recent Appraisal of Orderly Liquidation Value) of
Qualified Domestic Rigs owned by such Companies that are subject to a valid,
first priority and fully perfected lien and security interest in favor of the
Agent for the benefit of the Lenders and which are not subject to any other Lien
(other than Permitted Liens) and conform to the warranties contained herein and
which at all times continue to be acceptable to the Agent in the exercise of its
reasonable business judgment and less the applicable Availability Reserves.
"EMPLOYEE PLAN" shall means any employee benefit plan, program or
policy with respect to which each Company or any ERISA Affiliate may have any
liability or any obligation to contribute, other than a Plan or a Multiemployer
Plan.
"ENVIRONMENTAL LAWS" shall mean applicable federal, state or local
laws, rules or regulations, and any applicable judicial interpretations thereof,
including any judicial or administrative order, judgment, permit, approval
decision or determination, in each case pertaining to conservation or protection
of the environment, in effect at the time in question, including the Clean Air
Act, the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), the Federal Water Pollution Control Act, the Occupational Safety and
Health Act, the Resource Conservation and Recovery Act, the Safe Drinking Water
Act, the Toxic Substances Control Act, the Superfund Amendments and
Reauthorization Act of 1986, the Hazardous Materials Transportation Act and
analogous state and local laws as may be amended from time to time thereby
imposing either more or less stringent requirements as relates to activity
occurring after the date hereof of any such amendments.
"EQUIPMENT" shall mean all present and hereafter acquired equipment (as
defined in the U.C.C.) including, without limitation, all Rigs, all Rig
Accessories and all other machinery, equipment, furnishings and fixtures, and
all additions, substitutions and replacements thereof, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto and all proceeds of whatever sort thereof;
provided that notwithstanding the foregoing, Equipment shall not include drill
pipe.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
11
"EQUIPMENT ADVANCE PERCENTAGE" shall mean fifty percent (50%).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time.
"ERISA AFFILIATE" shall mean (a) any person which, together with each
Company, is treated as a "single employer" under Section 414 of the Internal
Revenue Code of 1986, as amended and the regulations thereunder, and (b) any
Subsidiary of each Company.
"EVENT(S) OF DEFAULT" shall have the meaning provided for in Section 10
of this Agreement.
"EXCLUDED L/CS" shall mean the aggregate undrawn face amount of standby
Letters of Credit, not to exceed $3,000,000 in the aggregate, which Letters of
Credit were issued on account of the Companies to insurance companies to assure
payment of premiums and workers' claims in connection with workers' compensation
claims.
"EXCESS" shall have the meaning provided for in Section 3, Paragraph 8
of this Agreement.
"FAIR MARKET VALUE" shall mean, with respect to any asset or property
of any Obligor or any of its Subsidiaries, the value of the consideration
obtained or obtainable in a cash sale of such asset or property in the open
market between a willing buyer and willing seller under no compulsion to sell or
buy, determined in an arm's length negotiation conducted in good faith and in an
orderly market process in the ordinary course of business.
"FINANCIALLY WEAKENED" shall mean a Person (i) has material
liabilities, contingent or liquidated, which Agent believes, in its discretion,
could be reasonably expected to have a Material Adverse Effect if such Person
were made a participant in the consolidated cash management system of the Parent
and its Subsidiaries or (ii) could reasonably be expected to have such negative
cash flows for the foreseeable future that the Agent finds it unreasonable, in
its discretion, to allow unlimited intercompany loans or advances thereto, or
investments therein, while such condition persists.
"FINANCIALS" shall have the meaning provided for in Xxxxxxx 0,
Xxxxxxxxx 00(x) of this Agreement.
"FISCAL QUARTER" shall mean each three (3) month period ending on March
31, June 30, September 30 and December 31 of each year.
"FISCAL YEAR" shall mean each twelve (12) month period commencing on
January 1 of each year and ending on the following December 31.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
12
"FIXED CHARGE COVERAGE RATIO" shall mean, for the twelve month period
ending on the date of the then most recent consolidated financial statements of
the Parent and its Subsidiaries delivered (or required to be delivered) to the
Agent pursuant to Section 7, Paragraph 8, the ratio determined by dividing (a)
EBITDA for Parent on a consolidated basis plus the aggregate of all proceeds
received from the issuance of Capital Stock by (b) the sum (for such period) of
(i) all interest obligations due, (ii) the amount of principal scheduled or
required to be repaid on the Indebtedness For Borrowed Money for Parent on a
consolidated basis, but excluding (A) principal portions of Indebtedness For
Borrowed Money of Parent on a consolidated basis that are repaid or discharged
directly with Capital Stock (which Capital Stock is issued within twelve months
prior to such repayment or discharge), (B) principal portions of Indebtedness
For Borrowed Money and other Indebtedness of the Parent on a consolidated basis
that are refinanced using securities that constitute Indebtedness For Borrowed
Money (other than the Revolving Loans) or proceeds therefrom (which securities
are issued within twelve months prior to such refinancing), (C) the repayment of
up to $3,500,000 of principal amount of the promissory notes originally issued
on July 31, 1998, in the aggregate face amount of $7,790,000 to the former
shareholders of SUITS Enterprises, Inc. in the event the Average Trading Value
(as defined in such notes as in effect on the date hereof) exceeds $30.00 per
share, and (D) principal portions of the Obligations, (iii) Capital Expenditures
(other than for Permitted Acquisitions or replacements of assets subject to
casualty occurrence with similar assets funded from insurance proceeds of such
casualty occurrence or purchases of assets with proceeds from sales of assets
permitted under this Agreement, (iv) all federal, state and local income tax
expenses due and payable, and (v) all dividends of cash and property (other than
dividends of Qualified Capital Stock).
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time and for the period as to
which such accounting principles are to apply.
"GENERAL INTANGIBLES" shall have the meaning set forth in the U.C.C.
and shall include, without limitation, all present and future right, title and
interest in and to all tradenames, Trademarks (together with the goodwill
associated therewith), Patents, licenses, customer lists, distribution
agreements, supply agreements, indemnification rights and tax refunds, together
with all monies and claims for monies now or hereafter due and payable in
connection with any of the foregoing or otherwise; all rights to payment,
whether or not yet earned by performance, from time to time arising in
connection with or otherwise relating to sales of Inventory by any Obligor to
its customers including, without limitation, rights to payment from Obligors'
customers pursuant to Obligors' trade credit agreements with their customers;
and all cash and non-cash proceeds thereof.
"GUARANTY" shall mean one or more guarantees to be executed and
delivered by Guarantors on or before the Closing Date in favor of the Agent in
form acceptable to the Agent, guaranteeing all present and future Obligations
(as the same may be amended, modified or changed from time to time).
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
13
"GUARANTOR" shall mean any person who now or may hereafter guarantees
payment or performance of all or any part of the Obligations, including, without
limitation, each of the Guarantors (as defined in the first paragraph of this
Agreement).
"HAZARDOUS MATERIALS" means (a) hazardous waste as defined in
applicable regulations issued pursuant to the Resource Conservation and Recovery
Act of 1976, or in any applicable federal, state or local law or regulation, (b)
hazardous substances, as defined in CERCLA, or in applicable state or local law
or regulation, (c) gasoline or any other petroleum product, (d) toxic
substances, as defined in the Toxic Substances Control Act of 1976, or in any
applicable federal, state or local law or regulation, (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable federal, state or, local law
or regulation as each such act, statute or regulation may be amended from time
to time, and (f) asbestos.
"INDEBTEDNESS" shall mean, without duplication, all liabilities,
contingent or otherwise, which are any of the following: (a) obligations in
respect of money or for the deferred purchase price of property, services or
assets, other than Inventory, or (b) lease obligations which, in accordance with
GAAP, have been, or which should be, capitalized.
"INDEBTEDNESS FOR BORROWED MONEY" shall mean, without duplication, all
liabilities, contingent or otherwise, which are any of the following: (a)
obligations in respect of borrowed money or for the deferred purchase price of
property, services, stock or assets (and excluding extended trade terms of less
than 365 days for purchases of Equipment, Inventory or services), or (b) lease
obligations which, in accordance with GAAP, have been, or which should be,
capitalized.
"INDEMNIFIED PERSON" shall have the meaning specified in Section 7,
Paragraph 13 of this Agreement.
"INDEMNIFIED LIABILITIES" shall have the meaning specified in Section
7, Paragraph 13 of this Agreement.
"INTELLECTUAL PROPERTY" shall mean all Trademarks, Patents, copyrights,
copyright licenses and other related property which constitute General
Intangibles.
"INVENTORY" shall mean all of each Company's present and hereafter
acquired inventory (as defined in the U.C.C.) including, without limitation, all
drill pipe and all merchandise, inventory and goods, and all additions,
substitutions and replacements thereof, wherever located, together with all
goods and materials used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production from raw materials through
work-in-process to finished goods and all proceeds thereof of whatever sort;
provided that notwithstanding the foregoing, Inventory shall not include Rigs
and Rig Accessories.
"ISSUING BANK" shall mean the bank issuing Letters of Credit for any
Company.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
14
"LETTERS OF CREDIT" shall mean all letters of credit issued with the
assistance of the Agent on behalf of the Lenders by the Issuing Bank for or on
behalf of any Company.
"LETTER OF CREDIT GUARANTY" shall mean the guaranty delivered by the
Agent in behalf of the Lenders to the Issuing Bank of a Company's reimbursement
obligation under the Issuing Bank's reimbursement agreement, Application for
Letter of Credit or other like document.
"LETTER OF CREDIT GUARANTY FEE" shall mean the fee the Agent in behalf
of the Lenders may charge the Company under Section 8, Paragraph 6 of this
Agreement for: (a) issuing the Letter of Credit Guaranty or (b) otherwise aiding
the Company in obtaining Letters of Credit.
"LETTER OF CREDIT SUB-LINE" shall mean $40,000,000 in the aggregate.
"LIBOR" shall mean at any time of determination with respect to each
interest period, the quotient obtained by dividing (i) the arithmetic average
(rounded to the nearest 1/16 of 1%) of the offered quotation to first-class
banks in the interbank eurodollar market by JPMorgan Chase Bank (or its
successor) for U.S. dollar deposits of amounts in same day funds generally
comparable to the aggregate principal amount of the loan for which an interest
rate is then being determined with maturities comparable to the LIBOR Period to
be applicable to such loan, determined as of 10:00 A.M. (
New York time) on the
date which is two Business Days prior to the commencement of such LIBOR Period,
(and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D). In
the event that JPMorgan Chase Bank (or its successor) is unable or unwilling to
make the applicable LIBOR rates known to the Agent, or if JPMorgan Chase Bank
(or its successor) no longer exists, then for each interest period LIBOR shall
mean the London Interbank Offered rate paid in London on dollar deposits from
other banks as determined by the Agent based upon information presented on
Telerate Systems at Page 3750 as of 11:00 a.m. (London time) or the date which
is on the date which is two Business Days prior to the commencement of such
LIBOR Period (and rounded upward to the next whole multiple of 1/16 of 1%.
"LIBOR LOAN" shall mean a Revolving Loan for which a Company has
elected to use LIBOR for interest rate computations.
"LIBOR PERIOD" shall mean the LIBOR for one month, two month, three
month or six month U.S. dollar deposits, as selected by a Company.
"LINE OF CREDIT" shall mean the commitment of the Lenders in the
aggregate amount of $100,000,000 to (a) make Revolving Loans pursuant to
Sections 3 and 4 of this Agreement, and (b) assist the Companies in opening
Letters of Credit pursuant to Section 5 of this Agreement (up to the Letter of
Credit Sub-Line).
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
15
"LINE OF CREDIT FEE" shall: (a) mean the fee due the Agent for the
benefit of the Lenders at the end of each month for the Line of Credit, and (b)
be determined by multiplying (i) the difference between the Line of Credit and
the sum of (x) the average daily balance of Revolving Loans of all Companies
plus (y) the average daily undrawn balance of all Letters of Credit for said
month, by (ii) three-eighths of one percent (0.375%) per annum for the number of
days in said month.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement and all notes
(including the Promissory Notes), guarantees, security agreements and other
agreements, documents and instruments now or at any time hereafter executed
and/or delivered by any Obligor, a Canadian Finance Company or a Canadian
Operating Company in connection with this Agreement (as the same may be amended,
modified or changed from time to time) or the Prior Loan Agreement.
"LOAN FACILITY FEE" shall mean the fee payable to the Agent for the
benefit of the Lenders in accordance with, and pursuant to, the provisions of
Section 8, Paragraph 3 of this Agreement.
"LOANS" shall mean the loans and advances made, from time to time, to
or for the account of each Company by the Agent on behalf of the Lenders
pursuant to Section 3 or Section 4 of this Agreement.
"LOUISIANA PLEDGED COLLATERAL" shall have the meaning provided for in
Section 6, Paragraph 11 of this Agreement.
"MATERIAL ADVERSE EFFECT" shall mean, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), (a) a material adverse
effect on the financial condition, business, operations, prospects or assets of
(i) the Parent and its Subsidiaries (including the Companies) taken as a whole
or (ii) UTI on an individual basis, or (b) a material impairment of the ability
of (i) the Parent and its Subsidiaries (including the Companies) taken as a
whole or (ii) UTI on an individual basis, to perform obligations under the Loan
Documents to which it is a party or (c) an impairment of the validity or
enforceability of any Loan Document in any manner which materially affects any
material rights and/or material benefits intended to be bestowed on Lenders
and/or the Agent under the Loan Documents.
"MATURITY DATE" means June 29, 2005.
"MAXIMUM LEGAL RATE" shall mean the maximum lawful interest rate which
may be contracted for, charged, taken, received or reserved under this Agreement
or the Loan Documents by the Agent and/or the Lenders in accordance with
applicable state or federal law (whichever provides for the highest permitted
rate), taking into account all items contracted for, charged or received in
connection with the Obligations evidenced hereby which are treated as interest
under the applicable state or federal law, as such rate may change from time to
time.
"MERGER" shall mean the merger between Xxxxxxxxx Energy, Inc., a
Delaware corporation, and UTI Energy Corp., a Delaware corporation.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
16
"MOBILE RIGS" shall mean Rigs and Rig Accessories which are attached or
affixed to, or comprise an integral part of, a vehicle, trailer or carrier.
"MULTIEMPLOYER PLAN" shall mean any plan which is a "multiemployer
plan" (as such term is defined in Section 4001(a)(3) of ERISA) to which each
Company or any ERISA Affiliate contributes or has any obligation or liability to
make contributions, including any withdrawal liability, contingent or otherwise.
"NET BOOK VALUE" shall mean, the amount determined, on a consolidated
basis, for property, plant and equipment (net of accumulated depreciation) as
reflected on the Parent's consolidated financial statements as determined in
accordance with GAAP.
"OBJECTION" means a claim by the Agent in its reasonable discretion
that a Person that is or may be acquired is Financially Weakened.
"OBLIGATIONS" shall mean all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Obligor
to the Agent or any Lender, and all covenants and duties regarding such amounts,
of any kind or nature, present or future, whether or not evidenced by any note,
agreement or other instrument, arising under the Agreement or any of the other
Loan Documents. This term includes all principal, interest (including all
interest which accrues after the commencement of any case or proceeding in
bankruptcy after the insolvency of, or for the reorganization of any Obligor,
whether or not allowed in such proceeding), fees, charges, expenses, attorneys'
fees and any other sum chargeable to any Obligor under the Agreement or any of
the other Loan Documents.
"OBLIGOR" shall mean each Company and each Guarantor, and "OBLIGORS"
shall mean, collectively, all of the Companies and all of the Guarantors.
"OECD" means the Organization for Economic Cooperation and Development.
"OPERATING LEASES" shall mean all leases of property (whether real,
personal or mixed) other than Capital Leases.
"ORDERLY LIQUIDATION VALUE" shall mean, at any date of determination,
with respect to any Equipment the value that would be obtained from a private
sale thereof (net of sales and liquidation expenses) completed within a six (6)
month period on an "as is and where is" basis where such sale is properly
advertised and conducted under current market conditions by an Approved
Appraiser. In the absence of an actual sale, such value shall have the meaning
customarily determined by appropriate appraisal methodologies in the equipment
appraisal industry at the time of the valuation, less the estimated marshaling,
stacking, reconditioning and sale expenses designed to maximize the resale value
of such Equipment as determined by an Approved Appraiser. Such value shall be
determined based on the then physical condition and location (i.e., "as is and
where is") of such Equipment, and their useful life and remaining useful life.
An Approved Appraiser's valuation, in the absence of a sale, may be made with or
without
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
17
physical inspection, at the Agent's discretion, and except as otherwise provided
in this Agreement such valuation as set forth in the then most recent Appraisal
of Orderly Liquidation Value shall apply with respect to determinations of
Orderly Liquidation Value under this Agreement.
"ORIGINAL CLOSING DATE" shall mean November 22, 1999.
"OTHER COLLATERAL" shall mean all now owned and hereafter acquired
deposit accounts maintained with any bank or financial institutions; all cash
and other monies and property in the possession or control of the Agent and/or
the Lenders; all books of account, records, customer lists, customer files,
customer records, data bases and other records in any way relating to any of the
foregoing, ledger cards, disks and related data processing computers and
software and all rights, licenses, privileges, trade secrets and other rights
for the possession and operation of same, at any time evidencing or containing
information relating to any of the Collateral described herein, or otherwise
necessary or helpful in the collection thereof or realization thereon; all
pension plan reversions; all letters of credit, credit memoranda and advices of
credit for the benefit of Company, and all of Company's rights to enforce and
receive payment thereof; all now owned and hereafter acquired investment
property, including all "Investment Property" as that term is defined in Section
9-115 of the U.C.C.; and all cash and non-cash proceeds of the foregoing.
"OTHER OVERADVANCES" shall have the meaning provided for in Xxxxxxx 0,
Xxxxxxxxx 0(x) of this Agreement.
"OUT-OF-POCKET EXPENSES" shall mean all of the Agent's and/or the
Lenders' present and future reasonable out of pocket expenses incurred relative
to this Agreement, whether incurred heretofore or hereafter, which expenses
shall include, without being limited to, the reasonable fees, costs and expenses
of the Agent's and/or Lenders' legal counsel in connection with the preparation,
negotiation, execution, amendment, administration and enforcement of this
Agreement and/or the other loan and security documents executed in connection
herewith or relating hereto from time to time, the cost of record searches, all
costs and expenses incurred by the Agent and/or the Lenders in opening bank
accounts, depositing checks, receiving and transferring funds, and any charges
imposed on the Agent and/or the Lenders due to "insufficient funds" of deposited
checks and the Agent's and/or the Lenders' standard fee relating thereto, any
amounts paid by the Agent in behalf of the Lenders, incurred by or charged to
the Agent in behalf of the Lenders by the Issuing Bank under the Letter of
Credit Guaranty or any Company's reimbursement agreement, application for Letter
of Credit or other like document which pertain either directly or indirectly to
such Letters of Credit, and the Agent's and/or the Lenders' standard fees
relating to the Letters of Credit and any drafts thereunder, reasonable travel,
lodging and similar expenses of the Agent's personnel inspecting and monitoring
the Collateral from time to time hereunder, local counsel fees, title insurance
premiums, real estate survey costs, fees and taxes relative to the filing of
financing statements, costs of preparing and recording mortgages/deeds of trust
against the Real Estate and all expenses, costs and fees set forth in Section
10, Paragraph 3 of this Agreement.
"OVERADVANCES" shall have the meaning provided in Section 3, Paragraph
1.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
18
"OVERADVANCE RATE" shall mean a rate equal to one-half of one percent
(1/2%) per annum in excess of the applicable contract rate of interest
determined in accordance with Section 8, Paragraph 1(a) of this Agreement.
"PATENTS" shall mean all present and hereafter acquired patents and/or
patent rights of each Company and all cash and non-cash proceeds thereof.
"PERMITTED ACQUISITION" shall mean an Acquisition of any of the
following in a transaction that meets the conditions precedent and other
criteria for an Acquisition Facility Loan set forth in Section 4 of this
Agreement (whether or not the proceeds of any Acquisition Facility Loans will be
used in connection with such acquisition):
(a) Rigs and/or Rigs Accessories (but excluding (i)
maintenance and replacement components and parts (including installation)
acquired in the ordinary course of business for existing Rigs and Rigs acquired
hereafter, (ii) drill pipe acquired in the ordinary course of business for Rigs,
or (iii) purchases of tangible assets pursuant to the reinvestment of casualty
insurance proceeds); and
(b) acquisitions of 90% or more of the Capital Stock or all or
substantially all of the assets of a Person engaged primarily in a Qualifying
Business.
"PERMITTED BUSINESS INVESTMENTS" means:
(a) investments by any Company in any Person engaged primarily
in a Qualified Business which, immediately after the making of such investment,
is or becomes a Substantially-Owned Subsidiary of any Company and an Obligor
pursuant to Section 4, provided that the Parent has furnished to the Agent the
information described in Section 4 of this Agreement, except that such
investments shall not be Permitted Business Investments to the extent that the
Agent reasonably determines that the liabilities and other obligations
(contingent or otherwise) of any Obligor resulting therefrom or associated
therewith could reasonably be expected to have a Material Adverse Effect;
(b) loans and other extensions of credit to officers,
directors and employees of any Obligor and its Subsidiaries for travel,
entertainment and moving and other relocation expenses made in direct
furtherance and in the ordinary course of the business of any such Obligor or
its Subsidiaries, provided that the aggregate principal amount of loans and
other extensions of credit made pursuant to this clause (b) does not exceed
$4,000,000 at any one time outstanding;
(c) loans by any Obligor to NDM for NDM's working capital
needs in an amount not to exceed $6,000,000 outstanding at any one time in the
aggregate with respect to all loans by Obligors;
(d) payments to any employee, officer or director of any
Obligor or any of its Subsidiaries pursuant to employee benefit plans or
compensation arrangements entered into in
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
19
the ordinary course of business and approved by the Board of Directors of the
applicable Obligor or such Subsidiary or payments, contributions or transactions
relating to such plans;
(e) Permitted Joint Venture Investments;
(f) Advances, contributions and loans or other investments, by
an Obligor, in or to, a Canadian Operating Company for the purpose of
consummating Permitted Acquisitions and working capital and other general
purposes; provided that (i) the amount of such advances, contributions and loans
do not exceed in the aggregate 125% of the total purchase price of Permitted
Acquisitions consummated by such Canadian Operating Company, (ii) no more than
35% of such advances, contributions and loans may be in the form of an advance,
contribution or other investment that is not a loan, and (iii) all such loans
are secured by a Canadian First Priority Lien;
(g) Advances, contributions, loans or other investments by an
Obligor in or to a Canadian Finance Company, provided that,
(i) such advances, contributions, loans and other
investments are for the purpose of funding the purchase from an Obligor of loans
made pursuant to paragraph (f) of this definition or for general corporate and
working capital of such Canadian Finance Company;
(ii) such advances, contributions, loans or other
investments are for the purpose of enabling such Canadian Finance Company to
make loans to a Canadian Operating Company for the purpose of consummating
Permitted Acquisitions or for general corporate and working capital purposes,
provided that (A) the loans made by the Canadian Finance Company to the Canadian
Operating Company do not exceed in the aggregate 125% of the total purchase
price of Permitted Acquisitions consummated by such Canadian Operating Company
less any advances, contributions, loans or investments made by an Obligor to the
Canadian Operating Company pursuant to paragraph (f) of this definition, and (B)
all such loans made by the Canadian Finance Company to the Canadian Operating
Company are secured by a Canadian First Priority Lien; or
(iii) the purpose of such advances, contributions,
loans or other investments is for the purpose of purchasing loans made by
another Canadian Finance Company to a Canadian Operating Company pursuant to
clause (g)(ii) of this definition and the cash proceeds of the loans being
purchased are being used to repay amounts due hereunder; or
(iv) the purpose of such advances, contributions,
loans and investments is to purchase loans (that do not exceed 125% of the total
purchase price of Canadian Operating Company less any advances, contributions,
loans or investments made by an Obligor to the Canadian Operating Company
pursuant to paragraph (g) of this definition) made by a third party to a
Canadian Operating Company that are secured by a Canadian First Priority Lien.
(h) investments made in the ordinary course of, and of a
nature that is or shall have become customary in, the oil and gas business as a
means of actively exploiting, exploring for, acquiring, developing, processing,
gathering, marketing or transporting oil and gas through agreements,
transactions, interests, or arrangements which permit one to share risks or
costs, comply
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
20
with regulatory requirements regarding local ownership or satisfy other
objectives customarily achieved through the conduct of oil and gas business
jointly with third parties, including, without limitation, the entry into
operating agreements, working interests, royalty interests, mineral leases,
processing agreements, farm out and farm in agreements, division orders,
contracts for the sale, transportation or exchange of oil or natural gas,
unitization and pooling declarations and agreements and area of mutual interest
agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests, and investments and
expenditures in connection therewith; provided that an investment pursuant to
this clause (h) in capital stock, partnership interests, joint venture interests
(other than partnership interests and joint venture interests expressly
permitted above in this clause (h)), limited liability company interests or
other similar equity interests in a Person shall not constitute a Permitted
Business Investment.
"PERMITTED FINANCIAL INVESTMENTS" means the following kinds of
instruments to the extent that the aggregate amount thereof outstanding do not
exceed $35,000,000 at any time (except that such $35,000,000 limitation shall
not apply for instruments described in subparagraphs (c) or (g) or (h)
immediately below or in the event that no Revolving Loan is outstanding) during
which there are any Revolving Loans outstanding:
(a) investments in (1) certificates of deposit in United
States dollars or Canadian dollars maturing within one year from the date of
issuance thereof, and overnight investments, issued by a bank or trust (i)
organized under the laws of the United States or any state thereof, having
capital, surplus and undivided profits aggregating at least $500,000,000, or
(ii) organized under the laws of any jurisdiction other than the United States
or any state thereof, provided that such foreign bank shall be one of the three
most reputable, creditworthy banks in such country; or (iii) organized under the
laws of Canada or any province thereof, having capital, surplus and undivided
profits aggregating at least $500,000,000 or the Canadian dollar equivalent
thereto, and (2) commercial paper rated A-1 or the equivalent thereof by
Standard & Poor's Ratings Group, a Division of XxXxxx-Xxxx, Inc., a
New York
corporation or P-1, or the equivalent thereof by Xxxxx'x Investors Service, Inc.
and in each case maturing within six months after the date of acquisition;
(b) deposit accounts (i) in a bank or trust organized under
the laws of the United States or any state thereof or Canada or any province
thereof, having capital surplus and undivided profits aggregating at least
$200,000,000 and whose commercial paper (or that of the holding company with
which such bank or trust company is affiliated) is rated A-1 or better by
Standard & Poor's Rating Group or P-1 or better by Xxxxx'x Investors Service,
Inc. or Canadian equivalent rating service, if applicable, (ii) in banks outside
of the United States, in currencies other than U.S. dollars, which banks provide
working capital, operating accounts or similar services to one or more
Subsidiaries of an Obligor at such foreign banks, provided that such foreign
bank shall be one of the three most reputable, creditworthy banks in such
country and (iii) in a bank organized under the laws of the United States or any
state thereof or Canada or any province thereof not included in the descriptions
in clause (i) or (ii) above, so long as the aggregate amount on deposit in such
bank by any Obligor and its Subsidiaries does not exceed $5,000,000 or the
Canadian equivalent thereof;
(c) receivables arising from the sale of goods and services in
the ordinary course of business of any Obligor and its Subsidiaries;
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
21
(d) investments in eurodollars not in excess of $10,000,000 in
the aggregate at any time outstanding, issued by any bank or trust company
having capital, surplus and undivided profits aggregating at least $500,000,000
and whose long term certificates of deposit are, at the time of acquisition
thereof by any Obligor, rated A-1 or better by Standard & Poor's Ratings Group
of P-1 or better by Xxxxx'x Investor Service, Inc.;
(e) marketable direct obligations issued or unconditionally
guaranteed by the United States or Canadian government or issued by any agency
thereof and backed by the full faith and credit of the United States or Canada,
as the case may be, in each case maturing no later than one year from the date
of acquisition;
(f) money market, mutual or similar funds that invest in
obligations referred to in clauses (a) or (d) of this definition, in each case
having assets in excess of $500,000,000;
(g) currency price hedging agreements, using customary ISDA
swap documentation or comparable documentation, entered into for the purpose of
hedging actual exposure on the currency price risks of its Qualified Business
and not speculation (with a maximum liability not to exceed US $5,000,000 at any
time for hedging of Mexican Pesos); or
(h) the acquisition or ownership of Capital Stock or
obligations or securities received in settlement of debts (created in the
ordinary course of business) owing to any Obligor thereof.
