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EXHIBIT 10.1
U.S. $10,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 31, 2000
Between
CARBO CERAMICS INC.
as Borrower
and
XXXXX BROTHERS XXXXXXXX & CO.
as Lender
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ARTICLE I
DEFINITIONS............................. 3
SECTION 1.01. Definitions.............................................. 3
SECTION 1.02. Accounting and Other Terms............................... 8
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT.................. 8
SECTION 2.01. The Commitment........................................... 8
SECTION 2.02. Making the Advances...................................... 9
SECTION 2.03. Commitment Fee........................................... 9
SECTION 2.04. Optional Termination of the Commitment................... 9
SECTION 2.05. Selection of Interest Options............................ 10
SECTION 2.06. Interest Rate Options.................................... 13
SECTION 2.07. Special Provisions for LIBOR Rate Advances............... 15
SECTION 2.08. Prepayments.............................................. 17
SECTION 2.09. Indemnity and Release.................................... 17
SECTION 2.10. Payments and Computations................................ 18
SECTION 2.11. Evidence of Debt......................................... 19
ARTICLE III
CONDITIONS OF LENDING........................ 19
SECTION 3.01. Condition Precedent to Initial Advance................... 19
SECTION 3.02. Conditions Precedent to All Advances..................... 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................. 22
SECTION 4.01. Representations and Warranties........................... 22
ARTICLE V
COVENANTS OF THE BORROWER....................... 25
SECTION 5.01. Affirmative Covenants.................................... 25
SECTION 5.02. Negative Covenants....................................... 30
ARTICLE VI
EVENTS OF DEFAULT.......................... 31
SECTION 6.01. Events of Default........................................ 31
ARTICLE VII
MISCELLANEOUS............................ 35
SECTION 7.01. Amendments, Etc.......................................... 35
SECTION 7.02. Notices, Etc............................................. 35
SECTION 7.03. No Waiver; Remedies...................................... 35
SECTION 7.04. Costs, Expenses, and Taxes............................... 36
SECTION 7.05. Right of Set-off......................................... 36
SECTION 7.06. Binding Effect........................................... 37
SECTION 7.07. Governing Law............................................ 37
SECTION 7.08. Merger of Agreements..................................... 38
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Schedule I - Litigation
Schedule II - Permitted Liens
Exhibit A - Promissory Note
Exhibit B - Rollover Notice
Exhibit C - No-Default Certificate
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 31, 2000
This Second Amended and Restated Credit Agreement is made and effective
as of December 31, 2000, by and between CARBO CERAMICS INC., a Delaware
corporation (the "Borrower"), and XXXXX BROTHERS XXXXXXXX & CO., a New York
limited partnership (the "Lender").
WITNESSETH:
WHEREAS, the Lender and the Borrower entered into a First Amended and
Restated Credit Agreement dated February 12, 1998, as amended by a First
Amendment dated as of March 31, 1999, a Second Amendment dated as of December
31, 1999, and a Third Amendment dated as of March 31, 2000 (as so amended, the
"Credit Agreement"), pursuant to which the Lender committed, among other things,
to make loans, advances, and other credit facilities available to the Borrower;
WHEREAS, the parties desire to amend and restate the Credit Agreement
in its entirety, as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing, for other valuable
consideration hereby acknowledged, and subject to the other terms and conditions
hereof, the Lender and the Borrower agree that the Credit Agreement shall be and
is hereby amended and restated in its entirety, effective the date hereof, as
follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below (such meanings to be
applicable equally to both the singular and plural forms of such terms).
"Adjusted LIBOR Rate" means, an interest rate per annum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) equal to the quotient
obtained by dividing (a) the LIBOR Rate for such LIBOR Interest Period by (b) a
percentage equal to one hundred percent (100%) minus the Eurodollar Reserve
Percentage applicable during such LIBOR Interest Period (or, if more than one
Eurodollar Reserve Percentage is so applicable, minus the daily average of such
Eurodollar Reserve Percentage for those days in such LIBOR Interest Period
during which any such Eurodollar Reserve Percentage may be so applicable).
"Advance" shall mean a disbursement by the Lender to or for the benefit
of the Borrower, all as set forth in Section 2.01 hereof.
"Agreement" means this Second Amended and Restated Credit Agreement,
and all amendments, modifications, and supplements thereto.
"Applicable Contract Rate" means either the Base Rate or the LIBOR
Fixed Rate, whichever is in effect during the particular time period in question
pursuant to the provisions of this Agreement.
"Authorized Officer" means, with respect to any act to be performed or
duty to be discharged by any entity which is not an individual, any officer or
other representative thereof then authorized to perform such act or discharge
such duty.
"Base Rate" means a fluctuating rate per annum which shall be equal to
one-half of one percent (.50%) below the rate of interest established by the
Lender in New York, New York, from
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time to time as the Lender's base rate of interest charged by the Lender to
commercial borrowers in the United States of America.
"Base Rate Advance" means an Advance during such time as it bears
interest, from time to time, at the Base Rate pursuant to the provisions of this
Agreement.
"Business Day" means any day other than a Saturday, Sunday, or a public
holiday or the equivalent for banks generally under the laws of the State of New
York.
"Closing Date" means the date first shown herein, as of which this
Agreement is executed and effective.
"Commitment" has the meaning set forth for such term in Section 2.01
hereof.
"Consequential Loss" means, with respect to the Borrower's payment or
prepayment of the principal sum of a LIBOR Rate Advance on a day other than the
last day of the Interest Period applicable to such LIBOR Rate Advance, any loss
or expense incurred by the Lender in redepositing such principal sum, including,
without limitation, the sum of (a) the interest which, but for such payment, the
Lender would have earned at the applicable LIBOR Fixed Rate, in respect of such
LIBOR Rate Advance so paid or prepaid, for the remainder of the LIBOR Interest
Period; reduced, if the Lender is reasonably able to redeposit such principal
sum so paid for the balance of such LIBOR Interest Period in a New York City
bank, by the interest earned by the Lender as a result of so redepositing such
principal sum, plus (b) any expense or penalty incurred by the Lender in
redepositing the principal sum of such LIBOR Rate Advance.
"Conversion Date" has the meaning specified in Section 2.06(c)(2)
hereof.
"Conversion Option" has the meaning specified in Section 2.06(c)(2)
hereof.
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"EBITDA" means the Borrower's earnings before deduction of interest,
taxes, depreciation, and amortization.
"Employee Plan" means an employee benefit plan or other plan covered by
Title IV of ERISA and maintained in whole or in part for employees of the
Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974,
together with the rules and regulations promulgated thereunder, as in effect
from time to time.
"Eurodollar Reserve Percentage" means, as of the date of any
determination, that reserve percentage actually required to be reserved by the
Lender with respect to the Advances, which percentage is applicable during any
LIBOR Interest Period (or if more than one such percentage is so applicable, the
daily average of such percentages for those days in such LIBOR Interest Period
during which any such percentage shall be applicable) under the regulations
issued, from time to time, by the Board of Governors of the Federal Reserve
System (or other governmental authority having jurisdiction with regard thereto
or any successor), for determining the maximum reserve requirements (including,
without limitation, basic, supplemental, transitional, emergency, or marginal
reserve requirements) for the Lender in respect to liabilities or assets
consisting of, or including, "Eurocurrency liabilities" as defined in Regulation
D. It shall be assumed, for purposes of computing reserve costs hereunder, that
the making and maintaining of the LIBOR Rate Advances have been accomplished by
the Lender through the Lender's principal office in New York City, New York.
