Exhibit 10.2
FIRST AMENDMENT TO
CREDIT AGREEMENT
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This First Amendment to Credit Agreement (the "First Amendment"), dated as
of December 20, 1994 is entered into by and between DRIL-QUIP, INC., a Texas
corporation ("Borrower"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION, a national
banking association ("Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Credit Agreement dated March 30, 1994
(the "Credit Agreement"), Lender agreed to make available to Borrower certain
loans upon the terms and conditions and for the purposes therein contained;
WHEREAS, Borrower has requested that its revolving line of credit be
increased up to a maximum of SEVENTEEN MILLION AND NO/100 DOLLARS
($17,000,000.00) and extended to October 1, 1996 and Lender has agreed to such
increase and extension; and
WHEREAS, Borrower has requested Lender to make available to Borrower an
additional advancing line of credit of up to ONE MILLION FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($1,500,000.00) and Lender has agreed to make such loan to
Borrower; and
WHEREAS, Borrower and Lender desire to amend the Credit Agreement so that
the Credit Agreement evidences such increase and extension of the revolving line
of credit and governs such additional advancing line of credit;
NOW THEREFORE, the parties hereto agree as follows:
1. Amendments to Credit Agreement. The Credit Agreement is modified as
follows:
1.1 Wherever the term "Agreement" is used in the Credit Agreement,
such term shall refer to the Credit Agreement as amended by this
First Amendment;
1.2 Article I - Definitions. The definition of the term "Commitment"
is deleted in its entirety, and the following is substituted in
place thereof:
"Commitment" means (i) the commitment of Lender to make
available the Revolving Credit Loan hereunder, (ii) the
commitment of Lender to make available the Advancing Credit
Loan hereunder, (iii) the commitment of Lender to make
available the Second Advancing Credit Loan hereunder, (iv)
the commitment of Lender to make available the Term
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Loan hereunder and (v) the commitment of Lender to issue the
Letters of Credit hereunder.
1.3 Article I - Definitions. The definition of the term "Loans" is
deleted in its entirety, and the following is substituted in
place thereof:
"Loans" means, collectively, the Revolving Credit Loan, the
Advancing Credit Loan, the Second Advancing Credit Loan and
the Term Loan, and "Loan" means singly, the Revolving Credit
Loan, the Advancing Credit Loan, the Second Advancing Credit
Loan or the Term Loan.
1.4 Article I - Definitions. The definition of the term "Notes" is
deleted in its entirety, and the following is substituted in
place thereof:
"Notes" shall mean the Revolving Credit Note, the Advancing
Credit Note, the Second Advancing Credit Note and the Term
Note and all extensions, renewals and modifications thereof.
1.5 Article I - Definitions. The definition of the term "Revolving
Credit Committed Sum" is deleted in its entirety, and the
following is substituted in place thereof:
"Revolving Credit Committed Sum" means SEVENTEEN MILLION AND
NO/100 DOLLARS ($17,000,000.00), as such amount may be
reduced pursuant to Section 2.06.
1.6 Article I - Definitions. The definition of the term "Revolving
Credit Note" is deleted in its entirety, and the following is
substituted in place thereof:
"Revolving Credit Note" means the promissory note in favor
of Lender in substantially the form of Exhibit H hereto, and
all extensions, renewals and modifications thereof.
1.7 Article I - Definitions. The definition of the term "Revolving
Credit Termination Date" is deleted in its entirety, and the
following is substituted in place thereof:
"Revolving Credit Termination Date" means October 1, 1996,
or such earlier date as the Revolving Credit Commitment
terminates as provided in this Agreement.
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1.8 Article I - Definitions. Article I-Section 1.01 of the Agreement
is hereby amended to add thereto the following definitions:
"Second Advancing Credit Commitment Fee" shall have the
meaning set forth in Section 3.14 hereof.
"Second Advancing Credit Commitment Period" means the period
commencing on December 20, 1994 and ending on the Second
Advancing Credit Termination Date.
