EXHIBIT 10.1
Execution Version
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$125,000,000
CREDIT AGREEMENT
Dated as of January 30, 2002
Among
VARCO INTERNATIONAL, INC.
as the Borrower,
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XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent,
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BANK ONE, NA,
as Syndication Agent,
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CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH
as Documentation Agent,
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and
THE BANKS NAMED HEREIN
as the Banks
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS......................................... 1
Section 1.1 Certain Defined Terms......................................... 1
Section 1.2 Computation of Time Periods................................... 16
Section 1.3 Accounting Terms; Changes in GAAP............................. 16
Section 1.4 Types of Advances............................................. 17
Section 1.5 Miscellaneous................................................. 17
ARTICLE II THE ADVANCES AND THE LETTERS OF CREDIT................................... 17
Section 2.1 The Advances.................................................. 17
Section 2.2 Method of Borrowing........................................... 18
Section 2.3 Fees.......................................................... 21
Section 2.4 Reduction of the Revolving Commitments........................ 22
Section 2.5 Repayment of Advances......................................... 22
Section 2.6 Interest...................................................... 22
Section 2.7 Prepayments................................................... 23
Section 2.8 Breakage Costs................................................ 24
Section 2.9 Increased Costs............................................... 24
Section 2.10 Payments and Computations..................................... 26
Section 2.11 Taxes......................................................... 27
Section 2.12 Illegality.................................................... 29
Section 2.13 Letters of Credit............................................. 29
Section 2.14 Sharing of Payments, Etc ..................................... 32
Section 2.15 Increase of Commitment ....................................... 33
ARTICLE III CONDITIONS OF LENDING ................................................... 35
Section 3.1 Conditions Precedent to Effectiveness of this Agreement ...... 35
Section 3.2 Conditions Precedent for each Borrowing or Letter of Cred .... 37
ARTICLE IV REPRESENTATIONS AND WARRANTIES .......................................... 37
Section 4.1 Corporate Existence; Subsidiaries ............................ 37
Section 4.2 Authorization and Validity ................................... 38
Section 4.3 Corporate Power .............................................. 38
Section 4.4 Authorization and Approvals .................................. 38
Section 4.5 Enforceable Obligations ...................................... 38
Section 4.6 Financial Statements ......................................... 39
Section 4.7 True and Complete Disclosure ................................. 39
Section 4.8 Litigation ................................................... 39
Section 4.9 Use of Proceeds ........................................ 39
Section 4.10 Investment Company Act ................................. 40
Section 4.11 Public Utility Holding Company Act ..................... 40
Section 4.12 Taxes .................................................. 40
Section 4.13 Pension Plans .......................................... 40
Section 4.14 Condition of Property; Casualties ...................... 40
Section 4.15 Insurance .............................................. 41
Section 4.16 No Burdensome Restrictions; No Defaults ................ 41
Section 4.17 Environmental Condition ................................ 41
Section 4.18 Permits, Licenses, etc ................................. 42
Section 4.19 Compliance with Laws ................................... 42
Section 4.20 Capitalization ......................................... 42
Section 4.21 Existing Indebtedness .................................. 42
ARTICLE V AFFIRMATIVE COVENANTS .............................................42
Section 5.1 Compliance with Laws, Etc ...............................42
Section 5.2 Insurance ...............................................43
Section 5.3 Preservation of Existence, Etc ..........................43
Section 5.4 Payment of Taxes, Etc ...................................43
Section 5.5 Visitation Rights .......................................43
Section 5.6 Reporting Requirements ..................................43
Section 5.7 Maintenance of Property .................................46
Section 5.8 Conduct of Business .....................................46
Section 5.9 Use of Proceeds .........................................46
Section 5.10 New Subsidiaries; Foreign Subsidiaries ..................46
Section 5.11 Pari Passu ..............................................47
ARTICLE VI NEGATIVE COVENANTS ................................................47
Section 6.1 Liens, Etc ..............................................47
Section 6.2 Indebtedness ............................................49
Section 6.3 Amendment of Organizational Documents; Senior Notes .....49
Section 6.4 Limitation on Certain Restrictions ......................50
Section 6.5 Merger or Consolidation; Asset Sales ....................50
Section 6.6 Restricted Payments .....................................51
Section 6.7 Investments, Loans, Advances ............................52
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Section 6.8 Affiliate Transactions ...................................... 53
Section 6.9 Other Businesses ............................................ 53
Section 6.10 Capital Expenditures ........................................ 53
Section 6.11 Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities ................................................. 53
Section 6.12 Contingent Obligations ...................................... 53
Section 6.13 Maximum Leverage Ratio ...................................... 53
Section 6.14 Minimum Interest Charge Coverage Ratio ...................... 53
ARTICLE VII REMEDIES .............................................................. 54
Section 7.1 Events of Default ........................................... 54
Section 7.2 Optional Acceleration of Maturity ........................... 56
Section 7.3 Cash Collateral Account ..................................... 56
Section 7.4 Non-exclusivity of Remedies ................................. 57
Section 7.5 Right of Set-off ............................................ 57
ARTICLE VIII AGENCY AND ISSUING BANK PROVISIONS .................................... 57
Section 8.1 Authorization and Action .................................... 57
Section 8.2 Administrative Agent's Reliance, Etc ........................ 58
Section 8.3 The Administrative Agent and Its Affiliates ................. 58
Section 8.4 Bank Credit Decision ........................................ 58
Section 8.5 Indemnification ............................................. 59
Section 8.6 Successor Administrative Agent and Issuing Bank ............. 59
Section 8.7 Execution of Collateral Documents ........................... 60
Section 8.8 Collateral Releases ......................................... 60
ARTICLE IX MISCELLANEOUS ......................................................... 60
Section 9.1 Amendments, Etc ............................................. 60
Section 9.2 Notices, Etc ................................................ 61
Section 9.3 No Waiver; Remedies ......................................... 61
Section 9.4 Costs and Expenses .......................................... 61
Section 9.5 Binding Effect .............................................. 62
Section 9.6 Bank Assignments and Participations ......................... 62
Section 9.7 Indemnification ............................................. 66
Section 9.8 Execution in Counterparts ................................... 66
Section 9.9 Survival of Representations, etc ............................ 66
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Section 9.10 Severability ........................................... 66
Section 9.11 Usury Not Intended ..................................... 66
Section 9.12 Governing Law .......................................... 67
Section 9.13 Waiver of Jury Trial ................................... 67
Section 9.14 Headings Descriptive ................................... 67
Section 9.15 Entire Agreement ....................................... 67
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Subsidiary Guaranty and Contribution Agreement
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Notice of Conversion or Continuation
Exhibit F - Form of Pledge and Security Agreement
Exhibit G - Form of Revolving Note
Exhibit H - Form of Swingline Note
SCHEDULES:
Schedule 1.1(a) - Revolving Commitments
Schedule 1.1(b) - Guarantors
Schedule 1.1(c) - Existing Letters of Credit
Schedule 4.1 - Subsidiaries
Schedule 4.20 - Capitalization
Schedule 4.21 Outstanding Indebtedness
Schedule 6.1 - Liens
Schedule 6.2 - Indebtedness
Schedule 6.11 - Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities
Schedule 9.2 - Notice Information for Banks
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CREDIT AGREEMENT
This Credit Agreement dated as of January 30, 2002 is among Varco
International, Inc., a Delaware corporation, as the Borrower, Xxxxx Fargo Bank
Texas, National Association, as Administrative Agent, Bank One, NA, as
Syndication Agent, Credit Suisse First Boston, Cayman Islands Branch, as
Documentation Agent, and the Banks.
The parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Acquisition" means any transaction, or any series of related transactions,
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consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger, consolidation or otherwise
or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of related transactions) at least a majority (in number
of votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company.
"Adjusted Prime Rate" means, for any day, the fluctuating rate per annum of
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interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the sum of the Federal Funds Rate in effect on such day plus 1/2% per annum.
"Administrative Agent" means Xxxxx Fargo Bank Texas, National Association
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in its capacity as administrative agent for the Banks pursuant to Article VIII
and any successor administrative agent pursuant to Section 8.6.
"Advance" means either a Revolving Advance or a Swingline Advance, any such
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Revolving Advance being either a Prime Rate Advance or a Eurodollar Rate
Advance.
"Affiliate" means, as to any Person, (a) any other Person that, directly or
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indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person or
(b) any other Person owning beneficially or controlling thirty percent (30%) or
more of the equity interests in such Person. The term "control" (including the
terms "controlled by" or "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or other equity interests, by contract or otherwise.
"Agent's Fee Letter" means the letter agreement dated as of November 6,
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2001 between the Borrower and the Administrative Agent, as the same may be
modified or amended from time to time.
"Agreement" means this Credit Agreement dated as of January 30, 2002 among
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the Borrower, the Administrative Agent, and the Banks, as it may be amended
hereafter in accordance with its terms.
"Applicable Lending Office" means, with respect to each Bank, such Bank's
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Domestic Lending Office in the case of a Prime Rate Advance and such Bank's
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time with respect to any Revolving
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Advance, commitment fees or letter of credit fees hereunder (except as otherwise
provided below), the following percentages based upon the ratings by Xxxxx'x and
S&P, respectively, applicable on such date to the Index Debt :
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Index Debt Rating Eurodollar
Rate Prime Rate Commitment
Category S&P Xxxxx'x Advances Advances Fees
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5 A- or higher A3 or higher 0.500% 0.00% 0.100%
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4 BBB+ Baa1 0.625% 0.00% 0.125%
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3 BBB Baa2 0.875% 0.00% 0.150%
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2 BBB- Baa3 1.125% 0.00% 0.200%
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1 BB+ or lower Ba1 or lower 1.375% 0.25% 0.250%
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For purposes of the foregoing, (a) if either Xxxxx'x or S&P shall not have
in effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then such rating agency
shall be deemed to have established a rating in Category 1; (b) if the ratings
established or deemed to have been established by Xxxxx'x and S&P for the Index
Debt shall fall within different Categories, the Applicable Margin shall be
based on the higher of the two ratings unless one of the two ratings is two or
more Categories lower than the other, in which case the Applicable Margin shall
be determined by reference to the Category next above that of the lower of the
two ratings; and (c) if the ratings established or deemed to have been
established by Xxxxx'x and S&P for the Index Debt shall be changed (other than
as a result of a change in the rating system of Xxxxx'x or S&P), such change
shall be effective as of the date on which it is first announced or published by
the applicable rating agency or, in the absence of such announcement or
publication, on the effective date of such rating. Each change in the Applicable
Margin shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Xxxxx'x or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Banks shall negotiate in good faith to
amend this definition to reflect such changed rating
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system or the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Margin shall be determined
by reference to the rating most recently in effect prior to such change or
cessation. From the Closing Date until the first such ratings change, if any,
the Applicable Margin shall be determined by reference to Category 4.