"PERMITTED INDEBTEDNESS" shall mean without duplication: (i) current
indebtedness maturing in less than one year and incurred in the ordinary course
of business for raw materials, supplies, equipment, services, taxes or labor;
(ii) purchase money indebtedness secured only by the Purchase Money Liens; (iii)
Subordinated Debt; (iv) deferred taxes and other expenses incurred in the
ordinary course of business; (v) other indebtedness existing on the date of
execution of this Agreement and listed in the most recent financial statement
delivered to the Agent and the Lenders or otherwise disclosed in the Loan
Documents to the Agent in writing; (vi) Indebtedness of (a) an Obligor owed to
another Obligor, and (b) Indebtedness of an Obligor owed to a Subsidiary of the
Parent that is not an Obligor, provided that such Indebtedness (other than
accounts payable and intercompany charges in the ordinary course of business) is
evidenced by a promissory note and is subordinated in writing (in a manner
reasonably satisfactory to the Agent) in right of payment to the prior payment
in full of the Obligations (c) of the Parent or any Subsidiary thereof to the
Parent or to any other Subsidiary thereof pursuant to the concentrated cash
management system for (1) collections of accounts receivable or (2)
disbursements to trade creditors; (vii) Indebtedness assumed as part of the
acquisition of any entity or asset by any Obligor or any Subsidiary thereof,
whether by merger, consolidation, purchase of assets or otherwise; provided that
(A) such Indebtedness is not created, incurred or assumed in contemplation of
such acquisition of such entity or asset and (B) the aggregate amount of all
such Indebtedness constituting Indebtedness For Borrowed Money does not exceed
$10,000,000 outstanding at any time, and (C) any Indebtedness discharged at the
closing of such acquisition shall not be deemed or constitute assumed
Indebtedness; (viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
22
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided that such
Indebtedness is extinguished within two Business Days; (ix) Indebtedness arising
from agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guarantees, letters of credit, surety bonds or
performance bonds securing any obligation of any Obligor, or any Subsidiary
thereof, incurred or assumed in connection with the disposition of any business,
assets or any Subsidiary of the Parent or any other Obligor or Subsidiary
thereof other than Guarantees by any Obligor or any Subsidiary thereof of
Indebtedness For Borrowed Money incurred by any Person acquiring all or a
portion of such business, asset or Subsidiary for the purpose of financing such
acquisition; provided that the maximum aggregate liability with respect to all
such Indebtedness and the amount of Indebtedness subject to such Guarantees in
each case with respect to a particular transaction, shall at no time exceed the
gross proceeds actually received from the sale of such business, asset or
Subsidiary; (x) Indebtedness constituting the net obligations of a Person as of
the date of a required calculation under currency hedging agreements entered
into in the ordinary course of business and not for the purposes of speculation;
(xi) Permitted Obligor Refinancing Indebtedness; (xii) Indebtedness constituting
a Permitted Business Investment (without duplication); (xiii) Indebtedness of a
Subsidiary of any Obligor incurred in connection with a transaction permitted
under Section 7, Paragraph 10H of this Agreement; (xiv) Indebtedness of the
Obligors to the Agent and/or the Lenders arising under this Agreement and the
other Loan Documents; (xv) Indebtedness of any Obligor or any Subsidiary
thereof, not otherwise described above, not to exceed in the aggregate with
respect to all Obligors and Subsidiaries taken as a whole $10,000,000
outstanding at any one time.
"PERMITTED INTERCOMPANY BALANCES" means loans, advances, inter-company
accounts, transfers and investments (including, but not limited to, loans made
pursuant to the concentrated cash management system for collections of accounts
receivable or disbursements to trade creditors) by any Obligor in, with or to
any other Obligor; provided that (i) each such lender and borrower (or
transferor and transferee, as the case may be) Obligor is Solvent after giving
effect thereto, (ii) each such Obligor has received reasonably equivalent value
in exchange for the transfers made and obligations incurred by it in connection
therewith, (iii) loans, transfers or advances to or investments in Restricted
Subsidiaries which were effected after the date of acquisition thereof by an
Obligor that do not exceed in the aggregate the amount obtained by subtracting
from the applicable Restricted Subsidiary Borrowing Base an amount equal to
Revolving Loans from the Lenders to such Restricted Subsidiary; and (iv) loans,
transfers or advances to or investments in PPLP and PPTC may not be made during
any time a Triggering Event has occurred and is continuing.
"PERMITTED JOINT VENTURES" means an investment in a limited liability
company, limited partnership or other entity for which there is no recourse
liability beyond the amount of the investment made other than an Obligor (a)
that is engaged in a Qualified Business; and (b) no debt or equity interest in
which (other than directors' qualifying shares with respect to corporations
formed under the laws of any country other than the United States of America) is
or will be held by an officer or director of the Obligor or of any Subsidiary
thereof, or any spouse, immediate family member of, or other relative having the
same principal residence as, any such officer or director, or any trust the
beneficiary of which is any of the foregoing parties or any other Affiliate of
the Obligor (except the Obligor or any Subsidiary thereof).
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
23
"PERMITTED JOINT VENTURE INVESTMENTS" means investments by any Obligor
in a Permitted Joint Venture if, after giving effect to such Investment, the
aggregate fair market value of all assets of the Obligors (determined on the
date of transfer) transferred since the Original Closing Date to Permitted Joint
Ventures (less the aggregate fair market value of all such assets subsequently
transferred back to the Obligor) would not exceed five percent (5%) of the
consolidated net worth of the Parent determined as of the end of the Parent's
most recent fiscal quarter for which financial information is available
immediately prior to the date of determination); provided that the Parent has
provided to the Agent the information described in Section 4 of this Agreement,
except that such investments shall not be Permitted Joint Venture Investments to
the extent that the Agent reasonably determines that the liabilities an other
obligations (contingent or otherwise) of any Obligor resulting therefrom or
associated therewith could reasonably be expected to have a Material Adverse
Effect.
"PERMITTED LIENS" shall mean: (a) liens existing on the date hereof and
listed on Schedule 1 hereto and other liens expressly permitted, or consented
to, by the Agent; (b) Purchase Money Liens; (c) Customarily Permitted Liens; (d)
liens granted to the Agent by any of the Companies; (e) liens for taxes not yet
due and payable or which are being diligently contested in good faith by Parent
or any direct or indirect Subsidiary thereof by appropriate proceedings and
which liens are not (i) other than with respect to Real Estate, senior to the
liens of the Agent or (ii) for taxes due the United States of America; (f) any
renewal for any lien permitted by any of the preceding clauses with respect to
the assets originally subject to such lien; provided that (i) the obligation
secured is not increased to an amount greater than the outstanding amount
secured by such lien as of the date of such renewal, (ii) the terms of the lien
remain substantially identical to original terms and (iii) such lien is secured
only by liens on those assets that secured such obligation prior to the renewal;
(g) liens securing Permitted Obligor Refinancing Indebtedness, so long as such
Permitted Obligor Refinancing Indebtedness is secured only by liens on those
assets that secured such Indebtedness prior to the renewal, extension,
refinancing, refund or repurchase or by liens otherwise permitted by this
definition; (h) liens on assets acquired in a Permitted Acquisition that secure
only Permitted Indebtedness assumed in such Permitted Acquisition (provided such
liens that would not constitute Customarily Permitted Liens are disclosed to the
Agent in connection with the delivery of information regarding such Permitted
Acquisition pursuant to Section 4 of this Agreement); and (i) Customarily
Permitted Liens on assets acquired, whether acquired in an asset purchase
transaction or a stock purchase transaction, in a Permitted Acquisition; and (j)
liens granted to Xxxxxx National Bank in a $750,000 certificate of deposit which
secures an outstanding letter of credit issued by Xxxxxx National Bank.
"PERMITTED OBLIGOR REFINANCING INDEBTEDNESS" means (a) Indebtedness of
any Obligor existing on the Closing Date, the terms of which have been amended,
modified or supplemented in a manner that such Indebtedness does not (i)
adversely affect the priority of such Indebtedness in right of payment in
relation to the Revolving Loans, (ii) accelerate the maturity of such
Indebtedness or (iii) shorten the Average Life of such Indebtedness and (b)
Indebtedness of any Obligor, the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Indebtedness of the Obligor;
provided that (A) if the Indebtedness being renewed, extended, refinanced,
refunded or repurchased is pari passu with or subordinated in right of payment
to the Revolving Loans, then such Indebtedness is pari passu with or
subordinated in
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
24
right of payment to the Revolving Loans at least to the same extent as the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, (B)
such Indebtedness is incurred that is equal to or greater than the remaining
Average Life at the time such Indebtedness is scheduled to mature no earlier
than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased and such Indebtedness has an Average Life at the time such
Indebtedness is incurred that is equal to or greater than the remaining Average
Life of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased; provided, further, that such Indebtedness is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the sum of (x) the aggregate principal amount then outstanding
of the Indebtedness being renewed, extended, refinanced, refunded or repurchased
(or if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP, (y) the amount of accrued and unpaid interest, if any, on
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
and (z) the amount of fees, expenses and costs related to the incurrence of such
Permitted Obligor Refinancing Indebtedness; provided that, after giving effect
thereto, the scheduled payments or aggregate outstanding amount of such
Indebtedness is not increased to an amount greater than the outstanding amount
thereof as of the date of such renewal, extension, refinancing, refund or
repurchase, and (C) the material terms of such Indebtedness shall be
substantially identical to the term that existing prior to such renewal,
extension, refinancing, refund or repurchase except as expressly provided above.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company or partnership, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"PLAN" shall mean any employee pension benefit plan (as defined in
Section 3(2) of ERISA), subject to Title IV of ERISA or Section 412 of the
Internal Revenue Code of 1986, as amended, other than a Multiemployer Plan, with
respect to which Parent, its Subsidiaries or an ERISA Affiliate contributes or
has an obligation or liability to contribute, including any such plan that may
have been terminated.
"PRIOR LOAN AGREEMENT" shall mean that certain Loan and Security
Agreement dated November 22, 1999 by and among the Agent, various lenders party
thereto and certain of the Obligors, as amended from time to time.
"PROJECTIONS" shall have the meaning provided for in Xxxxxxx 0,
Xxxxxxxxx 00(x) of this Agreement.
"PROMISSORY NOTES" shall mean each and every Revolving Loan Promissory
Note, in the form of Exhibit A attached hereto, delivered by the Companies to
the Agent to evidence the Revolving Loans, pursuant to, and repayable in
accordance with, the provisions of Section 3 of this Agreement.
"PURCHASE MONEY LIENS" shall mean liens on any item of equipment
acquired after the date of this Agreement; provided that (i) each such lien
shall attach only to the property to be
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
25
acquired, and (ii) the debt incurred in connection with such acquisitions shall
not exceed in the aggregate $10,000,000 incurred in any Fiscal Year.
"QUALIFIED BUSINESS" means, with respect to all Obligors, the business
of oil and gas well drilling, oil and gas well construction, oil and gas well
completion and oil and gas well workover or well service, oil and gas well
stimulation, drilling mud manufacturing, drilling and completion fluids services
and any business or services reasonably related to any foregoing, and with
respect to PPLP and PPTC, the business of oil and gas exploration and production
and any business or services reasonably related to any of the foregoing.
"QUALIFIED DOMESTIC RIGS" shall mean (i) Domestic Rigs and (ii) Mobile
Rigs (which are located in the United States) to the extent Agent determines
that such Mobile Rigs are subject to a perfected first priority lien in favor of
the Agent and securing all Obligations.
"QUALIFIED STOCK" means, with respect to any Person, any Capital Stock
of such Person or a Subsidiary of Such Person that is not Disqualified Stock.
"REAL ESTATE" shall mean fee and/or leasehold interests in the real
property of each Obligor and each Subsidiary thereof which may be encumbered,
mortgaged, pledged or assigned to the Agent or its designee in accordance with
the terms of the Loan Documents from time to time.
"REGULATION D" shall mean Regulation U of the Board (respecting
eurocurrency liabilities), and all official rulings and interpretations
thereunder or thereof.
"REGULATION U" shall mean Regulation U of the Board (respecting margin
credit extended by banks), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board (respecting the
Companies who obtain margin credit), as the same is from time to time in effect,
and all official rulings and interpretations thereunder or thereof.
"REQUESTED OVERADVANCES" shall have the meaning provided for in Xxxxxxx
0, Xxxxxxxxx 0(x) of this Agreement.
"REQUIRED LENDERS" shall mean Lenders holding more than fifty-one
percent (51%) of the outstanding loans, advances, extensions of credit and
commitments to each Company hereunder.
"RESTRICTED PAYMENT" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of any of the
Obligors now or hereafter outstanding, (b) any redemption, retirement, purchase
or other acquisition, direct or indirect, of any shares of any class of stock of
any of the Obligors, now or hereafter outstanding, or of any warrants, rights or
options to acquire any such shares, except to the extent that the consideration
therefor consists of shares of stock (including warrants, rights or options
relating thereto) of the Parent, and (c)
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
26
any investment, loan or advance by any of the Obligors not permitted under
Section 7, Paragraph 10(H) hereof.
"RESTRICTED SUBSIDIARY BORROWING BASE" means with respect to each
Restricted Subsidiary, the sum of (A) the product of the Eligible Accounts
Receivable of a Restricted Subsidiary multiplied by the Accounts Receivable
Advance Percentage, and (B) the product of the Eligible Equipment of such
Restricted Subsidiary multiplied by the Equipment Advance Percentage.
"RESTRICTED SUBSIDIARIES" means first tier Subsidiaries of Parent
formed, or acquired, after the date hereof (a) in connection with a business
acquisition that the parties thereto have attempted to structure as a
transaction that satisfies the requirements of Section 368 of the Internal
Revenue Code of 1986, as amended, or (b) is designated as such by the Agent
pursuant to Section 4, Paragraph 5(b) of this Agreement and (c) otherwise
satisfies the requirements to be a Company in accordance with Section 4,
Paragraph 5(a) hereof.
"REVOLVING LOANS" shall mean the loans and advances made, from time to
time, to or for the account of each Company by the Agent on behalf of the
Lenders pursuant to Section 3 or Section 4 of this Agreement.
"REVOLVING LOAN ACCOUNT" shall have the meaning specified in Section 3,
Paragraph 6 of this Agreement.
"REVOLVING LOAN COMMITMENT" shall mean, with respect to each Lender,
the amount set forth under Lender's name on the signature pages hereof, or
acquired by a Lender pursuant to Section 13, Paragraph 9, evidencing the amount
of its commitment to make Revolving Loans, as the same may be reduced from time
to time pursuant to this Agreement.
"REVOLVING LOAN PROMISSORY NOTE" shall mean the promissory note in the
form of Exhibit A hereto executed by each Company to evidence the Revolving
Loans made by the Agent on behalf of the Lenders to each Company pursuant to
Section 3 of this Agreement.
"RIG(S)" shall mean all land-based drilling and workover rigs owned by
any Company, together with all Rig Accessories which are installed on or affixed
to such Rig (but excluding hard rock boring machinery and equipment directly
owned by UHRB).
"RIG ACCESSORIES" shall mean pumps, drilling equipment, machinery,
equipment and parts and other miscellaneous assets indirect or necessarily
related to the ownership of Rigs (but excluding hard rock boring machinery and
equipment).
"SETTLEMENT DATE" shall mean the date, weekly, and more frequently, at
the discretion of the Agent, upon the occurrence of an Event of Default or a
continuing decline or increase of the Revolving Loans that the Agent and the
Lenders shall settle amongst themselves so that (x) the Agent shall not have, as
Agent, any money at risk and (y) on such Settlement Date the Lenders shall have
a pro rata amount of all outstanding Revolving Loans, provided that each
Settlement
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27
Date for a Lender shall be a Business Day on which such Lender and its bank are
open for business.
"SOLVENT" shall mean, with respect to any Person, (i) the fair value of
such Person's assets exceeds the fair value of such Person's liabilities; (ii)
such Person is generally able to pay its debts as they become due and payable;
and (iii) such Person does not have unreasonably small capital to carry on its
business as it is currently conducted absent extraordinary and unforeseen
circumstances.
"SUBORDINATED AGREEMENT" shall have the meaning specified in Section 7,
Paragraph 1 of this Agreement.
"SUBORDINATED DEBT" shall mean (i) the Indebtedness For Borrowed Money
due a Subordinating Creditor (and the note evidencing such) which has been
subordinated, by a Subordination Agreement, to the prior payment and
satisfaction of the Obligations to the Agent and/or the Lenders (in form and
substance satisfactory to the Agent), or (ii) the Indebtedness For Borrowed
Money due to a creditor which Indebtedness For Borrowed Money has been
subordinated to the prior payment and satisfaction of the Obligations to the
Agent and the Lenders, by means of a written agreement whose terms are
substantially similar to a Subordination Agreement.
"SUBORDINATING CREDITOR" shall mean any party hereafter executing a
Subordination Agreement.
"SUBORDINATION AGREEMENT" shall mean (i) any agreement among any or all
Obligors, a Subordinating Creditor, the Agent and, at the discretion of the
Agent, the Lenders (or any of them) or (ii) any agreement among any or all
Obligors, as the Subordinating Creditor, the Agent and, at the discretion of the
Agent, the Lenders (or any of them), pursuant to which, in either case, the
Subordinated Debt is subordinated to the prior payment and satisfaction of the
Obligations to the Agent and the Lenders in form and substance satisfactory to
the Agent upon execution and delivery thereof (as the same may be amended,
modified or changed from time to time).
"SUBSIDIARY" shall mean any corporation or other entity of which a
Person owns, directly or indirectly, through one or more intermediaries, more
than 50% of the Capital Stock or other equity interest at the time of
determination.
"SUBSTANTIALLY-OWNED SUBSIDIARY" means a Subsidiary of an Obligor in
which such Obligor owns and controls, directly or indirectly, not less than
ninety percent (90%) of the capital stock thereof (with power to vote on and
control all matters of such Subsidiary).
"TANGIBLE NET WORTH" shall mean at any date, total assets at such date
less the sum of (a) intangible assets and (b) total liabilities, and shall be
determined in accordance with GAAP, on a consistent basis with the latest
audited financial statements.
"TARGET" shall have the meaning assigned to such term in Section 4 of
this Agreement.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
28
"TRADE ACCOUNTS RECEIVABLE" shall mean that portion of Accounts which
arises from the sale of Inventory or the rendition of services in the ordinary
course of business.
"TRADEMARKS" shall mean all present and hereafter acquired trademarks
and/or trademark rights (together with the goodwill associated therewith) and
all cash and non-cash proceeds thereof.
"TRANSFEREE" shall have the meaning provided for in Xxxxxxx 00,
Xxxxxxxxx 0(x) of this Agreement.
"TRIGGERING EVENT" shall have the meaning provided for in Section 3,
Paragraph 4 of this Agreement.
"TTM EBITDA" shall mean, as of any date of determination thereof,
EBITDA of the Parent and all of its Subsidiaries on a consolidated basis for the
twelve (12) consecutive month period immediately preceding the date of
determination thereof; provided that, (i) on December 31, 1999, TTM EBITDA shall
be determined for the twelve month period immediately preceding December 31,
1999 by multiplying the EBITDA for the period from June 30, 1999 through
December 31, 1999 by 2, and (ii) on March 31, 2000, TTM EBITDA shall be
determined for the twelve month period immediately preceding March 31, 2000 by
multiplying the EBITDA for the period from June 30, 1999 through March 31, 2000
by 1.333.
"U.C.C." shall mean the Uniform Commercial Code as in effect from time
to time in the State of Texas.
SECTION 2. CONDITIONS PRECEDENT
The obligation of the Agent and the Lenders to make loans hereunder is
subject to the satisfaction of, or waiver of, immediately prior to or
concurrently with the making of such loans, the following conditions precedent:
(a) LIEN SEARCHES - The Agent shall have received tax, judgment and
U.C.C. searches satisfactory to the Agent for all locations presently occupied
or used by any Obligor.
(b) CASUALTY INSURANCE - The Companies shall have delivered to the
Agent evidence satisfactory to the Agent that casualty insurance policies
listing Agent as loss payee or mortgagee, as the case may be, are in full force
and effect, all as set forth in Section 7, Paragraph 5 of this Agreement.
(c) UCC FILINGS - Any documents (including, without limitation,
financing statements) required to be filed in order to create, in favor of the
Agent for the benefit of the Lenders a first and exclusive perfected security
interest in the Collateral with respect to which a security interest may be
perfected by a filing under the U.C.C. shall have been properly filed in each
office in each jurisdiction required in order to create in favor of the Agent
for the benefit of the Lenders a perfected lien on the Collateral. The Agent
shall have received acknowledgement
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
29
copies of all such filings (or, in lieu thereof, the Agent shall have received
other evidence satisfactory to the Agent that all such filings have been made);
and the Agent shall have received evidence that all necessary filing fees and
all taxes or other expenses related to such filings have been paid in full.
(d) PAYMENT OF FEES AND EXPENSES - The fees and expenses, payable on or
before the Closing Date as described in Section 8 of this Agreement, shall have
been paid in full.
(e) GUARANTEES - One or more guarantees shall have been executed and
delivered by Guarantors in favor of the Agent in form acceptable to the Agent,
guaranteeing all present and future Obligations.
(f) OPINIONS - Counsel for each Obligor shall have delivered to Agent
opinions satisfactory to Agent opining to such matters incident to the
transactions covered by this Agreement and the other Loan Documents as Agent may
require and each Obligor authorizes and directs such counsel to deliver such
opinions to Agent.
(g) PLEDGE AGREEMENT - Each Obligor, as a pledgor, shall (a) execute
and deliver to the Agent for the benefit of the Lenders a pledge and security
agreement and stock powers pledging to the Agent for the benefit of the Lenders,
as additional Collateral, all of the issued and outstanding stock of any and all
of its Subsidiaries and, (b) deliver to the Agent for the benefit of the Lenders
the stock certificates evidencing such stock together with duly executed stock
powers with respect thereto.
(h) ADDITIONAL DOCUMENTS - Each Obligor shall have executed and
delivered to the Agent all loan documents necessary to consummate the lending
arrangement contemplated by the Loan Documents.
(i) SUBORDINATION AGREEMENT - The Subordinating Creditors shall have
executed and delivered to the Agent their respective Subordination Agreements,
in form and substance satisfactory to the Agent, subordinating the debt due the
Subordinating Creditor by any Obligor to the prior payment and satisfaction of
the Obligations to the Agent and/or the Lenders.
(j) BOARD RESOLUTION - The Agent shall have received a copy of the
resolutions of the Board of Directors of each Obligor authorizing the execution,
delivery and performance of (i) this Agreement, (ii) the Guaranty (in the case
of Guarantors); and (iii) any related agreements, in each case certified by the
Secretary or Assistant Secretary of the applicable Obligor as of the date
hereof, together with a certificate of the Secretary or Assistant Secretary of
the applicable Obligor as to the incumbency and signature of the officers of the
applicable Obligor executing such agreements and any certificate or other
documents to be delivered by them pursuant hereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary.
(k) CORPORATE/LIMITED PARTNERSHIP ORGANIZATION - The Agent shall have
received (i) a copy of the Certificate of Incorporation of each corporate
Obligor certified by the Secretary of State of its incorporation, (ii) a copy of
the By-Laws (as amended through the date hereof) of each corporate Obligor,
certified by the Secretary or Assistant Secretary thereof; and (iii) a copy
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
30
of the certificate of limited partnership of each limited partnership which is
an Obligor certified by the secretary of state of the state of its formation.
(l) OFFICER'S CERTIFICATE - The Agent shall have received an executed
Officer's Certificate of each Obligor, satisfactory in form and substance to the
Agent, certifying that: (i) the representations and warranties contained herein
are true and correct in all material respects on and as of the date hereof; (ii)
each Obligor is in compliance with all of the terms and provisions set forth in
the Loan Documents to which it is a party; and (iii) no Default or Event of
Default has occurred and is continuing.
(m) ABSENCE OF DEFAULT AND MATERIAL ADVERSE CHANGE - No Default, Event
of Default has occurred and is continuing or material adverse change in the
financial condition, business, prospects, profits, operations or assets of any
Obligor shall have occurred.
(n) [INTENTIONALLY OMITTED]
(o) DELIVERY OF TITLES - Each Company shall deliver to the Agent the
original certificates of title issued by the department of transportation or
other corresponding instrumentality or agency of any State or jurisdiction which
relates to any Rig owned by each Company that is also classified by such State
or jurisdiction as a certificated vehicle, together with all such fees and
documentation necessary or desirable, under applicable law, to endorse on such
title and effectuate a first priority lien and security interest thereon in
favor of the Agent for the benefit of the Lenders.
(p) [INTENTIONALLY OMITTED]
(q) LEGAL RESTRAINTS/LITIGATION - At the date of execution of this
Agreement, there shall be no (x) litigation, investigation or proceeding
(judicial or administrative) pending or threatened against any Obligor or its
assets, by any agency, division or department of any county, city, state or
federal government arising out of this Agreement, (y) injunction, writ or
restraining order restraining or prohibiting the consummation of the financing
arrangements contemplated under this Agreement or (z) to the best knowledge of
the Obligors, suit, action, investigation or proceeding (judicial or
administrative) pending or threatened against any Obligor or its assets, which,
in the opinion of the Agent if adversely determined would reasonably be expected
to have a Material Adverse Effect.