"Second Advancing Credit Committed Sum" means ONE MILLION
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00), as
such amount may be reduced pursuant to Section 3.13 or
otherwise.
"Second Advancing Credit Loan" means the Loan made by Lender
to Borrower, in one or more Advances, during the Second
Advancing Credit Commitment Period, pursuant to
Section 3.08.
"Second Advancing Credit Note" means the promissory note in
favor of Lender in substantially the form of Exhibit I
hereto, and all extensions, renewals and modifications
thereof.
"Second Advancing Credit Termination Date" means 11:00 a.m.
Houston, Texas, time on October 1, 1995, or such earlier
date as the Commitment to make Advances pursuant to Section
3.08 terminates as provided in this Agreement.
1.9 Article III. The heading of Article III is hereby amended by the
substitution of "Advancing Credit Loans" for the previous
heading.
1.10 Article III. Article III is hereby amended to add thereto the
following Sections:
Section 3.08. Commitment for Second Advancing Credit Loan.
Subject to the terms and conditions of this Agreement, and
provided that no Default or Event of Default has occurred or
is continuing, Lender agrees to lend to Borrower, pursuant
to this Agreement, such amounts as the Borrower may request
in one or more Advances, from time to time during the Second
Advancing Credit Commitment Period to and including the
Second Advancing Credit Termination Date;
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provided, however, that such Advances shall not exceed
either singularly or cumulatively the Second Advancing
Credit Committed Sum; and further provided that Lender shall
not be obligated to make such Loans pursuant to this Section
3.08 in excess of eighty-five percent (85%) of the cost of
improvements, eighty percent (80%) of the cost of new
equipment, eighty percent (80%) of the cost of used,
refurbished equipment and sixty percent (60%) of the cost of
used, unrefurbished equipment; provided, however, that with
respect to any used, unrefurbished equipment, if Borrower
should subsequently refurbish such equipment, then the limit
shall be increased to eighty percent (80%) and Borrower may
increase the amount borrowed hereunder on account of such
equipment to bring the total to eighty percent (80%) of the
cost of such equipment and the cost of refurbishing such
equipment.
Section 3.09. Second Advancing Credit Note. The obligation
of Borrower to repay the Second Advancing Credit Loan shall
be evidenced by the Second Advancing Credit Note executed by
Borrower, payable to the order of Lender, in the principal
amount of the Second Advancing Credit Committed Sum and
dated December 20, 1994. The principal of the Second
Advancing Credit Loan outstanding on the Second Advancing
Credit Termination Date, plus accrued and unpaid interest
thereon, shall be due and payable: (a) in three (3)
installments of accrued and unpaid interest only due and
payable on April 1, 1995, July 1, 1995 and October 1, 1995;
(b) in fifteen (15) installments each equal to one thirtieth
(1/30th) of the outstanding principal of the Second
Advancing Credit Loan on the Second Advancing Credit
Termination Date, together with all accrued and unpaid
interest, the first of such installments being due and
payable on or before January 1, 1996 and like installments
being due and payable on the first day of each succeeding
third calendar month thereafter through and including July
1, 1999; and (c) a final installment shall be due on or
before October 1, 1999 in an amount equal to the remaining
unpaid principal outstanding on the Second Advancing Credit
Loan together with all accrued and unpaid interest. The
Second Advancing Credit Loan shall bear interest prior to
maturity at a varying rate per annum equal from day to day
to the lesser of (a) the Maximum Rate, or (b) the sum of the
Bank One Base Rate in effect from day to day
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plus three-quarters of one percent (3/4%), each such change
in the rate of interest charged hereunder to become
effective, without notice to Borrower, on the effective date
of each change in the Bank One Base Rate; provided, however,
if at any time the rate of interest specified in clause (b)
preceding shall exceed the Maximum Rate, thereby causing the
interest on the Second Advancing Credit Loan to be limited
to the Maximum Rate, then any subsequent reduction in the
Bank One Base Rate shall not reduce the rate of interest on
the Second Advancing Credit Loan below the Maximum Rate
until the aggregate amount of interest accrued on the Second
Advancing Credit Loan equals the aggregate amount of
interest which would have accrued on the Second Advancing
Credit Loan if the interest rate specified in clause (b)
preceding had at all times been in effect. All past due
principal and interest shall bear interest at the Maximum
Rate.