"Arranger" means Xxxxx Fargo, and its successors, in its capacity as
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arranger.
"Assignment and Acceptance" means an assignment and acceptance entered into
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by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of the attached Exhibit A.
"Banks" means each of the lenders party to this Agreement, including
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without limitation each Eligible Assignee that shall become a party to this
Agreement pursuant to Section 9.6.
"Borrower" means Varco International, Inc., a Delaware corporation, and any
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permitted successor thereof.
"Borrowing" means a Revolving Borrowing or the making of a Swingline
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Advance by Xxxxx Fargo.
"Business Day" means a day of the year on which banks are not required or
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authorized to close in New York City or Houston, Texas and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on by banks in the London interbank market.
"Capital Expenditures" means, without duplication, any expenditures for any
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purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Capital Lease" means, for any Person, any lease of any Property (whether
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real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
"Capitalized Lease Obligations" of a Person means the amount of the
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obligations of such Person under Capital Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Collateral Account" means a special cash collateral account
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containing cash deposited pursuant to Sections 2.13(f), 7.2(b) or 7.3(b) to be
maintained at the Administrative Agent's office in accordance with Section 7.3.
"Change in Control" means the acquisition by any Person, or two or more
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Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934), directly or indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing 50% or more of the
combined voting power of all outstanding securities of the Borrower entitled to
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vote in the election of directors, other than securities having such power only
by reason of the happening of a contingency.
"Closing Date" means January 30, 2002.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
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successor statute.
"Collateral" means the Collateral as defined in the Pledge Agreement.
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"Collateral Documents" means, collectively, the Pledge Agreement and each
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other agreement, instrument or document executed at any time which provides any
collateral security for the Obligations.
"Compliance Certificate" means a certificate of the Borrower in
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substantially the form of the attached Exhibit B.
"Consolidated" refers to the consolidation of the accounts of the Borrower
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and its Subsidiaries in accordance with GAAP, including, when used in reference
to the Borrower, principles of consolidation consistent with those applied in
the preparation of the Financial Statements.
"Consolidated EBITDA" means, with reference to any period of time, the
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EBITDA of the Borrower and its Subsidiaries calculated on a consolidated basis
for such period, determined in accordance with GAAP.
"Consolidated Indebtedness" means at any time the Indebtedness of the
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Borrower and its Subsidiaries calculated on a consolidated basis as of such
time, determined in accordance with GAAP.
"Consolidated Interest Expense" means, with reference to any period, the
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Interest Expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated stockholders'
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equity of the Borrower and its Subsidiaries calculated on a consolidated basis
as of such time (excluding treasury stock), determined in accordance with GAAP.
"Contingent Obligation" of a Person means any agreement, undertaking or
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arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, the obligations of any such Person
as general partner of a partnership with respect to the liabilities of the
partnership, or obligations of such Person in respect of letters of credit,
surety bonds, acceptance facilities, or drafts or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person; provided, however, that with respect to the Borrower and it
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Subsidiaries, any agreement, undertaking or arrangement by which the Borrower or
any Subsidiary assumes, guarantees,
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endorses, contingently agrees to purchase or provide funds for the payment of,
or otherwise becomes or is contingently liable upon, any Indebtedness of the
Borrower or any of its Subsidiaries which is otherwise permitted under the terms
of this Agreement shall not constitute a "Contingent Obligation" hereunder.
"Controlled Group" means all members of a controlled group of corporations
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and all trades (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.
"Convert", "Conversion", and "Converted" each refers to a conversion of
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Advances of one Type into Advances of another Type pursuant to Section 2.2(b).
"Credit Documents" means this Agreement, the Notes, the Guaranty, the
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Collateral Documents, the Letter of Credit Documents, the Agent's Fee Letter,
and each other agreement, instrument or document executed by the Borrower or any
of its Subsidiaries at any time in connection with this Agreement.
"Default" means (a) an Event of Default or (b) any event or condition which
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with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"Dollars" and "$" means lawful money of the United States of America.
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"Domestic Lending Office" means, with respect to any Bank, the office of
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such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule 9.2 or such other office of such Bank as such Bank may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any Person, the net income (or loss) of such Person
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determined in accordance with GAAP plus, to the extent deducted from revenues in
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determining the net income (or loss) of such Person, (i) Interest Expense, (ii)
expense for income taxes paid or accrued, (iii) depreciation, (iv) amortization
and (v) extraordinary, unusual or non-recurring losses incurred other than in
the ordinary course of business, minus, to the extent included in net income,
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extraordinary, unusual or non-recurring gains realized other than in the
ordinary course of business. Notwithstanding the foregoing, "EBITDA" shall be
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determined excluding recognized but unrealized gains and/or losses attributable
to commodity or interest rate derivative instruments determined under the
provisions of Financial Accounting Standards Board Statements ("FASB") 133, as
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the same may be further amended, modified or clarified by the FASB.
"Effective Date" means the date all of the conditions precedent set forth
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in Section 3.1 have been satisfied.
"Eligible Assignee" means (a) a commercial bank organized under the laws of
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the United States, or any State thereof, and having primary capital of not less
than $500,000,000 and approved by the Administrative Agent, the Issuing Bank,
and (provided no Default has occurred and is continuing) the Borrower, which
approvals will not be unreasonably withheld, (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development and having primary capital (or its
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equivalent) of not less than $500,000,000 and approved by the Administrative
Agent, the Issuing Bank, and (provided no Default has occurred and is
continuing) the Borrower, which approvals will not be unreasonably withheld, (c)
a Bank and (d) an Affiliate of the respective assigning Bank, without approval
of any Person but otherwise meeting the eligibility requirements of (a) or (b)
above.
"Environmental Claim" means any third party (including governmental
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agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation, including claims or proceedings under any
Environmental Law ("Claims") or any permit issued under any Environmental Law,
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including, without limitation, (a) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to health or
safety in relation to the environment.
"Environmental Laws" means any and all Legal Requirements arising from,
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relating to, or in connection with the environment, health or safety, relating
to (a) the protection of the environment, (b) the effect of the environment on
human health, (c) emissions, discharges or releases of Hazardous Substances into
surface water, ground water or land, or (d) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances or wastes or the clean-up or other remediation thereof.
"Environmental Permit" means any permit, license, order, approval or other
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authorization under Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
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Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office of
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such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule 9.2 (or, if no such office is specified, its Domestic Lending Office)
or such other office of such Bank as such Bank may from time to time specify to
the Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to a Eurodollar Rate Advance for the
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relevant Interest Period, the interest rate per annum equal to (a) the
applicable London interbank offered rate for deposits in Dollars appearing on
the Telerate British Bankers Association Interest Settlement Rate page
designated as Page 3750 ("Page 3750") as of 11:00 a.m. (London, England time)
two Business Days prior to the first day of such Interest Period, and having a
maturity equal to such Interest Period (provided that, if Page 3750 is not
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available for any reason, the Eurodollar Rate for the relevant Interest Period
shall instead be the London interbank offered rate for deposits in Dollars
appearing on Reuters Screen FRBD as of 11:00 a.m. (London, England time) two
Business Days prior to the first day of such Interest Period, and having a
maturity
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equal to such Interest Period), divided by (b) one minus the applicable
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statutory reserve requirements of the Administrative Agent, expressed as a
decimal (including without duplication or limitation, basic, supplemental,
marginal and emergency reserves), from time to time in effect under Regulation D
or similar regulations of the Federal Reserve Board. It is agreed that for
purposes of this definition, Eurodollar Rate Advances made hereunder shall be
deemed to constitute Eurocurrency Liabilities as defined in Regulation D and to
be subject to the reserve requirements of Regulation D.
"Eurodollar Rate Advance" means an Advance which bears interest as provided
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in Section 2.6(b).
"Events of Default" has the meaning set forth in Section 7.1.
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"Existing Credit Agreement" means the Amended and Restated Credit Agreement
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dated as of February 9, 1998 among Tuboscope Inc., as borrower, the lenders
party thereto and ABN AMRO Bank N.V., Houston Agency, as Administrative Agent,
as amended.
"Expiration Date" means, with respect to any Letter of Credit, the date on
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which such Letter of Credit will expire or terminate in accordance with its
terms.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
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annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for any such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
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System or any of its successors.
"Financial Contract" of a Person means (a) any exchange-traded or
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over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Hedging Transaction.
"Financial Statements" means the financial statements described in Section
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4.6.
"GAAP" means United States generally accepted accounting principles as in
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effect from time to time, applied on a basis consistent with the requirements of
Section 1.3.
"Governmental Authority" means any foreign governmental authority, the
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United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Borrower, or the Borrower's Subsidiaries or any of their
respective Properties.
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"Granting Bank" means any Bank which grants to any one SPC the option to
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provide to the Borrower all or any part of any Advance that such Granting Bank
would otherwise be obligated to make to the Borrower pursuant to this Agreement.
"Guarantor" means each of the Material Subsidiaries identified on Schedule
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1.1(b) and any other Material Subsidiary required to become a Guarantor pursuant
to Section 5.10, and "Guarantors" means such Persons collectively.
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"Guaranty" means the Subsidiary Guaranty and Contribution Agreement dated
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of even date herewith in substantially the form of the attached Exhibit C
executed by the Guarantors, as it may be amended hereafter in accordance with
this Agreement.
"Hazardous Substance" shall have the meaning assigned to that term in the
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Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Acts of 1986, and shall
also include substances regulated under any other Environmental Law, including
without limitation pollutants, contaminants, petroleum, petroleum products,
radionuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any
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Environmental Law.