(r) DISBURSEMENT AUTHORIZATION - Each Company shall have delivered to
the Agent all information necessary for the Agent to issue wire transfer
instructions on behalf of each Company for the initial and subsequent loans
and/or advances to be made under this Agreement including, but not limited to,
disbursement authorizations in form acceptable to the Agent.
(s) EXAMINATION AND VERIFICATION - The Agent shall have completed to
the satisfaction of the Agent an examination and verification of the Accounts,
Inventory, Equipment, books and records of each Obligor.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
31
(t) DEPOSITORY ACCOUNTS - Each Company shall have established a system
of bank accounts with respect to the collection of Accounts and the deposit of
proceeds of Equipment as shall be requested and acceptable to the Agent in all
respects.
Upon the execution of this Agreement and the initial disbursement of loans
hereunder, all of the above Conditions Precedent shall have been deemed
satisfied except as each Company and the Agent shall otherwise agree herein or
in a separate writing.
SECTION 3. REVOLVING LOANS
1. Upon the Agent's receipt of an executed Revolving Loan Promissory
Note, the Lenders agree, subject to the terms and conditions of this Agreement
from time to time, and within (x) the Availability and (y) the Line of Credit,
but subject to Lenders' right to make "overadvances", to make loans and advances
to the Companies on a revolving basis (i.e., subject to the limitations set
forth herein, each Company may borrow, repay and re-borrow Revolving Loans);
provided, however, that the Lenders shall not be obligated to lend to any
Restricted Subsidiary an amount in excess of a sum equal to (1) the Restricted
Subsidiary Borrowing Base less (2) the aggregate amount of all loans thereto by
any and all Obligors. Subject to such limitations, the aggregate amount of such
loans and advances outstanding shall be up to the sum of: (a) outstanding
Eligible Accounts Receivable of the Companies multiplied by the Accounts
Receivable Advance Percentage, plus (b) the lesser of (i) Net Book Value
multiplied by the Equipment Advance Percentage or (ii) the aggregate value of
Eligible Equipment of the Companies multiplied by the Equipment Advance
Percentage, minus (c) the outstanding undrawn balance of Letters of Credit
outstanding, and minus (d) the Availability Reserves. Each request shall
constitute, unless otherwise disclosed in writing to the Agent and the Lenders a
representation and warranty by each Company that (i) after giving effect to the
requested advance, no Default or Event of Default has or will have occurred and
be continuing, (ii) such requested Revolving Loan is within the Line of Credit
and Availability, and (iii) the proceeds of such Revolving Loan shall be used
(A) if the Revolving Loan is an Acquisition Facility Loan, solely for Permitted
Acquisitions, and (B) if the Revolving Loan is not an Acquisition Facility Loan,
for the purposes permitted for such loans as set forth in Xxxxxxx 0, Xxxxxxxxx
00(x). All requests for loans and advances must be received by an officer of the
Agent no later than 1:00 p.m.,
New York time, on the day on which such loans and
advances are required and must designate the portion thereof which are
Acquisition Facility Loans and the portion thereof which are Revolving Loans
other than Acquisitions Facility Loans. Should the Agent for any reason honor
requests for advances in excess of the limitations set forth herein, such
advances shall be considered "Overadvances" and shall be made in the Agent's
sole discretion, subject to any additional terms the Agent deems necessary and
the other terms and provisions of this Agreement; provided, however, Agent may
not make Overadvances which exceed the Line of Credit.
2. In furtherance of the continuing assignment and security interest in
the Companies Accounts, each such Company may, at its option (but in all cases
subject to Section 3, Paragraph 9 below) promptly after the creation of
Accounts, execute and deliver to the Agent in such form and manner as the Agent
may reasonably require, solely for the Agent's convenience in maintaining
records of collateral, such confirmatory schedules of Accounts as the Agent may
reasonably request, and such other appropriate reports designating, identifying
and describing the Accounts as the Agent may reasonably require. In addition,
each Company may,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
32
at its option (but in all cases subject to Section 3, Paragraph 9 below) provide
the Agent with copies of agreements with, or purchase orders from, such
Company's customers, and copies of invoices to customers, proof of shipment or
delivery and such other documentation and information relating to said Accounts
and other collateral as the Agent may reasonably require. Failure to provide the
Agent with any of the foregoing shall in no way affect, diminish, modify or
otherwise limit the security interests granted herein. Each Company hereby
authorizes the Agent to affix such Company's printed name or rubber stamp
signature on assignment schedules or invoices as the equivalent of a manual
signature by one of each Company's authorized officers or agents.
3. (a) The Obligors hereby jointly and severally represent and warrant
that: each Trade Account Receivable of each Company is based on an actual and
bona fide sale and delivery of goods or rendition of services to its customers,
made by such Company in the ordinary course of its business; Equipment and the
other goods, if any, being sold and the Trade Accounts Receivable created are
the exclusive property of such Company and are not and shall not be subject to
any lien, consignment arrangement, encumbrance, security interest or financing
statement whatsoever, other than the Permitted Liens; the invoices evidencing
such Trade Accounts Receivable are in the name of such Company; and the
customers of such Company have accepted the goods or services, owe and are
obligated to pay the full amounts stated in the invoices according to their
terms, without dispute, offset, defense, counterclaim or contracts, except for
disputes and other matters arising in the ordinary course of business with
respect to which such Company has complied with the notification requirements of
Paragraph 5 of this section;
(b) The Obligors confirm to the Agent that any and all taxes
or fees relating to each Company's business, sales, the Accounts or goods
relating thereto, are such Company's sole responsibility and that same will be
paid by such Company when due and that none of said taxes or fees represent a
lien on or claim against the Accounts. Each Company agrees to maintain such
books and records regarding Accounts as the Agent may reasonably require and
agrees that the books and records of each Company will reflect the Agent's
interest in the Accounts. All of the books and records of each Company will be
available to the Agent at normal business hours, including any records handled
or maintained for such Company by any other company or entity (including any
Guarantor); provided, however, that the inclusion of this provision is not
intended to waive the attorney-client privilege with respect to legal files in
the possession of counsel to the Obligors.
4. Until the Agent has advised the Parent to the contrary after the
occurrence of a Triggering Event (as defined below), the Companies may and will
enforce, collect and receive all amounts owing on the Accounts for the Agent's
and Lenders' benefit and on their behalf, but at the Companies' expense; such
privilege shall terminate automatically upon the institution by or against any
Company of any proceeding under any bankruptcy or insolvency law or, at the
election of the Agent, upon the occurrence of any Triggering Event and until
such Triggering Event is waived in writing by the Agent or cured to the Agent's
satisfaction. Any checks, cash, notes or other instruments or property received
by a Company with respect to any Accounts or other proceeds of Collateral shall
be held by or on behalf of such Company in trust for the Agent for the benefit
of the Lenders, separate from such Company's own property and funds, and
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
33
immediately deposited to the special depository accounts in the Agent's name at
a depository institution designated by the Agent for such purposes (the
"DEPOSITORY ACCOUNTS"). Each such Depository Account shall be covered by a
tri-party blocked account agreement in form and substance acceptable to Agent
among such depository institution, Agent and each Company. Each such blocked
account agreement shall provide, among other things, that (i) all items of
payment deposited in such accounts and proceeds thereof deposited in the
applicable Depositary Account are held by such depositary institution as agent
or bailee-in-possession for Agent, (ii) the depositary institution executing
such agreement has no rights of setoff or recoupment or any other claim against
such account, as the case may be, other than for payment of its service fee and
other charges directly related to the administration of such account and for
returned checks or other items of payment, and (iii) following Agent giving
notice to such depositary institution to do so (which notice Agent agrees not to
give to such bank prior to the occurrence of a Triggering Event), such
depositary institution agrees to immediately forward all amounts received in the
applicable Depositary Account to Agent. From and after the occurrence of a
Triggering Event, no Obligor shall, or shall cause or permit any Subsidiary
thereof to, accumulate or maintain cash in disbursement or payroll accounts as
of any date of determination in excess of checks outstanding against such
accounts as of that date and amounts necessary to meet minimum balance
requirements. As used in this Agreement, "TRIGGERING EVENT" means: (A) an Event
of Default has occurred and is continuing or (B) the amount of Availability,
determined without regard to the Excluded L/Cs, at any time is less than
$15,000,000. All amounts received by the Agent in payment of Accounts
("COLLECTIONS") will be credited to the Companies' accounts on the Business Day
of the Agent's receipt of "good funds" at the Agent's bank account in
New York,
New York on the Business Day of receipt if received no later than 1:00 p.m. (New
York City time) or on the next succeeding Business Day if received after 1:00
p.m. (New York City time). No checks, drafts or other instrument received by the
Agent shall constitute final payment to the Agent unless and until such
instruments have actually been collected. If all Triggering Events which occur
cease to continue for a period of thirty (30) consecutive days, in the
reasonable judgment of the Agent based on relevant information provided by the
Parent, then the Parent shall resume the enforcement, collection and receipt of
all amounts owing on Accounts pursuant to the first sentence of this Paragraph
4, as was in effect prior to the occurrence of such Triggering Events (except as
otherwise provided in Section 10 of this Agreement).
5. The Parent agrees to notify the Agent promptly of any matters
materially affecting the value, enforceability or collectibility of any Account
and of all material customer disputes, offsets, defenses, counterclaims,
returns, rejections and all reclaimed or repossessed merchandise or goods. The
Parent agrees to issue credit memoranda promptly (with duplicates to the Agent
upon request after the occurrence of an Event of Default that is continuing)
upon accepting returns or granting allowances, and may continue to do so until
the Agent has notified the Parent that an Event of Default has occurred and is
continuing and that all future credits or allowances are to be made only after
the Agent's prior written approval. Upon the occurrence of an Event of Default
that is continuing and until such time as such Event of Default is no longer
continuing or is waived in writing by the Agent or cured to the Agent's
satisfaction and on notice from the Agent, each Company agrees that all
returned, reclaimed or repossessed merchandise or goods shall be set aside by
each Company, marked with the Agent's name and held by the Companies for the
Agent's account as owner and assignee.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
34
6. The Agent shall maintain a separate account on its books in Parent's
name (the "REVOLVING LOAN ACCOUNT") in which the Companies will be charged with
loans and advances made by the Agent to them or for their account, and with any
other Obligations, including any and all costs, expenses and reasonable
attorney's fees which the Agent may incur in connection with the exercise by or
for the Agent of any of the rights or powers herein conferred upon the Agent, or
in the prosecution or defense of any action or proceeding to enforce or protect
any rights of the Agent in connection with this Agreement or the Collateral
assigned hereunder, or any Obligations owing to the Agent and the Lenders by
each Company. The Companies will be credited with all amounts received by the
Agent and/or the Lenders from such Companies or from others for the Companies'
account, including, as above set forth, all amounts received by the Agent in
payment of assigned Accounts and such amounts will be applied to payment of the
Obligations. In no event shall prior recourse to any Accounts or other security
granted to or by such Companies be a prerequisite to the Agent's right to demand
payment of any Obligation from any Obligor. Further, it is understood that the
Agent and/or the Lenders shall have no obligation whatsoever to perform in any
respect any of any Company's contracts or obligations relating to the Accounts.
7. After the end of each month, the Agent shall promptly send the
Parent a statement showing the accounting for the charges, loans, advances and
other transactions occurring between the Agent and the Companies during that
month. The monthly statements shall be deemed correct and binding upon the
Companies and shall constitute an account stated between such Companies and the
Agent unless the Agent receives a written statement of the exceptions within
thirty (30) days of the date of the monthly statement.
8. In the event that the sum of (i) the outstanding balance of
Revolving Loans and (ii) outstanding balance of Letters of Credit exceeds (x)
the maximum amount thereof available under Sections 3 and 5 of this Agreement or
(y) the Line of Credit (herein the amount of any excess shall be referred to as
the "Excess"), such Excess shall be due and payable to the Agent for the benefit
of the Lenders immediately upon the Agent's demand therefor.
9. Until such time as a Company provides the information required by
the Agent under Section 3, Paragraphs 2 above, such Company's Trade Accounts
Receivable shall not be included as Eligible Accounts Receivable for purposes of
calculating Availability. Notwithstanding the foregoing, such Company shall
provide monthly summaries of Accounts in form and substance reasonably
satisfactory to the Agent described in Xxxxxxx 0, Xxxxxxxxx 0(x)(xxx)(X) of this
Agreement.
SECTION 4. ACQUISITION FACILITY LOANS AND PERMITTED ACQUISITIONS
1. Dollar Amount of Acquisition Facility Loans. Each of the Companies
shall be permitted to borrow Revolving Loans for the purpose of the Parent or a
wholly-owned subsidiary of the Parent that is one of the Companies or Obligors
consummating Permitted Acquisitions ("ACQUISITION FACILITY LOANS") subject to
the following conditions:
(a) (i) Following the making of such Revolving Loan and
consummation
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
35
of the Permitted Acquisition, there is at least $15 million of Availability
(determined without regard to the Excluded L/Cs) and no more than an aggregate
of $80 million of Revolving Loans outstanding, and (ii) until the Obligors have
invested in the aggregate $25 million in cash (whether cash on hand or cash
provided from Revolving Loans to consummate Permitted Acquisitions pursuant to
this Section 4) in Permitted Acquisitions that are Domestic Acquisitions, the
aggregate amount of Revolving Loans outstanding for the purpose of consummating
Canadian Acquisitions cannot exceed the sum of (A) $20 million plus (B) the
amount of cash invested in Domestic Acquisitions (whether cash on hand or cash
provided from Revolving Loans); or
(b) UTI and the Parent received the Required Lenders' prior
written approval, which approval shall be given or not given in the sole and
absolute discretion of the Lenders.
2. Acquisition Request. In addition, an Obligor's ability to consummate
Permitted Acquisitions and UTI's ability to borrow Revolving Loans for the
purpose of consummating Permitted Acquisitions are subject to the Parent
providing to the Agent at least ten (10) Business Days (except as otherwise
stated below or the context otherwise requires) prior to the funding of the
Acquisition Facility Loan or the consummation of the Permitted Acquisition the
following:
(a) (i) in the case of (A) an acquisition of capital stock of
a Person or all or substantially all of the assets of a Person, the name of the
Person (the "TARGET") which is to be acquired or whose assets are to be
acquired, and (B) an acquisition of Rigs or Rig Accessories, the name of the
Person from whom the same are to be acquired; (ii) in the case of (A) an
acquisition of Capital Stock of a Person or all or substantially all of the
assets of a Person, a description of the nature of the Target's business, and
(B) an acquisition of Rigs or Rig Accessories, a description of the Rigs or Rig
Accessories to be acquired;
(b) copies of the current drafts of documentation as and when
prepared;
(c) copies of substantially final drafts of such documentation
at least one (1) Business Day prior to the earlier to occur of (i) the proposed
funding date of the Acquisition Facility Loan intended to effect the proposed
acquisition or (ii) the date such proposed acquisition is expected to be
consummated (the "ACQUISITION AGREEMENTS");
(d) a summary of the terms and conditions of the proposed
acquisition;
(e) a certificate of the chief financial officer or chief
executive officer of the Parent dated on or within two (2) days prior to the
earlier to occur of the proposed funding date of the Acquisition Facility Loan
or date such Permitted Acquisition is expected to be consummated certifying (i)
the total amount of cash that has been used for Permitted Acquisitions as of
that date in Canada and the United States, and (ii) that no Default or Event of
Default exists that is continuing or could reasonably be expected to occur as a
result of the proposed acquisition; and
(f) any other information the Agent may reasonably request
from time to time prior to such funding or date such Permitted Acquisition is
expected to be consummated that is
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36
available to such Obligor.
In addition, at least three (3) Business Days prior to the earlier to occur of
(x) the date that the proposed funding of the Acquisition Facility Loan or (y)
date such proposed acquisition is expected to be consummated, the Parent and UTI
must have been available to the Agent and the Lenders to answer questions
regarding the proposed acquisition and the documentation related thereto.
3. Acquisition Criteria. In addition, the Obligor's ability to
consummate Permitted Acquisitions and UTI's ability to borrow Revolving Loans
for the purpose of consummating Permitted Acquisitions are subject to the Parent
providing the Agent with evidence of the following:
(a) Parent has completed due diligence on the Target and the
assets to be acquired, as the case may be, reasonably satisfactory to Parent,
including, without limitation, if applicable, a due diligence investigation as
to the compliance with all Environmental Laws by the Target and the assets to be
acquired;
(b) Target's material business activities are in a Qualified
Business;
(c) Unless the Agent otherwise consents, if the proposed
acquisition is an acquisition of the stock of a Target, the acquisition will be
structured so that the Target will become a direct or indirect
Substantially-Owned Subsidiary of UTI; provided that if more than 50% of the
consideration to be paid for the acquisition is comprised of the Parent's stock
the Target may become a direct Subsidiary of Parent if reasonably required in
order for the transaction to qualify as a tax-free reorganization pursuant to
Section 368 of the Internal Revenue Code of 1986, as amended. If the proposed
acquisition is an acquisition of assets, the acquisition will be structured so
that a direct Substantially-Owned Subsidiary owned by UTI shall acquire the
assets.
(d) If the proposed acquisition is a Canadian Acquisition:
(i) the Target to be
acquired or the acquisition company to be
formed or existing for purposes of owning
the assets to be acquired (each a "CANADIAN
OPERATING COMPANY") shall become a direct or
indirect wholly-owned subsidiary of UTI
(except for Canadian Exchangeable Shares);
(ii) 66% of the Capital
Stock of each Canadian Operating Company
(except for Canadian Exchangeable Shares)
shall be pledged to the Agent for the
benefit of the Lenders (and constitutes a
first priority, fully perfected lien and
security interest on such stock); and
(iii) Any funds advanced to
the Canadian Operating Company or through a
Canadian Finance Company for
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37
purposes of consummating the proposed
acquisition shall qualify as Permitted
Business Investments.
(e) Neither the Target nor its assets nor the acquired assets,
as the case may be, shall be subject to any contingent obligations (including
contingent obligations arising from any environmental liabilities),
environmental liabilities, unsatisfied judgments or any pending action, charge,
claim, demand, suit, proceeding, petition, governmental investigation or
arbitration that (A) the Agent reasonably determines could reasonably be
expected to have a Material Adverse Effect and (B) are not subject to
indemnification or adjustment to acquisition consideration (or taken into
account in the determination of acquisition consideration) or other remedy
reasonably satisfactory to the Agent.
(f) The Parent shall have provided to the Agent each of the
following to the extent that they are reasonably available to the Parent: (A)
copies of (x) the internally prepared financial statements of the Target, for
the twelve (12) month period prior to the closing of the proposed acquisition
for which financial statements are available and (y) audited or reviewed
financial statements to the extent they exist for the two (2) most recently
completed fiscal years of the Target, and (B) a pro forma financial projection
of the Parent and its Subsidiaries (including the Target) for the period
following the date of the consummation of the proposed acquisition through the
end of the next succeeding Fiscal Year which reflects compliance with the
financial covenants set forth in this Agreement.
4. Acquisition Agreements. As soon as practicable following the earlier
to occur of the consummation of the proposed acquisition or the funding of the
Acquisition Facility Loans to be used for the proposed acquisition: (a) Agent
shall have received executed copies of the Acquisition Agreements relating to
the proposed acquisition and shall, in the ordinary course of business, have
forwarded copies thereof to the Lenders; (b) the Acquisition Agreements shall be
in full force and effect and no material term or condition thereof shall have
been amended, modified, or waived after the execution thereof (other than solely
to extend the date by which the proposed acquisition is required to occur)
except those for which prior written notice was provided to Agent; (c) none of
the parties to the Acquisition Agreements shall have failed to perform any
material obligation or covenant required by the Acquisition Agreement to be
performed or complied with by it on or before the date of the closing of the
proposed acquisition unless waived with the consent of the Agent; and (d) Agent
shall have received a certificate from the Company's chief executive officer or
chief financial officer to the effect set forth in clauses (a), (b) and, to his
knowledge, (c) above.
5. Acquisition Loan Documents. (a) If the proposed acquisition is an
acquisition of the stock of a Domestic Person, then: (i) the Target shall, upon
consummation of such acquisition, become a "Company" for all purposes under the
Loan Documents and shall execute and deliver to Agent documentation reasonably
required by the Agent in connection therewith, including, without limitation,
documentation confirming that such Person is or will be a Company or a
Restricted Subsidiary under the Loan Documents and an agreement in writing (in
form and substance reasonably satisfactory to the Agent) providing for the
subordination of inter-company indebtedness to the Obligations owed to the Agent
and the Lenders; (ii) the Obligors shall execute and deliver to the Agent an
amendment to the relevant Loan Documents
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
38
describing as collateral thereunder the stock of the Person and other Collateral
owned by such Person (together with documents incident thereto); and (iii) the
acquiring Obligor shall deliver to the Agent the certificates representing the
stock of such Person together with undated stock powers duly executed in blank.
If the proposed acquisition is an acquisition of Domestic assets, UTI shall
execute and deliver the Agent such documentation requested by Agent to cause the
property acquired to be subject to a fully perfected lien and security interest
in favor of Agent for the benefit of the Lenders and for such lien to have
priority over all other liens other than Permitted Liens.
(b) If, after giving effect to a Permitted Acquisition, the
Availability is or would be less than $30,000,000, then the Parent shall notify
the Agent in writing, as soon as practicable (but in no event more than five (5)
Business Days) after closing of such Acquisition in the event that, (i) any
Obligor effected a Permitted Acquisition of the Capital Stock of a Domestic
Subsidiary, (ii) such Subsidiary is or could be determined by Agent to be
Financially Weakened, and (iii) such Subsidiary is a first tier Subsidiary of
the Parent. Such Subsidiary shall be a Restricted Subsidiary for thirty (30)
days after the Agent receives written notice unless otherwise provided by
operation of this Paragraph 5(b). Within thirty (30) days after the Agent
receives such written notice, the Agent shall notify the Parent if the Agent has
an Objection to such Subsidiary (or its successor) becoming an Obligor, in which
event such Subsidiary (or its successor) shall become and remain a Restricted
Subsidiary until such time as the Agent determines, in the Agent's reasonable
discretion, that it has no further Objection or such Subsidiary becomes a
Subsidiary of UTI. If the Agent fails to assert its Objection, in writing,
within such thirty (30) day period, such Subsidiary shall instead not become a
Restricted Subsidiary of UTI. Regardless of whether a Subsidiary is a Restricted
Subsidiary under this clause (b), however, such Subsidiary shall become a
"Company" on the closing of such transaction, and the Agent, the Lenders and the
Obligors shall execute all documents (as contemplated in Paragraph 5(a) above)
as may be reasonably required to make such Subsidiary a "Company" hereunder.
Parent shall cause each Domestic Subsidiary to become a participant in the
Parent's consolidated cash management system, (A) in the event such Subsidiary
never becomes a Restricted Subsidiary, as soon as practicable but in no event
later than twenty (20) months after the acquisition of such Subsidiary, or (B)
in the event the Subsidiary becomes a Restricted Subsidiary, as soon as
practicable following the date such Subsidiary ceases to be considered a
Restricted Subsidiary, but in no event later than twenty (20) months after such
date.
(c) If, after giving effect to Permitted Acquisition of the
Capital Stock of a Domestic Person, Availability exceeds $30,000,000, then such
Person (or its successors) shall, upon the closing of the Acquisition thereof,
become a "Company" for all purposes hereof, and the parties hereto shall execute
all such documents (as contemplated in Paragraph 5(a) above) as may be
reasonably required to effect such result, and such Subsidiary shall not be a
Restricted Subsidiary.
(d) Within thirty (30) days following the closing of each
Permitted Acquisition, the Parent shall provide the Agent for the benefit of the
Lenders with a complete certified copy or executed original of all Acquisition
documents, instruments and agreements executed and delivered in connection with
such Acquisition.
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39
(e) Any Company that is a Restricted Subsidiary may not become
part of the Parent's consolidated cash management system without the prior
written approval of the Agent. Any Company that is not a Restricted Subsidiary
may become a member of the Parent's consolidated cash management system at any
time at the Parent's discretion.
SECTION 5. LETTERS OF CREDIT
In order to assist the Companies in establishing or opening Letters of
Credit with an Issuing Bank to cover the purchase of inventory, equipment or
otherwise, each Company has requested the Agent in behalf of the Lenders to join
in the applications for such Letters of Credit, and/or guarantee payment or
performance of such Letters of Credit and any drafts or acceptances thereunder
through the issuance of the Letters of Credit Guaranty, thereby lending the
Agent's and Lenders' credit to the Company and the Agent and the Lenders have
agreed to do so. These arrangements shall be handled by the Agent subject to the
terms and conditions set forth below.
1. Within the Line of Credit and the Availability, the Agent and the
Lenders shall assist the Companies in obtaining Letter(s) of Credit in an amount
not to exceed the available portion of the Letter of Credit Sub-Line in the
aggregate outstanding at any one time. The Agent's and Lenders' assistance for
amounts in excess of the limitation set forth herein shall at all times and in
all respects be in the sole discretion of the Agent prior to the occurrence and
continuance of an Event of Default and thereafter shall require the consent of
the Required Lenders. It is understood that the form, expiry date and purpose of
each Letter of Credit must be acceptable to the Agent in its reasonable business
judgment. Any and all outstanding Letters of Credit shall be treated as a
Revolving Loan for Availability purposes. Notwithstanding anything herein to the
contrary, so long as an Event of Default shall have occurred and be continuing,
the Agent's and Lenders' assistance in connection with the Letter of Credit
Guaranty shall be in the Agent's sole discretion unless such Event of Default is
no longer continuing or cured to the Agent's satisfaction or waived by the Agent
in writing.
2. The Agent shall have the right, without notice to any Company, to
charge such Company's Revolving Loan Account on the Agent's books with the
amount of any and all indebtedness, liability or obligation of any kind incurred
by the Agent under the Letters of Credit Guaranty at the earlier of (a) payment
by the Agent under the Letters of Credit Guaranty, or (b) so long as an Event of
Default shall have occurred and be continuing. Any amount charged to a Company's
Revolving Loan Account shall be deemed a Revolving Loan hereunder and shall
incur interest at the rate provided in Section 8, Paragraph 1 of this Agreement.
3. The Obligors jointly and severally unconditionally indemnify the
Agent and the Lenders and hold the Agent and the Lenders harmless from any and
all loss, claim or liability incurred by the Agent and/or the Lenders arising
from any transactions or occurrences relating to Letters of Credit established
or opened for any Company's account, the collateral relating thereto and any
drafts or acceptances thereunder, and all Obligations thereunder, including any
such loss or claim due to any action taken by any Issuing Bank, other than for
any such loss, claim or liability arising solely out of the gross negligence or
willful misconduct by the Agent and/or the Lenders under the Letters of Credit
Guaranty. The Obligors further agree jointly and severally to hold the Agent and
the Lenders harmless from any errors or omission, negligence or misconduct by
the Issuing Bank. Such unconditional obligation of the Obligors to the Agent and
the Lenders
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
40
hereunder shall not be modified or diminished for any reason or in any manner
whatsoever, other than as a result of the Agent's and/or the Lenders' gross
negligence or willful misconduct. The Obligors agree that any charges incurred
by the Agent and/or the Lenders for the account of the Companies by the Issuing
Bank shall be conclusive on the Agent and the Lenders and may be charged in the
manner determined by the Agent to the Revolving Loan Accounts of the appropriate
Companies.