Section 3.10. Expiration of Commitment to Lend Under Second
Advancing Credit. The maximum obligation of Lender to make
Advances under Section 3.08 hereof shall not at any time
exceed, either singularly or cumulatively, the Second
Advancing Credit Committed Sum, and Lender shall have no
obligation to make additional Advances under Section 3.08
hereof and Lender's Commitment to lend to Borrower pursuant
to Section 3.08 hereof shall terminate and expire at 11:00
a.m., Houston, Texas time on the Second Advancing Credit
Termination Date; provided that Borrower's Obligations and
the Rights of Lender under the Loan Papers shall continue in
full force and effect until the Obligations have been paid
and performed in full.
Section 3.11. Procedure for Borrowing Under the Second
Advancing Credit Loan. During the Second Advancing Credit
Commitment Period, Borrower shall give Lender a written
notice executed on behalf of the Borrower by any Authorized
Financial Officer of the Borrower (the "Notice of Second
Advancing Credit Borrowing") of any proposed Borrowing under
the Second Advancing Credit Loan which shall be irrevocable.
Each Notice of Second Advancing Credit Borrowing shall be
received by Lender not later than 11:00 a.m., Houston, Texas
time, at least one (1) Business Day prior to any proposed
Borrowing requested by Borrower together with copies of
invoices for the equipment purchased
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or improvements undertaken. Each such Notice of Second
Advancing Credit Borrowing shall be substantially in the
form of Exhibit J attached hereto. Lender, at its option,
may from time to time accept telephonic requests for
Advances; provided that Borrower shall promptly thereafter
provide Lender with a completed Notice of Second Advancing
Credit Borrowing together with copies of invoices for the
equipment purchased or improvements undertaken. Lender is
hereby authorized to act in reliance upon a certificate of
incumbency from Borrower's Secretary or Assistant Secretary
as to the identity of the foregoing officers and their due
appointment and authorization to issue Borrowing requests
and receive proceeds of Advances hereunder on behalf of
Borrower unless and until Lender is in actual receipt of
written notice by Borrower of revocation of said appointment
and authorization. Prior to 11:00 a.m. (Houston, Texas,
time) on each Borrowing Date and subject to the provisions
of Section 3.08, Lender shall make available to Borrower in
immediately available funds such requested Advance by
deposit to Borrower's deposit account maintained with Lender
or other reasonable disposition of such funds as Borrower
shall request in writing. Lender may, and is hereby
authorized by Borrower to, endorse on the schedule attached
to the Second Advancing Credit Note or on a continuation of
such schedule attached to and made a part of such Second
Advancing Credit Note an appropriate notation evidencing the
date and amount of each Advance and payment and prepayment
by Borrower of the principal of and interest on the Second
Advancing Credit Loan evidenced by such Second Advancing
Credit Note, but the failure of Lender to make any such
endorsement or any incorrect endorsement shall not subject
Lender to any liability hereunder and shall not limit or
otherwise affect the obligations of Borrower under such
Second Advancing Credit Note.
Section 3.12. Use of Proceeds of Second Advancing Credit
Loan. The proceeds of the Advances comprising the Second
Advancing Credit Loan shall be used to pay for up to eighty-
five percent (85%) of the cost's of Borrower for
improvements on the realty described on Schedule 3 attached
to the Credit Agreement, up to eighty-five percent (85%) of
the cost of improvements, eighty percent (80%) of the cost
of new equipment, eighty percent (80%) of the cost of used,
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refurbished equipment and sixty percent (60%) of the cost of
used, unrefurbished equipment; provided, however, that with
respect to any used, unrefurbished equipment, if Borrower
should subsequently refurbish such equipment, then the limit
shall be increased to eighty percent (80%) and Borrower may
increase the amount borrowed hereunder on account of such
equipment to bring the total to eighty percent (80%) of the
cost of such equipment and the cost of refurbishing such
equipment.