"Event of Default" means any of the events set forth in Section 6.01
hereof.
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"Fixed Charges" means, for any applicable period specified in Section
5.01(c) hereof, the aggregate of the Borrower's interest expense, lease expense,
principal payments, dividends and anticipated annual maintenance capital
expenditures of $4,000,000.
"Increased Costs" shall have the meaning specified in Section 2.07(b)
hereof.
"Indebtedness" means (i) all indebtedness or other obligations for
borrowed money or for the deferred purchase price of property or services, (ii)
all indebtedness or other obligations of another person for borrowed money, the
deferred purchase price of property or services (except for accounts payable by
the Borrower which have been incurred by the Borrower in the ordinary course of
its business), or otherwise, the payment or collection of which the Borrower has
guaranteed or in respect of which the Borrower has any direct or contingent
liability which is reportable on the Borrower's financial statements in
accordance with generally accepted accounting principles, (iii) all lease
obligations that, in accordance with generally accepted accounting principles
consistently applied, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of such obligation shall be the
capitalized amount thereof determined in accordance with such principles, and
(iv) any equity or other interest which, by its terms, is convertible into a
debt instrument.
"Interest Payment Date" means, as to either a Base Rate Advance or a
LIBOR Rate Advance, the first (1st) day of each calendar month during the term
of the Commitment.
"Interest Rate Option" has the meaning specified in Section 2.06(a)
hereof.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
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"LIBOR Fixed Rate" means, during the applicable LIBOR Interest Period
for a LIBOR Rate Advance, an interest rate per annum which shall be equal to the
sum of (a) the LIBOR Rate Margin plus (b) the Adjusted LIBOR Rate for such LIBOR
Interest Period.
"LIBOR Interest Period" means, with respect to a LIBOR Rate Advance, a
period commencing on the date specified by notice from the Borrower to the
Lender and ending on (but excluding) the date which is 30, 60, or 90 days
thereafter, as the Borrower shall elect.
"LIBOR Rate" during each applicable LIBOR Interest Period for a LIBOR
Rate Advance, means an interest rate equal to the rate of interest per annum at
which U.S. dollar deposits are offered by the Lender to prime banks in the
London interbank market at 10:00 a.m. (London time) two Business Days prior to
the first (1st) day of such LIBOR Interest Period for a period equal to such
LIBOR Interest Period.
"LIBOR Rate Advance" means an Advance during such time as it bears
interest, from time to time, at the LIBOR Fixed Rate pursuant to the provisions
of this Agreement.
"LIBOR Rate Margin" means three-quarters of one percent (.75%) per
annum.
"Loan Documents" means this Agreement, the Note, and all amendments,
modifications, and supplements thereto.
"Maximum Rate" means the maximum rate of interest, if any, from time to
time permitted under federal or Texas laws applicable to the indebtedness
evidenced hereby.
"No-Default Certificate" means a certificate by an authorized officer
of the Borrower, substantially in the form of Exhibit C hereto.
"Note" has the meaning set forth for such term in Section 2.11 hereof.
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"Prohibited Transaction" has the meaning specified therefor in Section
4975 of the Internal Revenue Code or Title I of ERISA.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as from time to time in effect, and shall include any
successor or other regulation relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Reportable Event" has the meaning specified therefor in Title IV of
ERISA.
"Rollover Notice" means a notice in the form of Exhibit B hereto.
"Termination Date" means December 31, 2003; provided, however, that
such date may be extended by mutual consent for additional one-year periods;
provided further, however, if so extended, such extended date may be shortened
during any such one-year period to the end of any calendar quarter within such
one-year period, beginning March 31, 2004, upon not less than thirty (30) days
prior written notice from either party to the other party.
SECTION 1.02. Accounting and Other Terms. All accounting terms used in
this Agreement which are not otherwise defined herein shall be construed in
accordance with generally accepted accounting principles consistently applied
unless otherwise expressly stated herein.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
SECTION 2.01. The Commitment. The Lender agrees, on the terms and
conditions hereinafter set forth, to make Advances to the Borrower in an
aggregate principal amount not to exceed Ten Million Dollars ($10,000,000), as
such commitment may be terminated pursuant to Section 2.04 hereof (the
"Commitment"). Such Advances shall
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be made from time to time on any Business Day during the period from the Closing
Date to the Termination Date. Each Advance shall be in an amount not less than
$1,000 or an integral multiple thereof, except that an Advance may be in an
amount equal to the entire unused Commitment. Within the limits of the
Commitment, the Borrower may borrow, prepay pursuant to Section 2.08, and
reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. Each Advance shall be made on the
same day the Borrower has given notice to the Lender, provided the Lender has
received such notice by 12:00 p.m. (New York City time) on such date. Such
notice shall be by telephone and shall be promptly confirmed by the Borrower in
writing. All such notices shall specify the date and amount thereof. Upon
fulfillment by the Borrower of the applicable conditions set forth in Article
III, the Lender will make such Advance available to the Borrower in immediately
available funds at the Lender's office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
SECTION 2.03. Commitment Fee. The Borrower agrees to pay to the Lender
a commitment fee on the average daily unused portion of the Commitment from the
Closing Date until the Termination Date at the rate of three-eighths (3/8) of
one percent (1%) per annum, payable quarterly in arrears on the last Business
Day of each fiscal quarter of the Borrower for the then-ending fiscal quarter of
the Borrower in each year during such period, commencing March 31, 2001, and
ending on the Termination Date.
SECTION 2.04. Optional Termination of the Commitment. The Borrower
shall have the right, upon (i) at least thirty (30) days' notice to the Lender
prior to the end of each fiscal quarter of the Borrower after the first
anniversary of the Closing Date, and (ii) full repayment of all sums, both
principal and accrued interest, then outstanding, to terminate the Commitment in
whole, but not in part. Simultaneously with any termination of the Commitment
under this Section, the Borrower
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shall pay to the Lender the commitment fee earned through the Termination Date
on the amount of the Commitment so terminated.
SECTION 2.05. Selection of Interest Options. Subject to Section 2.06,
and provided that no Event of Default shall have occurred and is continuing, the
outstanding principal balance of each Advance shall bear interest at the LIBOR
Fixed Rate or the Base Rate, in accordance with the following:
(a) Interest on a Base Rate Advance. A Base Rate Advance shall
bear interest on the unpaid principal balance thereof, from time to
time outstanding, at a fluctuating interest rate per annum which shall,
from day to day, be equal to the lesser of either: (1) the Base Rate;
or (2) the Maximum Rate. Each change in either the Base Rate or the
Maximum Rate (or any component of the Base Rate or the Maximum Rate) as
the case may be, shall become effective, without notice to the Borrower
(which notice is hereby expressly waived by the Borrower), on the date
of each change in either of such interest rates (or any component of
any of such interest rates).