4. The Agent and/or the Lenders shall not be responsible for: the
existence, character, quality, quantity, condition, packing, value or delivery
of the goods purporting to be represented by any documents; any difference or
variation in the character, quality, quantity, condition, packing, value or
delivery of the goods from that expressed in the documents; the existence,
character, quality or value of services, related to such documents; the
validity, sufficiency or genuineness of any documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; the time, place, manner or
order in which shipment is made; partial or incomplete shipment, or failure or
omission to ship any or all of the goods referred to in the Letters of Credit or
documents; any deviation from instructions; delay, default, or fraud by the
shipper and/or anyone else in connection with the Collateral or the shipping
thereof; or any breach of contract between the shipper or vendors and the
Company. Furthermore, without being limited by the foregoing, the Agent and/or
the Lenders shall not be responsible for any act or omission with respect to or
in connection with any Collateral.
5. Any action authorized or permitted under this Agreement and taken by
the Agent and/or the Lenders, if taken in good faith, or any action taken by any
Issuing Bank, under or in connection with the Letters of Credit, the guarantees,
the drafts or acceptances, or the Collateral, shall be binding on the Obligors
and shall not put the Agent and/or the Lenders in any resulting liability to the
Obligors. In furtherance thereof, upon the occurrence of an Event of Default and
so long as the same is continuing, the Agent shall have the full right and
authority to clear and resolve any questions of noncompliance with documents, to
give any instructions as to acceptance or rejection of any documents or goods;
to execute any and all steamship or airways guaranties (and applications
therefore), indemnities or delivery orders; to grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances, or documents; and to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the applications, Letters of Credit, drafts or acceptances; all in the
Agent's sole name, and the Issuing Bank shall be entitled to comply with and
honor any and all such documents or instruments executed by or received solely
from the Agent all without any notice to or any consent from any Company.
6. Without the Agent's express consent and endorsement in writing, each
Company agrees: (a) not to execute any and all applications for steamship or
airway guaranties, indemnities or delivery orders; to grant any extensions of
the maturity of, time of payment for, or time of presentation of, any drafts,
acceptances or documents; or to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the applications, Letters of Credit, drafts or acceptances; and (b) after the
occurrence of an Event of Default and so long as the same is continuing, and
which is not waived by the Agent,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
41
not to (i) clear and resolve any questions of non-compliance of documents, or
(ii) give any instructions as to acceptances or rejection of any documents or
goods.
7. Each Company agrees that any necessary import, export or other
licenses or certificates for the import or handling of the Collateral will have
been promptly procured; all foreign and Domestic governmental laws and
regulations in regard to the shipment and importation of the Collateral, or the
financing thereof will have been promptly and full complied with; and any
certificates in that regard that the Agent may at any time request will be
promptly furnished. In this connection, each Company warrants and represents
that all shipments made under any such Letters of Credit are in accordance with
the laws and regulations of the countries in which the shipments originate and
terminate, and are not prohibited by any such laws and regulations. Each Company
assumes all risk, liability and responsibility for, and agrees to pay and
discharge, all present and future local, state, federal or foreign taxes,
duties, or levies owed thereby in connection with the conduct of their
respective businesses, except to the extent subject to appropriate dispute
resolution proceedings and for which adequate reserves in accordance with GAAP
have been established. Any embargo, restriction, laws, customs or regulations of
any country, state, city, or other political subdivision, where the Collateral
is or may be located, or wherein payments are to be made, or wherein drafts may
be drawn, negotiated, accepted, or paid, shall be solely each Company's risk,
liability and responsibility.
8. Upon any payments made to the Issuing Bank under the Letter of
Credit Guaranty the Agent for the benefit of the Lenders shall acquire by
subrogation, any rights, remedies, duties or obligations granted or undertaken
by the applicable Company to the Issuing Bank in any application for Letters of
Credit, any standing agreement relating to Letters of Credit or otherwise, all
of which shall be deemed to have been granted to the Agent for the benefit of
the Lenders and apply in all respects to the Agent for the benefit of the
Lenders and shall be in addition to any rights, remedies, duties or obligations
contained herein.
SECTION 6. COLLATERAL
1. As security for the prompt payment in full of all loans and advances
made and to be made to each Company from time to time by the Agent and/or the
Lenders pursuant hereto, as well as to secure the payment in full of the other
Obligations, each Obligor (other than PPLP and PPTC) hereby pledges and grants
to the Agent for the benefit of the Lenders a continuing general lien upon and
security interest in all of its (excluding Real Estate, automobiles owned by any
Obligor and Intellectual Property):
(a) present and hereafter acquired Inventory;
(b) present and hereafter acquired Equipment (including, but
not limited to, Eligible Equipment and Rigs);
(c) present and future Accounts;
(d) present and future Documents of Title;
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
42
(e) present and future General Intangibles; and
(f) present and future Other Collateral;
together with all cash and non-cash proceeds and products of the foregoing.
2. The security interests granted hereunder shall extend and attach to:
(a) All Collateral which is presently in existence and which
is owned by any Obligor or in which any Company has any interest, whether held
by such Obligor or others for its account, and, if any Collateral is Equipment,
whether such Obligor's interest in such Equipment is as owner or lessee or
conditional vendee;
(b) All Equipment whether the same constitutes personal
property or fixtures, including, but without limiting the generality of the
foregoing, all Rigs, dies, jigs, tools, benches, tables, accretions, component
parts thereof and additions thereto, as well as all accessories, motors, engines
and auxiliary parts used in connection with or attached to the Equipment;
(c) All Inventory, if any, and any portion thereof which may
be returned, rejected, reclaimed or repossessed by either the Agent or any
Obligor from such Obligor's customers, as well as to all supplies, goods,
incidentals, packaging materials, labels and any other items which contribute to
the finished goods or products manufactured or processed by such Company, or to
the sale, promotion or shipment thereof.
3. Each Obligor agrees to safeguard, protect and hold all Inventory for
the Agent's account and make no disposition thereof except in the regular course
of the business of such Obligor and not otherwise prohibited herein. Until an
Event of Default has occurred that is continuing which has not been waived in
writing by the Agent and the Agent has given such Obligor notice to the
contrary, as provided for below, any Inventory may, to the extent applicable to
the Companies, be sold and shipped by each Company to its customers in the
ordinary course of such Company's business, on open account terms which do not
exceed one hundred twenty (120) days from shipment date or as otherwise provided
herein, provided that all proceeds of all sales (including cash, accounts
receivable, checks, notes, instruments for the payment of money and similar
proceeds) are forthwith transferred, endorsed, and turned over to the Agent for
the benefit of the Lenders or deposited in the Depository Accounts in accordance
with Section 3, Paragraph 4 of this Agreement. The Agent shall have the right to
withdraw this permission at any time upon the occurrence of an Event of Default
that is continuing so long as the same is continuing and until such time as such
Event of Default is waived or cured to the Agent's reasonable satisfaction, in
which event no further disposition shall be made of the Inventory by such
Company without the Agent's prior written approval. The proceeds of sales of
Inventory shall be deposited in the form received to the Depository Accounts.
Upon the sale, exchange, or other disposition of Inventory, as herein provided,
the security interest in such Company's Inventory provided for herein shall,
without break in continuity and without further formality or act, continue in,
and attach to, all proceeds, including any instruments for the payment of money,
accounts receivable, contract rights, documents of title, shipping documents,
chattel paper and all other cash and non-cash proceeds of such sale, exchange or
disposition. As to any such sale,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
43
exchange or other disposition, the Agent shall have all of the rights of an
unpaid seller, including stoppage in transit, replevin, rescission and
reclamation.
4. The Companies agree, at their own cost and expense, to keep the
Equipment in as good and substantial repair and condition as the same is now or
at the time the lien and security interest granted herein shall attach thereto,
reasonable wear and tear excepted, making any and all repairs and replacements
when and where necessary, except where the Companies believe, in their
reasonable business judgment, that such repairs are not consistent with their
customary business practices. The Companies also agree that to safeguard and
protect the proceeds of any sales of Equipment such proceeds shall not be
commingled with such Companies other property, but shall be segregated, and
shall be deposited immediately by such Companies in the identical form received
by such Companies by deposit to the Depository Accounts. Upon the sale,
exchange, or other disposition of the Equipment, as herein provided, the
security interest provided for herein shall, without break in continuity and
without further formality or act, continue in, and attach to, all proceeds,
including any instruments for the payment of money, accounts receivable,
contract rights, documents of title, shipping documents, chattel paper and all
other cash and non-cash proceeds of such sales, exchange or disposition. As to
any such sale, exchange or other disposition, the Agent shall have all of the
rights of an unpaid seller, including stoppage in transit, replevin, rescission
and reclamation. Notwithstanding anything in this Agreement to the contrary, any
Obligor may from time to time sell, lease, exchange, assign, transfer or
otherwise dispose of (1) any Equipment (plus any drill pipe and other inventory
reasonably necessary or incident to the ongoing operation of such Rigs),
provided that, immediately following the consummation of such sale, lease,
exchange or other disposition, (a) the Obligors, taken as a whole, own at least
two hundred (200) Domestic Rigs upon which the Agent, for the benefit of the
Lenders, has a first priority lien and fully perfected security interest, and
(b) the Orderly Liquidation Value of the Domestic Rigs upon which the Agent, for
the benefit of the Lenders, has such first priority lien and fully perfected
security interest exceeds $200,000,000 in aggregate, and (c) in no event shall
the Obligors be permitted to sell, lease, exchange, assign or transfer an
aggregate number of Rigs in any Fiscal Year of Parent that exceeds 15% of the
aggregate number of Rigs owned by the Obligors on the first day of such Fiscal
Year, or if the foregoing conditions are not or would not otherwise be satisfied
upon the consummation of such sale, lease, exchange or other disposition, and
(2) Equipment no longer needed in such Obligor's operations; provided, however,
that with respect to dispositions permitted in this clause (2), (A) the greater
of the Book Value or Fair Market Value of the Equipment so disposed of does not
exceed $5,000,000 in the aggregate in any Fiscal Year for all of the Obligors in
the aggregate, and (B) the proceeds of such sales or dispositions are delivered
to the Agent or deposited in the Depository Accounts in accordance with the
foregoing provisions of this paragraph; provided, however, that the aforesaid
rights shall automatically cease upon the occurrence of an Event of Default that
is continuing which is not waived in writing by the Agent or cured within any
applicable grace period.
5. The rights and security interests granted to the Agent for the
benefit of the Lenders hereunder are to continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that the account
maintained in the Companies names on the books of the Agent may from time to
time be temporarily in a credit position, until the final payment in full to the
Agent and the Lenders of all Obligations and the termination of this Agreement.
Any delay,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
44
or omission by the Agent and/or the Lenders to exercise any right hereunder,
shall not be deemed a waiver thereof, or be deemed a waiver of any other right,
unless such waiver be in writing and signed by the Agent. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.
6. To the extent that the Obligations are now or hereafter secured by
any assets or property other than the Collateral or by the guarantee,
endorsement, assets or property of any other person, then the Agent shall have
the right in its sole discretion to determine which rights, security, liens,
security interests or remedies the Agent shall at any time pursue, foreclose
upon, relinquish, subordinate, modify or take any other action with respect to,
without in any way modifying or affecting any of them, or any of the Agent's or
the Lenders' rights hereunder.
7. Any reserves or balances to the credit of any Obligor and any other
property or assets of such Obligor in the possession of the Agent and/or the
Lenders may be held by the Agent as security for any Obligations and applied in
whole or partial satisfaction of such Obligations when due. The liens and
security interests granted herein and any other lien or security interest the
Agent may have in any other assets of such Obligors, shall secure payment and
performance of all now existing and future Obligations. The Agent may in its
discretion charge any or all of the Obligations to the Revolving Loan Account of
such Company when due.
8. This Agreement and the obligation of each Company to perform all of
its covenants and obligations hereunder shall be further secured, at the Agent's
discretion, upon the occurrence of an Event of Default that is continuing, by
mortgage(s), deed(s) of trust or assignment(s) on the Real Estate which shall
not be recorded until the occurrence of an Event of Default that is continuing.
Upon the occurrence of an Event of Default that is continuing, the Obligors
shall promptly execute such mortgages, deeds of trust assignments and other
documents as shall be requested by the Agent with respect to Real Estate now
owned or hereafter acquired by each Company as the Agent and/or the Lenders
shall require to obtain a valid first lien thereon subject only to Permitted
Liens and those exceptions of title as set forth in future title insurance
policies that are satisfactory to the Agent.
9. Upon and from time to time following the occurrence of an Event of
Default that is continuing, the Agent for the benefit of the Lenders may, in its
sole discretion, record such mortgage(s), deed(s) of trust or assignment(s) on
the Real Estate or real estate then existing or acquired after the date thereof.
Once recorded, such documents shall remain of record until all of the
Obligations are paid and discharged in full (notwithstanding any other provision
in any Loan Document).
10. Each Obligor shall give to the Agent for the benefit of the
Lenders, and/or shall cause the appropriate party to give to the Agent for the
benefit of the Lenders, from time to time such pledge agreements or security
agreements with respect to General Intangibles, capital stock and other property
(other than (except as provided in this Agreement) with respect to such
automobiles and Intellectual Property) of such Obligor which is or may
constitute Collateral as the Agent shall require to obtain a valid first
priority and fully perfected security interest and liens thereon. This Agreement
and the obligation of each Company to perform all of its covenants and
obligations hereunder shall be further secured, upon the occurrence of an Event
of
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
45
Default that is continuing, by a security interest in each Obligor's automobiles
and Intellectual Property, which shall not attach or be documented or filed or
recorded until the occurrence of an Event of Default that is continuing. Upon
the occurrence of an Event of Default that is continuing the Obligors shall, at
the Agent's request, promptly execute such assignments and other documents and
deliver such certificates of title as requested by the Agent with respect to
such automobiles and Intellectual Property now owned or hereafter acquired by
each Company as the Agent and/or the Lenders shall require to obtain a valid
first lien and fully perfected security interest thereon subject only to
Permitted Liens. Once recorded, such documents shall remain of record until all
of the Obligations are paid and discharged in full (notwithstanding any other
provision in any Loan Document).
11. The provisions in this Section 6, Paragraph 11 and in Section 10,
Paragraph 4 of this Agreement apply to the Collateral including all proceeds
thereof at all times during which such Collateral or the proceeds thereof are
located in Louisiana or are otherwise subject to the application of Louisiana
law in any respect (the "LOUISIANA PLEDGED COLLATERAL").
(a) The parties hereto recognize and agree that at all times
during which portions of the Louisiana Pledged Collateral or the proceeds
thereof are located in the State of Louisiana or are otherwise subject to the
application of Louisiana law, the perfection and priority of the security
interest granted by Obligors to the Agent in such portions or proceeds of the
Louisiana Pledged Collateral hereunder and the exercise of remedies in
connection therewith shall be subject to the provisions of Chapter 9 of the
Louisiana Commercial Laws that are mandatorily applicable thereto
notwithstanding under Louisiana law, the choice of any other jurisdiction's laws
to govern such matters (La. R.S. Sections 10:9-101, et seq.) and all other
applicable provisions of Louisiana law.
(b) Contemporaneously with the execution of this Agreement,
each Obligor has completed and signed one or more appropriate Louisiana UCC-1
financing statements with regard to the Louisiana Pledged Collateral and the
proceeds thereof. Debtor authorizes Secured Party, at Debtor's expense, to file
multiple originals, or photocopies, carbon copies or facsimile copies of such
Louisiana UCC-1 financing statements with the appropriate filing officer or
officers in the State of Louisiana, pursuant to the provisions of Chapter 9 of
the Louisiana Commercial Laws (La. R.S. Sections 10:9-101, et. seq.).
(c) Each Obligor shall give the Agent thirty (30) days' notice
prior to any change in any Obligor's employer identification number made by the
Agent and shall give the Agent notice of any change in such Obligor's employer
identification number that is not made by such Obligor within thirty (30) days
after such change. In the event of any change whatsoever in an Obligor's
employer identification number, such Obligor will execute and file any new UCC-1
financing statements or any other documents that are necessary or desirable to
preserve and continue the Agent's security interest under this Agreement within
thirty (30) days after such change.
12. The provisions of this Section 6 shall not apply to PPLP and PPTC;
provided, however, PPLP and PPTC agree that until termination of the Agreement
and satisfaction of all Obligations due under the Agreement, PPLP and PPTC shall
not mortgage, pledge, encumber or collaterally assign any of their respective
assets except for Permitted Liens.
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46
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS
1. Each Obligor hereby warrants and represents and/or covenants with
respect to itself and each other Obligor that each Obligor is Solvent. Each
Obligor further warrants and represents that Schedule 7(1) hereto correctly and
completely sets forth each Obligor's chief executive office and all of the
locations of all of each Obligor's locations of all Collateral; and except for
the Permitted Liens, the security interests granted herein constitute and shall
at all times constitute the first and only liens on the Collateral; that, except
for the Permitted Liens, each Obligor is or will be at the time additional
Collateral is acquired by it, the absolute owner of the Collateral with full
right to pledge, sell, consign, transfer and create a security interest therein,
free and clear of any and all claims or liens in favor of others; that each
Obligor will at its expense forever warrant and, at the Agent's request, defend
the same from any and all claims and demands of any other Person other than the
Permitted Liens; that no Obligor will grant, create or permit to exist, any lien
upon or security interest in the Collateral, or any proceeds thereof, in favor
of any other Person other than the holders of the Permitted Liens; and that the
Equipment does not comprise a part of the Inventory of each Company and that the
Equipment is and will only be used by each Company in its business and will not
be held for sale or lease, or removed from its premises, or otherwise disposed
of by each Company without the prior written approval of the Agent except as
otherwise expressly permitted in Section 6, Paragraph 4 of this Agreement and,
additionally, in the case of the Rigs, in the ordinary course of Business. Each
Obligor makes each representation and warranty made in favor of each
Subordinating Creditor in each agreement with respect to or evidencing
Subordinated Debt ("SUBORDINATED AGREEMENTS") as if the same were set forth at
length herein.
2. Each Obligor agrees to maintain books and records pertaining to the
Collateral in such detail, form and scope as the Agent shall reasonably require.
Each Obligor agrees that the Agent or its agents may enter upon such Obligor's
premises at any time during normal business hours, and from time to time, for
the purpose of inspecting the Collateral, and any and all records pertaining
thereto. The Parent agrees to afford the Agent written notice, on the Agent's
request, of changes in the location of any item or items of tangible Collateral,
within thirty (30) days following such request. The Parent is required, in any
event, to notify the Agent of the relocation of any Rig to a location not
previously known to Agent at least once each sixty (60) days, on reports
customarily maintained or created in the ordinary course of business by the
Obligors. Each Obligor shall also advise the Agent promptly, in sufficient
detail, of any material adverse change relating to the type, quantity or quality
of the Collateral taken as a whole, ordinary wear and tear excepted or on the
security interests granted to the Agent therein. Each Guarantor represents,
warrants and covenants that it does not own and shall own no Rigs or Rig
Accessories.
3. Each Obligor agrees to: execute and deliver to the Agent, from time
to time, solely for the Agent's convenience in maintaining a record of the
Collateral, such written statements, and schedules as the Agent may reasonably
require, designating, identifying or describing the Collateral pledged to the
Agent hereunder. Each Obligor's failure, however, to promptly give the Agent
such statements, or schedules shall not affect, diminish, modify or otherwise
limit the Agent's security interests in the Collateral.
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47
4. Each Obligor agrees to comply and to cause each Obligor to comply,
with the requirements of all state and federal laws in order to grant to the
Agent valid and fully perfected first priority security interests in the
Collateral, subject only to the Permitted Liens. The Agent is hereby authorized
by each Obligor to file any financing statements covering the Collateral whether
or not each Obligor's signature appears thereon. Each Obligor agrees to do
whatever the Agent may reasonably request, from time to time, consistent with
the Obligors' obligations hereunder by way of: filing notices of liens,
financing statements, amendments, renewals and continuations thereof; filing of
leases (or copies thereof) with appropriate governmental authorities (including,
without limitation, for the purposes of obtaining the benefits of 60 Oklahoma
Statutes Section 319 and similar laws); cooperating with the Agent's custodians;
keeping stock records; transferring proceeds of Collateral to the Depository
Accounts; and performing such further acts as the Agent may reasonably require
in order to effect the purposes of this Agreement and the other Loan Documents.
5. If Real Estate becomes Collateral hereunder, the Companies agree to
maintain and to cause each other Obligor (as applicable) to maintain, casualty
insurance on its Real Estate under such policies of insurance, with such
insurance companies, in such reasonable amounts and covering such insurable
risks as are at all times consistent with industry practices and reasonably
satisfactory to the Agent. All policies covering such Real Estate shall be made
payable to the Agent for the benefit of the Lenders, in case of loss, under a
standard non-contributory "mortgagee", "lender" or "secured party" clause and
are to contain such other provisions as the Agent may reasonably require to
fully protect the Agent's interest in the Real Estate and to any payments to be
made under such policies; provided, however, that such rights under such
policies will be subject to the rights under such policies of any holders of
Permitted Liens holding claims senior to those of the Agent for the benefit of
the Lenders.
6. Each Obligor agrees to pay, when due, all taxes, assessments, claims
and other charges (herein "TAXES") lawfully levied or assessed upon such Obligor
or the Collateral and if such taxes remain unpaid after the date fixed for the
payment thereof unless such taxes are being diligently contested in good faith
by such Obligor by appropriate proceedings or if any lien shall be claimed
thereunder and execution thereon is not effectively stayed by such proceeding
(a) for taxes due the United States of America or (b) which in the Agent's
opinion might create a valid obligation having priority over the liens granted
to the Agent herein, the Agent may, on each Obligor's behalf, pay such taxes,
and the amount thereof shall be an Obligation secured hereby and due to the
Agent on demand.
7. Each Obligor: (a) agrees to comply with all acts, rules, regulations
and orders of any legislative, administrative or judicial body or official,
which the failure to comply with would have a material and adverse impact on the
Collateral taken as a whole, or any material part thereof, or on the operation
of such Obligor's business; provided that such Obligor may contest any acts,
rules, regulations, orders and directions of such bodies or officials in any
reasonable manner which will not, in the Agent's reasonable opinion, materially
and adversely effect the Agent's rights or priority in the Collateral; (b)
agrees to comply with all Environmental Laws as presently existing or as adopted
or amended in the future, applicable to the ownership and/or use of its property
and operation of its business, which the failure to comply with would have a
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
48
material and adverse impact on the Collateral, or any material part thereof, or
on the operation of the business of each Obligor. The Obligors hereby jointly
and severally indemnify the Agent and the Lenders and agrees to defend and hold
the Agent and the Lenders harmless from and against any and all loss, damage,
claim, liability, injury or expense which the Agent and/or the Lenders may
sustain or incur (other than as a result of actions of the Agent and/or the
Lenders) in connection with any claim or expense asserted against the Agent
and/or the Lenders as a result of any environmental pollution, Hazardous
Material or environmental clean-up of any Obligor's real property; or any claim
or expense which results from each Obligor's operations (including, but not
limited to, each Obligor's off-site disposal practices) and such Obligor further
agrees that this indemnification shall survive termination of this Agreement as
well as the payment of all Obligations or amounts payable hereunder. Each
Obligor shall be deemed not to have breached any provision of this Paragraph 7
if (i) the failure to comply with the requirements of this Paragraph 7 resulted
from good faith error or innocent omission, (ii) such Obligor promptly commences
and diligently pursues a cure of such breach and (iii) such failure is cured
within thirty (30) days following such Obligor's receipt of notice of such
failure.
8. Until the termination of this Agreement and payment and satisfaction
of all Obligations due hereunder, the following periodic reporting shall be
required:
(a) The Parent agrees that, unless the Agent shall have otherwise
consented in writing, Parent will furnish to the Agent and each Lender, within
ninety (90) days after the end of each Fiscal Year of Parent, an audited
Consolidated Balance Sheet and an unaudited Consolidating Balance Sheet as of
the close of such year, and statements of profit and loss, cash flow and
reconciliation of surplus of the Parent, of each Company and all of their
Subsidiaries of each for such year, in the case of an audited Consolidated
Balance Sheet of the Parent, audited by independent public accountants selected
by the Parent and satisfactory to the Agent; within sixty (60) days after the
end of each Fiscal Quarter a Consolidated Balance Sheet and Consolidating
Balance Sheet as of the end of such period and statements of profit and loss,
cash flow and surplus of the Parent and all Subsidiaries of each, certified by
an authorized financial or accounting officer of Parent; and from time to time,
such further information regarding the business affairs and financial condition
of the Parent, each Company and all of their Subsidiaries thereof as the Agent
may reasonably request, including, without limitation (i) the accountant's
management practice letter, and (ii) annual projections in form reasonably
satisfactory to the Agent. Each financial statement which Parent is required to
submit or cause to be submitted hereunder must be accompanied by an officer's
certificate, signed by the President, Vice President, Senior Vice President,
Chief Financial Officer, Controller, or Treasurer of the Parent, pursuant to
which any one such officer must certify that: (A) the financial statement(s)
fairly and accurately represent(s) the Parent's and each Company's financial
condition in all material respects at the end of the particular accounting
period, as well as the Parents notes and such Company's operating results during
such accounting period, subject to year-end audit adjustments and the absence of
footnotes which are substantially the same in form, substance and economic
effect as those contained in the most recent audited financial statements
delivered to the Agent prior to the Closing Date; (B) during the particular
accounting period: (x) there has been no Default or Event of Default under this
Agreement that is continuing; provided, however, that if any such officer has
knowledge that any such Default or Event of Default that is continuing has
occurred during such period, the existence of and a detailed description of same
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
49
shall be set forth in such officer's certificate; and (y) neither any Company
nor the Parent has received any notice of cancellation with respect to its
property insurance policies; and (C) the exhibits attached to such financial
statement(s) constitute detailed calculations showing compliance with all
financial covenants contained in this Agreement.