Section 3.13. Reduction or Termination of Second Advancing
Committed Sum. Borrower may at any time by giving at least
three (3) Business Days' notice in writing to Lender
terminate or reduce the Second Advancing Credit Committed
Sum; provided, however, that no such reduction of the Second
Advancing Credit Committed Sum shall be effective unless the
amount by which the Second Advancing Credit Committed Sum is
reduced shall be ONE HUNDRED THOUSAND AND NO/100
($100,000.00). Once reduced or terminated, the Second
Advancing Credit Committed Sum may not be increased or
reinstated without the prior written consent of Lender.
Section 3.14. Second Advancing Credit Commitment Fee.
Borrower agrees to pay to Lender a fee (the "Second
Advancing Credit Commitment Fee") on the average daily
unused portion of the Second Advancing Credit Commitment,
from December 20, 1994 to and including the Second Advancing
Credit Termination Date, at the rate of one-half of one
percent (1/2%) per annum based on a 365 day year and the
actual number of days elapsed payable in arrears, on April
1, 1995, and on the Second Advancing Credit Termination
Date.
2. Condition Precedent. The obligation of Lender to make any Advances
pursuant to Sections 2.01 or 3.08 of the Agreement is subject to the condition
precedent that the Lender shall have received all of the following, each duly
executed and in form and substance satisfactory to Lender:
(a) Promissory Note dated December 20, 1994 in the principal amount
of $17,000,000.00 executed by Borrower to the order of Lender,
after execution and delivery being the Revolving Credit Note;
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(b) Promissory Note dated December 20, 1994 in the principal amount
of $1,500,000.00 executed by Borrower to the order of Lender,
after execution and delivery being the Second Advancing Credit
Note;
(c) Ratifications or amendments of existing Security Documents and/or
new Security Documents as may be requested by Lender to continue
or establish a Lien in favor or for the benefit of Lender in or
against (i) all of Borrower's accounts, accounts receivable,
equipment, machinery, fixtures, raw materials, work-in-process,
inventory, chattel paper, documents, instruments and general
intangibles, whether now owned or hereafter acquired, and all
products and proceeds thereof, (ii) the realty described in
Schedule 3 of the Credit Agreement, the appurtenances thereto and
improvements thereon, and (iii) proceeds of the life insurance
policies required to be maintained by Section 9.17 of the Credit
Agreement;
(d) Certified copies of resolutions of the Board of Directors of
Borrower authorizing or ratifying the execution, delivery and
performance, respectively, of those of this First Amendment, the
Revolving Credit Note, the Second Advancing Credit Note, and all
other documents provided for in this First Amendment to which
each is a party;
(e) The articles of incorporation of Borrower certified by the
Secretary of State of the State of incorporation, and dated
reasonably near the date of this First Amendment;
(f) Certificates of the appropriate government officials of the
jurisdiction of incorporation of Borrower as to its existence and
good standing, dated reasonably near the date of this First
Amendment; and
(g) A favorable opinion of legal counsel to Borrower.
3. Representations and Warranties. The representations and warranties
made in Article VIII of the Credit Agreement by Borrower to Lender are true and
correct as of the date of execution of this First Amendment.
4. Defined Terms. Words and terms used herein which are defined in the
Credit Agreement are used herein as defined in the Credit Agreement, except as
specifically modified by the terms of this First Amendment. Any of the terms
used in this First Amendment which are not defined in the Credit Agreement shall
be used therein as herein defined.
5. Preservation of the Credit Agreement. Except as specifically modified
by the terms of this First Amendment, all of the terms, provisions, covenants,
warranties and agreements contained in the Credit Agreement shall remain in full
force and effect.