(b) Interest on a LIBOR Rate Advance. A LIBOR Rate Advance
shall bear interest, during each LIBOR Interest Period applicable
thereto, on the unpaid principal balance thereof, from time to time
outstanding, at an interest rate per annum which shall, from day to
day, be equal to the lesser of either: (1) the applicable LIBOR Fixed
Rate; or (2) the Maximum Rate. Each change in the Maximum Rate or any
component of the Maximum Rate, as the case may be, shall become
effective, without notice to the Borrower (which notice is hereby
expressly waived by the Borrower) on the date of each change in such
interest rate or any component of such interest rate.
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(c) Advance Deemed To Be Base Rate Advance. Unless the
Borrower selects the LIBOR Fixed Rate as the Applicable Contract Rate
with regard to an Advance, as provided for in this Article II, such
Advance shall be deemed to be a Base Rate Advance for the purpose of
computing interest thereon pursuant to this Agreement.
(d) Interest Recoupment. If, at any time, the Applicable
Contract Rate then in effect shall exceed the Maximum Rate, thereby
causing the Applicable Contract Rate to be limited to the Maximum Rate,
any subsequent reductions in the Applicable Contract Rate shall not
reduce the Applicable Contract Rate below the Maximum Rate until the
total amount of interest accrued on the unpaid principal balance of the
Advances from time to time outstanding during the term thereof, equals
the amount of interest which would have accrued thereon if the various
Applicable Contract Rates which are applicable to the unpaid principal
balances of the Advances from time to time outstanding during the term
of this Agreement, had at all times been in effect without the
limitation of the Maximum Rate.
(e) Final Interest Payment. If on the date of the final
payment of all Advances (whether on the Termination Date or otherwise),
the total amount of interest actually paid, or accrued, under the
provisions of the Loan Documents is less than the total amount of
interest which would have accrued if the various Applicable Contract
Rates had at all times been applicable to the principal balance of the
Advances, from time to time outstanding, during the term of this
Agreement, the Borrower agrees to pay, to the extent permitted by
applicable law, to the Lender an amount equal to the difference
between: (1) the lesser of either (A) the amount of interest which
would have accrued on the Advances if the Maximum Rate had at all times
been in effect, or (B) the amount of interest which would
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have accrued on the Advances if the various Applicable Contract Rates
had at all times been in effect without the limitation of the Maximum
Rate; and (2) the amount of interest which has actually accrued or been
paid on the Advances through the date of such final payment in
accordance with the provisions of the Loan Documents.
(f) Interest After Maturity of the Advances. All delinquent
payments of principal and/or interest on the Advances shall bear
interest at a fluctuating rate per annum equal to the Base Rate plus
four percent (4%) from the date due until paid.
(g) Interest Payment Dates. Interest on the aggregate
principal balance of the Advances from time to time outstanding shall
be payable as it accrues on each Interest Payment Date, beginning with
the Interest Payment Date following the Closing Date, and continuing on
each Interest Payment Date thereafter, until the maturity thereof.
(h) Payment on Business Day. If any payment of principal or
interest to be made on the Advances shall become due on a day other
than a Business Day, such payment may be made on the next succeeding
Business Day (unless the result of such extension of time would be to
extend the date for such payment into another calendar month, beyond
the maturity date of the Advances or beyond the expiration of the
applicable LIBOR Interest Period, in such event, said payment shall be
made on the Business Day immediately preceding the day on which such
payment would otherwise have been due) and such extension of time shall
in such case be included in computing of interest, if any, in
connection with such payment.
(i) Additional Amounts Payable Upon Prepayments or Other
Payments of LIBOR Rate Advances. If any LIBOR Rate Advance is to be
prepaid, or if the Borrower
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makes any principal payments with respect to any such LIBOR Rate
Advance on any date other than the last day of the LIBOR Interest
Period for such LIBOR Rate Advance, the Borrower shall reimburse the
Lender, on demand, for all Consequential Loss and Increased Costs
incurred by Lender, plus all accrued, but unpaid, interest on the
amount so prepaid to such prepayment or payment date, together with any
other amounts owing to the Lender in connection with such prepayment or
payment pursuant to the terms of this Agreement or any of the other
Loan Documents. All prepayments (whether optional or otherwise) made
pursuant to this Agreement shall be applied first to accrued, but
unpaid, interest and then to principal. A certificate of the Lender
setting forth the amount of any such loss or cost shall, in the absence
of manifest error or bad faith, be final, binding, and conclusive for
all purposes. Any conversion of any LIBOR Rate Advance to a Base Rate
Advance on a day other than on the last day of the applicable LIBOR
Interest Period shall be deemed a principal prepayment for the purpose
of this Subsection 2.05(i).
SECTION 2.06 Interest Rate Options.
(a) Interest Rate Options. Subject to the provisions of this
Section 2.06, and provided that no Event of Default has occurred and is
continuing, the Borrower shall have the option of having an Advance
bear interest at the Base Rate or the LIBOR Fixed Rate (an "Interest
Rate Option"); provided, however, that (i) the Borrower may not have
more than three (3) Interest Rate Options which select the LIBOR Fixed
Rate for the Advances in effect at any one time and (ii) no Interest
Rate Option which selects the LIBOR Fixed Rate for any portion of the
Advances shall be for an amount less than the principal amount of
$2,000,000 plus an integral multiple of $100,000.
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(b) Changes in Interest Rate Options. Each change in Interest
Rate Options made pursuant to this Section 2.06 shall, for all purposes
of this Agreement, be deemed both a payment of the Base Rate Advance or
LIBOR Rate Advance, whichever is applicable, from which such change was
made and a borrowing (notwithstanding that the aggregate unpaid
principal of the Advances is not thereby changed) of the Base Rate
Advance or LIBOR Rate Advance, whichever is applicable, into which such
Advance is converted.
(c) Selection of Interest Rate Options. The Borrower may
select an Interest Rate Option by giving the Lender a Rollover Notice
in accordance with the provisions of subsections (1) or (2) below, as
applicable, which notice shall specify a LIBOR Interest Period;
provided, however, that (i) any LIBOR Interest Period which would
otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day, unless the result of such extension
would be to extend such LIBOR Interest Period into another calendar
month, in which event such LIBOR Interest Period shall end on the
immediately preceding Business Day; (ii) any LIBOR Interest Period that
begins on the last Business Day of a calendar month shall end on the
last Business Day of a calendar month; (iii) any LIBOR Interest Period
which begins on a day for which there is no numerically corresponding
day in the calendar month at the end of such LIBOR Interest Period
shall end on the last Business Day of such calendar month; (iv) the
length of each LIBOR Interest Period selected by the Borrower shall be
irrevocable for the period so selected; and (v) no LIBOR Interest
Period shall extend beyond the Termination Date.
(1) Selection at Expiration of LIBOR Interest Period.
Before the termination of any LIBOR Interest Period, and
provided that no Event of Default has
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occurred and is continuing, the Borrower shall give the Lender
a Rollover Notice specifying the Interest Rate Option which
shall be applicable to such LIBOR Rate Advance upon the
expiration of such LIBOR Interest Period. Such Rollover Notice
shall be given to the Lender at least three (3) Business Days
before the termination of such LIBOR Interest Period. If the
Borrower shall specify the LIBOR Fixed Rate, such Rollover
Notice shall also specify the length of the succeeding LIBOR
Interest Period selected by the Borrower. Each Rollover Notice
shall be irrevocable and effective upon receipt thereof by the
Lender. If the required Rollover Notice shall not have been
timely received by the Lender as herein provided before
expiration of the then relevant LIBOR Interest Period, the
applicable LIBOR Rate Advance shall be automatically converted
to a Base Rate Advance on the last day of the then current
LIBOR Interest Period for such LIBOR Rate Advance.