(b) (i) Within forty-five (45) days after the end of each fiscal month
of the Parent (sixty (60) days for each fiscal month which is the last month of
a fiscal quarter), (A) the consolidated balance sheet of the Parent and its
Subsidiaries as of the end of such fiscal month and the related consolidated
statements of income and a schedule showing aggregate Capital Expenditures and
the aggregate amount of depreciation, depletion and amortization expense and
accumulated depreciation for such fiscal month and for the elapsed portion of
the Fiscal Year ended with the last day of such fiscal month, all of which shall
be certified by the chief financial officer or other authorized executive
officer of the Parent, (B) together with a comparison for such period and year
to date to the projection prepared for the Agent pursuant to Paragraph 8(a)(ii)
above, and (C) a list and, on the Agent's request, a copy of the leases and
subleases to persons other than Obligors of Rigs and Rig Accessories, related
thereto (together with information in reasonable detail describing the terms of
each lease, the location of the Equipment and the name and address of the
parties thereto); subject to normal year-end audit adjustments and the absence
of footnotes which are substantially the same in form, substance and economic
effect as those contained in the most recent audited financial statements
delivered to the Agent prior to the Closing Date; and (ii) within fifteen (15)
days after the end of each fiscal month of the Parent, a report with information
in form and substance substantially similar to the form set forth on Schedule
7(8)(b)(ii) hereto, with such changes and modifications to the information and
form contained in such report as reasonably acceptable to the Agent, setting
forth no less than the following information calculated in good faith based upon
the then most current information: (a) total available days; (b) total operating
days; and rig counts (including the total rigs, stacked rigs, and marketable
rigs) in each case relative to the "Mid-Continent," Mexico, "West Texas/New
Mexico," "South Texas," "East Texas" and "Rockies" regions, as such counts
relate to crude oil drilling and natural gas and crude oil services; and (iii)
within forty-five (45) days after the end of each fiscal month of the Parent, a
report in form and substance reasonably satisfactory to the Agent which sets
forth a summary in reasonable detail of (A) all Permitted Acquisitions made
since the Closing Date to the end of the month first preceding the date of such
report, stating whether such acquisition was a Domestic Acquisition or a
Canadian Acquisition, the name of the Obligor which is the purchaser and the
name and address of the seller, (B) the type and amount of payments in cash
(consisting of Revolving Loans and/or other working capital of the Obligors),
Capital Stock of the Parent or other consideration paid for the assets or stock
purchased in such acquisitions, (C) a list of Rigs, if any, that may be
construed to be Mobile Rigs in which a security interest cannot be perfected by
filing a financing statement under the U.C.C.; and (D) subject to Section 3,
Paragraph 9 above, a report in the form of Schedule 7(8)(b)(iii) with
receivables aging of the Parent and its Subsidiaries for the preceding month,
all certified by the chief financial officer or other executive officer of the
Parent.
9. Until termination of this Agreement and payment and satisfaction of
all Obligations due hereunder, each Company agrees that upon Agent's request,
each Company shall, at its expense, no more than once in any three (3) month
period, but at any time or times as Agent may request on or after an Event of
Default and so long as the same is continuing, deliver
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
50
or cause to be delivered to Agent written updated (as opposed to new) reports or
appraisals (including Appraisals of Orderly Liquidation Value) as to the
Collateral in form, scope and methodology acceptable to Agent and by an Approved
Appraiser, addressed to Agent and Lenders or upon which the Agent and Lenders
are expressly permitted to rely.
10. Until termination of this Agreement and payment and satisfaction of
all Obligations due hereunder, each Obligor agrees that, without the prior
written consent of the Agent (or the Required Lenders for any matter prohibited
by Xxxxxxxxxxxxx 00X, 00X, 00X and 10D in this Section 7 or for all matters
prohibited by this Paragraph at any time during which Availability is less than
$20,000,000), except as otherwise herein provided, it will not and it will not
permit any other Obligor to:
A. Mortgage or pledge any of its assets as security, or otherwise
permit any lien, charge, security interest (whether as a
result of a purchase money or title retention transaction, or
other security interest, other transaction intended as
security) to exist on any of its assets or goods, whether
real, personal or mixed, whether now owned or hereafter
acquired, except for the Permitted Liens;
B. Incur or create any Indebtedness for Borrowed Money other than
the Permitted Indebtedness;
C. Borrow any money on the security of the Collateral or on any
automobile or other vehicle owned by any Obligor, Real Estate
or Intellectual Property that is or may become Collateral from
sources other than the Agent and the Lenders (excluding
purchase money Permitted Indebtedness secured only by Purchase
Money Liens);
D. Sell, lease, assign, transfer or otherwise dispose of (i)
Collateral, except as otherwise specifically permitted by this
Agreement, or (ii) either all or substantially all of any
Obligor's assets which do not constitute Collateral; provided,
however, that as long as there has not occurred an Event of
Default that is continuing which has not been waived in
writing by the Agent and no Default or Event of Default would
occur or exist after giving effect thereto, this Section 7,
Paragraph 10D shall not prohibit:
(i) any sale, lease assignment, transfer or other
disposition permitted under Section 6, Paragraph 4 of
this Agreement;
(ii) (a) the sale, lease, assignment, transfer or other
disposition of Inventory in the ordinary course of
business, and (b) the lease of Rigs or other
Equipment in the ordinary course of business of the
Companies, provided that each such lease shall be
subordinate (in form and substance reasonably
satisfactory to the Agent) to the terms of the liens
and security interests created in connection herewith
in favor of the Agent, the aggregate fair market
value of such Rigs and other Equipment so leased to
third parties not affiliated with any Obligor does
not exceed $10,000,000 in the aggregate during the
term of this Agreement and all such Rigs and
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
51
other Equipment so leased are disclosed to the Agent
in writing as such and are excluded from Eligible
Equipment;
(iii) the sale, transfer or disposition approved by the
Board of Directors of the Parent to a Person that is
not an Obligor of (a) the capital stock or
substantially all of the assets of UWSI, IPSCO, ADF,
LSM, PPLP and PPTC (so long as such entities do not
own any Rigs or Rig Accessories), (b) UHRB's hard
rock boring business or assets or (c) all of the
capital stock or substantially all of the assets of
any other Obligor (other than UTI) that has Tangible
Net Worth on a consolidated basis for such Obligor
and its Subsidiaries of less than $15,000,000;
(iv) the sale, lease, assignment, transfer or other
disposition of any or all of the assets of any
Obligor to any other Obligor to the extent that the
same qualifies as a Permitted Intercompany Balance,
except that no more than an aggregate of ten (10)
Rigs may be leased at any one time to NDM and no Rigs
may be sold, transferred or leased to any Guarantor;
(v) the sale, transfer or assignment by an Obligor to a
Canadian Finance Company of a loan or other amount
owed from a Canadian Operating Company to such
Obligor;
(vi) any Obligor may license any Intellectual Property to
any other Obligor, and any Obligor may license any
Intellectual Property to a Person that is not
affiliated with an Obligor so long as the license of
such Intellectual Property does not materially
adversely affect the operation of any Obligors'
business;
(vii) the sale, transfer or other disposition of oil and
gas mineral interests (and related operating
agreements covering the operation of such interests)
and including, without limiting the generality of the
foregoing, dispositions of oil and gas properties
pursuant to farm-ins and farm-outs and transfers of
royalty interests, overriding royalty interests, net
revenue interests and other similar transfers, all
pursuant to exploration and development activity in
the ordinary course of business; and
(viii) the sale, transfer, lease or assignment by any of the
Companies or the Obligors of up to 15 Rigs in
aggregate to a Canadian Operating Company.
E. Merge, consolidate or otherwise alter or modify its corporate
name, principal place of business, chief executive office,
structure, status or existence (other than the Designated
Mergers), or enter into or engage in any operation or activity
that is not a Qualified Business or is materially different
from that presently being conducted by the Obligors taken as a
whole, except that an Obligor may change its corporate name,
or principal place of business or address to a location within
the 48 contiguous states of the United States of America;
provided that (x) such Obligor shall give the Agent thirty
(30) days prior written notice thereof and (y)
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
52
such Obligor shall execute and deliver prior to or
simultaneously with any such action any and all documents and
agreements requested by the Agent (including, without
limitation, any and all U.C.C. financing statements) to
confirm the continuation and preservation of all security
interests and liens granted to the Agent for the benefit of
the Lenders hereunder; provided, however, that as long as
there has not occurred an Event of Default that is continuing
which has not been waived in writing by the Agent and no
Default or Event of Default would occur or exist after giving
effect thereto and such Obligor has complied with clause (x)
and clause (y) immediately above, this Section 7, Paragraph
10E of this Agreement shall not prohibit any of the following
except to the extent that the Agent reasonably determines,
during the thirty (30) day period following the Agent's
receipt of the notice referred to in clause (x) above and all
executed documents and Agreements requested as described in
clause (y) above, that the liabilities and other obligations
(contingent or otherwise) of any Obligor resulting therefrom
or associated therewith could reasonably be expected to have a
Material Adverse Effect or that the Person to be merged or
consolidated is Financially Weakened:
(i) the merger or consolidation of any Subsidiary of
the Parent in existence on the date of this Agreement
into any one or more of the Companies in a
transaction in which a Company is the surviving
Person and no Person other than a Company receives
any consideration or if such consideration is paid to
others that are not Subsidiaries, if such payment
would be permitted to be made if it was made as a
Restricted Payment (and in such case such payment
shall constitute a Restricted Payment for all
purposes of this Agreement);
(ii) upon the prior written consent of the Agent
which shall not be withheld unreasonably, the merger
or consolidation of any foreign Subsidiary of any of
the Companies with and into any of the Companies or
any Domestic Subsidiary of any of the Companies, in a
transaction in which no Person other than the Parent
or a Subsidiary of the Parent receives any
consideration (or if such consideration is paid to
others that are not Subsidiaries, if such payment
would be permitted to be made if it was made as a
Restricted Payment);
(iii) upon the prior written consent of the Agent
which shall not be withheld unreasonably, the merger
or consolidation of any other Person with and into
any of the Companies if (a) all or substantially all
of the consideration given by any Company to
consummate the merger or consolidation consists of
Qualified Stock issued by the Parent, and (b) the
applicable Company is the surviving entity and after
giving effect to such merger or consolidation, the
Companies shall be in compliance, on a pro forma
basis after giving effect to such transaction, with
all of the covenants contained herein as of the first
day of each relevant period for testing such
compliance (but without regard to the financial
covenants contained in Section 7, Paragraph 11 of
this Agreement if such covenants
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
53
do not then otherwise apply because minimum
Availability exceeds $15,000,000), and the Parent
shall have delivered to the Agent an officer's
certificate to that effect, together with all
relevant financial information and calculations
demonstrating such compliance; provided, however,
that the Agent's consent shall be required to be
given if the amount of Availability is more than
$30,000,000 after giving effect to the transaction;
and
(iv) without limitation of any of the other
requirements set forth in this Section 7, Paragraph
10, a Company may not merge or consolidate any other
Person that has been acquired pursuant to a Permitted
Acquisition with and into any of the Companies or
integrate such Person's cash management systems with
the cash management systems of the other Companies
without the Agent's prior written consent, which
shall not be unreasonably withheld, unless the
Availability both before and after such merger or
consolidation is equal or greater than $30,000,000
and the Parent shall have delivered to the Agent an
officer's certificate to that effect, together with
all relevant financial information and calculations
demonstrating such compliance.
F. Assume, guarantee, endorse, or otherwise become liable upon
the obligations of any Person, other than by the endorsement
of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, except that
this Section 7, Paragraph 10F of this Agreement shall not
prohibit the assumption, guarantee or incurrence, of any
contingent obligation to the extent that such obligation, were
it considered Indebtedness, would be permitted to be incurred
under the other terms and provisions of Xxxxxxx 0, Xxxxxxxxx
00X of this Agreement or otherwise constitute Permitted
Indebtedness;
G. Make any Restricted Payment; provided, however, that as long
as no Event of Default has occurred that is continuing which
has not been waived in writing by the Agent and no Default or
Event of Default would occur or exist after giving effect
thereto, this Section 7, Paragraph 10G of this Agreement shall
not prohibit:
(i) any Restricted Payment by Parent payable solely
in shares of Capital Stock or warrants, rights or
options to acquire shares of stock of the Parent,
including, without limitation, any stock split or
stock dividend effected by the Parent;
(ii) any Restricted Payment payable solely to one or
more of the Obligors, so long as such Restricted
Payment is a Permitted Intercompany Balance;
(iii) any Restricted Payment if immediately after
giving effect to such Restricted Payment no Revolving
Loans are then outstanding or result
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
54
therefrom and the Companies have excess Availability
of $15,000,000 or more after giving effect thereto;
(iv) any Restricted Payment if (1) immediately after
giving effect to such Restricted Payment the
Companies have excess Availability of $15,000,000 or
more and the Fixed Charge Coverage Ratio (after
giving effect to such Restricted Payment by including
it in the denominator of such ratio) for the twelve
month period ending on the date of the then most
recent consolidated financial statements of the
Parent and its Subsidiaries delivered (or required to
be delivered) to the Agent pursuant to Section 7,
Paragraph 8, preceding the date of such Restricted
Payment is at least 1.2 to 1.0 and (2) the aggregate
amount of all Restricted Payments expended subsequent
to the Original Closing Date (the amount so expended,
if other than in cash, to be valued at its fair
market value as determined by the Board of Directors
of the Parent) does not exceed the sum of (a)
$5,000,000, plus (b) 50% of the aggregate
consolidated net income of the Parent and its
Subsidiaries, determined in accordance with GAAP (or
if such consolidated net income shall be a loss,
minus 100% of such loss) during the period (treated
as one accounting period) subsequent to September 30,
1999, and ending on the last day of the fiscal
quarter immediately preceding the date of such
Restricted Payment, plus (c) 75% of the aggregate net
cash proceeds received by the Parent as a result of
the issuance of Qualified Stock of the Parent,
including any net proceeds received upon exercise of
any rights, options or warrants, other than in
connection with the conversion or exchange of any
Indebtedness or Disqualified Stock of the Parent;
(v) the payment of any dividend by the Parent within
sixty (60) days after the date of its declaration if
at the date of declaration the payment would have
complied with this covenant;
(vi) the purchase, redemption, acquisition or
retirement of any shares of Capital Stock of the
Parent in exchange for, or out of the net proceeds of
the substantially concurrent sale (other than to a
Subsidiary) of, other shares of Qualified Stock of
the Parent;
(vii) purchases of common stock by the Parent or a
trust pursuant to a stock ownership or similar
employee benefit plan of the Parent or the cashless
exercise of stock options or warrants to purchase
common stock of the Parent by the Parent or a trust
that in each case has been approved by the Board of
Directors of the Parent;
(viii) offsets in an amount not to exceed $5,000,000
in the aggregate against and acquisitions of Capital
Stock of the Parent in satisfaction of
indemnification and other obligations owed to the
Parent or its
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
55
Subsidiaries under acquisition arrangements in which
Capital Stock of the Parent is issued as
consideration for the acquisition;
(ix) the payment of dividends on the Parent's
Preferred Stock if and when issued pursuant to the
Parent's Stockholders Rights Plan with ChaseMellon
Shareholder Series LLC or its successor, provided
that the aggregate amount of all such dividends paid
thereon shall not exceed $50,000 per calendar
quarter; and
(x) the payment of dividends on the Parent's
Preferred Stock if and when issued pursuant to the
Parent's Rights Agreement, dated as of January 2,
1997, between the Parent and Continental Stock
Transfer & Trust Company or its successor, provided
that the aggregate amount of all such dividends paid
thereon shall not exceed $100,000 per calendar
quarter.
H. Make any advance or loan to, or any investment in, any Person
or make any Acquisition; provided, however, that as long as
there has not occurred an Event of Default that is continuing
which has not been waived in writing by the Agent and no
Default or Event of Default would occur or exist after giving
effect thereto, this Section 7, Paragraph 10H shall not
prohibit:
(i) any Obligor from having any Permitted
Intercompany Balances;
(ii) any Obligor from making and owning any Permitted
Business Investments;
(iii) any Obligor from making and owning any
Permitted Financial Investments;
(iv) any Obligor from continuing to own loans,
advances and investments owned by it on the date
hereof which are set forth on Schedule 7.(10)(H)(iv),
including, without limitation, all investments in
Subsidiaries, partnerships and other Persons owned on
the Closing Date; provided that the respective
amounts thereof do not exceed the corresponding
amounts thereof set forth on Schedule 7.(10)(H)(iv).
(v) any Obligor from making investments, loans and
advances permitted to be made under Section 7,
Paragraph 10(G) of this Agreement as a Restricted
Payment;
(vi) any Obligor from incurring obligations permitted
under Section 7, Paragraph 10(F) of this Agreement;
(vii) any Obligor from effecting a Permitted
Acquisition in accordance with the terms of this
Agreement, provided that after giving effect to such
Permitted Acquisition the Company has excess
Availability (determined as if the Excluded L/Cs were
not outstanding) of $15,000,000 or more;
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
56
(viii) any Obligor from effecting a merger or
consolidation permitted under Section 7, Paragraph
10(E) of this Agreement;
(ix) the Parent or any Subsidiary thereof from making
any investment in any Person to the extent the
consideration paid consists of Qualified Stock of the
Parent;
(x) the acquisition of Capital Stock or securities of
any Obligor by another Obligor if the acquiring
Obligor would be permitted to have the other Obligor
merge into it pursuant to Section 7, Paragraph 10(E)
of this Agreement;
(xi) any note received as consideration for the sale
or disposition of UHRB's hard rock boring assets;
provided that the aggregate principal amount of such
note does not exceed $2,000,000;
(xii) the purchase by any Obligor of an airplane to
be used for the Obligors in their businesses with a
purchase price not to exceed $6,000,000; and
(xiii) any other loans, advances or investments in an
amount not to exceed $5,000,000 in the aggregate for
all Obligors at any one time outstanding.
I. Directly or indirectly conduct any business or enter into,
renew, extend or permit to exist any transaction (including
the purchase, sale, lease or exchange of any assets or the
rendering of any service) or series of related transactions
with any Affiliate of the Parent (other than a
Substantially-Owned Subsidiary or employee benefit plan or
plan trust (an "AFFILIATE TRANSACTION") on terms that are less
favorable to the Obligor party to such transaction, than would
be available in a comparable arm's length transaction with a
Person who is not an affiliate of the Parent, except for:
(i) the payment of reasonable and customary regular fees
to directors of the Obligor who are not employees of
the Obligor;
(ii) loans and advances to officers, directors and
employees of the Obligors or its Subsidiaries for
travel, entertainment and moving and other relocation
expenses made in direct furtherance and in the
ordinary course of business of the Obligor and its
Subsidiaries; provided, however, the aggregate
principal amount of loans and advances made pursuant
to this clause (ii) shall not exceed $3,000,000 at
any time outstanding;
(iii) any other transaction with any employee, officer or
director of the Obligor or any of its Subsidiaries
pursuant to employee benefit or compensation
arrangements entered into in the ordinary course of
business and approved by the Board of Directors of
the Obligor or the Board of Directors of such
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
57
Subsidiary; provided, however, the aggregate
principal amount of loans and advances made pursuant
to this clause (iii) shall not exceed $3,000,000 at
any time outstanding;
(iv) any transaction entered into in the ordinary course
of business with the Obligor or any Subsidiary of
Parent which is for inter-company charges for
administrative services, allocations of overhead,
concentrated cash management systems for collections
and disbursements, and sales of goods and services in
connection with the business of the Parent and its
Subsidiaries in the ordinary course of business of
such Persons;
(v) licenses and other transfers of patents, trademarks,
trade names, copyrights, trade secrets, know-how and
other intellectual property between and among any two
or more of the Obligors and Subsidiaries of the
Parent;
(vi) transactions between or among any of the Obligors
and any of the Subsidiaries of the Parent which
qualify as Permitted Intercompany Balances;
(vii) any other transaction entered into in the ordinary
course of business with any employee, officer or
director of Parent or any of its Subsidiaries
pursuant to drilling arrangements, exploration and
production arrangements, benefit plans, compensation
or other similar arrangements entered into in the
ordinary course of business and the leasing of
aircraft by any senior officer of Parent to any
Obligor, all as more fully described in the Parent's
annual report on Form 10-K for the year ended
December 31, 2000;
(viii) the charter from time to time by an employee of the
Parent, or any Subsidiary thereof, of any aircraft
owned or leased by the Parent or such subsidiary,
without regard to the terms of such charter; and
(ix) the performance of drilling services on a contract
basis by Parent or any Subsidiary of the Parent for,
or the sales of drilling mud, drilling fluids or
other related goods or services to (A) Parent or any
other Subsidiary of Parent, or (B) any joint venture
or other oil and gas development activity incident to
the oil and gas exploration and development activity
of any such Subsidiary, without regard to any
beneficial interest that an officer or employee of
Parent or any such Subsidiary may have in the
exploration or development venture for which the
drilling services are being performed and as long as
such services also comply with Section 7,
Subparagraph 10(I) of this Agreement.
J. Without the prior written consent of the Required Lenders,
(x) amend or modify the Subordinated Debt (if any) in a
manner that materially affects the Lenders,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
58
(y) amend or modify any Subordination Agreement in a
manner that materially affects the Lenders, or
(z) make any payment on the Subordinated Debt unless (A)
there has not occurred an Event of Default that is
continuing which has not been waived in writing by
the Agent and no Default or Event of Default would
occur and exist after giving effect thereto, (B) such
payment is permitted under the Subordination
Agreement, (C) after giving effect to such payment as
though it were a scheduled or required payment on the
Subordinated Debt (other than Subordinated Debt owing
to an Obligor) the Fixed Charge Coverage Ratio of the
Parent is not less than 1.0 to 1.0 for the twelve
month period ending on the date of the then most
recent consolidated financial statements of the
Parent and its Subsidiaries delivered (or required to
be delivered) to the Agent pursuant to Section 7,
Paragraph 8, preceding the date of such payment, and
(D) after giving effect to such payment, the amount
of the Availability would not be less than
$15,000,000 (in which case such payment shall not be
considered a Restricted Payment under this
Agreement); provided, however, if there has not
occurred an Event of Default that is continuing which
has not been waived in writing by the Agent, nothing
contained in paragraph (z) shall prohibit the making
of any payment on the Subordinated Debt at any time
with Qualified Capital Stock or the proceeds
therefrom or if the payment would be permitted as a
Restricted Payment (after giving effect to such
payment) under this Agreement.
11. Until termination of this Agreement and payment and satisfaction in
full of all Obligations hereunder, if any Event of Default shall occur and be
continuing which has not been waived in writing by the Agent or if the
Availability (determined as of the Excluded L/Cs were not outstanding) shall at
any time be less than $20,000,000, then the Obligors agree that the Parent will,
on a consolidated basis:
(a) maintain as of the last day of each calendar month a
Tangible Net Worth of not less than $375,000,000; and
(b) maintain as of the last day of each month TTM EBITDA
of not less than $25,000,000.
12. [Intentionally Omitted]
13. The Companies shall, jointly and severally, pay, indemnify, defend,
and hold the Agent, the Lender, and each of their respective officers,
directors, employees, counsel, agents, and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and disbursements
and other costs and expenses actually incurred in connection therewith (as and
when they are incurred and irrespective of
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
59
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them in connection with or as a result of or related to the
execution, delivery, enforcement, performance, and administration of this
Agreement and any other Loan Documents or the transactions contemplated herein
or therein, and with respect to any investigation, litigation, or proceeding
related to this Agreement, any other Loan Document, or the use of the proceeds
of the credit provided hereunder (irrespective of whether any Indemnified Person
is a party thereto), or any act, omission, event or circumstance in any manner
related thereto (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"). Company shall have no obligation to any Indemnified Person under
this Paragraph 13 with respect to any Indemnified Liability that a court of
competent jurisdiction finally determines to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. This provision
shall survive the termination of this Agreement and the repayment of the other
Obligations.
14. Each Company agrees to advise the Agent in writing of: (a) all
expenditures (actual or anticipated) in excess of $500,000 for (i) environmental
clean-up, (ii) environmental compliance or (iii) environmental testing and the
impact of said expenses on the Working Capital of the Company; and (b) any
notices any Company receives from any local, state or federal authority advising
such Company of any material environmental liability (real or potential)
stemming from such Company's operations, its premises, its waste disposal
practices, or waste disposal sites used by such Company and to provide the Agent
with copies of all such notices if so required.
15. The Obligors represent and warrant that Xxxxxxxxx Onshore and
Analytical Seismic Systems do not have any assets. The Obligors covenant and
agree that Xxxxxxxxx Onshore and Analytical Seismic Systems will each be merged
into an Obligor on or before December 31, 2002 (written evidence of each such
merger to be provided to Agent promptly after such mergers) and that such
entities will continue to have no assets at all times prior to such mergers.
16. [Intentionally Omitted].
17. Agent may at any time and from time to time request a certificate
from an Executive Officer of each Obligor representing that all conditions
precedent to the making of Loans contained herein are satisfied. In the event of
such request by Agent, Lenders may, at their option, cease to make any further
Loans until Agent has received such certificate and, in addition, Agent has
determined that such conditions are satisfied.
18. In order to induce the Lenders to enter into this Agreement and to
make the loans and advances provided for herein and to provide other credit
accommodations, each Obligor for itself and each of their respective
Subsidiaries jointly and severally make, on or as of the date hereof and on the
occurrence of each such loan or advance or other credit accommodation (except to
the extent such representations or warranties relate to an earlier date or are
no longer true and correct in all material respects solely as a result of
transactions not prohibited by the Loan Documents), the following
representations and warranties to the Agent and the Lenders:
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
60
(a) Organization and Qualification. Each Obligor (a) is duly
organized validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (b) has all requisite
corporate or partnership power to own its property and to carry on its business
as now conducted and (c) is duly qualified to do business and is in good
standing, in each case in each jurisdiction in which the failure to be so
qualified or in good standing would reasonably be expected to have a Material
Adverse Effect.
(b) Authorization and Validity. Each Obligor has all requisite
corporate or partnership power and authority to execute, deliver and perform its
obligations hereunder and under the other Loan Documents to which it is a party
and all such action has been duly authorized by all necessary corporate or
partnership proceedings on its part. The Loan Documents to which each corporate
Obligor is a party have been duly and validly executed and delivered by such
Obligor and constitute valid and legally binding agreements of such Obligor
enforceable in accordance with the respective terms thereof, except, in each
case, as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to or affecting the enforcement of creditors' rights generally and
general principles of equity.
(c) Consents. No authorization, consent, approval, license or
exemption (other than such exemptions that exist under applicable law, that are
permitted, or that have been obtained) of any Person or filing or registration
with any court or governmental department, commission, board, bureau, agency or
instrumentality, Domestic or foreign, is necessary for the valid, delivery or
performance by any Obligor of any Loan Document to which it is a party or for
the grant of a security interest in or mortgage on the collateral covered by the
Loan Documents, except such matters relating to performance as would ordinarily
be done in the ordinary course of business after the date hereof.
(d) Conflicting or Adverse Agreements or Ratifications. As of
the date hereof, Obligor is a party to any contract or agreement or subject to
any restriction which would reasonably be expected to have a Material Adverse
Effect. As of the date hereof, all agreements (other than this Agreement and the
other Loan Documents) of each Obligor relating to the lending of money or the
issuance of letters of credit to or for the account of any party are described
hereto on Schedule 7(18)(d). Neither the execution nor delivery by an Obligor of
the Loan Documents nor compliance with the terms and provisions hereof or
thereof will be contrary to the provisions of, or constitute a default under (i)
the charter or bylaws of any corporate Obligor, (ii) the Partnership agreement
or any Obligor that is a limited partnership, or (iii) any applicable law or any
applicable regulation, order, writ, injunction or decree of any court or
governmental instrumentality or (iv) any material agreement to which any Obligor
is a party or by which it is bound or to which it is subject, other than such
conflict or defaults which would not reasonably be expected to have a Material
Adverse Effect or violate any provision of the articles of incorporation or
bylaws of any of the Obligors.