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6. Applicable Law. This First Amendment shall be deemed to be a contract
made under, and shall be construed in accordance with, the laws of the State of
Texas.
7. Entire Agreement. The Credit Agreement as amended by this First
Amendment and the other Loan Papers contain the entire agreement between the
parties relating to the transactions contemplated hereby. All prior or
contemporaneous understandings, representations, statements and agreements,
whether written or oral, are merged herein and superseded by the Credit
Agreement as amended by this First Amendment. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of
the date first above written.
BORROWER:
DRIL-QUIP, INC.
By:_________________________________
J. Xxxx Xxxxxx
Vice President
LENDER:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
By:_________________________________
Xxxxxx X. Xxxxxxxxx
Vice President
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EXHIBIT H
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PROMISSORY NOTE
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$17,000,000.00 Houston, Texas December 20, 1994
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP, INC., a Texas
corporation, ("Maker"), hereby promises to pay to the order of BANK ONE, TEXAS,
NATIONAL ASSOCIATION, a national banking association ("Payee"), at its offices
at 910 Travis, Houston, Xxxxxx County, Texas, on October 1, 1996, in lawful
money of the United States of America, the principal sum of SEVENTEEN MILLION
AND NO/100 DOLLARS ($17,000,000.00), or so much thereof as may be advanced and
outstanding hereunder, together with interest on the outstanding principal
balance hereof, at a varying rate per annum which shall from day to day be equal
to the lesser of (a) the maximum rate permitted by applicable law as the same
exists from day to day during the term hereof ("Maximum Rate"), including, as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling" or (b) the sum of
the Bank One Base Rate (hereinafter defined) of Payee in effect from day to day
plus one-half of one percent (1/2%), each such change in the rate of interest
charged hereunder to become effective, without notice to Maker, on the effective
date of each change in the Bank One Base Rate; provided however, if at any time
the rate of interest specified in clause (b) preceding shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the Maximum
Rate, then any subsequent reduction in the Bank One Base Rate will not reduce
the rate of interest hereon below the Maximum Rate until the total amount of
interest accrued hereon equals the amount of interest which would have accrued
hereon if the rate specified in clause (b) preceding had at all times been in
effect.
Accrued and unpaid interest shall be due and payable quarterly in
arrears during the term hereof, on the lst day of each successive January,
April, July and October commencing on January 1, 1995, until payment in full of
the outstanding principal hereunder. All principal hereof, together with all
accrued and unpaid interest thereon, shall be due and payable on maturity. All
past due principal and interest shall bear interest at the Maximum Rate.
Whenever any payment hereunder shall be stated to be due on a day that
is not a day Payee is open for business, such payment may be made on the next
succeeding day Payee is open for business and interest shall continue to accrue
during such extension.
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Page 1 of a 4 Page Note Identification
As used herein, the term "Bank One Base Rate" means, at any time the
lesser of (i) the rate of interest per annum then most recently established by
Payee as its Bank One Base Rate in effect from day to day, with each change in
the rate of interest charged as the Bank One Base Rate to become effective,
without notice to Maker, on the effective date of each change in the Bank One
Base Rate, such Bank One Base Rate to be computed on the basis of a year
composed of 365 days for the actual number of days elapsed (including the first
day but excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Revolving Credit Note provided for and as defined in
that certain Credit Agreement dated March 30, 1994 as amended by First Amendment
to Credit Agreement dated of even date herewith by and among Maker and Payee
(such instruments as the same may be amended or modified from time to time, are
hereinafter referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and
conditions specified in the Agreement. Maker may borrow, repay and reborrow
hereunder upon the terms and conditions specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this note or otherwise in connection with this loan transaction the provisions
of this paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker.