(2) Conversion Option. With respect to Base Rate
Advances, and provided no Event of Default has occurred and is
continuing, the Borrower shall have the option ("Conversion
Option"), on any Business Day ("Conversion Date"), to convert
from the Base Rate to the LIBOR Fixed Rate by giving the
Lender a Rollover Notice specifying such Conversion Option at
least three (3) Business Days prior to such Conversion Date.
SECTION 2.07 Special Provisions for LIBOR Rate Advances.
(a) Unavailability, Illegality, or Inadequacy of the LIBOR
Fixed Rate. If at any time the Lender determines (which determination
shall, for all purposes, be final, conclusive, and binding on the
Borrower) that: (1) the Lender is unable, or that it has become
unlawful
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for the Lender to obtain, or cause to be obtained, funds in the London
interbank market in order to make, fund, or maintain the principal
balances of any LIBOR Rate Advances during any applicable LIBOR
Interest Period; or (2) the LIBOR Fixed Rate will not adequately and
fairly reflect the cost to the Lender of making, maintaining, or
funding LIBOR Rate Advances for such LIBOR Interest Period, the Lender
shall so notify the Borrower by telephone or telex (to be confirmed in
writing) of such determination, whereupon, until the Lender notifies
the Borrower that the circumstances which have given rise to such
notice no longer exist, (A) the obligation of the Lender to provide the
LIBOR Fixed Rate with respect to such LIBOR Rate Advances shall be
suspended, and (B) such LIBOR Rate Advances shall be made, continued
as, or converted to Base Rate Advances.
(b) Increased Costs. If due either to: (1) the introduction
of, or any change (including, without limitation, any change by way of
any imposition or increase of reserve requirements) in the
interpretation of, any law or regulation, including, without
limitation, Regulation D or (2) the compliance by the Lender with any
guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any
increase in the cost to the Lender of agreeing to make, fund, or
maintain the LIBOR Rate Advances (such costs being herein collectively
called "Increased Costs"), the Borrower shall, from time to time, upon
demand by the Lender, pay to the Lender, such additional amounts as are
sufficient to indemnify the Lender against such Increased Costs. Absent
manifest error, a certificate as to the amount of such Increased Costs,
submitted to the Borrower by the Lender shall, for all purposes, be
final, conclusive, and binding on the Borrower. It shall be assumed for
purposes of computing Increased Costs, that the making
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and maintaining of LIBOR Rate Advances has been by the Lender's
principal office in New York City, New York.
(c) Indemnity. Without prejudice to any other provisions of
this Agreement or any of the other Loan Documents, the Borrower shall
indemnify the Lender against any loss or expense which the Lender (or
its branches, subsidiaries, affiliates, or partners) may sustain or
incur as a consequence of any Event of Default by the Borrower in
making any payment when due of any amount due hereunder or in making
any scheduled borrowing hereunder with respect to any LIBOR Rate
Advance, including, without limitation, any loss of profit, premium or
penalty incurred by the Lender (or its branches, subsidiaries,
affiliates, or partners) in respect of funds borrowed by the Lender (or
its branches, subsidiaries, affiliates, or partners), for the purpose
of maintaining such LIBOR Rate Advance, as determined by the Lender in
the exercise of its sole, but reasonable, discretion. Absent manifest
error, a certificate as to any such loss or expense submitted by the
Lender to the Borrower shall, for all purposes, be final, conclusive,
and binding on the Borrower.
SECTION 2.08. Prepayments. The Borrower shall have the right to prepay
any principal amount of any Advance, in whole or in part, subject to the
requirements of Sections 2.05(i) and 2.09, but otherwise without premium or
penalty; provided, however, that each such partial prepayment shall be in an
integral multiple of $1,000, except that a prepayment may be in an amount equal
to the entire outstanding principal balance of all Advances.
SECTION 2.09. Indemnity and Release. The Borrower shall indemnify the
Lender against any loss or expense which the Lender may sustain or incur as a
consequence of any failure by the Borrower to fulfill on the date of any Advance
hereunder the applicable conditions set forth
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in Article III, any default in payment or prepayment of the principal amount of
any Advance or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by irrevocable notice of prepayment, or
otherwise), or the occurrence of any Event of Default. By its execution hereof,
the Borrower hereby certifies to the Lender that as of the date hereof, (i) all
representations and warranties heretofore made by it under any credit agreement,
promissory note or other instrument or document related thereto which are
amended by or which relate to this Agreement are true in all material respects,
(ii) the Borrower does not have or claim to have any offset, counterclaim, or
defense to any of its obligations under any of such prior instruments or
documents, and (iii) in consideration of and to induce the Lender's agreement to
the terms of this Agreement, the Borrower, for itself and its successors and
assigns, does hereby RELEASE, ACQUIT, and FOREVER DISCHARGE the Lender, its
partners, officers, employees, agents, attorneys, other representatives and all
other persons, (collectively, the "Indemnitees") who might be liable, from any
and all claims, demands, liabilities, and causes of action of whatsoever nature,
whether in contract or in tort, or arising under or by virtue of any statute,
rule, regulation, or other laws, for all losses and damages, including but not
limited to exemplary and punitive damages, that have accrued or may ever accrue
to the Borrower and its successors and assigns, and which arise out of, result
from, or are caused by any act or omission of any one or more of the Indemnitees
on or prior to the date hereof in connection with the Loan Documents, or any
matter or thing in connection therewith or related thereto. The Lender shall use
its best efforts to mitigate any loss and to reduce any expense for which it is
being indemnified pursuant to this Section.
SECTION 2.10. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Note not later than 12:00 noon (New York
City time) on the day
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when due in lawful money of the United States of America to the Lender for the
account of Borrower at the Lender's office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, in same day funds.
(b) The Borrower hereby authorizes the Lender, if and to the
extent payment for interest, principal, or fees is not made when due
hereunder or under the Note, to charge from time to time against any of
the Borrower's accounts with the Lender any amount so due.
(c) Except to the extent the result would cause an interest
rate to exceed the Maximum Rate, all computations of interest and of
commitment fees hereunder shall be made by the Lender on the basis of a
year of 360 days for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such
interest or commitment fee is payable.
SECTION 2.11. Evidence of Debt. The indebtedness of the Borrower
resulting from all Advances made from time to time shall be evidenced by a
promissory note of the Borrower, in substantially the form of Exhibit A hereto
(the "Note"), delivered to the Lender pursuant to Article III.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Condition Precedent to Initial Advance. The obligation of
the Lender to make its initial Advance is subject to the fulfillment, in a
manner satisfactory to the Lender, of each of the following conditions
precedent:
(a) The making of the Commitment shall not contravene any law,
rule, or regulation applicable to the Lender.
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(b) No material adverse change in the condition or operations,
financial or otherwise, of the Borrower, as reasonably determined by
the Lender, shall have occurred and be continuing since the date of the
latest audited financial statements of the Borrower provided to the
Lender, the representations and warranties contained in Section 4.01
shall be true and correct, and no event shall have occurred and be
continuing, or would result from such Advance, which constitutes or
could constitute an Event of Default, as set forth in a certificate
from an Authorized Officer of the Borrower dated as of the Closing
Date.