"Hedging Transactions" means any transaction (including an agreement with
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respect thereto) now existing or hereafter entered into by the Borrower which is
a rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.
"Hedging Obligations" of a Person means, without duplication, any and all
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obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all Hedging Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Hedging Transactions.
"Indebtedness" of a Person means, without duplication, such Person's (a)
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obligations for borrowed money, (b) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade and any other amounts that are being contested and for which adequate
reserves have been established), (c) obligations of others which such Person has
directly or indirectly, whether or not assumed, secured by Liens or payable out
of the proceeds or production from Property now or hereafter owned or acquired
by such Person, guaranteed or otherwise provided credit support therefore but
only to the extent of such Property's fair market value, (d) obligations which
are evidenced by notes, acceptances, or other instruments, (e)
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reimbursement obligations of such Person in respect of letters of credit, surety
bonds, acceptance facilities, or drafts or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person; (f) obligations of such Person to purchase securities or other Property
arising out of or in connection with the sale of the same or substantially
similar securities or Property, (g) Capitalized Lease Obligations, (h) Net
Xxxx-to-Market Exposure under Hedging Transactions and other Financial
Contracts, (i) Hedging Obligations, and (j) any other obligation for borrowed
money or other financial accommodation which in accordance with GAAP would be
shown as a liability on the consolidated balance sheet of such Person.
"Index Debt" means senior, unsecured, long-term indebtedness for borrowed
----------
money of the Borrower that is not guaranteed by any other Person or subject to
any other credit enhancement.
"Interest Charge Coverage Ratio" means, as of the end of any fiscal
------------------------------
quarter, the ratio of (a) Consolidated EBITDA for the four-fiscal quarter period
then ended to (b) Consolidated Interest Expense for the four-fiscal quarter
period then ended.
"Interest Expense" means for any period, interest expense, whether expensed
----------------
or capitalized, paid, accrued or scheduled to be paid or accrued during such
period, determined in accordance with GAAP, without duplication.
"Interest Period" means, for each Eurodollar Rate Advance comprising part
---------------
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Prime Rate Advance into such an Advance and ending
on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.2 and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.2. The duration of each such Interest Period
shall be one, two, three or six months, in each case as the Borrower may, upon
notice received by the Administrative Agent not later than 12:00 p.m. (Houston,
Texas time) on the third Business Day prior to the first day of such Interest
Period (except as otherwise provided in Section 2.2(a)), select; provided,
--------
however, that:
-------
(a) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, provided that if
--------
such extension would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period shall occur
on the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
(d) no Interest Period shall end after the Maturity Date.
-9-
"Investment" of a Person means any loan, advance (other than commission,
----------
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificates of deposit owned by such Person.
"Issuing Bank" means Xxxxx Fargo or any Bank acting as a successor issuing
------------
bank pursuant to Section 8.6.
"Legal Requirement" means any law, statute, ordinance, decree, requirement,
-----------------
order, judgment, injunction, rule, regulation or other restriction (or official
interpretation of any of the foregoing) of, and the terms of any license,
permit, concession, grant or franchise issued by, any Governmental Authority.
"Letter of Credit" means, individually, any letter of credit issued by the
----------------
Issuing Bank which is subject to this Agreement, including, without limitation,
the letters of credit described on Schedule 1.1(c), and "Letters of Credit"
-----------------
means all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
--------------------------
such Letter of Credit and any agreements, documents, and instruments entered
into in connection with or relating to such Letter of Credit.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
-------------------------
aggregate undrawn maximum face amount of each Letter of Credit at such time and
(b) the aggregate unpaid amount of all Reimbursement Obligations at such time.
"Letter of Credit Obligations" means any obligations of the Borrower under
----------------------------
this Agreement in connection with the Letters of Credit.
"Leverage Ratio" means, as of any date of calculation, the ratio of the
--------------
Borrower's Total Funded Consolidated Indebtedness outstanding on such date to
its Total Consolidated Capitalization outstanding on such date.
"Lien" means any lien (statutory or otherwise), mortgage, pledge,
----
hypothecation, assignment, deposit arrangement, charge, deed of trust, security
interest, encumbrance or other type of preferential arrangement, priority or
other security agreement of any kind or nature whatsoever to secure or provide
for the payment of any obligation of any Person, whether arising by contract,
operation of law or otherwise (including, without limitation, the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement).
"Liquid Investments" means:
------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States or any
agency or instrumentality thereof having maturity not more than twelve months
from the date of acquisition;
-10-
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within one year from
the date of acquisition thereof ("bank debt securities"), issued by (A) any Bank
or (B) any other bank, financial institution or trust company whose short-term
senior unsecured debt rating is at least A-2 from S&P or P-2 from Moody's, and
(ii) commercial paper issued by (A) any Bank or (B) any other Person if at the
time of purchase such commercial paper is rated not less than A-2 by S&P or P-2
by Moody's, with maturities of not more than twelve months from the date of
acquisition;
(c) repurchase agreements relating to investments described in
clauses (a) and (b) above with a market value at least equal to the
consideration paid in connection therewith, with any Person whose short-term
senior unsecured debt rating is at least A-2 from S&P or P-2 from Moody's;
(d) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing at least twelve months from the date of
acquisition thereof or providing for the resetting of the interest rate
applicable thereto not less often than annually and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P or Moody's; and
(e) money market funds which have at least $1,000,000,000 in assets
and which invest primarily in securities of the types described in clauses (a),
(b), (c) and (d) above and which do not constitute "margin stock" within the
meaning of Regulation U of the Federal Reserve Board; and
(f) such other instruments (within the meaning of Article 9 of the
Texas Business and Commerce Code) as the Borrower may request and the Majority
Banks may approve in writing, which approval will not be unreasonably withheld.
"Majority Banks" means, at any time, Banks holding at least 51% of the then
--------------
aggregate unpaid principal amount of the Notes held by the Banks and the
participation interest in the Letter of Credit Exposure of the Banks at such
time, or, if no such principal amount and Letter of Credit Exposure is then
outstanding, Banks having at least 51% of the aggregate amount of the Revolving
Commitments at such time.
"Mandatory Revolving Borrowing" means a Revolving Borrowing comprised of
-----------------------------
Prime Rate Advances made to repay a Swingline Advance which has not been repaid
to Xxxxx Fargo on or before the date when due.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, Property, condition (financial or otherwise), or results of operations
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under the Credit Documents to which it is a
party, or (c) the validity or enforceability of any of the Credit Documents or
the rights or remedies of the Administrative Agent or the Banks thereunder.
"Material Subsidiary" means any Subsidiary of the Borrower whose revenues
-------------------
determined in accordance with GAAP, EBITDA or book value of total assets as
established in accordance with GAAP is equal to or greater than 5% of any of (a)
the Borrower's Consolidated revenues
-11-
determined in accordance with GAAP, (b) Consolidated EBITDA or (c) Consolidated
book value of total assets as established in accordance with GAAP.
"Maturity Date" means January 30, 2005.
-------------
"Maximum Rate" means the maximum nonusurious interest rate under applicable
------------
Legal Requirements.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor thereto
-------
which is a nationally recognized statistical rating organization.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
------------------
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
---------------------------
determination, the excess (if any) of all Unrealized Losses over all Unrealized
Profits of such Person arising from Hedging Transactions. Notwithstanding the
foregoing, "Net Xxxx-to-Market Exposure" shall be determined excluding
---------------------------
recognized but unrealized gains and/or losses attributable to commodity or
interest rate derivative instruments determined under the provisions of FASB
133, as the same may be further amended, modified or clarified by the FASB.
"Note" means a Revolving Note or the Swingline Note.
----
"Notice of Borrowing" means a notice of borrowing in the form of the
-------------------
attached Exhibit D signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
------------------------------------
continuation in the form of the attached Exhibit E signed by a Responsible
Officer of the Borrower.
"Obligations" means all Advances, Reimbursement Obligations, Hedging
-----------
Obligations owing to any Bank or any Affiliate of a Bank, and any other fees,
expenses, reimbursements, indemnities or other obligations payable by the
Borrower to the Administrative Agent, the Banks or any other indemnified party
under the Credit Documents.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
---------------------------
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any liability under any Sale and Leaseback
Transaction which is not a Capital Lease, (c) any liability under any so-called
"synthetic lease" transaction entered into by such Person, or (d) any obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheets of such Person (other than any such obligations which would
otherwise constitute or arise under an Investment, Contingent Obligation,
Indebtedness or an Operating Lease).
"Operating Lease" of a Person means any lease of Property (other than a
---------------
Capital Lease) by such Person as lessee which has an original term (including
any required renewals and any renewals effective at the option of the lessor) of
one year or more.
-12-
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Business" has the meaning set forth in Section 6.9.
------------------
"Permitted Liens" means the Liens permitted to exist pursuant to Section
---------------
6.1.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
----
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.
"Pledge Agreement" means any Pledge and Security Agreement between the
----------------
Borrower or any Guarantor and the Administrative Agent, in substantially the
form of Exhibit F hereto.
"Prime Rate" means at any time the rate of interest most recently announced
----------
by Xxxxx Fargo at its principal office in San Francisco, California as its prime
rate, whether or not the Borrower has notice thereof, with the understanding
that the Prime Rate is one of Xxxxx Fargo's base rates and serves as the basis
upon which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Xxxxx Fargo may
designate. Each change in the Prime Rate shall be effective on the day the
change is announced within Xxxxx Fargo.
"Prime Rate Advance" means an Advance which bears interest as provided in
------------------
Section 2.6(a).
"Property" of any Person means any and all property (whether real,
--------
personal, or mixed, tangible or intangible) or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, at any time with respect to any Bank, either (a)
--------------
the ratio (expressed as a percentage) of such Bank's Revolving Commitment at
such time to the aggregate Revolving Commitments of the Banks at such time or
(b) if the Revolving Commitments have been terminated, the ratio (expressed as a
percentage) of such Bank's aggregate outstanding Advances and participation
interest in the Letter of Credit Exposure at such time to the aggregate
outstanding Advances and Letter of Credit Exposure of all the Banks at such
time.
"Register" has the meaning set forth in paragraph (c) of Section 9.6.
--------
"Reimbursement Obligations" means all of the obligations of the Borrower
-------------------------
set forth in Section 2.13(c).