(e) Title to Assets; Licenses and Permits. (i) Each Obligor
has good and marketable title to all of its Equipment, including, without
limitation, all Rigs, and other Eligible Equipment, and other personal property
and good and indefeasible title to or a subsisting leasehold interest in, all
realty as reflected as of the date hereof on its books and records as being
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
61
owned or leased by it after giving effect to the transaction contemplated
herein, subject to no Liens except Permitted Liens. All of the real property
owned or leased by any Obligor as of the date hereof is set forth on Schedule
7(18)(e)(i) hereto, with the applicable owner or lessee, location and real
property interest identified thereon. To the knowledge of each Obligor there are
no actual, threatened or alleged defaults of a material nature with respect to
any leases of real property under which any Obligor is bound after giving effect
to the transaction contemplated herein. After giving effect to the transaction
contemplated herein, each Obligor is current and in good standing with respect
to all governmental approvals, permits, certificates, licenses, consents and
franchises necessary to continue to conduct its business and to own or lease and
operate its properties as heretofore conducted, owned, leased or operated,
except where any such failure to maintain or file approvals, permits,
certificates, licenses, consents and franchises would not have a Material
Adverse Effect.
(ii) Since June 30, 1999, and as of the date hereof,
nothing has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.
(iii) Except as fully reflected in the financial
statements described in Section 7(18)(g) and the Indebtedness incurred under
this Agreement, (i) there were as of the Closing Date (and after giving effect
to any loans made on such date), no liabilities or obligations (excluding
obligations or liabilities incurred in the ordinary course of business, which,
individually, or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect) with respect to any Obligor or any of their
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due), and (ii) neither any Obligor nor any of its
Subsidiaries knows of any basis for the assertion against any Obligor or any of
its Subsidiaries of any such liability or obligation which, either individually
or in the aggregate, has, or could be reasonably likely to have, a Material
Adverse Effect.
(iv) Each of the Domestic Rigs (excluding certain
swab trucks and self-propelled service rigs with an Orderly Liquidation Value
not exceeding $1,500,000) are (a) goods which are mobile, of a type normally
used in more than one jurisdiction and not designed to be permanently used in
any one location; and (b) not fixtures under the laws of any jurisdiction in
which any of the Domestic Rigs is located. The Domestic Rigs are not "motor
vehicles" subject to Chapter 501 of the Transportation Code of the State of
Texas or any comparable statute, law, regulation or rule or any state in which
any of the Domestic Rigs is located and not certificated as motor vehicles under
that laws of any jurisdiction. Each self-propelled Mobile Rig in Texas has been
issued a permit license plate or machinery license plate in accordance with
Transportation Code Sections 502.276, 623.144 and 623.149 and is exempted from
(i) certification under Section 501 of the Transportation Code of the State of
Texas pursuant to Texas Department of Transportation Rules, Chapter 43, Section
17.3, and (ii) registration under Section 502 of the Transportation Code of the
State of Texas. All of the Rigs (other than immaterial Rig Accessories) owned or
leased by any Obligor as of the date hereof are set forth on Schedule
7(18)(e)(iv) hereof; and such schedule contains the information (as of November
13, 1999) described in Section 7, Paragraph 8(b) of this Agreement.
(f) Litigation. Except as shown on Schedule 7(18)(f) as of the
date hereof, no proceedings against or affecting any Obligor are pending or, to
the knowledge of any Obligor,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
62
threatened before any court or governmental agency or department which could
reasonably be expected to have a Material Adverse Effect.
(g) Financial Statements. Prior to the date hereof, the Parent
has furnished to the Lenders the audited financial statements of each Obligor as
of December 31, 2001 (such financial statements, collectively, are referred to
as "FINANCIALS"). The Financials have been prepared in conformity with GAAP
consistently applied and present fairly, in all material respects, the
consolidated financial condition of the respective Subsidiaries and Affiliates
of the Obligor as of the dates thereof. Since the date of the Parent's audited
financial statements most recently delivered to the Agent, there has not
occurred any event which would reasonably be expected have a Material Adverse
Effect. Each Obligor has delivered the Parent's internally prepared financial
projections on a consolidated basis for the 12 month period commencing on
January 1, 2002 (the "PROJECTIONS"). The Parent has delivered, as of the date
hereof, the Projections have been prepared in good faith and are based on what
each Obligor believes to be a reasonable assessment of the future performance of
the Parent and its Subsidiaries, on a consolidated basis, although there can be
no assurances that the results projected in the Projections will occur or that
actual results will not vary materially from the projected results.
(h) No Defaults. No Obligor is in default (i) under any
material provisions of any instrument evidencing any Indebtedness For Borrowed
Money or other Indebtedness with an outstanding balance in excess of $2,000,000
or of any agreement relating thereto in such manner as to cause a Material
Adverse Effect or (ii) in any respect under or in violation of any order, writ,
injunction or decree of any court or governmental instrumentality, in such
manner as to cause a Material Adverse Effect or (iii) under any provision of any
material contract to which each Obligor or any of its Subsidiaries is a party,
which default would reasonably be expected to have a Material Adverse Effect.
(i) Investment Company Act. No Obligor is an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(j) ERISA. (i) The Parent and each ERISA Affiliate have
operated and administered each Plan and Employee Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and would not reasonably be expected to have a Material Adverse Effect.
Neither the Parent nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the
Internal Revenue Code of 1986, as amended relating to employee benefit plans (as
defined in Section 3 of ERISA) which would individually or in the aggregate
reasonably be expected to have a Material Adverse Effect and no event,
transaction or condition has occurred or exists that would reasonably be
expected to result in the incurrence of any such liability by each Obligor or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Parent or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Internal Revenue Code of 1986, as
amended, other than such liabilities or liens as would not individually or in
the aggregate reasonably be expected to have a Material Adverse Effect;
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
63
(ii) No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, exists
or is expected to be incurred with respect to any Plan.
(iii) The Parent and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate would reasonably be expected to have
a Material Adverse Effect.
(iv) The expected post-retirement benefit obligation
(determined as of the last day of the Parent's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Internal Revenue Code of 1986, as amended) of the Parent
and its Subsidiaries would not reasonably be expected to have a Material Adverse
Effect.
(k) Environmental Matters. Except as disclosed on Schedule
7(18)(k), each Obligor (a) possesses and will possess all environmental, health
and safety licenses, permits, authorizations, registrations, approvals and
similar rights necessary under Environmental Laws for the Obligors to conduct
their operations as now being conducted, except where failure to have such
licenses, permits, authorizations, registrations, approvals, and similar rights
would not reasonably be expected to have a Material Adverse Effect, and (b) each
of such licenses, permits, authorizations, registrations, approvals and similar
rights is, and will be, valid and subsisting, in full force and effect and
enforceable by the Obligors, and Obligors are, and will be, in compliance with
all terms, conditions or other provisions of such permits, authorizations,
regulations, approvals and similar rights except for such failure or
noncompliance that, individually or in the aggregate for Obligor and their
respective Subsidiaries, would not reasonably be expected to have a Material
Adverse Effect. Except as disclosed on Schedule 7(18)(k), no Obligor has
received any written notices of any violation or noncompliance with, or remedial
obligation under, any Environmental Laws (which violation, non-compliance, or
remedial obligation has not been cured or would not reasonably be expected to
have a Material Adverse Effect) and there are no writs, injunctions, decrees,
orders or judgments outstanding under the Environmental Laws, or lawsuits,
claims, proceedings, or, to the knowledge of any Obligor, investigations or
inquiries pending or threatened under Environmental Laws, relating to the
ownership, use, condition, maintenance or operation of, or conduct of business
related to, any property owned, leased or operated by any Obligor or other
assets of any Obligor other than those violations, instances of noncompliance,
obligations, writs, injunctions, decrees, orders, judgments, lawsuits, claims,
proceedings, investigations or inquiries that individually or in the aggregate
for each Obligor, would not reasonably be expected to have a Material Adverse
Effect. Except as disclosed on Schedule 7(18)(k), there are no obligations,
undertakings or liabilities arising out of or relating to Environmental Laws
which any Obligor has agreed to, assumed or retained, or by which Obligors and
their respective Subsidiaries are adversely affected, by contract or otherwise,
except such obligations, undertakings or liabilities as would not reasonably be
expected to have a Material Adverse Effect. Except as disclosed on Schedule
7(18)(k), no Obligor received a written notice or claim to the effect that any
of them are or may be liable to any other Person as the result of a release or
threatened release (as such
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
64
term is used in its broadest sense) of a Hazardous Material except such notice
or claim that would not reasonably be expected to have a Material Adverse
Effect.
(l) Purpose of Loans. The proceeds of the Revolving Credit
Loans other than the Acquisition Facility Loans will be used by each Company to
refinance current debt, for working capital, and for repairs and ordinary
maintenance to the Company's Equipment (i.e., not for acquisitions of Rigs and
Rig Accessories and acquisitions of the capital stock or all or substantially
all of the assets of any Person, or for any other Capital Expenditures). The
proceeds of the Acquisition Facility Loans will be used by the Companies for the
purpose of funding Permitted Acquisitions. None of the proceeds of any Advance
will be used directly or indirectly for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U (herein called "MARGIN
STOCK") or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry margin stock, or for any other purpose
which might constitute this transaction as a "purpose credit" within the meaning
of Regulation U. Neither the making of any Loan, nor the use of proceeds
thereof, violate Regulation U, Regulation X or any other regulation of the
Board.
(m) Subsidiaries; Capital Stock. Except as disclosed on
Schedule 7(18)(m), on the date hereof or as disclosed in writing to the Agent,
no Obligor has any Subsidiaries or is a party to any joint venture, partnership
or similar organization. All of the issued and outstanding capital stock of
Parent's Subsidiaries is owned by Parent and its direct Subsidiaries. As of the
date hereof, the ownership of the capital stock of each Obligor is accurately
set forth on Schedule 7(18)(m) hereof;
(n) Insurance. Without limiting the provisions of Section 7,
Paragraph 5(a) above:
(i) Each Obligor will, and will cause each of its
respective Subsidiaries to, at all times maintain in full force and
effect insurance with reputable and solvent insurance carriers,
covering such risks and liabilities and with such insured amounts,
deductibles or self-insured retentions consistent with industry
standards, and reasonably acceptable to Agent. Schedule 7(18)(n) sets
forth a true and complete list of policies in effect covering each
Obligor as of the Closing Date. The Obligors will, on each such later
date as the Agent or the Required Lenders may reasonably request,
furnish a summary of the insurance carried in respect of each Obligor
and its Subsidiaries and the assets of each Obligor and its
Subsidiaries together with original certificates of insurance, policies
and other evidence of such insurance, if any, naming the Agent as an
additional insured and/or loss payee as required pursuant to the next
paragraph of this Paragraph 18(n), in form and substance reasonably
satisfactory to the Agent.
(ii) Such insurance shall be provided by insurance
companies licensed to do business in the applicable state of each
Obligor's operations and shall be rated "A; VIII" or better by Best's
Key Ratings Guide or as may be reasonably acceptable to the Agent if
not so rated or licensed, and shall include the following insurance
coverages and any other insurance coverages that may be required by
applicable law:
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
65
(A) Commercial General Liability insurance
written on an occurrence basis, including coverage for
premises, operations, products and completed operations,
explosion, collapse and underground, broad form commercial
general liability equivalent coverages with a minimum combined
single limit for bodily injury and property damage of
$2,000,000 per occurrence and $2,000,000 in the aggregate,
with a self-insured retention not greater than $1,000,000;
(B) Business Automobile Liability insurance
covering all owned, non-owned and hired automobiles for a
combined bodily injury and property damage limit of no less
than $1,000,000 per occurrence and containing appropriate
no-fault insurance provisions required by law;
(C) Workers' Compensation insurance in
amounts required by applicable law and employers liability
with limits of not less than $1,000,000;
(D) umbrella (or excess form should umbrella
coverage be unavailable) liability coverage written on an
occurrence basis with a limit of liability of $40,000,000, and
also to include a "drop down" provision which will pick up any
exhaustion of limits under the primary coverages subject to a
retention of $100,000. Such insurance coverage shall provide
substantially identical coverages as are set forth in the form
of the insurance required in clauses (i), (ii)(A)/(B)/(C) and
(iii);
(E) All-Risk Physical Loss or Damage
Property Insurance (including water damage, Domestic transit
coverage, collapse coverage, coverage of fire, flood and
earthquakes and rapid means of transportation coverages on an
agreed value basis) with respect to any Rig (on a
"no-coinsurance" basis) in an amount equal to or greater than
$200,000,000 with a deductible not greater than $100,000 per
occurrence;
(F) Pollution Legal Liability Insurance with
limits of not less than $5,000,000 per occurrence; and
(G) such other insurance policies and
coverages as the Agent may require.
(iii) All policies except Workers' Compensation shall
insure the interests of the Agent and the Lenders (and their respective
employees, agents, attorneys, representatives and officers) as
additional insureds (each, an "ADDITIONAL INSURED") and the policies
required by subclause (ii)(E) of this Paragraph 18(n) (in the nature of
property damage insurance) shall provide for the direct payment of all
proceeds to the Agent and the applicable Company or Companies, as their
interests may appear, which proceeds shall then be deposited to the
Agent or, if so directed in writing by the Agent, to the Depository
Account. Each policy or certificate with respect to insurance of the
Collateral shall be endorsed to the Agent's satisfaction for the
benefit of the Agent
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
66
(including, without limitation, by naming the Agent as loss payee, as
its interests may appear, as required by the Agent) and such policy or
certificate shall be delivered to the Agent. All policies required
hereby shall provide for not less than thirty (30) days prior written
notice to be received by the Agent and the Lenders of the termination
or cancellation of the insurance evidenced thereby, unless such
termination or cancellation is a result of non-payment of premiums in
which case ten (10) days prior written notice shall be given to the
Agent. Each Obligor agrees that, unless the insurance policies by their
terms provide that they cannot cease (by reason of nonrenewal or
otherwise) without the Agent being informed and having the option to
continue the insurance by paying any premiums not paid by the Obligors,
receipts showing payment of premiums for required insurance and also of
demands from underwriters shall be in the hands of the Agent prior to
the risk in question commencing. Prior to the expiration of any such
policy of insurance, the appropriate Obligor shall deliver to the Agent
an extension or renewal or replacement policy or an insurance
certificate evidencing renewal, replacement or extension of such
policy. If any such Obligor shall fail to insure such Collateral in
accordance with this Paragraph (18)(n) or if any Obligor shall fail to
so endorse and deposit, or to extend or renew, all such insurance
policies or certificates with respect thereto, the Agent shall have the
right (but shall be under no obligation) to advance funds to procure or
renew or extend such insurance and each Company jointly and severally
agrees to reimburse the Agent for all costs and expenses thereof, with
interest on all such funds from the date advanced until paid in full at
the highest rate then in effect under the Credit Agreement. The Agent
agrees that it shall provide notice to the applicable Company that it
has advanced funds on its behalf pursuant to this Paragraph 18(n). Each
policy shall also provide:
(A) that no Additional Insured shall have
any obligation or liability for premiums, commissions,
assessments or calls in connection with such insurance;
(B) that the insurer thereunder waives all
rights of subrogation against all Obligors and the Additional
Insureds and any right of set-off or counterclaim and any
other right to deduction whether by attachment or otherwise;
(C) that such insurance shall be primary
without right of contribution from any other insurance carried
by or on behalf of any Additional Insured;
(D) with respect to liability insurance only
that, insofar as the policy is written to cover more than one
insured, all terms, conditions, insuring more than one
insured, all terms, conditions, insuring agreements and
endorsements, with the exception of limits of liability and
deductibles, shall operate in the same manner as if there were
a separate policy covering each insured;
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
67
(E) that no Obligor will do or omit any act,
nor voluntarily suffer or permit any act to be done or
omitted, whereby the insurance required to be carried or
maintained hereunder shall or may be suspended, impaired or
canceled, and no Obligor will use or operate, or permit the
Rigs to be used or operated for purposes more hazardous than
permitted by the terms of the insurance policies carried by
the Obligors pursuant to this Xxxxxxxxx (00)(x) without first
notifying the Agent and having previously insured the Rigs by
additional coverage to extend to such uses, operations or
risks;
(F) that such policies shall not contain any
date recognition exclusions; and
(G) that such policies shall insure the
Additional Insureds regardless of any breach or violation of
the terms, conditions or warranties of such policies by any
Obligor.
(iv) The Companies shall deliver to each Additional
Insured prior notice of any proposed insurance arrangement that the
Obligors intend to put into effect which differs in any material
respect (including terms of policies or identity of insurers or share
of coverage to be provided by a particular insurer) from that which was
previously in effect.
(v) Each Obligor will, at its own expense, make or
cause to be made all proofs of loss and take, or cause to be taken, all
other action necessary or appropriate to make collections from the
underwriters of insurance required to be carried and maintained by this
Paragraph 18(n) and report all claims and give all notices in a timely
fashion with copies to the Agent.
(vi) Physical Damage Insurance proceeds paid to the
Agent and the applicable Company or Companies (with the proceeds to be
deposited in the Depository Account) shall be applied to the repair or
replacement of Collateral at such times and in such amounts as the
Companies may require, except that after the occurrence of any Event of
Default that is continuing, such proceeds shall, in their entirety, be
held as cash Collateral and/or applied by the Agent in satisfaction of
the Revolving Loans as it determines in its sole discretion.
(o) Indebtedness and Contingent Liabilities. Except as
disclosed in Schedule 7(18)(o) as of the date hereof, no Obligor has any
outstanding Indebtedness For Borrowed Money (excluding the loans and advances
hereunder) or material contractually assumed contingent liabilities.
(p) Security Interests. This Agreement and the other Loan
Documents create valid security interest and liens in all of the Collateral
described therein in favor of the Agent for the benefit of the Lenders securing
the Obligations and constitute (subject to (i) the filing of financing
statements and assignments of patents and trademarks delivered to the Agent on
the date hereof and thereafter from time to time and (ii) the delivery of any
collateral after the date
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hereof as provided herein or any other Loan Document) perfected first priority
liens and security interests in substantially all of such Collateral described
therein subject to no liens other than Permitted Liens (other than titled
equipment, rolling stock and patents, trademarks, copyrights and similar items
existing or issued outside of the United States).
SECTION 8. INTEREST, FEES AND EXPENSES
1. (a) Interest on the Revolving Loans shall be payable monthly as of
the end of each month and shall be an amount equal to the lesser of (a) the sum
of (i) the Applicable Margin plus the Chase Bank Rate per annum on the average
of the net balances owing by each Company to the Agent and/or the Lenders in the
Company's Revolving Loan Account at the close of each day during such month on
balances other than LIBOR Loans, and (ii) the Applicable Margin, plus the
applicable LIBOR on any LIBOR Loan, on a per annum basis, on the average of the
net balances owing by the Company to the Agent and/or the Lenders as set forth
in the Company's Revolving Loan Account at the close of each day during such
month or (b) interest computed in accordance with the provisions of this clause
(a) but at the Maximum Legal Rate. The rates hereunder shall be calculated based
on a 360-day year. The Agent and the Lenders shall be entitled to charge the
Company's Revolving Loan Account at the rate provided for herein when due until
all Obligations have been paid in full.
(b) Notwithstanding any provision to the contrary contained in
this section in the event that the sum of the outstanding balance of (i)
Revolving Loans and Letters of Credit (but subject to Section 3, Paragraph 8
above) exceeds the lesser of (x) the maximum amount of Availability under
Sections 3 and 4 of this Agreement or (y) the Line of Credit: (A) as a result of
the sum of the Revolving Loans advanced or Letters of Credit arranged by the
Agent at the request of any Company (herein "REQUESTED OVERADVANCES"), for any
one (1) or more days in any month or months hereafter or (b) for any other
reason whatsoever (herein "OTHER OVERADVANCES") and such Other Overadvances
continue for five (5) or more consecutive days in any month hereafter, the
average net balance of all Revolving Loans owing by each Company to the Agent
and the Lenders for such month (or, if the fifth day occurs in a succeeding
month, then the net balances shall apply to the month in which the Overadvance
first occurred) shall bear interest at the Overadvance Rate. Upon and after the
occurrence and during the continuance of an Event of Default and the giving of
any required notice by the Agent in accordance with the provisions of Section
10, Paragraph 2 of this Agreement, but only for so long as such Event of Default
shall be continuing, all Obligations shall bear interest at the Default Rate of
Interest.
2. Each Company may elect to use LIBOR as the basis for calculating the
interest rate to accrue on any other Revolving Loans, provided that (A) there is
then no Event of Default that is continuing, (B) such Company has so advised the
Agent of its election to use LIBOR and the LIBOR Period selected no later than
three (3) Business Days preceding the first day of a LIBOR Period and (C) the
election and LIBOR shall be effective, provided there is then no Event of
Default that is continuing, on the third Business Day following said notice. The
LIBOR elections must be for $1,000,000 or integer multiples thereof and there
shall be no more than five (5) LIBOR Loans outstanding at one time. If no such
election is timely made or can be made, or if the LIBOR rate can not be
determined, then the Agent shall use the Chase Bank Rate to compute interest. In
the event a Company requests any LIBOR election such Company shall pay
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69
to the Agent a $500 processing fee upon the date hereof of each such LIBOR
election hereunder. In addition, such Company shall pay to the Agent for the
benefit of the Lenders, upon the request of the Agent such amount or amounts as
shall compensate the Agent and/or the Lenders for any loss, costs or expenses
incurred by the Agent and/or the Lenders (as reasonably determined by the Agent
and the Lenders) as a result of: (i) any payment or prepayment on a date other
than the last day of a LIBOR Period for such LIBOR Loan, or (ii) any failure of
such Company to borrow a LIBOR Loan on the date for such borrowing specified in
the relevant notice; such compensation to include, without limitation, an amount
equal to any loss or expense suffered by the Agent and/or the Lenders during the
period from the date of receipt of such payment or prepayment or the date of
such failure to borrow to the last day of such LIBOR Period if the rate of
interest obtained by the Agent and/or the Lenders upon the reemployment of an
amount of funds equal to the amount of such payment, prepayment or failure to
borrow is less than the rate of interest applicable to such LIBOR Loan for such
LIBOR Period. The determination by the Agent and/or the Lenders of the amount of
any such loss or expense, when set forth in a written notice to such Company,
containing the Agent's and/or the Lenders' calculations thereof in reasonable
detail, shall be conclusive on such Company, in the absence of manifest error.
Calculation of all amounts payable to the Agent and/or the Lenders under this
paragraph with regard to LIBOR Loans shall be made as though the Agent and the
Lenders had actually funded the LIBOR Loans through the purchase of deposits in
the relevant market and currency, as the case may be, bearing interest at the
rate applicable to such LIBOR Loans in an amount equal to the amount of the
LIBOR Loans and having a maturity comparable to the relevant interest period;
provided, however, that the Agent and the Lenders may obtain funds for each of
the LIBOR Loans in any manner the Agent and the Lenders see fit and the
foregoing assumption shall be used only for calculation of amounts payable under
this paragraph. In addition, notwithstanding anything to the contrary contained
herein, the Agent and the Lenders shall apply all proceeds of Collateral,
including the Accounts, and all other amounts received by it from or on behalf
of the Companies (i) initially to the Chase Bank Rate loans and (ii)
subsequently to LIBOR Loans; provided, however, (x) and upon the occurrence and
during the continuation of an Event of Default or (y) in the event the aggregate
amount of outstanding LIBOR Rate Loans exceeds Availability or the applicable
maximum levels set forth therefor, the Agent and the Lenders may apply all such
amounts received by them to the payment of Obligations in such manner and in
such order as the Agent may elect in its reasonable business judgment. In the
event that any such amounts are applied to Revolving Loans which are LIBOR
Loans, such application shall be treated as a prepayment of such loans and the
Agent and the Lenders shall be entitled to indemnification hereunder.
3. In consideration of the Letter of Credit Guaranty of the Agent, the
Company shall pay the Agent for the benefit of the Lenders the Letter of Credit
Guaranty Fee which shall be an amount equal to one and one-quarter percent
(1.25%) per annum, payable monthly, on the face amount of each Letter of Credit
less the amount of any and all amounts previously drawn under the Letter of
Credit.
4. Any charges, fees, commissions, costs and expenses charged to the
Agent and/or the Lenders for a Company's account by any Issuing Bank in
connection with or arising out of Letters of Credit issued pursuant to this
Agreement or out of transactions relating thereto will be
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70
charged to the applicable Company's account in full when charged to or paid by
the Agent and when made by any such Issuing Bank shall be conclusive on the
Agent.
5. The Companies shall reimburse or pay the Agent for: (a) all
Out-of-Pocket Expenses and (b) any applicable Documentation Fee.
6. Upon the last Business Day of each month, commencing with the last
day of the month in which this Agreement is executed the Companies shall pay the
Agent for the benefit of the Lenders the Line of Credit Fee.
7. [Intentionally Omitted]
8. Upon the date hereof and on such annual anniversary hereof the
Companies shall pay to the Agent for the sole and separate account of the Agent
the Administrative Management Fee, which shall be fully earned and not
refundable or rebateable when due.
9. [Intentionally Omitted]
10. [Intentionally Omitted]
11. Each Company shall pay the Agent's standard charges for, and the
fees and expenses of, the Agent's personnel used by the Agent for reviewing the
books and records of such Company and for verifying, testing, protecting,
safeguarding, preserving or disposing of all or any part of the Collateral;
provided, however, that the foregoing (other than Out-of-Pocket Expenses) shall
not be payable until the occurrence and during the continuation of an Event of
Default which has not been waived in writing by the Agent if the Companies are
paying an Administrative Management Fee.
12. In no event shall the rates of interest hereunder exceed the
Maximum Legal Rate. In the event that the Contract Rate computed under this
section would exceed the Maximum Legal Rate, the rates of interest under this
Agreement for any such period shall be limited to the Maximum Legal Rate, but
any subsequent reductions in the Contract Rate shall not reduce the rates of
interest under this Agreement below the Maximum Legal Rate until the total
amount of interest charged hereunder equals the amount of interest that would
have been charged had the Contract Rate been charged at all times.
13. Each Company hereby authorizes the Agent to charge the Revolving
Loan Account with the Agent with the amount of all payments due hereunder, and
under the other Loan Documents as such payments become due. Each Company
confirms that any charges which the Agent may so make to each Company's account
as herein provided will be made as an accommodation to each Company and solely
at the Agent's discretion.