(c) The Lender shall have received the following, in form and
substance satisfactory to the Lender:
(i) the Note, duly executed by the Borrower;
(ii) a copy of the resolutions of the Borrower's
Board of Directors, certified as of the Closing Date by an
Authorized Officer thereof, authorizing (A) the transactions
contemplated by the Loan Documents to which the Borrower is a
party and (B) the execution, delivery, and performance by the
Borrower of the Loan Documents;
(iii) a certificate, dated as of the Closing Date, of
an Authorized Officer of the Borrower, certifying the names
and genuine signatures of the officers of the Borrower
authorized to sign on behalf of the Borrower the Loan
Documents and the other documents to be executed and delivered
by the Borrower in connection herewith, together with evidence
of the incumbency of such Authorized Officer;
(iv) a copy of the Articles of Incorporation of the
Borrower, recently certified by the Secretary of State of the
State of Delaware;
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(v) a copy of the By-laws of the Borrower, certified
as of the Closing Date by an Authorized Officer;
(vi) Certificates of Existence and Good Standing of
the Borrower, issued by the appropriate government officials
of the State of Delaware, the State of Texas and any other
applicable jurisdiction, together with any other evidence
satisfactory to the Lender that the Borrower has been duly
formed, is validly existing and in good standing under the
laws of the State of Delaware and has been duly qualified to
do business and is in good standing under the laws of the
State of Texas and each other jurisdiction where the Borrower
does business;
(vii) a favorable written opinion of Xxxxxxxx &
Knight, LLP, counsel to the Borrower, dated the Closing Date,
as to such matters as the Lender may reasonably request; and
(viii) payment of a closing fee of $7,500.
SECTION 3.02. Conditions Precedent to All Advances. The obligation of
the Lender to make each Advance shall be subject to the further conditions
precedent that, on the date of such Advance (a) the Lender shall have received a
notice of such Advance as required by Section 2.02 hereof, (b) the following
statements shall be true, and by making or sending any such notice of an
Advance, the Borrower shall be deemed to have made the following statements to
the Lender as of the date on which such notice is made or sent to the Lender:
(i) The representations and warranties contained in
Section 4.01 are true and correct on and as of the date of
such Advance as though made on and as of such date, and
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(ii) No event has occurred and is continuing, or
would result from such Advance, which constitutes an Event of
Default; and
(c) the Lender shall have received such other approvals, opinions, or documents
as the Lender may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. The Borrower represents
and warrants as follows:
(a) The Borrower is a corporation duly organized and validly
existing under the laws of the State of Delaware. The Borrower is duly
qualified to do business and in good standing in the States of Texas,
Louisiana, Alabama, Georgia and every other jurisdiction in which the
transaction of any material portion of its business (as now conducted
and as currently contemplated) makes such qualification necessary.
(b) The execution, delivery, and performance by the Borrower
of each Loan Document is within the Borrower's powers, has been duly
authorized by all necessary action, does not contravene (i) the
Borrower's charter or by-laws or (ii) any law or governmental
regulation or contractual restriction binding on or affecting the
Borrower or any of its properties, and does not result in or require
the creation of any lien, security interest, or other charge or
encumbrance upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution,
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delivery, and performance by the Borrower of any Loan Document to which
it is or will be a party.
(d) This Agreement is, and each Loan Document to which the
Borrower will be a party when delivered hereunder, will be the legal,
valid, and binding obligations of the Borrower, legally enforceable
against the Borrower in accordance with their respective terms.
(e) Except as set forth on Schedule I hereto, there is no
action, suit, or proceeding pending or threatened against or otherwise
affecting the Borrower before any court, arbitrator, or governmental
department, commission, board, bureau, agency, or instrumentality,
which may materially adversely affect the condition or operations,
financial or otherwise, of the Borrower or the ability of the Borrower
to perform its obligations under the Loan Documents.
(f) The financial statements of the Borrower heretofore
provided to the Lender by the Borrower fairly present the financial
condition of the Borrower as at the respective dates thereof, and the
results of operations of the Borrower for the fiscal periods ended on
such respective dates, all in accordance with generally accepted
accounting principles consistently applied, subject to changes
resulting from normal year-end audit adjustments, and, since December
31, 1999, there has been no material adverse change in such condition
or operations.
(g) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing, carrying, or trading in
securities (within the meaning of Regulation T issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any
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Advance will be used to purchase, carry, or trade in any such
securities or to extend credit to others for the purpose of purchasing,
carrying, or trading in any such securities.
(h) All federal, state, and local tax returns and other
material reports required by applicable law to be filed by the Borrower
have been filed, and except with respect to any taxes, assessments, or
other governmental charges being contested in good faith by the
Borrower, all taxes, assessments, and other governmental charges
imposed upon the Borrower or any of its properties which have become
due and payable on or prior to the date hereof have been paid.
(i) Each Employee Plan, if any, of the Borrower has satisfied
the minimum funding standards under the Internal Revenue Code and ERISA
applicable thereto, and no Employee Plan, if any, has an accumulated
funding deficiency thereunder. The Borrower has not incurred any
liability under ERISA to the Pension Benefit Guaranty Corporation with
respect to any Employee Plan, and no Reportable Event or other event
has occurred which could constitute grounds for the termination of any
Employee Plan by the Pension Benefit Guaranty Corporation or the
appointment of a trustee to administer any Employee Plan. The Borrower
has not participated in any Prohibited Transaction with respect to any
Employee Plan or trust created thereunder, and the consummation of the
transactions contemplated hereby will not involve any Prohibited
Transaction. The Borrower is not in the process of terminating any
Employee Plan, which could result in the creation of any material
liability for the Borrower.
(j) The Borrower has not violated its charter or by-laws or
any law, governmental regulation, order, judgment, or any agreement or
instrument binding on or affecting it or any
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of its properties in such a manner so as to result in a material
adverse change to the condition or operations, financial or otherwise,
of the Borrower.
(k) Except as set forth on Schedule II hereto, and except as
may be created by statute, all of the real property owned by the
Borrower, including any and all real property leasehold interests, is
free and clear of all liens, security interests, and other charges and
encumbrances.
(l) The Borrower has not made a material misstatement of or
failed to disclose a material fact to the Lender at any time during the
course of the negotiations related to this Agreement or in connection
with the Advances.
(m) No proceeds of any Advance will be used to acquire any
security in any transaction which is subject to Sections 13 and 14 of
the Securities Exchange Act of 1934. All proceeds of the Advances will
be used for general corporate and working capital purposes.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any principal of or
interest on the Note shall remain unpaid or the Lender shall have any Commitment
hereunder, the Borrower will, unless the Lender shall otherwise consent in
writing:
(a) Current Ratio. Maintain a ratio of its current assets to
its current liabilities of not less than 2.5 to 1.0.
(b) Minimum Tangible Net Worth. Maintain an amount of tangible
net worth of at least $95,000,000 at all times during its fiscal year
2001, and cause the amount of such
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capital to increase in each fiscal year thereafter by at least fifty
percent (50%) of its net income in the immediately preceding fiscal
year.
(c) Earnings Ratio. Maintain a ratio of its EBITDA to its
Fixed Charges greater than 2.5 to 1.0 calculated quarterly on a rolling
four (4) quarter basis for the four (4) quarters immediately preceding
the date of such calculation.