"Release" shall have the meaning set forth under any Environmental Law.
-------
-13-
"Reportable Event" means any of the events set forth in Section 4043(b) of
----------------
ERISA and the regulations issued under such section, with respect to a Plan.
"Response" shall have the meaning set forth under any Environmental Law.
--------
"Responsible Officer" means the Chief Executive Officer, the President, the
-------------------
Chief Financial Officer, any Vice President, any Treasurer, any Assistant
Treasurer, any Secretary, any Assistant Secretary or Manager of any Person.
"Restricted Payment" means (a) any direct or indirect payment, prepayment,
------------------
redemption, defeasance, retirement, purchase of, or other acquisition of or
deposit of funds or Property for the payment, prepayment, redemption,
defeasance, retirement, or purchase of Senior Notes, and (b) the making by any
Person of any dividends or other distributions (in cash, property, or otherwise)
on, or payment for the purchase, redemption or other acquisition or retirement
of, any shares of any capital stock or other ownership interests of such Person,
other than dividends payable in such Person's stock or ownership interests.
"Revolving Advance" means any advance by a Bank to the Borrower pursuant to
-----------------
Section 2.1(a).
"Revolving Borrowing" means a borrowing consisting of simultaneous
-------------------
Revolving Advances of the same Type made by each Bank pursuant to Section 2.1(a)
or Converted by each Bank to Revolving Advances of a different Type pursuant to
Section 2.2(b).
"Revolving Commitment" means, with respect to any Bank, the amount set
--------------------
opposite such Bank's name on Schedule 1.1(a) as its Revolving Commitment, or if
such Bank has entered into any Assignment and Acceptance, the amount set forth
for such Bank as its Revolving Commitment in the Register maintained by the
Administrative Agent pursuant to Section 9.6(c), as such amount may be reduced
pursuant to Section 2.4.
"Revolving Note" means a promissory note of the Borrower payable to the
--------------
order of any Bank, in substantially the form of the attached Exhibit G,
evidencing Indebtedness of the Borrower to such Bank resulting from Revolving
Advances owing to such Bank.
"Sale and Leaseback Transaction" means any sale or other transfer of
------------------------------
Property by any Person with the intent to lease such Property as lessee.
"S&P" means Standard & Poor's Ratings Service, a division of The
---
XxXxxx-Xxxx Companies, Inc., or any successor thereof which is a nationally
recognized statistical rating organization.
"Senior Notes" means (a) the 7-1/2% Senior Notes due 2008 in the aggregate
------------
principal amount of $100,000,000 and (b) the 7-1/4% Senior Notes due 2011 in the
aggregate principal amount of $200,000,000.
"Senior Note Documents" means any indenture, note or other agreement
---------------------
evidencing or governing the Senior Notes, as such indenture, note or other
agreement may be amended, supplemented or otherwise modified as permitted
hereby.
-14-
"SPC" means a special purpose funding vehicle identified in writing from
---
time to time by the Granting Bank to the Administrative Agent and the Borrower
the purpose of which is described in Section 9.6 of this Agreement, provided
--------
that each Granting Bank may have only one SPC.
----
"Subsidiary" of a Person means any corporation, association, partnership,
----------
limited liability company, or other business entity (excluding Unrestricted
Subsidiaries) of which more than 50% of the outstanding shares of capital stock
(or other equivalent interests) having by the terms thereof ordinary voting
power under ordinary circumstances to elect a majority of the board of directors
or Persons performing similar functions (or, if there are no such directors or
Persons, having general voting power) of such entity (irrespective of whether at
the time capital stock (or other equivalent interests) of any other class or
classes of such entity shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person.
"Swingline Advance" has the meaning set forth in Section 2.1(b).
-----------------
"Swingline Note" means a promissory note of the Borrower payable to the
--------------
order of Xxxxx Fargo in substantially the form of the attached Exhibit H,
evidencing the Indebtedness of the Borrower to Xxxxx Fargo from Swingline
Advances owing to Xxxxx Fargo.
"Syndication Agent" means Bank One, NA.
-----------------
"Termination Event" means (a) the occurrence of a Reportable Event with
-----------------
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of its Affiliates from a Plan during a plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"Total Consolidated Capitalization" means the sum of Consolidated
---------------------------------
Indebtedness and Consolidated Net Worth.
"Total Funded Consolidated Indebtedness" means at any time the aggregate
--------------------------------------
dollar amount of Consolidated Indebtedness which has actually been funded and is
outstanding at such time, whether or not such amount is due or payable at such
time.
"Type" has the meaning set forth in Section 1.4.
----
"Unrealized Losses" means, with respect to any Hedging Transaction, the
-----------------
fair market value of the cost to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).
-15-
"Unrealized Profits" means, with respect to any Hedging Transaction, the
------------------
fair market value of the gain to such Person of replacing such Hedging
Transaction as of the date of determination (assuming such Hedging Transaction
were to be terminated as of that date).
"Unrestricted Subsidiary" means any Subsidiary that is not a Guarantor that
-----------------------
is designated by the Borrower as an Unrestricted Subsidiary with the consent of
the Administrative Agent (which consent shall not be unreasonably withheld),
except that the Borrower may designate up to one such Person that but for such
designation would have been required to become a Guarantor pursuant to the terms
of Section 5.10 and that is not a Guarantor on the Effective Date, provided that
--------
the Borrower shall not designate as an Unrestricted Subsidiary any Person that
but for its designation as an Unrestricted Subsidiary would be a Subsidiary that
owns, directly or indirectly, any Material Subsidiary or Guarantor or that is a
direct Subsidiary of the Borrower. The Borrower may elect to treat any
Subsidiary as an Unrestricted Subsidiary, and may rescind any such prior
election, so long as no Default or Event of Default shall have occurred and be
continuing, by giving written notice thereof to the Administrative Agent
specifying the name of such Subsidiary and the effective date of such election,
which shall be a date within 60 days after the date such notice is given, and
obtaining the consent of the Administrative Agent as provided herein. The
election to treat a particular Subsidiary as an Unrestricted Subsidiary may only
be made once.
"Xxxxx Fargo" means Xxxxx Fargo Bank Texas, National Association.
-----------
Section 1.2 Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.3 Accounting Terms; Changes in GAAP.
---------------------------------
(a) All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP applied on a consistent basis with
those applied in the preparation of the Financial Statements.
(b) Unless otherwise indicated, all financial statements of the
Borrower, all calculations for compliance with covenants in this Agreement, and
all calculations of any amounts to be calculated under the definitions in
Section 1.1 shall be based upon the Consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP.
(c) If any changes in accounting principles after the Effective Date
are required by GAAP or the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or similar agencies results in a
change in the method of calculation of, or affects the results of such
calculation of, any of the financial covenants, standards or terms found in this
Agreement, then the parties shall enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to
equitably reflect such change, with the desired result that the criteria for
evaluating the Borrower's and its Consolidated Subsidiaries' financial condition
shall be the same after such change as if such change had not been made.
-16-
Section 1.4 Types of Advances. Advances are distinguished by "Type". The
-----------------
"Type" of an Advance refers to the determination whether such Advance is a
Eurodollar Rate Advance or Prime Rate Advance, each of which constitutes a Type.
Section 1.5 Miscellaneous. Article, Section, Schedule and Exhibit
-------------
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.1 The Advances.
------------
(a) Revolving Advances. Each Bank severally agrees, on the terms
------------------
and conditions set forth in this Agreement, to make Revolving Advances to the
Borrower from time to time on any Business Day prior to the Maturity Date in an
aggregate amount not to exceed at any time outstanding an amount equal to such
Bank's Revolving Commitment less such Bank's Pro Rata Share of the Letter of
----
Credit Exposure at such time. The aggregate amount of all outstanding Revolving
Advances, Swingline Advances and Letter of Credit Exposure at any time may not
exceed the aggregate Revolving Commitments at such time. Within the limits of
each Bank's Revolving Commitment, the Borrower may from time to time prepay
pursuant to Section 2.7 and reborrow under this Section 2.1(a).
(b) Swingline Advances. On the terms and conditions set forth in
------------------
this Agreement, Xxxxx Fargo may, in its sole discretion from time-to-time on any
Business Day during the period from the date of this Agreement until the
Maturity Date, make advances ("Swingline Advances") under the Swingline Note to
------------------
the Borrower in an aggregate principal amount not to exceed $10,000,000
outstanding at any time; provided that the aggregate principal amount of
--------
outstanding Revolving Advances, Swingline Advances, and Letter of Credit
Exposure may not exceed the aggregate Revolving Commitments at such time; and
provided further than no Swingline Advance shall be made by Xxxxx Fargo if the
-------- -------
statements set forth in Section 3.2 are not true on the date of the making of
such Swingline Advance, it being agreed by the Borrower that the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Swingline Advance shall constitute a representation and
warranty by the Borrower that on the date of such Swingline Advance such
statements are true. Subject to the other provisions hereof, the Borrower may
from time-to-time borrow, prepay (in whole or in part) and reborrow Swingline
Advances.
(i) Except as provided in the following clause (ii) below,
each request for a Swingline Advance shall be made pursuant to telephone
notice to Xxxxx Fargo given no later than 12:00 p.m. (Houston, Texas time)
on the date of the proposed Swingline Advance, promptly confirmed by a
completed and executed Notice of Borrowing telecopied to the Administrative
Agent. Xxxxx Fargo will promptly (but in any event prior to 3:00 p.m.
(Houston, Texas time) on the date of such proposed Swingline Advance make
the Swingline Advance available to the Borrower at the Borrowers'
-17-
account with the Administrative Agent or such other accounts as may be
designated by the Borrower.
(ii) The Borrower and the Banks agree that in the event
any Swingline Advance is not repaid on the date due to Xxxxx Fargo, each
Bank shall pay to the Administrative Agent its Pro Rata Share of such
Swingline Advance and such payment shall be deemed to be a Prime Rate
Advance made pursuant to such Bank's Revolving Commitment, whether made
before or after termination of the Revolving Commitments, acceleration of
the Advances, or otherwise, and whether or not the conditions precedent in
Section 3.2 have been satisfied. The Administrative Agent shall give each
Bank notice of such Mandatory Revolving Borrowing by 12:00 p.m. (Houston,
Texas time) on the date the Mandatory Revolving Borrowing is to be made.