If default be made in the payment of principal or interest under this
note and such default shall continue for three (3) Business Days after notice
thereof to Maker pursuant to the Agreement, as defined in the Agreement, or upon
the occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
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Page 2 of a 4 Page Note Identification
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
This note is performable in Houston, Xxxxxx County, Texas, and Maker
and each surety, guarantor, endorser and other party ever liable for payment of
any sums of money payable on this note, jointly and severally waive the right to
be sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable
for payment of any sums of money payable on this note jointly and severally
waive presentment and demand for payment, protest, notice of protest and non-
payment of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, and grace, and consent to
all extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other indulgences or forbearances whatsoever, without
notice to any other party and without in any way affecting the personal
liability of any party hereunder.
This note is executed in renewal and extension, but not in novation or
discharge, of that certain Promissory Note dated March 30, 1994, in the original
principal amount of $15,000,000.00, executed by Maker for the benefit of Payee.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof, all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to make
endorsement shall not limit or otherwise affect the obligations of Maker under
the Agreement or this note.
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Initialled for
Page 3 of a 4 Page Note Identification
DRIL-QUIP, INC.
By:________________________________
J. Xxxx Xxxxxx, Vice President
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Initialled for
Page 4 of a 4 Page Note Identification
EXHIBIT I
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PROMISSORY NOTE
---------------
$1,500,000.00 Houston, Texas December 20, 1994
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP, INC., a Texas
corporation, ("Maker"), hereby promises to pay to the order of BANK ONE, TEXAS,
NATIONAL ASSOCIATION, a national banking association ("Payee"), at its offices
at 910 Travis, Houston, Xxxxxx County, Texas, on October 1, 1999, in lawful
money of the United States of America, the principal sum of ONE MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00), or so much thereof as may
be advanced and outstanding hereunder, plus accrued and unpaid interest thereon
as hereinafter calculated, as follows:
(a) in three (3) installments of accrued and unpaid interest due and
payable on April 1, 1995, July 1, 1995 and October 1, 1995;
(b) fifteen (15) quarterly installments each in the principal amount
equal to one-thirtieth (1/30th) of the principal balance outstanding
hereunder as of 11:00 a.m., October 1, 1995, together with all accrued and
unpaid interest, with the first of such installments due and payable on
January 1, 1996, and like successive installments of principal plus accrued
and unpaid interest due and payable on the 1st day of each succeeding
April, July, October and January thereafter, through and including July 1,
1999; and
(c) a final installment in the amount of all outstanding principal,
plus accrued and unpaid interest, due and payable on the maturity of this
note, October 1, 1999.
Whenever any payment hereunder shall be stated to be due on a day that
is not a day Payee is open for business, such payment may be made on the next
succeeding day Payee is open for business and interest shall continue to accrue
during such extension.
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Page 1 of a 4 Page Note Identification
The outstanding principal balance hereof shall bear interest prior to
maturity at a varying rate per annum which shall from day to day be equal to the
lesser of (a) the maximum rate permitted by applicable law as the same exists
from day to day during the term hereof ("Maximum Rate"), including, as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling" or (b) the sum of
the Bank One Base Rate (hereinafter defined) of Payee in effect from day to day
plus three-quarters of one percent (3/4%), each such change in the rate of
interest charged hereunder to become effective, without notice to Maker, on the
effective date of each change in the Bank One Base Rate; provided however, if at
any time the rate of interest specified in clause (b) preceding shall exceed the
Maximum Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate , then any subsequent reduction in the Bank One Base Rate will not
reduce the rate of interest hereon below the Maximum Rate until the total amount
of interest accrued hereon equals the amount of interest which would have
accrued hereon if the rate specified in clause (b) preceding had at all times
been in effect. All past due principal and interest shall bear interest at the
Maximum Rate.