(d) Ratio of Debt to Worth. Maintain a ratio of its total
Indebtedness to its tangible net worth of less than 0.5 to 1.0.
(e) Capital Expenditures. Maintain its level of capital
expenditures in any fiscal year at a level not more than one-half the
amount of its EBITDA for the preceding fiscal year.
(f) Reporting Requirements. Furnish to the Lender:
(i) as soon as available and in any event within 45
days after the end of each quarter of each fiscal year of the
Borrower, (A) unaudited financial statements (including a
balance sheet, income statement, and statement of cash flows)
of the Borrower as of the end of such quarter, in reasonable
detail, prepared in accordance with generally accepted
accounting principles consistently applied and duly certified
by the Treasurer of the Borrower as (1) fairly presenting the
financial condition of the Borrower at the end of such quarter
and the results of the operations of the Borrower for such
period (subject to changes resulting from normal year-end
audit adjustments) and (2) having been prepared in accordance
with generally accepted accounting principles consistently
applied, together with a No-Default Certificate of such
officer and (B) a copy of SEC Form 10-Q, as filed by the
Borrower with the Securities and
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Exchange Commission for such quarter, unless such SEC Form
10-Q is filed with the Securities and Exchange Commission by
means of the XXXXX electronic filing system;
(ii) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, (A)
audited financial statements (including a balance sheet,
income statement, and statement of cash flows) of the Borrower
for such fiscal year, all in reasonable detail, prepared in
accordance with generally accepted accounting principles
consistently applied, accompanied by a report and opinion,
based on an end-of-year review, each in form and substance
reasonably satisfactory to the Lender, of a public accounting
firm reasonably satisfactory to the Lender, together with a
No-Default Certificate and (B) a copy of SEC Form 10-K, as
filed by the Borrower with the Securities and Exchange
Commission for such fiscal year, unless such SEC Form 10-K is
filed with the Securities and Exchange Commission by means of
the XXXXX electronic filing system;
(iii) as soon as possible and in any event within
five (5) days after the occurrence of each Event of Default or
event which, with the giving of notice or the lapse of time or
both, would constitute an Event of Default, and which is
continuing on the date of such statement, the statement of the
Treasurer or the President of the Borrower setting forth the
details of such Event of Default or event and the action which
the Borrower proposes to take with respect thereto;
(iv) promptly after the filing or receipt thereof,
copies of all reports and notices, if any, which the Borrower
either (A) files in respect of any Employee Plan
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under the Internal Revenue Code or ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor, or which the Borrower receives
from any agency thereof, (B) furnishes to any holders of any
Indebtedness of the Borrower, or (C) files with the Securities
and Exchange Commission on SEC Form 8-K, if any of the
information therein could form the basis of, or any dispute
referred to therein which, if determined adversely to the
Borrower, could constitute or give rise to, an Event of
Default or an event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default;
(v) within five Business Days after the knowledge of
the Borrower of the commencement thereof, notice of each
action, suit, or proceeding before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality involving a claim which may materially
adversely affect the condition or operations, financial or
otherwise, of the Borrower;
(vi) as soon as available and in any event within 45
days after the end of each fiscal quarter of the Borrower, a
quarterly summary setting forth any contingent liability
(including but not limited to any liability as a guarantor,
surety, warrantor, or account party to a letter of credit)
incurred, assumed, or created during such period and any
material joint venture or partnership entered into by the
Borrower; and
(vii) promptly upon request, such other information
concerning the condition or operations, financial or
otherwise, as the Lender may from time to time reasonably
request.
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(g) Maintenance of Existence, Compliance with Laws. Etc.
Maintain its legal existence and permits and authority to do business
in all jurisdictions where the nature of its business requires such
permits and authority to be maintained, and comply in all material
respects with all applicable laws, rules, regulations, and orders, such
compliance to include, without limitation, compliance with ERISA and
all applicable laws pertaining to the environment and workers' health
and safety, paying before the same become delinquent all taxes,
assessments, and governmental charges or levies imposed upon it or upon
its income or profits or upon any of its properties, and paying all
lawful claims which if unpaid might become a lien or charge upon any of
its properties, except to the extent any such taxes, assessments,
governmental charges or levies, and claims may be diligently contested
by the Borrower in good faith and by appropriate proceedings, and for
which adequate reserves have been established by the Borrower.
(h) Insurance. (i) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers to
such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies
similarly situated and in the same or similar businesses, (ii) maintain
in full force and effect public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about,
or in connection with the use of any properties owned, occupied, or
controlled by the Borrower, in such amount as shall be reasonably
necessary, and (iii) maintain such other insurance as may be required
by law. The amounts and types of insurance coverages and the insurers
issuing such coverages shall be subject to the Lender's approval, which
approval shall not be unreasonably withheld.
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(i) Keeping of Records and Books of Account. Keep adequate
records and books of account, with complete entries made in accordance
with generally accepted accounting principles consistently applied,
reflecting all of its financial transactions.
(j) Inspection Rights. Permit the Lender or any of its
representatives or agents at any reasonable time and from time to time,
upon reasonable notice, to examine and make copies of and abstracts
from its records and books of account, to visit and inspect its
properties and to discuss its affairs, finances, and accounts with any
of the directors or officers thereof, all as the Lender may reasonably
request.
SECTION 5.02. Negative Covenants. So long as any principal of or
interest on the Note shall remain unpaid or the Lender shall have any Commitment
hereunder, the Borrower will not, without the prior written consent of the
Lender:
(a) Liens, Etc. Create or suffer to exist any lien, security
interest, or other charge or encumbrance, or any other type of
preferential arrangement, upon or with respect to any of its
properties, rights, or other assets, whether now owned or hereafter
acquired, other than:
(i) liens existing as of the date hereof, as shown on
Schedule II hereto; and
(ii) such other liens as may be mutually agreed upon
by the Lender and the Borrower from time to time.
(b) Indebtedness. Create, incur, or suffer to exist any
Indebtedness which would cause the ratio of its total Indebtedness to
its tangible net worth to exceed the ratio specified in Section
5.01(d), above.
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(c) Change in Nature of Business. Change the primary nature of
its business from the manufacture of ceramic proppants.
(d) Sales, Etc. of Assets. Sell, assign, lease, or otherwise
dispose of any of its assets, or any part thereof, including its
receivables, except in the ordinary course of business.