Each Bank shall make its Advance available to the Administrative Agent for
the account of Xxxxx Fargo in immediately available funds by 2:00 p.m.
(Houston, Texas time) on the date requested, and the Borrower hereby
irrevocably instructs Xxxxx Fargo to apply the proceeds of such Mandatory
Revolving Borrowing to the payment of the outstanding Swingline Advances.
Section 2.2 Method of Borrowing.
-------------------
(a) Notice. Each Revolving Borrowing shall be made pursuant to
------
a Notice of Borrowing, given not later than (i) 12:00 p.m. (Houston, Texas time)
on the third Business Day before the date of the proposed Borrowing, in the case
of a Eurodollar Rate Advance or (ii) 12:00 p.m. (Houston, Texas time) one
Business Day before the date of the proposed Borrowing, in the case of a Prime
Rate Advance, by the Borrower to the Administrative Agent, and the
Administrative Agent shall give each Bank prompt notice on the day of receipt of
timely Notice of Borrowing of such proposed Borrowing by telecopier; provided
--------
however that the Administrative Agent and each of the Banks hereby waive the
requirement in subsection (i) of this Section 2.2(a) that the Borrower provide
three Business Days advance written notice of the date of the initial Borrowing.
Each Notice of Borrowing shall be by telephone or telecopier, and if by
telephone, confirmed promptly in writing, specifying the requested (i) date of
such Borrowing, (ii) Type of Advances comprising such Borrowing, (iii) aggregate
amount of such Borrowing, and (iv) if such Borrowing is to be comprised of
Eurodollar Rate Advances, the Interest Period for each such Advance. In the case
of a proposed Borrowing comprised of Eurodollar Rate Advances, the
Administrative Agent shall promptly notify each Bank of the applicable interest
rate under Section 2.6(b). Each Bank shall before 3:00 p.m. (Houston, Texas
time) on the date of the proposed Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at its address
referred to in Section 9.2, or such other location as the Administrative Agent
may specify by notice to the Banks, in same day funds, such Bank's Pro Rata
Share of such Borrowing. Promptly upon the Administrative Agent's receipt of
such funds (but in any event not later than 4:00 p.m. (Houston, Texas time) on
the date of the proposed Borrowing) and provided that the applicable conditions
set forth in Article III have been satisfied, the Administrative Agent will make
such funds available to the Borrower at its account with the Administrative
Agent.
(b) Conversions and Continuations. In order to elect to Convert
-----------------------------
or continue Advances comprising part of the same Revolving Borrowing under this
Section, the Borrower shall deliver an irrevocable Notice of Conversion or
Continuation to the Administrative Agent at
-18-
the Administrative Agent's office no later than 12:00 p.m. (Houston, Texas
time) (i) at least one Business Day in advance of the proposed conversion date
in the case of a Conversion of such Advances to Prime Rate Advances and (ii) at
least three Business Days in advance of the proposed Conversion or continuation
date in the case of a Conversion to, or a continuation of, Eurodollar Rate
Advances. Each such Notice of Conversion or Continuation shall be in writing or
by telecopier, specifying (A) the requested Conversion or continuation date
(which shall be a Business Day), (B) the Borrowing amount and Type of the
Advances to be Converted or continued, (C) whether a Conversion or continuation
is requested, and if a Conversion, into what Type of Advances, and (D) in the
case of a Conversion to, or a continuation of, Eurodollar Rate Advances, the
requested Interest Period. Revolving Advances may only be Converted or continued
as Revolving Advances. Swingline Advances may not be Converted or continued.
Promptly after receipt of a Notice of Conversion or Continuation under this
paragraph, the Administrative Agent shall provide each Bank with a copy thereof
and, in the case of a Conversion to or a continuation of Eurodollar Rate
Advances, notify each Bank of the applicable interest rate under Section 2.6(b).
For purposes other than the conditions set forth in Section 3.2, the portion of
Revolving Advances comprising part of the same Revolving Borrowing that are
Converted to Revolving Advances of another Type shall constitute a new Revolving
Borrowing.
(c) Certain Limitations. Notwithstanding anything in paragraphs
-------------------
(a) and (b) above:
(i) each Borrowing (other than a Borrowing of Swingline
Advances) shall be in an aggregate amount not less than $3,000,000 or
greater multiples of $1,000,000, in the case of Eurodollar Rate Advances,
or $500,000 or greater multiples of $100,000, in the case of Prime Rate
Advances, and shall consist of Advances of the same Type made on the same
day by the Banks ratably according to their respective Revolving
Commitments.
(ii) at no time shall there be more than eight Interest
Periods applicable to outstanding Eurodollar Rate Advances;
(iii) the Borrower may not select Eurodollar Rate
Advances for any Borrowing to be made, Converted or continued if (A) the
aggregate amount of such Borrowing is less than $3,000,000 or (B) a Default
or Event of Default has occurred and is continuing;
(iv) (A) if any Bank shall, at any time prior to the
making of any requested Borrowing comprised of Eurodollar Rate Advances,
notify the Administrative Agent that the introduction of or any change in
or in the interpretation of any Legal Requirement makes it unlawful, or
that any central bank or other Governmental Authority asserts that it is
unlawful, for such Bank or its Eurodollar Lending Office to perform its
obligations under this Agreement to make Eurodollar Rate Advances or to
fund or maintain Eurodollar Rate Advances, such Bank's Pro Rata Share of
such Borrowing shall be made as a Prime Rate Advance of such Bank, but
otherwise shall be considered part of the same Borrowing and interest on
such Prime Rate Advance shall be due and payable at the same time that
interest on the Eurodollar Rate Advances comprising the remainder of such
Borrowing shall be due and payable; and (B) such
-19-
Bank agrees to use commercially reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation would
avoid the effect of this paragraph and would not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank;
(v) if the Administrative Agent is unable to determine
the Eurodollar Rate for Eurodollar Rate Advances comprising any requested
Borrowing, the right of the Borrower to select Eurodollar Rate Advances for
such Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Prime Rate Advance;
(vi) if the Majority Banks shall, at least one Business
Day before the date of any requested Borrowing, notify the Administrative
Agent that the Eurodollar Rate for Eurodollar Rate Advances comprising such
Borrowing will not adequately reflect the cost to such Banks of making or
funding their respective Eurodollar Rate Advances, as the case may be, for
such Borrowing, the right of the Borrower to select Eurodollar Rate
Advances for such Borrowing or for any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the Borrower and the
Banks that the circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be a Prime Rate Advance; and
(vii) if the Borrower shall fail to select the duration
or continuation of any Interest Period for any Eurodollar Rate Advances in
accordance with the provisions contained in the definition of "Interest
--------
Period" in Section 1.1 and paragraph (a) or (b) above, the Administrative
------
Agent will forthwith so notify the Borrower and the Banks and such Advances
will be made available to the Borrower on the date of such Borrowing as
Prime Rate Advances or, if an existing Advance, Converted into Prime Rate
Advances.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of
-------------------
Conversion or Continuation shall be irrevocable and binding on the Borrower. In
the case of any Borrowing which the related Notice of Borrowing specifies is to
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Bank
against any loss, out-of-pocket cost or expense incurred by such Bank as a
result of any condition precedent for Borrowing set forth in Article III not
being satisfied for any reason, including, without limitation, any loss, cost or
expense actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to fund the Advance to be made by
such Bank as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Administrative Agent Reliance. Unless the Administrative
-----------------------------
Agent shall have received notice from a Bank before the date of any Revolving
Borrowing or Mandatory Revolving Borrowing that such Bank will not make
available to the Administrative Agent such Bank's Pro Rata Share of the
Borrowing, the Administrative Agent may assume that such Bank has made its Pro
Rata Share of such Borrowing available to the Administrative Agent on the date
of such Borrowing in accordance with paragraph (a) of this Section 2.2 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Bank shall not have so made its Pro Rata
-20-
Share of such Borrowing available to the Administrative Agent, such Bank and
the Borrower severally agree to immediately repay to the Administrative Agent on
demand such corresponding amount, together with interest on such amount, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid to the Administrative Agent, at (i) in the case of
the Borrower, the interest rate applicable on such day to Advances comprising
such Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for
such day. If such Bank shall repay to the Administrative Agent such
corresponding amount and interest as provided above, such corresponding amount
so repaid shall constitute such Bank's Advance as part of such Borrowing for
purposes of this Agreement even though not made on the same day as the other
Advances comprising such Borrowing.
(f) Bank Obligations Several. The failure of any Bank to make
------------------------
the Advance to be made by it as part of any Borrowing shall not relieve any
other Bank of its obligation, if any, to make its Advance on the date of such
Borrowing. No Bank shall be responsible for the failure of any other Bank to
make the Advance to be made by such other Bank on the date of any Borrowing.
(g) Notes. The Obligations of the Borrower to each Bank
-----
resulting from Revolving Advances owing to such Bank shall be evidenced by the
Revolving Note of the Borrower payable to the order of such Bank in
substantially the form of Exhibit G. The Obligations of the Borrower to Xxxxx
Fargo resulting from Swingline Advances owing to Xxxxx Fargo shall be evidenced
by the Swingline Note of the Borrower payable to the order of Xxxxx Fargo in
substantially the form of Exhibit H.
Section 2.3 Fees.
----
(a) Commitment Fees. The Borrower agrees to pay to the
---------------
Administrative Agent for the account of each Bank a commitment fee on the
average daily amount by which such Bank's Revolving Commitment exceeds the sum
of such Bank's outstanding Revolving Advances and Pro Rata Share of the Letter
of Credit Exposure at a rate per annum equal to the Applicable Margin for the
period from the Closing Date until the Maturity Date, such fees due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December, commencing March 31, 2002, and on the Maturity Date.
(b) Utilization Fees. The Borrower agrees to pay to the
----------------
Administrative Agent for the account of each Bank a daily utilization fee equal
to one-eighth percent (1/8%) per annum of the amount by which on any day the sum
of such Bank's outstanding Revolving Advances, Swingline Advances and Pro Rata
Share of the Letter of Credit Exposure exceeds 33 1/3% of such Bank's Revolving
Commitment from the Closing Date until the Maturity Date, such fees due and
payable quarterly in arrears on the fifth day after the last Business Day of
each March, June, September and December, commencing March 31, 2002, and on the
Maturity Date.