SECTION 9. POWERS
Each Obligor hereby constitutes the Agent on behalf of the Lenders or
any person or agent the Agent may designate as its attorney-in-fact, at such
Obligor's cost and expense, to
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exercise all of the following powers, which being coupled with an interest,
shall be irrevocable until all of the Obligations to the Agent and the Lenders
have been paid in full:
(a) To receive, take, endorse, sign, assign and deliver, all in the
name of the Agent or such Obligor, any and all checks, notes, drafts, and other
documents or instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to such Obligor
and to notify postal authorities to change the address for delivery thereof to
such address as the Agent may designate;
(c) To request from customers indebted on Accounts at any time, in the
name of the Agent or such Obligor or that of the Agent's designee, information
concerning the amounts owing on the Accounts;
(d) To transmit to customers indebted on Accounts notice of the Agent's
interest therein and to notify customers indebted on Accounts to make payment
directly to the Agent for such Obligor's account; and
(e) To take or bring, in the name of the Agent or such Obligor, all
steps, actions, suits or proceedings deemed by the Agent necessary or desirable
to enforce or effect collection of the Accounts .
Notwithstanding anything hereinabove contained to the contrary, the
powers set forth in Paragraphs (a), (b), (d) and (e) above may only be exercised
after the occurrence of and during the continuation of an Event of Default and
until such time as such Event of Default that is continuing is waived in writing
by the Agent or cured to the Agent's satisfaction. In addition, the powers set
forth in Paragraph (c) above will only be exercised in the name of applicable
Obligor or a certified public accountant designated by the Agent prior to the
occurrence of such Event of Default that is continuing.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES
1. Notwithstanding anything hereinabove to the contrary, the Lenders
acting through the Agent may terminate this Agreement immediately upon the
occurrence and during the continuance of any of the following (herein "EVENTS OF
DEFAULT"):
(a) cessation of the business of any other Obligor or the calling of a
meeting of the creditors of any other Obligor for purposes of compromising the
debts and obligations any Obligor;
(b) the failure of any Obligor to generally meet debts as they mature;
(c) the commencement by or against any Obligor of any bankruptcy,
insolvency, arrangement, reorganization, receivership or similar proceedings
under any federal or state law,
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provided that in the event of any involuntary proceeding commenced against any
Obligor such proceeding is not dismissed or discharged within sixty (60) days
after commencement thereof;
(d) breach by any Obligor of any warranty, representation or covenant
contained herein (other than those referred to in Paragraph (e) below) or in any
other Loan Document, provided that such breach of any of the warranties,
representations or covenants referred in this Paragraph (d) shall not be deemed
to be an Event of Default unless and until such breach shall remain unremedied
to the Agent's satisfaction for a period of ten (10) Business Days after the
occurrence thereof;
(e) breach by any Obligor of any warranty, representation or covenant
of Section 3, Paragraph 3 (other than the second sentence of Paragraph 3(b)) and
Paragraph 4 of this Agreement; Section 4, Paragraphs 3 and Paragraph 4 (other
than the first sentence of Paragraph 4) of this Agreement; or Section 7,
Paragraphs 1, 5, 6, and 10, 11 and 13 of this Agreement;
(f) failure of any Company to pay any of the Obligations within five
(5) Business Days of the due date thereof, provided that nothing contained
herein shall prohibit the Agent from charging such amounts to the Revolving Loan
Account on the due date thereof;
(g) any Obligor shall (i) engage in any "prohibited transaction" as
defined in ERISA, (ii) have any "accumulated funding deficiency" as defined in
ERISA, (iii) have any Reportable Event, (iv) terminate any Plan or (v) be
engaged in any proceeding in which the Pension Benefit Guaranty Corporation
shall seek appointment, or is appointed, as trustee or administrator of any
Plan, and with respect to this Paragraph (g) such event or condition (x) remains
uncured for a period of thirty (30) days from date of occurrence and (y) could,
in the reasonable opinion of the Agent, subject any Obligor to any tax, penalty
or other liability that could have a Material Adverse Effect.
(h) the occurrence of any default or event of default (after giving
effect to any applicable grace or cure periods) under any instrument or
agreement evidencing (x) Subordinated Debt or (y) any other Indebtedness For
Borrowed Money of any Company having a principal amount in excess of $2,000,000;
(i) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of more than 30% of the total voting power of all classes of
stock then outstanding of Parent entitled to vote in the election of directors;
or
(j) the occurrence of any default or event of default under any other
Loan Document.
For purposes of this Agreement and the other Loan Documents, in the
event of (x) a misstatement, or misrepresentation with respect to any matter
that reasonably could be considered material to a commercial lender (including,
without limitation, any negligent or intentional misstatement or
misrepresentation in a certificate or other document delivered by an Obligor
pursuant to this Agreement) or (y) any breach or violation of any covenant
contained in
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any Loan Document by any Obligor arising from or relating to the failure or
delay in delivering to the Agent or depositing into a Depository Account any
Collections or other proceeds of Collateral or other funds which are required to
be so delivered or deposited pursuant to any Loan Document (including, without
limitation, the diversion, misdirection, misuse or misapplication of any such
Collections, proceeds or funds), that constitutes an Event of Default, such
Event of Default shall be considered continuing until such times as it is waived
in writing by the Agent.
2. Upon the occurrence and during the continuation of an Event of
Default, the Agent may (at its option), and shall at the direction of the
Required Lenders, declare that all loans, advances and extensions of credit
provided for in Section 3 of this Agreement shall thereafter be in the Agent's
sole discretion and the obligation of the Agent and/or the Lenders to make
Revolving Loans and/or open Letters of Credit shall cease unless such Event of
Default is waived in writing by the Agent on behalf of the Lenders or cured to
the Agent's satisfaction, and so long as an Event of Default shall have occurred
and be continuing the Agent may (at its option), and shall at the direction of
the Required Lenders declare that: (i) all Obligations shall become immediately
due and payable; (ii) the Default Rate of Interest shall be charged on all then
outstanding or thereafter incurred Obligations in lieu of the interest provided
for in Section 8 of this Agreement; provided that with respect to this clause
(ii), (a) the Agent has given the Parent written notice of the Event of Default;
provided, further that no notice is required if the Event of Default is the
event listed in Paragraph 1(c) of this section, and (b) the Default Rate shall
accrue from and after the date of the occurrence of the Event of Default listed
in Paragraph 1(c) of this section; and (iii) this Agreement shall immediately
terminate upon notice to the Parent; provided, however, that no notice of
termination is required if the Event of Default is the event listed in Paragraph
1(c) of this section. The exercise of any remedy available to the Agent and/or
the Lender is not exclusive of any other remedy available to the Agent and/or
the Lender, which may be exercised at any time by the Agent and/or the Lenders.
3. Immediately upon the occurrence of any Event of Default and during
the continuation thereof which has not been waived in writing by the Agent, the
Agent may and, at the direction of the Required Lenders, shall to the extent
permitted by law: (a) remove from any premises where same may be located any and
all documents, instruments, files and records, and any receptacles or cabinets
containing same, relating to the Accounts, or the Agent may use, at the expense
of the Obligors, such of each Obligor's personnel, supplies or space at each
Obligor's places of business or otherwise, including UTIMS, as may be necessary
to properly administer and control the Accounts or the handling of collections
and realizations thereon; (b) bring suit, in the name of any Obligor or all
Obligors, or the Agent on behalf of the Lenders, and generally shall have all
other rights respecting said Accounts, including, without limitation, the right
to: accelerate or extend the time of payment, settle, compromise, release in
whole or in part any amounts owing on any Accounts and issue credits in the name
of each Obligor or the Agent; (c) sell, assign and deliver the Collateral and
any returned, reclaimed or repossessed merchandise, with or without
advertisement, at public or private sale, for cash, on credit or otherwise, at
the Agent's sole option and discretion, and the Agent may bid or become a
purchaser at any such sale, free from any right of redemption, which right is
hereby expressly waived by each Obligor; (d) foreclose the security interests in
the Collateral created herein by any available judicial procedure, or to take
possession of any or all of the Inventory, Equipment and/or Other Collateral
without judicial process, and to enter any premises where any Inventory,
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74
Equipment and/or Other Collateral may be located for the purpose of taking
possession of or removing the same; and (e) exercise any other rights and
remedies provided in law, in equity, by contract or otherwise. The Agent shall
have the right to sell, lease, or otherwise dispose of all or any part of the
Collateral with reasonable notice, if any, as required by law, whether in its
then condition or after further preparation or processing, in the name of the
applicable Obligor or the Agent, or in the name of such other party as the Agent
may designate, either at public or private sale or at any broker's board, in
lots or in bulk, for cash or for credit, with or without warranties or
representations, and upon such other terms and conditions as the Agent in its
sole discretion may deem advisable, and the Agent shall have the right to
purchase at any such sale. If any Inventory and Equipment shall require
rebuilding, repairing, maintenance or preparation, the Agent shall have the
right, at its option, to do such of the aforesaid as is necessary, for the
purpose of putting the Inventory and Equipment in such saleable condition as the
Agent shall deem appropriate. Each Obligor agrees, at the request of the Agent,
to assemble the Inventory and Equipment and to make it available to the Agent at
premises of such Obligor or elsewhere and to make available to the Agent the
premises and facilities of such Obligor for the purpose of the Agent's taking
possession of, removing or putting the Inventory and Equipment in saleable form.
However, if notice of intended disposition of any Collateral is required by law,
it is agreed that ten (10) days notice shall constitute reasonable notification
and full compliance with the law. The net cash proceeds resulting from the
Agent's exercise of any of the foregoing rights (after deducting all charges,
costs and expenses, including reasonable attorneys' fees), shall be applied by
the Agent to the payment of the Obligations, whether due or to become due, in
such order as the Agent may elect, and each Obligor shall remain liable to the
Agent and the Lenders for any deficiencies, and the Agent in turn agrees to
remit to each Company or its successors or assigns, any surplus resulting
therefrom. The enumeration of the foregoing rights is not intended to be
exhaustive and the exercise of any right shall not preclude the exercise of any
other rights, all of which shall be cumulative. Any mortgage(s), deed(s) of
trust or assignment(s) on the Real Estate shall govern the rights and remedies
of the Agent and the Lenders thereto.
4. So long as an Event of Default has occurred and is continuing which
has not been waived in writing by the Agent, the Agent shall have the following
rights and remedies with respect to the Louisiana Pledged Collateral, which
rights and remedies are in addition to and are not in lieu or limitation of any
other rights and remedies that may be provided in this Agreement, under Chapter
9 of the Louisiana Commercial Laws (La. R.S. Sections 10:9-101, et seq.), under
the Uniform Commercial Code of any state other than Louisiana, or at law or
equity generally:
(a) The Agent may cause the Louisiana Pledged Collateral, or
any part or parts thereof, to be immediately seized wherever found, and sold,
whether in term of court or in vacation, under ordinary or executory process, in
accordance with applicable Louisiana law, to the highest bidder for cash, with
or without appraisement, without the necessity of making additional demand, or
of notifying any Obligor, or placing any Obligor in default.
(b) For purposes of foreclosure under Louisiana executory
process procedures, each Obligor confesses judgment and acknowledges to be
indebted unto and in favor of the Agent up to the full amount of the
Obligations, including, without limitation, principal, interest, costs,
expenses, attorneys' fees and other fees and charges. To the extent permitted
under applicable Louisiana law, each Obligor additionally waives: (a) the
benefit of appraisal as
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75
provided in Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil
Procedure and all other laws with regard to appraisal upon judicial sale; (b)
the demand and three (3) days' delay as provided under Articles 2639 of the
Louisiana Code of Civil Procedure; (c) the Notice of Seizure as provided under
Articles 2293 of the Louisiana Code of Civil Procedure; (d) the three (3) days'
delay provided under Articles 2331 and 2722 of the Louisiana Code of Civil
Procedure; and (e) all other benefits provided under Articles 2331, 2722 and
2723 of the Louisiana Code of Civil Procedure.
(c) Should any of the Louisiana Pledged Collateral be seized
as an incident to an action for the recognition or enforcement of the
Obligations or this Agreement, by executory process, sequestration, attachment,
writ of fieri facias or otherwise, each Obligor agrees that the court issuing
any such order shall, if requested by the Agent, appoint the Agent or any Person
named by the Agent at the time such seizure is requested, or at any time
thereafter, as keeper of the Louisiana Pledged Collateral as provided under La.
R.S. Sections 9:5136, et seq. Each Obligor agrees to pay the reasonable fees of
such keeper, which compensation to the keeper shall also be a part of the
Obligations.
(d) Should it become necessary for the Agent to foreclose
against the Louisiana Pledged Collateral, all declarations of fact that are made
under an authentic act before a Notary Public in the presence of two witnesses,
by a person declaring such facts to lie within his or her knowledge, shall
constitute authentic evidence for purposes of executory process and also for
purposes of La. R.S. Section 9:3509.1, La. R.S. Section 9:3504(D)(6) and La.
R.S. Section 10:9-508, as applicable.
(e) ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT
NOTWITHSTANDING, THE SECURITY INTERESTS IN THE LOUISIANA PLEDGED COLLATERAL
GRANTED IN THIS AGREEMENT, AND THE AGENT'S REMEDIES IN THE COURTS SITTING IN AND
FOR THE STATE OF LOUISIANA WITH RESPECT TO THE LOUISIANA PLEDGED COLLATERAL
SHALL BE GOVERNED BY LOUISIANA LAW, WITH NEW YORK LAW GOVERNING THE
INTERPRETATION AND CONSTRUCTION OF THE PROVISIONS OF THIS AGREEMENT, ITS
APPLICATION TO THE PLEDGED COLLATERAL AND THE PROCEEDS THEREOF, AND ALL RIGHTS
AND OBLIGATIONS OF THE PARTIES THEREUNDER IN ALL OTHER RESPECTS.
5. Once the Agent has commenced the exercise of remedies under this
Section 10, notwithstanding that the Event of Default may at any time thereafter
no longer be continuing, the Agent shall be entitled to continue to exercise any
and all rights and remedies contemplated by this Section 10.
SECTION 11. TERMINATION
Not later than ninety (90) days prior to an Anniversary Date, the
Parent shall deliver to the Agent a report, certified by the Parent's Chief
Financial Officer or other executive officer, setting forth in reasonable detail
the Parent's consolidated capital structure, including a summary of the material
terms (including maturity dates and redemption, exchange, conversion, call and
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76
similar features, if applicable) of all outstanding debt and capital stock
(including preferred stock) and indicate therein (i) if any Qualified Capital
Stock will or may become Disqualified Capital Stock during the annual period
commencing on the Anniversary Date next following the date of such report and
(ii) a calculation of the Fixed Charge Coverage giving effect to the information
provided in clause (i) with respect to such period. Except as otherwise
permitted herein, the Companies or any Lender acting through the Agent may
terminate this Agreement and the Line of Credit only as of the initial or any
subsequent Anniversary Date and then only by giving the other at least sixty
(60) days prior written notice of termination. Notwithstanding the foregoing the
Lenders acting through the Agent may terminate this Agreement immediately upon
the occurrence of an Event of Default and so long as the same is continuing;
provided, however, that if the Event of Default is an event listed in Paragraph
1(c) of Section 10 of this Agreement, the Agent and the Lenders may regard this
Agreement as terminated and notice to that effect is not required. This
Agreement, unless terminated as herein provided, shall automatically continue
from Anniversary Date to the next successive Anniversary Date. Notwithstanding
the foregoing, the Companies may terminate this Agreement and the Line of Credit
prior to any applicable Anniversary Date upon sixty (60) days' prior written
notice to the Agent and the Lenders, provided that the Companies pay to the
Agent for the benefit of the Lenders immediately on demand, an Early Termination
Fee, if applicable. All Obligations shall become due and payable as of any
termination hereunder or under Section 10 hereof and, pending a final
accounting, the Agent and the Lenders may withhold any balances in each and
every Company's account (unless supplied with an indemnity satisfactory to the
Agent) to cover all of the Obligations, whether absolute or contingent. All of
the Agent's and Lenders' rights, liens and security interests shall continue
after any termination until all Obligations have been paid and satisfied in
full.
SECTION 12. MISCELLANEOUS
1. WAIVERS, ETC. Each Obligor hereby waives diligence, demand,
presentment and protest and any notices thereof as well as notice of nonpayment,
notice of dishonor, notice of intent to accelerate and notice of acceleration.
No delay or omission of the Agent and/or the Lenders or any Obligor to exercise
any right or remedy hereunder, whether before or after the happening of any
Event of Default, shall impair any such right or shall operate as a waiver
thereof or as a waiver of any such Event of Default. No single or partial
exercise by the Agent or the Lenders of any right or remedy precludes any other
or further exercise thereof, or precludes any other right or remedy.
2. NO ORAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER DOCUMENTS
REFERENCED HEREIN OR CONTEMPLATED HEREBY REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
3. INTEREST SAVINGS PROVISION. It is the intent of each Obligor, the
Agent and the Lenders to conform strictly to all applicable state and federal
usury laws. All agreements between a Company, any other Obligor, the Agent and
the Lenders whether now existing or
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
77
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
the maturity hereof or otherwise, shall the amount contracted for, charged,
received or collected by the Agent and/or the Lenders for the use, forbearance,
or detention of the money loaned hereunder or otherwise, or for the payment or
performance of any covenant or obligation contained herein or in any other
document evidencing, securing or pertaining to the Obligations evidenced hereby
which may be legally deemed to be for the use, forbearance or detention of
money, exceed the maximum amount which each Company or any other Obligor is
legally entitled to contract for, charge, receive or collect under applicable
state or federal law. If from any circumstances whatsoever fulfillment of any
provision hereof or of such other documents, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled shall be automatically
reduced to the limit of such validity, and if from any such circumstance the
Agent and/or the Lenders shall ever receive as interest or otherwise an amount
in excess of the maximum that can be legally collected, then such amount which
would be excessive interest shall be applied to the reduction of the principal
indebtedness hereof and any other amounts due with respect to the Obligations
evidenced hereby, but not to the payment of interest and if such amount which
would be excess interest exceeds the Obligations and all other non interest
indebtedness described above, then such additional amount shall be refunded to
each Company. In determining whether or not all sums paid or agreed to be paid
by each Company for the use, forbearance or detention of the Obligations to the
Agent and/or the Lenders, under any specific contingency, exceeds the maximum
amount permitted by applicable law, each Company and the Agent and the Lenders
shall to the maximum extent permitted under applicable law, (a) treat all
Obligations as but a single extension of credit, (b) characterize any
nonprincipal payment as an expense, fee or premium rather than as sums paid or
agreed to be paid by each Company for the use, forbearance or detention of the
Obligations, (c) exclude voluntary prepayments and the effect thereof, and (d)
amortize, prorate, allocate and spread in equal parts, the total amount of such
sums paid or agreed to be paid by each Company for the use, forbearance or
detention of the Obligations to the Agent and the Lenders throughout the entire
contemplated term of the Obligations so that the interest rate is uniform
through the entire term of the Obligations. The terms and provisions of this
paragraph shall control and supersede every other provision hereof and all other
agreements between a Company, each other Obligor, the Agent and the Lenders.
4. SEVERABILITY. If any provision hereof or of any other agreement made
in connection herewith is held to be illegal or unenforceable, such provision
shall be fully severable, and the remaining provisions of the applicable
agreement shall remain in full force and effect and shall not be affected by
such provision's severance. Furthermore, in lieu of any such provision, there
shall be added automatically as a part of the applicable agreement a legal and
enforceable provision as similar in terms to the severed provision as may be
possible.
5. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH COMPANY AND OTHER OBLIGOR, THE AGENT AND THE LENDERS EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS
AGREEMENT. EACH COMPANY AND OTHER OBLIGOR HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF
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78
PROCESS AND CONSENTS TO SERVICE OF PROCESS BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED.
6. NOTICES. Except as otherwise herein provided, any notice or other
communication required hereunder shall be in writing, and shall be deemed to
have been validly served, given or delivered when hand delivered or sent by
telegram or telex, or three days after deposit in the United State mails, with
proper first class postage prepaid and addressed to the party to be notified as
follows:
(a) if to the Agent, at:
The CIT Group/Business Credit, Inc., as Agent
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx
Attn: Regional Credit Manager
Fax No.: (000) 000-0000
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
79
with a copy to Agent's Counsel:
Xxxxxx Xxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
(b) if to any other party becoming a Lender hereunder to the
address specified in the Assignment and Transfer Agreement;
(c) if to any other Lender which is a party hereto (other than
CITBC), to the address specified under the signature of such
Lenders or agent, as the case may be, on the signature pages
hereof.
(d) if to any Company at:
c/o Patterson-UTI Energy, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Fax No.: (000) 000-0000
with a copy to Company's Counsel:
Fulbright & Xxxxxxxx LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Partner
Fax No.: (000) 000-0000
(e) if to any Guarantor (other than UTICO, Inc.) at:
c/o Patterson-UTI Energy, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Fax No.: (000) 000-0000
with a copy to Guarantor's Counsel:
Fulbright & Xxxxxxxx LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Partner
Fax No.: (000) 000-0000
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
80
(f) if to UTICO, Inc.
UTICO, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
with a copy to UTICO, Inc.'s Counsel:
Fulbright & Xxxxxxxx LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Partner
Fax No.: (000) 000-0000
or to such other address as any party may designate for itself by like notice.
7. GOVERNING LAW. EXCEPT AS PROVIDED IN SECTION 10, PARAGRAPH 4(e) OF
THIS AGREEMENT, THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, BUT
NOT LIMITED TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).
8. NO AMENDMENTS. This Agreement can be amended, modified or changed
only by a writing signed by each Obligor, the Agent and the Required Lenders
(unless the consent of all Lenders is required pursuant to Section 14, Paragraph
10 of this Agreement).
9. SUBMISSION TO JURISDICTION. (a) ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH COMPANY AND OTHER OBLIGOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT
OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING EACH COMPANY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL POSTAGE PREPAID), TO IT AT ITS ADDRESS PROVIDED IN SECTION 14,
PARAGRAPH 6(d) OF THIS AGREEMENT SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30)
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR
ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH COMPANY IN ANY OTHER
JURISDICTION.
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81
(b) EACH COMPANY AND OTHER OBLIGOR HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN THE FIRST SENTENCE OF CLAUSE (a)
ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
10. WAIVER OF CONSUMER RIGHTS. EACH COMPANY AND OTHER OBLIGOR HEREBY
WAIVES ITS RIGHTS, UNDER THE DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION
ACT, SECTION 17.41 ET. SEQ. BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS
SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF ITS OWN
SELECTION, EACH COMPANY AND OTHER OBLIGOR VOLUNTARILY CONSENTS TO THIS WAIVER.
EACH COMPANY AND OTHER OBLIGOR EXPRESSLY WARRANTS AND REPRESENTS THAT IT (a) IS
NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION RELATIVE TO LENDER, AND (b)
HAS BEEN REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
11. AMENDMENT AND RESTATEMENT. This Agreement is an amendment and
restatement of the Prior Loan Agreement and Obligors acknowledge and agree that
all the security interests and liens granted under the Prior Loan Agreement
hereby are renewed and continued herein in full force and effect.
12. JOINT AND SEVERAL LIABILITY; STRUCTURE OF CREDIT FACILITY;
OBLIGOR'S INTENT.
(a) The Obligors acknowledge that the loans and advances and other
credit accommodations to any Company or the Companies as a group hereunder shall
be for the benefit of all Obligors. The Obligors hereby irrevocably and
unconditionally: (i) agree that they are jointly and severally liable to the
Lenders and the Agent, for the full and prompt payment of the Obligations and
the performance by each Company of its Obligations hereunder in accordance with
the terms hereof; (ii) agree to fully and promptly perform all of its
Obligations hereunder with respect to each advance of credit hereunder as if
such advance had been made directly to it; and (iii) agree as a primary
obligation to indemnify Lenders and the Agent on demand for and against any loss
incurred by Lenders and/or the Agent as a result of any of the Obligations of
any one or more of the Obligors being or becoming void, voidable, unenforceable
or ineffective for any reason whatsoever, whether or not known to Lender and/or
the Agent or any Person, the amount of such loss being the amount which Lender
and/or the Agent would otherwise have been entitled to recover from any one or
more of the Obligors.
(b) It is the intent of each Obligor that the indebtedness, obligations
and liability hereunder of no one of them be subject to challenge on any basis,
including, without limitation, pursuant to any applicable fraudulent conveyance
or fraudulent transfer laws. Accordingly, as of
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
82
the date hereof, the liability of each Obligor under this Paragraph 12, together
with all of its other liabilities to all Persons as of the date hereof and as of
any other date on which a transfer or conveyance is deemed to occur by virtue of
this Agreement, calculated in amount sufficient to pay its probable net
liabilities on its existing indebtedness as the same become absolute and matured
("DATED LIABILITIES") is, and is to be, less than the amount of the aggregate of
a fair valuation of its property as of such corresponding date ("DATED ASSETS").
To this end, each Obligor under this Paragraph 12, (i) grants to and recognizes
in each other Obligor, ratably, rights of subrogation and contribution in the
amount, if any, by which the Dated Assets of such Obligor, but for the aggregate
of subrogation and contribution in its favor recognized herein, would exceed the
Dated Liabilities of such Obligor or, as the case may be, (ii) acknowledges
receipt of and recognizes its right to subrogation and contribution ratably from
each of the other Obligors in the amount, if any, by which the Dated Liabilities
of such Obligor, but for the aggregate of subrogation and contribution in its
favor recognized herein, would exceed the Dated Assets of such Obligor under
this Paragraph 12. In recognizing the value of the Dated Assets and the Dated
Liabilities, it is understood that Obligors will recognize, to at least the same
extent of their aggregate recognition of liabilities hereunder, their rights to
subrogation and contribution hereunder. It is a material objective of this
Paragraph 12 that each Obligor recognizes rights to subrogation and contribution
rather than be deemed to be insolvent (or in contemplation thereof) by reason of
an arbitrary interpretation of its joint and several obligations hereunder. In
addition to and not in limitation of the foregoing provisions of this Paragraph
12, the Obligors and Lender and/or the Agent hereby agree and acknowledge that
it is the intent of each Obligor, Lender and the Agent that the obligations of
each Obligor hereunder be in all respects in compliance with, and not be
voidable pursuant to, applicable fraudulent conveyance and fraudulent transfer
laws.