(e) Consolidation, Merger, Etc. Consolidate with, merge into,
or acquire any other entity or convey, transfer, or lease its
properties, voting stock, and assets substantially as an entirety to
any person or entity, or permit any entity to consolidate with, merge
into, or acquire the Borrower or convey, transfer, or lease its
properties, voting stock, or assets substantially as an entirety to the
Borrower; provided, however, that the Lender's prior written consent
shall not be required for any such transaction (i) in which the other
party's principal business is the same as or functionally related to
the Borrower's principal business and (ii) which, when combined with
all other such transactions consummated by the Borrower during any one
of its fiscal years does not involve an aggregate payment by the
Borrower of consideration in cash, securities, or otherwise, of more
than $40,000,000; provided further, that nothing in this subsection (e)
shall be deemed to permit the Borrower to incur any Indebtedness not
expressly permitted under subsection (b) of this Section 5.02.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
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(a) The Borrower shall fail to pay any principal amount of, or
interest on, the Note when due; or
(b) Any representation or warranty made by the Borrower (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) The Borrower (i) shall fail to perform or observe any
covenant in subsections (c), (d), or (e) of Section 5.02 hereof, or
(ii) shall fail to perform or observe any other term, covenant, or
agreement contained in any Loan Document on its part to be performed or
observed, and which failure continues for a period of fifteen (15) days
or more, or
(d) The Borrower shall (i) fail to pay any Indebtedness,
including all currently existing Indebtedness of the Borrower to the
Lender, but excluding Indebtedness evidenced by the Note, of the
Borrower, when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Indebtedness, or (ii) fail to perform or
observe any term, covenant, or condition on its part to be performed or
observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed, and such
failure shall continue after the applicable grace period, if any,
specified in such agreement or instrument; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the
stated maturity thereof; or
(e) The Borrower shall admit in writing its inability to pay
its debts as they come due, or shall make a general assignment for the
benefit of creditors; or any proceeding shall
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be instituted by or against the Borrower seeking reorganization,
arrangement, adjustment, composition of it or its debts, or any other
relief under any law relating to bankruptcy, insolvency,
reorganization, or relief of debtors, or seeking appointment of a
receiver, trustee, or other similar official for it or for any
substantial part of its property; or the Borrower shall take any action
to authorize any of the actions set forth above in this subsection (e);
or
(f) The Borrower shall receive notice of termination of an
Employee Plan by reason of the occurrence of a Reportable Event; or
(g) The Borrower shall fail to maintain all material licenses,
authorizations, and approvals required to operate its business, which
failure is not cured to the Lender's satisfaction within fifteen (15)
days following the occurrence of such failure; or
(h) The Borrower shall liquidate, dissolve, or take any action
in contemplation thereof, or there shall be any change in the material
terms of Borrower's charter or by-laws without the prior written
consent of the Lender, which consent shall not be unreasonably
withheld; or
(i) The validity or the enforceability of any of the Loan
Documents is contested by the Borrower; or
(j) The entry of a final non-appealable judgment or order
against the Borrower for the payment of money of $1,000,000 or more in
excess of amounts covered by third-party insurance, and such judgment
or order shall continue unsatisfied and in effect for a period of 60
consecutive days; or
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(k) The failure of the persons who were the shareholders of
the Borrower on March 31, 1996 to maintain their beneficial ownership,
in the aggregate, of at least fifty-one percent (51%) of the
outstanding voting stock of the Borrower; or
(l) Any action or proceeding shall be initiated by or against
the Borrower or any of its properties wherein the validity of or the
Borrower's right to use any patent, copyright, trademark, trade secret,
right, permit, license, or any other form of intellectual property
owned or held by the Borrower shall be contested, which action or
proceeding is not diligently prosecuted in good faith by the Borrower
in appropriate proceedings deemed by the Lender to be satisfactory; or
(m) Any event which, in the good-faith judgment of the Lender,
constitutes or could reasonably be expected to constitute or result in
a material adverse change in the financial condition or business
operations of the Borrower;
then, and in any such event, and the continuance thereof, the Lender may, by
notice to the Borrower, (i) declare its obligation to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare the
principal balances of all Advances and the Note, all accrued but unpaid interest
thereon, and other amounts properly payable under this Agreement to be forthwith
due and payable, whereupon the principal balances of all Advances and the Note,
all such interest, and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest, or further notice of any kind,
all of which are hereby expressly waived by the Borrower, (iii) take such other
actions as may be permitted under the Loan Documents, and (iv) exercise any and
all other remedies available under applicable law.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any provision
of the Loan Documents, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 7.02. Notices, Etc. Except as otherwise specifically provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic communication) and mailed or telegraphed or
delivered, if to the Borrower, at its address at 0000 XxxXxxxxx Xxxxxxxxx, Xxx.
0000, Xxxxxx, Xxxxx 00000-0000, Attention: Xx. Xxxx X. Xxxxx; if to the Lender,
at its address at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Credit
Department; or, as to each party, at such other address as shall be designated
by such party in a written notice to the other party. All such notices and
communications shall, when mailed or telegraphed, be effective when deposited in
the mails or delivered to the telegraph company, respectively, addressed as
aforesaid.
SECTION 7.03. No Waiver; Remedies. No failure on the part of the Lender
to exercise, and no delay in exercising, any right under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any Loan Document preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies that may be available to the Lender
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at law, in equity, or otherwise. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
SECTION 7.04. Costs, Expenses, and Taxes. (a) The Borrower agrees to
pay on demand all costs and expenses reasonably incurred by the Lender in
connection with the preparation, execution, delivery, filing, recording, and
administration of the Loan Documents and the other documents to be delivered
under the Loan Documents, including, without limitation, all fees and
out-of-pocket expenses of counsel for the Lender with respect thereto and with
respect to advising the Lender as to its rights and responsibilities under the
Loan Documents, and all costs and expenses, if any, in connection with the
enforcement of the Loan Documents and the other documents to be delivered under
the Loan Documents. In addition, the Borrower shall pay any and all stamp and
other taxes, excluding taxes imposed on net income and all income and franchise
taxes of the United States and any political subdivisions thereof (all such
non-excluded taxes being herein referred to as "Taxes") and fees, if any,
payable or determined to be payable in connection with the execution and
delivery of the Loan Documents and the other documents to be delivered under the
Loan Documents, and agrees to save the Lender harmless from and against any and
all liabilities with respect to or resulting from any delay by the Borrower in
paying or omission to pay such Taxes and fees.
SECTION 7.05. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Lender
to or for the credit or the account of the Borrower against any and all of the
obligations of
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the Borrower now or hereafter existing under this Agreement and the Note,
irrespective or whether or not the Lender shall have made any demand under this
Agreement or the Note and although such obligations may be unmatured. The Lender
agrees to use its best efforts to notify the Borrower promptly after any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Lender
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Lender may have.
SECTION 7.06. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Lender, and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lender. The Lender may, with the Borrower's consent, such consent
not to be unreasonably withheld or delayed, assign to one or more banks or
entities all or any part of, or may grant participations to one or more banks or
other entities in or to all or any part of, any Advance or Advances and the
Note, and to the extent of any such assignment or participation (unless
otherwise stated therein), the assignee or participant of such assignment or
participation shall have the same rights and benefits hereunder and under the
Note as it would have if it were the Lender hereunder.
SECTION 7.07. Governing Law. The Loan Documents shall be governed by
and construed in accordance with the laws of the State of Texas, except to the
extent any law, rule, or regulation of the federal government of the United
States of America may be applicable, in which case such federal law, rule, or
regulation shall govern and control; provided that the provisions of Chapter 346
of the Texas Finance Code shall not be applicable to this Agreement.
37
40
SECTION 7.08 Merger of Agreements. THE LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES HERETO 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CARBO CERAMICS INC.
ATTEST:
By:
---------------------------------
Print Name:
---------------------
Title:
--------------------------
per pro XXXXX BROTHERS XXXXXXXX & CO.
Print Name:
-------------------------
Title:
-------------------------------
38
41
SCHEDULE I
Litigation
On April 26, 1999, the Company was served with a U.S. federal grand
jury subpoena requesting the production of documents in connection with an
investigation by the Antitrust Division of the U.S. Department of Justice of
possible anti-competitive practices in the proppants industry.