(c) Letter of Credit Fees. The Borrower agrees to pay to the
---------------------
Administrative Agent for the pro rata benefit of the Banks, issuance fees in
respect of all Letters of Credit outstanding at a rate per annum equal to the
Applicable Margin for Eurodollar Rate Advances calculated on the maximum amount
available from time to time to be drawn under such outstanding Letters of
Credit, payable quarterly in arrears on the last Business Day of each
-21-
March, June, September and December, commencing March 31, 2002, and on the
Maturity Date. In addition, the Borrower agrees to pay to the Issuing Bank for
its own account fronting fees in respect of all Letters of Credit outstanding
and issued by the Issuing Bank equal to one-eighth percent (1/8%) per annum of
the maximum amount available from time to time to be drawn under such
outstanding Letters of Credit, payable at issuance and on the earlier of each
annual anniversary thereafter or the Maturity Date. The Borrower shall also pay
to the Issuing Bank for its own account such documentary, processing and other
charges in connection with the issuance, amendment, transfer, modification of
and draws under Letters of Credit assessed or incurred by the Issuing Bank from
time to time.
(d) Administrative Agent Fees. The Borrower agrees to pay when
-------------------------
due to the Administrative Agent for its benefit the fees set forth in the
Agent's Fee Letter.
Section 2.4 Reduction of the Revolving Commitments. The Borrower shall
--------------------------------------
have the right, upon at least three Business Days' irrevocable notice to the
Administrative Agent and the Banks, to terminate in whole or reduce ratably in
part the unused portion of the Revolving Commitments; provided that each partial
--------
reduction shall be in the aggregate amount of $3,000,000 or an integral multiple
of $1,000,000. Any reduction or termination of the Revolving Commitments
pursuant to this Section 2.4 shall be permanent, with no obligation of the Banks
to reinstate such Revolving Commitments and the commitment fees provided for in
Section 2.3(a) shall thereafter be computed on the basis of the Revolving
Commitments, as so reduced.
Section 2.5 Repayment of Advances.
---------------------
(a) Revolving Advances. The Borrower shall repay the
------------------
outstanding principal amount of each Revolving Advance on the Maturity Date.
(b) Swingline Advances. The Borrower shall repay the
------------------
outstanding principal amount of each Swingline Advance on the earlier of the
Maturity Date or the date which is ten Business Days after the date such
Swingline Advance was made.
Section 2.6 Interest. The Borrower shall pay interest on the unpaid
--------
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(a) Prime Rate Advances. If such Advance is a Prime Rate
-------------------
Advance, a rate per annum equal at all times to the lesser of (i) the Adjusted
Prime Rate in effect from time to time plus the Applicable Margin and (ii) the
----
Maximum Rate, payable in arrears on the last Business Day of each calendar
quarter, commencing with the calendar quarter ending March 31, 2002, and on the
date such Prime Rate Advance shall be paid in full, provided that if any payment
--------
of principal on any Advance is not made when due, such Advances shall bear
interest from the date such payment was due until such Advances are paid in
full, payable on demand, at a rate per annum equal at all times to the lesser of
(a) the rate required to be paid on such Advance immediately prior to the date
on which such amount becomes due plus two percent (2%) and (b) the Maximum Rate.
----
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar
------------------------
Rate Advance, a rate per annum equal at all times during the Interest Period for
such Advance to the
-22-
lesser of (i) the Eurodollar Rate for such Interest Period plus the Applicable
----
Margin and (ii) the Maximum Rate, payable in arrears on the last day of such
Interest Period, and on the date such Eurodollar Rate Advance shall be paid in
full; provided that if any payment of principal on any Advance is not made when
--------
due, such Advances shall bear interest from the date such payment was due until
such Advances are paid in full, payable on demand, at a rate per annum equal at
all times to the lesser of (A) the greater of (1) the Adjusted Prime Rate in
effect from time to time plus two percent (2%) and (2) the rate required to be
----
paid on such Advance immediately prior to the date on which such amount became
due plus two percent (2%) and (B) the Maximum Rate.
----
(c) Swingline Advances. If such Advance is a Swingline Advance,
------------------
a rate per annum equal at all times to the lesser of (i) the Adjusted Prime Rate
in effect from time to time plus the Applicable Margin and (ii) the Maximum
----
Rate, payable in arrears on the date such Advance shall be paid in full;
provided that if any payment of principal on any Advance is not made when due,
--------
such Advances shall bear interest from the date such payment was due until such
Advances are paid in full, at a rate per annum equal at all times to the lesser
of (A) the rate required to be paid on such Advance immediately prior to the
date on which such amount becomes due plus two percent (2%) and (B) the Maximum
----
Rate.
(d) Usury Recapture. In the event the rate of interest
---------------
chargeable under this Agreement or the Notes at any time is greater than the
Maximum Rate, the unpaid principal amount of the Notes shall bear interest at
the Maximum Rate until the total amount of interest paid or accrued on the Notes
equals the amount of interest which would have been paid or accrued on the Notes
if the stated rates of interest set forth in this Agreement had at all times
been in effect. In the event, upon payment in full of the Notes, the total
amount of interest paid or accrued under the terms of this Agreement and the
Notes is less than the total amount of interest which would have been paid or
accrued if the rates of interest set forth in this Agreement had, at all times,
been in effect, then the Borrower shall, to the extent permitted by applicable
Legal Requirements, pay the Administrative Agent for the account of the Banks an
amount equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on the Notes if the Maximum Rate had, at
all times, been in effect and (B) the amount of interest which would have
accrued on the Notes if the rates of interest set forth in this Agreement had at
all times been in effect and (ii) the amount of interest actually paid or
accrued under this Agreement on the Notes. In the event the Banks ever receive,
collect or apply as interest any sum in excess of the Maximum Rate, such excess
amount shall, to the extent permitted by law, be applied to the reduction of the
principal balance of the Notes, and if no such principal is then outstanding,
such excess or part thereof remaining shall be paid to the Borrower.
(e) Other Amounts Overdue. If any amount payable under this
---------------------
Agreement other than the Advances is not paid when due and payable, including
without limitation, accrued interest and fees, then such overdue amount shall
accrue interest hereon due and payable on demand at a rate per annum equal to
the Adjusted Prime Rate plus two percent (2%), from the date such amount became
----
due until the date such amount is paid in full.
Section 2.7 Prepayments.
-----------
(a) Right to Prepay. The Borrower shall have no right to prepay
---------------
any principal amount of any Advance except as provided in this Section 2.7.
-23-
(b) Optional Prepayments. The Borrower may elect to prepay any of
--------------------
the Advances, after giving notice thereof to the Administrative Agent and the
Banks by 12:00 p.m. (Houston, Texas time) (i) on the day of prepayment of any
Swingline Advance, (ii) at least three Business Days' prior to the day of
prepayment of any Eurodollar Rate Advances, and (iii) at least one Business Day
prior to the day of prepayment of any Prime Rate Advances. Such notice shall be
by telephone or telecopier, and if by telephone, confirmed promptly in writing,
and must state the proposed date and aggregate principal amount of such
prepayment, whether such prepayment should be applied to reduce outstanding
Revolving Advances or Swingline Advances, and if applicable, the relevant
Interest Period for the Advances to be prepaid. If any such notice is given, the
Borrower shall prepay Advances comprising part of the same Borrowing in whole or
ratably in part in an aggregate principal amount equal to the amount specified
in such notice, and shall also pay accrued interest to the date of such
prepayment on the principal amount prepaid and amounts, if any, required to be
paid pursuant to Section 2.8 as a result of such prepayment being made on such
date; provided, however, that each partial prepayment of Revolving Advances
-------- -------
shall be in an aggregate principal amount not less than $3,000,000 or an
integral multiple of $1,000,000. Each prepayment pursuant to this Section 2.7(b)
shall be accompanied by accrued interest on the amount prepaid to the date of
such prepayment and amounts, if any, required to be paid pursuant to Section 2.8
as a result of such prepayment being made on such date.
(c) Ratable Payments. Each payment of any Advance pursuant to
----------------
this Section 2.7 or any other provision of this Agreement shall be made in a
manner such that all Advances comprising part of the same Borrowing are paid in
whole or ratably in part.
(d) Effect of Notice. All notices given pursuant to this
----------------
Section 2.7 shall be irrevocable and binding upon the Borrower.
Section 2.8 Breakage Costs. If (a) any payment of principal of any
--------------
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance as a result of any payment pursuant to Section 2.7 or
the acceleration of the maturity of the Notes pursuant to Article VIII or
otherwise; (b) any Conversion of a Eurodollar Rate Advance is made other than on
the last day of the Interest Period for such Advance pursuant to Section 2.12 or
otherwise; or (c) the Borrower fails to make a principal or interest payment
with respect to any Eurodollar Rate Advance on the date such payment is due and
payable, the Borrower shall, within 10 days of any written demand sent by any
Bank to the Borrower (with a copy to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank any amounts (without
duplication of any other amounts payable in respect of breakage costs) required
to compensate such Bank for any additional losses, out-of-pocket costs or
expenses which it may reasonably incur as a result of such payment or
nonpayment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Bank to fund or maintain
such Advance.
Section 2.9 Increased Costs.
---------------
(a) Eurodollar Rate Advances. If, due to either (i) the
------------------------
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the calculation of the Eurodollar
Rate) in or in the interpretation of any Legal Requirement or
-24-
(ii) the compliance 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 any Bank of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances, then the Borrower shall from time to time,
upon demand by such Bank (with a copy of such demand to the Administrative
Agent), promptly pay to the Administrative Agent for the account of such Bank
additional amounts (without duplication of any other amounts payable in respect
of increased costs) sufficient to compensate such Bank for such increased cost;
provided, however, that, before making any such demand, each Bank agrees to use
-------- -------
commercially reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate as to the amount
of such increased cost and detailing the calculation of such cost submitted to
the Borrower and the Administrative Agent by such Bank at the time such Bank
demands payment under this Section shall be conclusive and binding for all
purposes, absent manifest error.