As used herein, the term "Bank One Base Rate" means, at any time the
lesser of (i) the rate of interest per annum then most recently established by
Payee as its Bank One Base Rate in effect from day to day, with each change in
the rate of interest charged as the Bank One Base Rate to become effective,
without notice to Maker, on the effective date of each change in the Bank One
Base Rate, such Bank One Base Rate to be computed on the basis of a year
composed of 365 days for the actual number of days elapsed (including the first
day but excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Second Advancing Credit Note provided for and as
defined in that certain Credit Agreement dated March 30, 1994 as amended by
First Amendment to Credit Agreement dated of even date herewith by and among
Maker and Payee (such instruments as the same may be further amended or modified
from time to time, are hereinafter referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and
conditions specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this note or otherwise in connection with this loan transaction the provisions
of this paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent
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jurisdiction, any such excess shall be applied as a payment and reduction of the
principal of indebtedness evidenced by this note; and, if the principal amount
hereof has been paid in full, any remaining excess shall forthwith be paid to
Maker.
If default be made in the payment of principal or interest under this
note and such default shall continue for three (3) Business Days after notice
thereof to Maker pursuant to the Agreement, as defined in the Agreement, or upon
the occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
This note is performable in Houston, Xxxxxx County, Texas, and Maker
and each surety, guarantor, endorser and other party ever liable for payment of
any sums of money payable on this note, jointly and severally waive the right to
be sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable
for payment of any sums of money payable on this note jointly and severally
waive presentment and demand for payment, protest, notice of protest and non-
payment of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, and grace, and consent to
all extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other
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indulgences or forbearances whatsoever, without notice to any other party and
without in any way affecting the personal liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof, all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to make
endorsement shall not limit or otherwise affect the obligations of Maker under
the Agreement or this note.
DRIL-QUIP, INC.
By:_________________________________
J. Xxxx Xxxxxx, Vice President
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EXHIBIT J
---------
FORM OF NOTICE OF SECOND ADVANCING
CREDIT BORROWING
_________________, 00___
XXXX XXX, XXXXX, NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx, 00000
Attention: ____________________
Gentlemen:
The undersigned is an Authorized Financial Officer of Dril-Quip, Inc., a
Texas corporation ("Borrower"), and as such is authorized to make and deliver
this Notice of Advancing Credit Borrowing pursuant to Section 3.11 of that
certain Credit Agreement dated March 30, 1994 as amended by that certain First
Amendment to Credit Agreement dated December 20, 1994 (as may be further amended
from time to time, the "Credit Agreement"), by and between BANK ONE, TEXAS,
NATIONAL ASSOCIATION ("Lender") and Borrower. All terms defined in the Credit
Agreement shall have the same meaning herein. Borrower hereby requests a
Borrowing under the Advancing Credit Loan from Lender in accordance with Section
3.11 of the Credit Agreement.
In connection with the foregoing and pursuant to the terms and provisions
of the Credit Agreement, the undersigned hereby certifies that:
(i) Except as disclosed in Schedule I attached hereto, the
representations and warranties contained in Article VIII of the Credit
Agreement are true and correct in all material respects at and as of the
date hereof as though made as of the date hereof.
(ii) No Default or Event of Default has occurred and is continuing.
(iii) The amount of the Second Advancing Credit Loan to be made
pursuant to this request, either singularly or together with other
Borrowings previously made under Section 3.08 of the Credit Agreement does
not exceed the Second Advancing Credit Committed Sum.
(iv) [Proceeds from this Borrowing will be used to pay for up to
eighty-five percent (85%) of the costs of improvements to the realty
described on Schedule 3 to the Credit Agreement].
[Proceeds from this Borrowing will be used to pay for up to sixty
percent (60%) of the cost of certain used, unrefurbished equipment].
[Proceeds from this Borrowing will be used to pay for up to eighty
percent (80%) of the cost of certain new equipment].
[Proceeds from this Borrowing will be used to pay for up to eighty
percent (80%) of the costs of certain used, refurbished equipment].
(v) [Attached hereto are copies of invoices for such materials and
work performed].
[Attached hereto are copies of invoices for such equipment purchased].
(vi) All information supplied herein is true and accurate as of the
date hereof.
The Borrowing Date shall be ___________________________, 19_____.
DRIL-QUIP, INC.
By:________________________________
Name:______________________________
Title:_____________________________