(c) Each Obligor agrees and acknowledges that the present structure of
the credit facilities detailed in this Agreement is based in part upon the
financial and other information presently known to Lender and/or the Agent
regarding certain Obligors, the corporate structure of the Obligors, and the
present financial condition of the Obligors. Each Obligor represents to the
Agent and the Lenders that its existing cash management system processes
collections only on a consolidated basis for Parent and its Subsidiaries (other
than as to NDC, UWSI, NDS and NDM, which will be in the cash management system
by January 2, 2000) and that it would impose a material operational inefficiency
on such cash management if it were changed to process collections separately for
each Obligor. Each Obligor represents to the Agent and the Lenders that it
conducts its commercial dealings with its suppliers, vendors and other creditors
as a consolidated enterprise of Parent and its Subsidiaries and not as a
separate entity or on any other basis, and holds itself out to the business
community at large as an integrated energy services company rather than as
separate and distinct companies or enterprises. Each Obligor represents to the
Agent and the Lenders that all financial and credit information provided to each
Obligor's suppliers, vendors and other creditors are provided only on a
consolidated basis for Parent and its Subsidiaries and that such information is
not provided for any Obligor on a separate basis or on any other basis. Each
Obligor agrees that it shall not make or permit to exist any loans, intercompany
accounts or investments between itself and any Company, other present or future
Obligor or other present or future Subsidiary of Parent which do not qualify as
Permitted Intercompany Balances. Each Obligor hereby agrees that Lender and the
Agent shall have the right, in its or their sole credit judgment, to require
that any or all of the following changes be made to these credit facilities
without limitation on the other applicable provisions of
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
83
the Loan Documents: (i) establish at the Closing Date and thereafter enforce
consolidated lockbox and dominion accounts after the occurrence of any Event of
Default and during the continuation thereof, or so long as Availability is less
than $15,000,000 for all of the Companies, subject to the last sentence of
Section 3, paragraph 4, (ii) further restrict or prohibit loans, intercompany
accounts and investments among the Companies, the Obligors and Parent and its
Subsidiaries following the occurrence of any Event of Default and during the
continuation thereof, or so long as Availability is less than $15,000,000 for
all of the Companies, (iii) establish or exercise controls or such other
procedures as shall be reasonably deemed by the Agent to be useful in tracking
where loans are made under this Agreement and the source of payments received by
the Agent and/or Lender on such loans, and (iv) establishing separate borrowing
bases, requiring application of collections separately for each Company and
restricting Revolving Loans to the Companies, and the Availability of the
Companies, to within the same following the occurrence of any Event of Default
and during the continuation thereof, or so long as Availability is less than
$15,000,000 for all of the Companies.
SECTION 13. AGREEMENT BETWEEN THE LENDERS
1. (a) The Agent, for the account of the Lenders, shall disburse all
loans and advances to each Company and shall handle all collections of
Collateral and repayment of Obligations. It is understood that for purposes of
advances to each Company and for purposes of this section, the Agent is using
the funds of the Agent.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to any advance to any Company that such Lender will not make
the amount which would constitute its share of the borrowing on such date
available to the Agent, the Agent may assume that such Lender shall make such
amount available to the Agent on a Settlement Date, and the Agent may, in
reliance upon such assumption, make available to each Company a corresponding
amount. A certificate of the Agent submitted to any Lender with respect to any
amount owing under this subsection shall be conclusive, absent manifest error.
If such Lender's share of such borrowing is not in fact made available to the
Agent by such Lender on the Settlement Date, the Agent shall be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Revolving Loans hereunder, on demand, from any Company without prejudice to any
rights which the Agent may have against such Lender hereunder. Nothing contained
in this subsection shall relieve any Lender which has failed to make available
its ratable portion of any borrowing hereunder from its obligation to do so in
accordance with the terms hereof. Nothing contained herein shall be deemed to
obligate the Agent to make available to any Company the full amount of a
requested advance when the Agent has any notice (written or otherwise) that any
of the Lenders will not advance its ratable portion thereof.
2. On the Settlement Date, the Agent and the Lenders shall each remit
to the other, in immediately available funds, all amounts necessary so as to
ensure that, as of the Settlement Date, the Lenders shall have their
proportionate share of all outstanding Obligations.
3. The Agent shall forward to each Lender, at the end of each month, a
copy of the account statement rendered by the Agent to each Company.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
84
4. The Agent shall, after receipt of any interest and fees earned under
this Agreement, promptly remit to the Lenders: (a) their pro rata portion of all
fees; provided, however, that the Lenders (other than CITBC in its role as the
Agent) shall (x) not share in the Administrative Management Fee or Documentation
Fees or the fees provided for in Section 8, Paragraphs 5 and 8 of this
Agreement; and (y) receive their share of the Loan Facility Fee in accordance
with their respective agreements with the Agent and; (b) interest computed at
the rate and as provided for in Section 8 of this Agreement on all outstanding
amounts advanced by the Lenders on each Settlement Date, prior to adjustment,
that are subsequent to the last remittance by the Agent to the Lenders of each
Company's interest.
5. (a) Each Obligor acknowledges that the Lenders may sell
participations, in an amount of not less than $5,000,000 in the loans and
extensions of credit made and to be made to each Company hereunder. Each Obligor
further acknowledges that in doing so, the Lenders may grant to such
participants certain rights which would require the participant's consent to
certain waivers, amendments and other actions with respect to the provisions of
this Agreement, provided that the consent of any such participant shall not be
required except for matters requiring the consent of all Lenders hereunder as
set forth in Section 14, Paragraph 10 of this Agreement.
(b) Each Obligor authorizes each Lender to disclose to any
participant or purchasing lender (each, a "TRANSFEREE") and any prospective
Transferee any and all financial information in such Lender's possession
concerning such Obligor and its affiliates which has been delivered to such
Lender by or on behalf of such Obligor pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of such Obligor in connection with
such Lender's credit evaluation of such Obligor and its affiliates prior to
entering into this Agreement.
6. Each Company hereby agrees that each Lender is solely responsible
for its portion of the Line of Credit and that neither the Agent nor any Lender
shall be responsible for, nor assume any obligations for the failure of any
Lender to make available its portion of the Line of Credit. Further, should any
Lender refuse to make available its portion of the Line of Credit, then the
other Lender may, but without obligation to do so, increase, unilaterally, its
portion of the Line of Credit in which event such Company is so obligated to
that other Lender.
7. In the event that the Agent, the Lenders or any one of them is sued
or threatened with suit by any Obligor, or by any receiver, trustee, creditor or
any committee of creditors on account of any preference, voidable transfer or
lender liability issue, alleged to have occurred or been received as a result
of, or during the transactions contemplated under this Agreement, then in such
event any money paid in satisfaction or compromise of such suit, action, claim
or demand and any expenses, costs and attorneys' fees paid or incurred in
connection therewith, whether by the Agent, the Lenders or any one of them,
shall be shared proportionately by the Lenders. In addition, any costs,
expenses, fees or disbursements incurred by outside agencies or attorneys
retained by the Agent to effect collection or enforcement of any rights in the
Collateral, including enforcing, preserving or maintaining rights under this
Agreement shall be shared proportionately between and among the Lenders to the
extent not reimbursed by such Company or from the proceeds of Collateral. The
provisions of this paragraph shall not apply to any suits,
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85
actions, proceedings or claims that (x) predate the date of this Agreement or
(y) are based on transactions, actions or omissions that predate the date of
this Agreement.
8. Each of the Lenders agrees with each other Lender that any money or
assets of each Obligor held or received by such Lender, no matter how or when
received, shall be applied to the reduction of the Obligations (to the extent
permitted hereunder) after (x) the occurrence of an Event of Default and so long
as the same is continuing and (y) the election by the Required Lenders to
accelerate the Obligations. In addition, each Obligor authorizes, and the
Lenders shall have the right, without notice, upon any amount becoming due and
payable hereunder, to set-off and apply against any and all property held by, or
in the possession of such Lender the Obligations due such Lenders.
9. CITBC shall have the right at any time to assign to one or more
Eligible Assignees, all or a portion (but in an amount that is not less than
$5,000,000) of its rights and obligations under this Agreement; provided that no
such assignment shall be made to any Person that does not, prior to the
execution of such Assignment Agreement, execute and deliver to the Agent and the
Parent IRS Form W-8BEN, Form W-8ECI or successors forms, and is otherwise exempt
from IRS interest withholding obligations. Upon execution of an Assignment and
Transfer Agreement, (i) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such assignment, have the rights and obligations of CITBC as the
case may be hereunder and (ii) CITBC shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such assignment,
relinquish its rights and be released from its obligations under this Agreement.
Each Obligor shall, if necessary, execute any documents reasonably required to
effectuate the assignments. No other Lender may assign its interest in the loans
and advances and extensions of credit hereunder without the prior written
consent of the Agent, and such assignment, if consented to, shall be in amounts
of not less than $5,000,000.
SECTION 14. LENDERS
1. Each Lender hereby irrevocably designates and appoints CITBC as the
Agent for the Lenders under this Agreement and any Loan Documents and
irrevocably authorizes CITBC as Agent for such Lender, to take such action on
its behalf under the provisions of this Agreement and all Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement and any Loan Document together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement and the Loan Documents or otherwise exist against the Agent.
2. The Agent may execute any of its duties under this Agreement and any
Loan Document by or through agents or attorneys-in-fact and shall be entitled to
the advice of counsel concerning all matters pertaining to such duties.
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3. Neither the Agent nor any of its officers, directors, employees,
agents, or attorneys-in-fact shall be (i) liable to any Lender for any action
lawfully taken or omitted to be taken by it or such person under or in
connection with this Agreement and/or any Loan Documents (except for its or such
person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Obligor or any officer thereof contained in this
Agreement and all Loan Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement and all ancillary documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement and all ancillary documents or for any failure of any Obligor to
perform its obligations thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement and any
Loan Document or to inspect the properties, books or records of Obligors.
4. The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper person or
persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any Obligor), independent accountants and other experts
selected by the Agent. Neither the Agent nor the Lenders shall change the
account into which Revolving Loan proceeds are disbursed in response to any
telephonic borrowing request. All Revolving Loan proceeds shall be disbursed by
the Agent only to the bank accounts designated in a written notice, on the
Parent's letterhead, signed by the Parent, and to which the chief financial
officer and the controller of the Parent are both signatories. The Agent shall
be fully justified in failing or refusing to take any action under this
Agreement and all ancillary documents unless it shall first receive such advice
or concurrence of the Lenders, or the Required Lenders, as the case may be, as
it deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and all ancillary documents in accordance with a request of the
Lenders, or the Required Lenders, as the case may be, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.
5. The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Company describing such Default or Event of
Default. In the event that the Agent receives such a notice, the Agent shall
promptly give notice thereof to the Lenders. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Lenders, or Required Lenders, as the case may be; provided that unless
and until the Agent shall have received such direction, the Agent may in the
interim (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable and in the best interests of the Lenders.
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6. Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents or attorneys-in-fact has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of any Obligor shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of each Obligor and made its own decision to enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
or creditworthiness of each Obligor. The Agent, however, shall provide the
Lenders with copies of all financial statements, projections and business plans
which come into the possession of the Agent or any of its officers, employees,
agents or attorneys-in-fact.
7. The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by each Obligor and without limiting the obligation of
each Obligor to do so), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever (including negligence on the part of the
agent) which may at any time be imposed on, incurred by or asserted against the
Agent in anyway relating to or arising out of this Agreement or any ancillary
documents or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence or willful
misconduct. The agreements in this paragraph shall survive the payment of the
obligations.
8. The Agent may make loans to, and generally engage in any kind of
business with any Obligor as though the Agent were not the Agent hereunder. With
respect to its loans made or renewed by it or loan obligations hereunder as
Lender, the Agent shall have the same rights and powers, duties and liabilities
under this Agreement as any Lender and may exercise the same as though it was
not the Agent and the terms "Lender" and "Lenders" shall include the Agent in
its individual capacities.
9. The Agent may resign as the Agent upon thirty (30) days' notice to
the Lenders and such resignation shall be effective upon the appointment of a
successor Agent. If the Agent shall resign as Agent, then the Lenders shall
appoint a successor Agent for the Lenders whereupon such successor Agent shall
succeed to the rights, powers and duties of the Agent and the term "Agent" shall
mean such successor Agent effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
88
After any retiring Agent's resignation hereunder as the Agent the provisions of
this section shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent.
10. Notwithstanding anything contained in this Agreement to the
contrary, the Agent will not, without the prior written consent of all Lenders:
(a) amend this Agreement to (i) increase the Line of Credit; (ii) reduce the
interest rates; (iii) reduce or waive (A) any fees in which the Lenders share
hereunder; or (B) the repayment of any Obligations due the Lenders; (iv) extend
the maturity of the Obligations; or (v) alter or amend (1) this Paragraph 10 or
(2) the definitions of Accounts Receivable Advance Percentage, Equipment Advance
Percentage, or Required Lenders, or the Agent's criteria for determining
compliance with such definitions of eligibility; or (b) release Collateral in
bulk without a corresponding reduction in the Obligations to the Lenders, except
that dispositions of Collateral by any of the Companies which are expressly
permitted under this Agreement shall not require consent of the Agent or the
other Lenders or any reduction in Lenders' Obligations. The Agent will not
increase any Lender's commitment to provide financing hereunder without such
Lender's prior written consent. Agent may, in its sole discretion (a) provided
no Event of Default has occurred and is continuing, intentionally make
Overadvances as long as any such Overadvance is not outstanding for more than
ninety (90) consecutive days and after giving effect thereto the total
outstanding Revolving Loans for each Company would not exceed one hundred and
ten percent (110%) of the maximum amount available under Sections 3 and 4 of
this Agreement, and (b) after and during the continuance of an Event of Default,
intentionally make Overadvances for purposes of preserving or protecting the
Collateral. Any Overadvance by Agent which is contrary to the limitations set
forth in the immediately preceding sentence shall require the written consent of
the Required Lenders. In all other respects the Agent is authorized to take such
actions or fail to take such actions if the Agent, in its reasonable discretion,
deems such to be advisable and in the best interest of the Lenders, including,
but not limited to, the making of an overadvance or the termination of this
Agreement upon the occurrence and during the continuance of an Event of Default
unless it is specifically instructed to the contrary by the Required Lenders.
11. In the event any Lender's consent is required pursuant to the
provisions of this Agreement and such Lender does not respond to any request by
the Agent for such consent within ten (10) days after such request is made to
such Lender, such failure to respond shall be deemed a consent. In addition, in
the event that any Lender declines to give its consent to any such request, it
is hereby mutually agreed that the Agent and/or any other Lender shall have the
right (but not the obligation) to purchase such Lender's share of the Loans for
the full amount thereof together with accrued interest thereon to the date of
such purchase.
12. Each Lender agrees that notwithstanding the provisions of Section
11 of this Agreement any Lender may terminate this Agreement and the Line of
Credit only as of the initial or any subsequent Anniversary Date and then only
by giving the Agent sixty (60) days prior written notice thereof. Within thirty
(30) days after receipt of any such termination notice, the Agent shall, at its
option, either (i) give notice of termination to each Company hereunder or (ii)
purchase the Lender's share of the Obligations hereunder for the full amount
thereof plus accrued interest thereon. Unless so terminated this Agreement and
the Line of Credit shall be automatically extended from Anniversary Date to
Anniversary Date.
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
89
IN WITNESS WHEREOF, this Agreement has been duly executed on the date
first written above.
COMPANIES:
UTI DRILLING, L.P.
UTI MANAGEMENT SERVICES, L.P.
By: UTICO HARD ROCK BORING, INC.,
as Sole General Partner of UTI Drilling, L.P.
and UTI Management Services, L.P.
By:
--------------------------------------------------
Xxxxxxxx X. Xxxxxx, Vice President
NORTON DRILLING, L.P.
By: Xxxxxx XX, L.L.C., its sole general partner
By: Norton Drilling Services, Inc., as Sole Member
of Xxxxxx XX, L.L.C.
By:
-------------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
UNIVERSAL WELL SERVICES, INC.
SUITS DRILLING COMPANY
By:
-------------------------------------------------------
Xxxxxxxx X. Xxxxxx, Vice President of each of the
foregoing Companies
XXXXXXXXX-UTI DRILLING COMPANY LP, LLLP
LONE STAR MUD LP, LLLP
AMBAR DRILLING FLUIDS LP, LLLP
By: Xxxxxxxxx (GP) LLC, general partner of each of the
foregoing Companies
By:
----------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
XXXXXXXXX-UTI DRILLING COMPANY SOUTH LP, LLLP
XXXXXXXXX-UTI DRILLING COMPANY WEST LP, LLLP
By: Xxxxxxxxx (GP2) LLC, general partner of each of the
foregoing Companies
By:
----------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
GUARANTORS:
XXXXXXXXX-UTI ENERGY, INC.
UTICO, INC.
UTICO HARD ROCK BORING, INC.
NORTON DRILLING SERVICES, INC.
NORTON DRILLING COMPANY MEXICO, INC.
INTERNATIONAL PETROLEUM SERVICE
COMPANY
UTI DRILLING CANADA, INC.
XXXXXXXXX (LP) LLC
XXXXXXXXX (GP) LLC
XXXXXXXXX (GP2) LLC
By:
----------------------------------------------------
Xxxxxxxx X. Xxxxxx, Vice President-Finance of
each of the foregoing Guarantors
XXXXXXXXX PETROLEUM LP, LLLP
XXXXXXXXX PETROLEUM TRADING COMPANY LP, LLLP
By: Xxxxxxxxx (GP) LLC, general partner of each of the
foregoing Guarantors
By:
-------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
XXXXXX XX, L.L.C.
By: Norton Drilling Services, Inc.
Its Sole Member
By:
-------------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THE CIT GROUP/BUSINESS CREDIT, INC., as Agent
By:
----------------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By:
----------------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
Revolving Loan Commitment: $30,000,000
Address for Notices:
The CIT Group/Business Credit, Inc., as Agent
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx
Attn: Regional Credit Manager
Fax No.: (000) 000-0000
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
FOOTHILL CAPITAL CORPORATION,
as a Lender and Documentation Agent
By:
----------------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
Revolving Loan Commitment: $35,000,000
Address for Notices:
Foothill Capital Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Fax No.:
----------------------------------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THE CIT GROUP/EQUIPMENT FINANCE, INC.
By:
----------------------------------------------------
Name:
----------------------------------------------------
Title:
----------------------------------------------------
Revolving Loan Commitment: $10,000,000
ADDRESS FOR NOTICES:
The CIT Group/Equipment Finance, Inc.
0000 Xxxx Xxxxxxxxxxxx Xxxxxxx
Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Fax No.:
--------------------------------------------------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
FLEET CAPITAL CORPORATION
By:
----------------------------------------------------
Name:
----------------------------------------------------
Title:
----------------------------------------------------
Revolving Loan Commitment: $25,000,000
ADDRESS FOR NOTICES:
Fleet Capital Corporation
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxxx
Fax No.:
--------------------------------------------------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
EXHIBIT A
REVOLVING LOAN PROMISSORY NOTE
July 26, 2002
$100,000,000
FOR VALUE RECEIVED, the undersigned Companies (each a "COMPANY" and,
collectively, the "COMPANIES"), promise, jointly and severally, to pay to the
order of THE CIT GROUP/BUSINESS CREDIT, INC. (herein "CITBC"), as Agent for the
Lenders under a certain Amended and Restated Loan and Security Agreement dated
July 26, 2002 between CITBC as Agent and Lender, other Lenders parties thereto
and each Company, as amended from time to time (herein the "AGREEMENT") at its
office located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such
other address as may be designated by the Agent, in lawful money of the United
States of America and in immediately available funds, the principal amount of
One Hundred Million and No/100 Dollars ($100,000,000), or such other principal
amount advanced pursuant to Section 3, Paragraph 1 or Section 4 of the
Agreement. The balance of such Revolving Loan will fluctuate as a result of the
daily application of the proceeds of collections of the Accounts and the making
of additional Revolving Loans as described in said Section 3 or Section 4 of the
Agreement. The Revolving Loans may be borrowed, repaid and reborrowed by any
Company, subject to the terms of the Agreement. A final payment in an amount
equal to the outstanding aggregate balance of principal and interest remaining
unpaid, if any, under this Revolving Loan Promissory Note as shown on the books
and records of the Agent shall be due and payable upon any termination of the
Agreement.
All capitalized terms used herein shall have the meaning provided therefor in
the Agreement, unless otherwise defined herein.
The Companies further promise, jointly and severally, to pay interest at such
office, in like money, on the unpaid principal amount owing hereunder from time
to time from the date hereof on the dates and at the rates specified in Section
8, Paragraph 1 of the Agreement.
If any payment on this Revolving Loan Promissory Note becomes due and payable on
a day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day, and with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
This Revolving Loan Promissory Note is a Revolving Loan Promissory Note referred
to in the Agreement, and is subject to, and entitled to, all provisions and
benefits thereof and is subject to optional and mandatory prepayment, in whole
or in part, as provided therein.
The date and amount of the advance(s) made hereunder may be recorded on the
schedule which is attached hereto and hereby made part of this Note or the
separate ledgers maintained by the Agent, provided that any failure to record
any such information on such schedule shall not in any manner affect the
obligation of any Company to make payments of principal and interest in
accordance with the terms of this Revolving Loan Promissory Note. The aggregate
unpaid principal amount of all
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
A-1
advances made pursuant hereto may be set forth in the balance column on said
schedule or such ledgers maintained by the Agent. All such advances, whether or
not so recorded, shall be due as part of this Revolving Loan Promissory Note.
Each Company confirms that any amount received by or paid to the Agent in
connection with this Agreement and/or any balances standing to its credit on any
of its accounts on the Agent's books under this Agreement may in accordance with
the terms of this Agreement be applied in reduction of this Revolving Loan
Promissory Note, but no balance or amounts shall be deemed to effect payment in
whole or in part of this Revolving Loan Promissory Note unless the Agent shall
have actually charged such account or accounts for the purposes of such
reduction or payment of this Revolving Loan Promissory Note.
Upon the occurrence and during the continuance of any one or more of the Events
of Default specified in the Agreement or upon termination of this Agreement, all
amounts then remaining unpaid on this Revolving Loan Promissory Note may become,
or be declared to be, immediately due and payable as provided in the Agreement.
Each Company and the Guarantors, sureties and endorsers jointly and severally
waive grace, demand, presentment for payment, notice of dishonor or default,
notice of intent to accelerate, notice of acceleration, protest and diligence in
collecting this Revolving Loan Promissory Note.
This Revolving Loan Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York and the applicable federal
laws of the United States.
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
A-2
This Revolving Loan Promissory Note is given in amendment, replacement and
substitution, but not extinguishment, of all amounts unpaid under that certain
Revolving Loan Promissory Note dated June 29, 2001 payable by the Companies to
the order of CITBC as Agent for the Lenders in the stated principal amount of
$100,000,000.00.
COMPANIES:
UTI DRILLING, L.P.
UTI MANAGEMENT SERVICES, L.P.
By: Utico Hard Rock Boring, Inc., the sole general partner of
UTI Drilling, L.P. and UTI Management Services, L.P.
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
NORTON DRILLING, L.P.
By: Xxxxxx XX, L.L.C., its sole general partner
By: Norton Drilling Services, Inc., as Sole Member
of Xxxxxx XX, L.L.C.
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
UNIVERSAL WELL SERVICES, INC.
SUITS DRILLING COMPANY
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President of each of the foregoing
Companies
XXXXXXXXX-UTI DRILLING COMPANY LP, LLLP
LONE STAR MUD LP, LLLP
AMBAR DRILLING FLUIDS LP, LLLP
By: Xxxxxxxxx (GP) LLC, general partner of each of the
foregoing Companies
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
XXXXXXXXX-UTI DRILLING COMPANY SOUTH LP, LLLP
XXXXXXXXX-UTI DRILLING COMPANY WEST LP, LLLP
By: Xxxxxxxxx (GP2) LLC., general partner of each of the
foregoing Companies
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President-Finance
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
SCHEDULE TO GRID
Date Loan Payment Balance
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
------------------------------- ---------------------------- --------------------------- ----------------------------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
EXHIBIT B
ASSIGNMENT AND TRANSFER AGREEMENT
Dated: , 200
------------- -
Reference herein is made to the Amended and Restated Loan and Security Agreement
dated as of July __, 2002 (as amended, modified, supplemented and in effect from
time to time, the "AGREEMENT"), among XXXXXXXXX-UTI ENERGY, INC. AND ITS
SUBSIDIARIES, collectively (the "COMPANY"), the Lenders named therein, and The
CIT Group/Business Credit, Inc., as Agent (the "AGENT"). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in this Agreement. This Assignment and Transfer Agreement, between the Assignor
(as defined and set forth on Schedule 1 hereto and made a part hereof) and the
Assignee (as defined and set forth on Schedule 1 hereto and made a part hereof)
is dated as of Date hereof (as set forth on Schedule 1 hereto and made a part
hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the Date
hereof, an undivided interest (the "ASSIGNED INTEREST") in and to all the
Assignor's rights and obligations under this Agreement respecting those, and
only those, financing facilities contained in this Agreement as are set forth on
Schedule 1 (collectively, the "ASSIGNED FACILITIES" and individually, an
"ASSIGNED FACILITY"), in a principal amount for each Assigned Facility as set
forth on Schedule 1.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other instrument, document
or agreement executed in conjunction therewith (collectively the "LOAN
DOCUMENTS") or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any Collateral thereunder or any of the
Loan Documents furnished pursuant thereto, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (ii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of each Company or any guarantor or the performance or observance by
each Company or any guarantor of any of its respective obligations under this
Agreement or any of the Loan Documents furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Transfer Agreement; (ii) confirms
that it has received a copy of this Agreement, together with the copies of the
most recent financial statements of each Company, and such other documents and
information as it has deemed appropriate to make its own credit analysis; (iii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (iv) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms thereof,
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
B-1
together with such powers as are reasonably incidental thereto; (v) agrees that
it will be bound by the provisions of this Agreement and will perform in
accordance with its terms all the obligations which by the terms of this
Agreement are required to be performed by it as Lender; and (vi) if the Assignee
is organized under the laws of a jurisdiction outside the United States,
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under this
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such tax at a rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment and Transfer Agreement,
such agreement will be delivered to the Agent for acceptance by it and each
Company, effective as of the Date hereof.
5. Upon such acceptance, from and after the Date hereof, the Agent
shall make all payments in respect of the assigned interest (including payments
of principal, interest, fees and other amounts) to the Assignee, whether such
amounts have accrued prior to the Date hereof or accrue subsequent to the Date
hereof. The Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Date hereof made by the Agent or with respect
to the making of this assignment directly between themselves.
6. From and after the Date hereof, (i) the Assignee shall be a party to
this Agreement and, to the extent provided in this Assignment and Transfer
Agreement, have the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, to the extent provided in this Assignment and Transfer
Agreement, relinquish its rights and be released from its obligations under this
Agreement.
7. THIS ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on the
date first written above.
THE CIT GROUP/BUSINESS
CREDIT, INC., AS AGENT
as Assignor
By: By:
---------------------------------------- --------------------------------------
Title: Title:
------------------------------------- -----------------------------------
-------------------------------------------- ------------------------------------------
(the "Company") as Assignee
By: By:
---------------------------------------- --------------------------------------
Title: Title:
------------------------------------- -----------------------------------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
SCHEDULE 1 TO ASSIGNMENT AND TRANSFER AGREEMENT
Name of Assignor:
Name of Assignee:
Date hereof of Assignment: , 200
-----------------
Percentage Assigned of
Each Facility (Shown
as a percentage of
Principal aggregate original
Assigned Amount principal amount
Facilities Assigned of all Lenders)
---------- -------- --------------
Revolving Loans $ %
--------- --------------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
SCHEDULE 1
SCHEDULE 1 - EXISTING LIENS
FILING FILING SECURED
LOCATION COMPANY NUMBER DATE PARTY COLLATERAL
-------- ------- ------ ------ ------- ----------
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
SCHEDULE 1
SCHEDULE 2 - COLLATERAL LOCATIONS AND CHIEF EXECUTIVE OFFICE
CHIEF EXECUTIVE OFFICE
COLLATERAL LOCATIONS
UTI - AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
E-1