(b) Capital Adequacy. If any Bank or the Issuing Bank
----------------
determines in good faith that compliance with any Legal Requirement or any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law) implemented or effective after the date
of this Agreement affects or would affect the amount of capital required or
expected to be maintained by such Bank or the Issuing Bank and that the amount
of such capital is increased by or based upon the existence of such Bank's
commitment to lend or the Issuing Bank's commitment to issue Letters of Credit
or any Bank's commitment to risk participate in Letters of Credit and other
commitments of this type, then, upon 30 days prior written notice by such Bank
or the Issuing Bank (with a copy of any such demand to the Administrative
Agent), the Borrower shall promptly pay to the Administrative Agent for the
account of such Bank or to the Issuing Bank, as the case may be, from time to
time as specified by such Bank or the Issuing Bank, additional amounts (without
duplication of any other amounts payable in respect of increased costs)
sufficient to compensate such Bank or the Issuing Bank, in light of such
circumstances, (i) with respect to such Bank, to the extent that such Bank
reasonably determines such increase in capital to be allocable to the existence
of such Bank's commitment to lend under this Agreement or its commitment to risk
participate in Letters of Credit and (ii) with respect to the Issuing Bank, to
the extent that the Issuing Bank reasonably determines such increase in capital
to be allocable to the issuance or maintenance of the Letters of Credit. A
certificate as to such amounts and detailing the calculation of such amounts
submitted to the Borrower by such Bank or the Issuing Bank shall be conclusive
and binding for all purposes, absent manifest error.
(c) Letters of Credit. If any change in any Legal Requirement
-----------------
or in the interpretation thereof by any court or administrative or Governmental
Authority charged with the administration thereof shall either (i) impose,
modify, or deem applicable any reserve, special deposit, or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, the Issuing Bank or any Bank or (ii) impose on the Issuing Bank
or any Bank any other condition regarding the provisions of this Agreement
relating to the Letters of Credit or any Letter of Credit Obligations, and the
result of any event referred to in the preceding clause (i) or (ii) shall be to
increase the cost to the Issuing Bank of issuing or maintaining any Letter of
Credit, or increase the cost to such Bank of its risk participation in any
Letter of Credit
-25-
(which increase in cost shall be determined by the Issuing Bank's or such Bank's
reasonable allocation of the aggregate of such cost increases resulting from
such event), then, upon demand by the Issuing Bank or such Bank (with a copy
sent to the Administrative Agent), as the case may be, the Borrower shall pay to
the Administrative Agent (for the account of the Issuing Bank), as the case may
be, from time to time as specified by the Issuing Bank or such Bank, additional
amounts which shall be sufficient to compensate the Issuing Bank or such Bank
for such increased cost. The Issuing Bank and each Bank agrees to use
commercially reasonable efforts (consistent with internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office for
the booking of its Letters of Credit or risk participations if the making of
such designation would avoid the effect of this paragraph and would not, in the
reasonable judgment of the Issuing Bank or such Bank, be otherwise
disadvantageous to the Issuing Bank or such Bank, as the case may be. A
certificate as to such increased cost incurred by the Issuing Bank or such Bank,
as the case may be, as a result of any event mentioned in clause (i) or (ii)
above, and detailing the calculation of such increased costs submitted by the
Issuing Bank or such Bank to the Borrower, shall be conclusive and binding for
all purposes, absent manifest error.
Section 2.10 Payments and Computations.
-------------------------
(a) Payment Procedures. Except if otherwise set forth herein,
------------------
the Borrower shall make each payment under this Agreement and under the Notes
not later than 1:00 p.m. (Houston, Texas time) on the day when due in Dollars to
the Administrative Agent at the location referred to in the Notes (or such other
location as the Administrative Agent shall designate in writing to the Borrower)
in same day funds. The Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Administrative Agent, the
Issuing Bank, or a specific Bank pursuant to Section 2.1(b), 2.3(c), 2.3(d),
2.6(c), 2.6(d), 2.8, 2.9, 2.11, 2.12, or 2.13(c) but after taking into account
payments effected pursuant to Section 9.4) to the Banks in accordance with each
Bank's Pro Rata Share for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Bank or the Issuing Bank to such Bank or the Issuing Bank for the account of
its Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement.
(b) Computations. All computations of interest based on the
------------
Adjusted Prime Rate shall be made by the Administrative Agent on the basis of a
year of 365 or 366 days, as the case may be, and all computations of fees and
interest based on the Eurodollar Rate and the Federal Funds Rate shall be made
by the Administrative Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate shall be
conclusive and binding for all purposes, absent manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be
-------------------------
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be; provided, however, that if such extension would
--------
-26-
cause payment of interest on or principal of Eurodollar Rate Advances to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day.
(d) Administrative Agent Reliance. Unless the Administrative
-----------------------------
Agent shall have received written notice from the Borrower prior to the date on
which any payment is due to the Banks that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such date an amount equal to the amount then due
such Bank. If and to the extent the Borrower shall not have so made such payment
in full to the Administrative Agent, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank, together with
interest, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Administrative Agent, at the
Federal Funds Rate for such day.
(e) Application of Payments. Whenever any payment received by
-----------------------
the Administrative Agent under this Agreement is insufficient to pay in full all
amounts then due and payable under this Agreement and the Notes, such payment
shall be distributed and applied by the Administrative Agent and the Banks in
the following order: first, to the payment of fees and expenses due and payable
-----
to the Administrative Agent under and in connection with this Agreement or any
other Credit Document; second, to the payment of all expenses due and payable
------
under Section 2.11(c), ratably among the Banks in accordance with the aggregate
amount of such payments owed to each such Bank; third, to the payment of fees
-----
due and payable to the Issuing Bank pursuant to Section 2.3(c); fourth, to the
------
payment of all other fees due and payable under Section 2.3 ratably among the
Banks in accordance with their applicable Revolving Commitments; and fifth, to
-----
the payment of the interest accrued on and the principal amount of all of the
Notes and the interest accrued on and the principal amount of all Reimbursement
Obligations, regardless of whether any such amount is then due and payable,
ratably among the Banks in accordance with the aggregate accrued interest plus
the aggregate principal amount owed to such Bank.
Section 2.11 Taxes.
-----
(a) No Deduction for Certain Taxes. Any and all payments by the
------------------------------
Borrower shall be made, in accordance with Section 2.10, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank, the Issuing Bank, and the Administrative
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank, the Issuing Bank, or the
Administrative Agent (as the case may be) is organized or any political
subdivision of the jurisdiction (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes") and, in the case of each Bank and the Issuing Bank, Taxes by the
jurisdiction of such Bank's Applicable Lending Office or any political
subdivision of such jurisdiction. If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable to any Bank, the Issuing
Bank, or the Administrative Agent, (i) the sum payable shall be increased as may
be necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11), such Bank, the
Issuing
-27-
Bank, or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made; provided,
--------
however, that if the Borrower's obligation to deduct or withhold Taxes is caused
solely by such Bank's, the Issuing Bank's, or the Administrative Agent's failure
to provide the forms described in paragraph (e) of this Section 2.11 and such
Bank, the Issuing Bank, or the Administrative Agent could have provided such
forms, no such increase shall be required; (ii) the Borrower shall make such
deductions; and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Legal Requirements.
(b) Other Taxes. In addition, the Borrower agrees to pay any
-----------
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes, or the other Credit Documents (hereinafter referred to as
"Other Taxes").
(c) Indemnification. The Borrower indemnifies each Bank, the
---------------
Issuing Bank, and the Administrative Agent for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.11) paid by such Bank, the
Issuing Bank, or the Administrative Agent (as the case may be) and any liability
(including interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Each payment required to be made by the Borrower in respect of this
indemnification shall be made to the Administrative Agent for the benefit of any
party claiming such indemnification within 30 days from the date the Borrower
receives written demand detailing the calculation of such amounts therefor from
the Administrative Agent, the Issuing Bank, or any such Bank (with a copy of
such demand to the Administrative Agent). If any Bank, the Administrative Agent,
or the Issuing Bank receives a refund in respect of any taxes paid by the
Borrower under this paragraph (c), such Bank, the Administrative Agent, or the
Issuing Bank, as the case may be, shall promptly pay to the Borrower the
Borrower's share of such refund.
(d) Evidence of Tax Payments. The Borrower will pay prior to
------------------------
delinquency all Taxes payable in respect of any payment. Within 30 days after
the date of any payment of Taxes, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 9.2, the original or
a certified copy of a receipt evidencing payment of such Taxes.
(e) Foreign Bank Withholding Exemption. Each Bank and the
----------------------------------
Issuing Bank that is not incorporated under the laws of the United States of
America or a state thereof agrees that it will deliver to the Borrower and the
Administrative Agent on the date of this Agreement or upon the effectiveness of
any Assignment and Acceptance (i) two duly completed copies of United States
Internal Revenue Service Form W-8ECI, W-8BEN, W-8EXP or W-8IMY or successor
applicable form, as the case may be, certifying in each case that such Bank is
entitled to receive payments under this Agreement and the Notes payable to it,
without deduction or withholding of any United States federal income taxes, (ii)
if applicable, an Internal Revenue Service Form W-8ECI, W-8BEN, and W-8EXP or
W-9 or successor applicable form, as the case may be, to establish an exemption
from United States backup withholding tax, and (iii) any other governmental
forms which are necessary or required under an applicable tax treaty or
otherwise by law to reduce or eliminate any withholding tax, which have been
reasonably requested by the
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Borrower. Each Bank which delivers to the Borrower and the Administrative
Agent a Form W-8ECI, W-8BEN, W-8EXP or W-8IMY or W-9 pursuant to the next
preceding sentence further undertakes to deliver to the Borrower and the
Administrative Agent two further copies of Form W-8ECI, W-8BEN, W-8EXP or W-8IMY
or W-9, or successor applicable forms, or other manner of certification, as the
case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower and the Administrative
Agent, and such extensions or renewals thereof as may reasonably be requested by
the Borrower and the Administrative Agent certifying in the case of a Form
W-8ECI, W-8BEN, W-8EXP or W-8IMY that such Bank is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes. If an event (including without limitation any change in
any Legal Requirement) has occurred prior to the date on which any delivery
required by the preceding sentence would otherwise be required which renders all
such forms inapplicable or which would prevent any Bank from duly completing and
delivering any such letter or form with respect to it and such Bank advises the
Borrower and the Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax, and in the case of a Form W-8ECI, W-8BEN, W-8EXP or W-8IMY or W-9,
establishing an exemption from United States backup withholding tax, such Bank
shall not be required to deliver such forms. The Borrower shall withhold tax at
the rate and in the manner required by the laws of the United States with
respect to payments made to a Bank failing to timely provide the requisite
Internal Revenue Service forms.