42
SCHEDULE II
Permitted Liens
The following liens, security interests, and other charges and
encumbrances are expressly permitted under the terms of this Agreement, and the
amounts of such liens, security interests and other charges and encumbrances
described in (a), (b) and (c) below shall not exceed $500,000 in the aggregate
at any time during the term of this Agreement:
(a) Statutory and Good Faith Deposits. (i) Pledges or deposits under
workmen's compensation laws, unemployment insurance laws, the Social Security
Act, or similar legislation, and (ii) deposits to secure public or statutory
obligations of Borrower, surety, customs, appeal, or performance bonds to which
Borrower is a party, or the payment of contested taxes or import duties of
Borrower, each made and maintained in the ordinary course of business;
(b) Statutory Liens. (i) Any lien which is imposed by law, such as
those of carriers, warehousemen, and mechanics, if payment of the obligation
secured thereby is not yet due, or the validity or amount of which is being
contested by appropriate legal proceedings, or (ii) any lien for taxes,
assessments, or other governmental charges of levies not yet subject to
penalties for nonpayment or the validity or amount of which is being contested
by appropriate legal proceedings;
(c) Minor Title Defects. Minor survey exceptions, minor encumbrances,
easements, or reservations of, or rights of others for, sewers, electric lines,
telegraph and telephone lines, rights of way, and other similar purposes, or
zoning or other restrictions as to the use of any real property; provided that
all of the foregoing, in the aggregate, do not at any time materially detract
from the value of said property or materially impair the use of such property in
the operation of the business of Borrower.
(d) Landlord's Liens. Security interests in favor of Cambridge/Las
Colinas Limited Partnership, as lessor, on personal property of the Borrower now
or hereafter attached or affixed to or used in or about the premises leased by
the said lessor to the Borrower, as lessee, at 0000 XxxXxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000-0000.
(e) Equipment. Security interests in (i) a used Caterpillar 938F Wheel
Loader in favor of Xxxxxxxx Tractor Co., Inc., as described in that certain
UCC-1 Financing Statement filed with the Secretary of State of the State of
Alabama on December 6, 1996, file No. 96-51148 and (ii) a new Caterpillar 928F
Wheel Loader in favor of Xxxxxxxx Tractor Co., Inc., as described in that
certain UCC-1 Financing Statement filed with the Secretary of State of the State
of Alabama on February 24, 1997, file No. 97-07667.
43
Exhibit A
REVOLVING CREDIT NOTE
U.S. $10,000,000 Dated: December 31, 2000
FOR VALUE RECEIVED, the undersigned, CARBO CERAMICS INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of XXXXX
BROTHERS XXXXXXXX & CO., a New York limited partnership (the "Lender") the
principal amount of each Advance made by the Lender to the Borrower pursuant to
the Credit Agreement (as hereinafter defined). All terms not otherwise defined
herein shall have the meanings set forth for such terms in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
each Advance from the date of such Advance until such principal amount is paid
in full, at such interest rate, and payable at such times, as are specified in
the Credit Agreement. In no event, however, shall the rate of interest charged
hereunder exceed the Maximum Rate.
All agreements between the Borrower and the Lender, whether now
existing or hereafter arising and whether written for oral, are hereby expressly
limited so that in no event, whether by reason of acceleration of the maturity
hereof or otherwise, shall the amount paid or agreed to be paid to the holder
hereof for the use, forbearance or detention of the money to be loaned hereunder
or otherwise exceed the Maximum Rate. In fulfillment of any provision hereof or
of any loan agreement or other document evidencing or securing the loan
evidenced by this Note, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity; and if the holder of this Note shall ever receive anything of value
deemed to be interest under applicable law which would exceed interest at the
Maximum Rate, an amount equal to any such excessive interest shall be applied to
the reduction of the principal amount owing hereunder and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
hereof, such excess shall be refunded to the Borrower. All sums paid or agreed
to be paid to the holder hereof for the use, forbearance, or detention of the
indebtedness of the Borrower to the Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full term of such indebtedness until payment in full so that the rate of
interest of account of such indebtedness is uniform throughout the term thereof.
The provisions of this paragraph shall control all agreements between the
Borrower and the Lender.
Both principal and interest are payable for the account of Borrower in
lawful money of the United States of America to the Lender at its offices at 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in same day funds. Each Advance made by
the Lender to the Borrower and the maturity thereof, and all payments made on
account of principal hereof, shall be recorded by the Lender and, prior to any
transfer hereof, either endorsed on the grid attached hereto which is part of
this Promissory Note or maintained in comparable form within the Lender's
internal books and records (which may be electronic).
44
The Borrower hereby affirms and certifies to the Lender that the
obligation evidenced by this note was not and will not be incurred for the
purposes of purchasing, carrying, or trading in securities, as defined in
Regulation T of the Board of Governors of the Federal Reserve System.
This Promissory Note is the Note referred to in, and is entitled to the
benefits of, the Second Amended and Restated Credit Agreement dated as of
December 31, 2000 (the "Credit Agreement") between the Borrower and the Lender.
The Credit Agreement, among other things, (i) provides for the making of
advances (the "Advances") by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each such
Advance being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by and construed in accordance
with the laws of the State of Texas, except to the extent any law, rule, or
regulation of the federal government of the United States of America may be
applicable, in which case such federal law, rule, or regulation shall govern and
control; provided that the provisions of Chapter 346 of the Texas Finance Code
shall not be applicable to this Promissory Note.
CARBO CERAMICS INC.
ATTEST:
By:
-------------------------------
Print Name:
-------------------
Title:
------------------------
45
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Amount of Principal Principal Notations
Date Advance Payment Balance Made By
---- --------- --------- --------- ---------
46
Exhibit C
NO DEFAULT CERTIFICATE
Pursuant to Section 5.01(f) of that certain Second Amended and Restated
Credit Agreement dated as of December 31, 2000 (the "Credit Agreement"), between
Carbo Ceramics Inc. (the "Borrower") and Xxxxx Brothers Xxxxxxxx & Co. (the
"Lender"), the undersigned, being the Treasurer of the Borrower, hereby
certifies to the Lender as follows:
1. On and as of the date hereof, no event has occurred which
constitutes an Event of Default under the Credit Agreement or which, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default under the Credit Agreement.
2. As of the Borrower's fiscal quarter ended September 30, 2000, the
following statements were true:
(a) The ratio of the Borrower's current assets to its
current liabilities was 5.29 to 1.0.
(b) The Borrower's tangible net worth was $103,054,000.
(c) The ratio of the Borrower's EBITDA to its Fixed
Charges, for the four (4) quarters ending on
September 30, 200 was 3.18 to 1.0.
(d) The ratio of the Borrower's total Indebtedness to its
tangible net worth was N/A to 1.0.
3. The amount of capital expenditures to the date hereof in the
Borrower's current fiscal year is $1,075,000. The amount of the Borrower's
EBITDA for the immediately preceding fiscal year was $20,895,000.
All initially capitalized terms herein have the same meanings as set
forth in the Credit Agreement.
IN WITNESS WHEREOF, this instrument is executed by the undersigned as
of December 29, 2000.
, Treasurer