Section 2.12 Illegality. If any Bank shall notify the Administrative Agent
----------
and the Borrower that the introduction of or any change in or in the
interpretation of any Legal Requirement makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful for such Bank
or its Eurodollar Lending Office to perform its obligations under this Agreement
to maintain any Eurodollar Rate Advances of such Bank then outstanding
hereunder, then, notwithstanding anything herein to the contrary, the Borrower
shall, if demanded by such Bank in its notice, no later than 12:00 p.m.
(Houston, Texas time), (a) if not prohibited by any Legal Requirement to
maintain such Eurodollar Rate Advances for the duration of the Interest Period,
on the last day of the Interest Period for each outstanding Eurodollar Rate
Advance of such Bank or (b) if prohibited by any Legal Requirement to maintain
such Eurodollar Rate Advances for the duration of the Interest Period, on the
second Business Day following its receipt of such notice from such Bank, Convert
all Eurodollar Rate Advances of such Bank then outstanding to Prime Rate
Advances, and pay accrued interest on the principal amount Converted to the date
of such Conversion and amounts, if any, required to be paid pursuant to Section
2.8 as a result of such Conversion being made on such date. Each Bank agrees to
use commercially reasonable efforts (consistent with its internal policies and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such designation would avoid the effect of this
paragraph and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank.
Section 2.13 Letters of Credit.
-----------------
(a) Issuance. From time to time from the date of this Agreement until ten
--------
days before the Maturity Date, at the request of the Borrower, the Issuing Bank
shall, on any Business Day and on the terms and conditions hereinafter set
forth, issue, increase, decrease,
-29-
amend, or extend the expiration date of Letters of Credit for the account of
the Borrower (for its own benefit or for the benefit of any of its
Subsidiaries). No Letter of Credit will be issued, increased, or extended (i) if
such issuance, increase, or extension would cause the Letter of Credit Exposure
to exceed the lesser of (A) $25,000,000 or (B) an amount equal to (1) the
aggregate Revolving Commitments less (2) the aggregate outstanding Revolving
----
Advances, Swingline Advances and Letter of Credit Exposure at such time; (ii)
unless such Letter of Credit has an Expiration Date not later than the earlier
of (A) thirty-six months after the date of issuance thereof and (B) twelve
months after the Maturity Date; (iii) unless such Letter of Credit is in form
and substance acceptable to the Issuing Bank in its sole discretion; (iv) unless
the Borrower has delivered to the Issuing Bank a completed and executed letter
of credit application on the Issuing Bank's standard form, which shall contain
terms no more restrictive than the terms of this Agreement; (v) unless the face
amount of such Letter of Credit is equal to or greater than $300,000; and (vi)
unless such Letter of Credit is governed by the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 ("UCP") or any successor to the UCP. If the terms of any
letter of credit application referred to in the foregoing clause (iv) conflicts
with the terms of this Agreement, the terms of this Agreement shall control.
(b) Participations. With respect to each Letter of Credit described on
--------------
Schedule 1.1(c) which is outstanding on the Effective Date, each Bank agrees
that it has a participation in the related Letter of Credit Exposure equal to
such Bank's Pro Rata Share on the Effective Date. On the date of the issuance or
increase of any Letter of Credit on or after the Effective Date, the Issuing
Bank shall be deemed to have sold to each other Bank and each other Bank shall
have been deemed to have purchased from the Issuing Bank a participation in the
Letter of Credit Exposure related to the Letters of Credit issued by the Issuing
Bank equal to such Bank's Pro Rata Share at such date and such sale and purchase
shall otherwise be in accordance with the terms of this Agreement. The Issuing
Bank shall promptly notify each such participant Bank by telex, telephone, or
telecopy (with a copy of such demand to the Administrative Agent) of each Letter
of Credit of the Issuing Bank issued, increased or decreased, and the actual
dollar amount of such Bank's participation in such Letter of Credit. Each Bank's
obligation to purchase participating interests pursuant to this Section and to
reimburse the Issuing Bank for such Bank's Pro Rata Share of any payment under a
Letter of Credit by the Issuing Bank not reimbursed in full by the Borrower
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any of the circumstances
described in paragraph (d) below, (ii) the occurrence and continuance of a
Default, (iii) an adverse change in the financial condition of the Borrower or
any Guarantor, or (iv) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing, except for any such
circumstance, happening or event constituting or arising from gross negligence
or willful misconduct on the part of the Issuing Bank.
(c) Reimbursement. The Borrower hereby agrees to pay on demand to the
-------------
Issuing Bank in respect of each Letter of Credit issued by the Issuing Bank an
amount equal to any amount paid by the Issuing Bank under or in respect of such
Letter of Credit. In the event the Issuing Bank makes a payment pursuant to a
request for draw presented under a Letter of Credit and such payment is not
promptly reimbursed by the Borrower upon demand, the Issuing Bank shall give
notice of such payment to the Administrative Agent and the Banks, and each Bank
shall promptly reimburse the Issuing Bank for such Bank's Pro Rata Share of such
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payment, and such reimbursement shall be deemed for all purposes of this
Agreement to constitute a Prime Rate Advance to the Borrower from such Bank. If
such reimbursement is not made by any Bank to the Issuing Bank on the same day
on which the Issuing Bank shall have made payment on any such draw, such Bank
shall pay interest thereon to the Issuing Bank at a rate per annum equal to the
Federal Funds Rate. The Borrower hereby unconditionally and irrevocably
authorizes, empowers, and directs the Administrative Agent and the Banks to
record and otherwise treat each payment under a Letter of Credit not immediately
reimbursed by the Borrower as a Borrowing comprised of Prime Rate Advances to
the Borrower.
(d) Obligations Unconditional. The obligations of the Borrower under
-------------------------
this Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit Documents;
(ii) any amendment or waiver of or any consent to departure from
any Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other right
which the Borrower or any Bank or any other Person may have at any time
against any beneficiary or transferee of such Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Bank or any other Person or entity, whether in
connection with this Agreement, the transactions contemplated in this
Agreement or in any Letter of Credit Documents or any unrelated
transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect to the extent the Issuing Bank would not be liable therefor
pursuant to the following paragraph (e);
(v) payment by the Issuing Bank under such Letter of Credit
against presentation of a draft or certificate which does not comply with
the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing;
provided, however, that nothing contained in this paragraph (d) shall be deemed
-------- -------
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.
(e) Liability of Issuing Bank. The Borrower assumes all risks of the
-------------------------
acts or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit. Neither the Issuing Bank nor any of
its officers or directors shall be liable or responsible for:
-31-
(i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of documents, or
of any endorsement thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of
documents which do not comply with the terms of a Letter of Credit,
including failure of any documents to bear any reference or adequate
reference to the relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit (including the Issuing Bank's own
negligence),
except that the Borrower shall have a claim against the Issuing Bank, and the
------
Issuing Bank shall be liable to, and shall promptly pay to, the Borrower, to the
extent of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by the Issuing Bank's willful
misconduct or gross negligence. In furtherance and not in limitation of the
foregoing, the Issuing Bank may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
(f) Cash Collateral Account. The Borrower shall be required to deposit
-----------------------
cash or an irrevocable standby letter of credit issued by a bank or other
financial institution acceptable to the Administrative Agent in the Cash
Collateral Account if (i) required pursuant to Sections 7.2(b) or 7.3(b), or
(ii) within 30 days prior to the Maturity Date in an amount equal to the Letter
of Credit Exposure as of such date.
Section 2.14 Sharing of Payments, Etc. If any Bank shall obtain any payment
------------------------
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) on account of its Advances or its share of Letter of Credit
Obligations in excess of its Pro Rata Share of payments on account of the
Advances or Letter of Credit Obligations obtained by all the Banks, such Bank
shall notify the Administrative Agent and the Banks and forthwith purchase from
the other Banks such participations in the Advances made by them or Letter of
Credit Obligations held by them as shall be necessary to cause such purchasing
Bank to share the excess payment ratably in accordance with the requirements of
this Agreement with each of them; provided, however, that if all or any portion
--------
of such excess payment is thereafter recovered from such purchasing Bank, such
purchase from each Bank shall be rescinded and such Bank shall repay to the
purchasing Bank the purchase price to the extent of such Bank's ratable share
(according to the proportion of (a) the amount of the participation sold by such
Bank to the purchasing Bank as a result of such excess payment to (b) the total
amount of such excess payment) of such recovery, together with an amount equal
to such Bank's ratable share (according to the proportion of (i) the amount of
such Bank's required repayment to the purchasing Bank to (ii) the total amount
of all such required repayments to the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section 2.14 may, to the fullest extent permitted
by law, unless and until rescinded as provided above, exercise all its
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rights of payment (including the right of set-off) with respect to
such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.
Section 2.15 Increase of Commitment.
----------------------
(a) On any one date occurring on or prior to January 30, 2004, the
Borrower may increase the aggregate Revolving Commitments by an amount not
greater than $25,000,000 (any such increase, a "Commitment Increase"), provided,
------------------- --------
however, that the aggregate Revolving Commitments shall not at any time exceed
$150,000,000, by designating either one or more of the existing Banks (each of
which, in its sole discretion, may determine whether and to what degree to
participate in such Revolving Commitment Increase) or one or more other banks or
other financial institutions reasonably acceptable to the Administrative Agent
that at the time agree, in the case of any such bank or financial institution
that is an existing Bank to increase its Revolving Commitment as such Bank shall
so select (an "Increasing Bank") and, in the case of any other such bank or
---------------
financial institution (an "Additional Bank"), to become a party to this
---------------
Agreement. The sum of the increases in the Revolving Commitments of the
Increasing Banks plus the Revolving Commitments of the Additional Banks upon
giving effect to the Commitment Increase shall not in the aggregate exceed the
amount of the Commitment Increase. The Borrower shall provide prompt notice of
any proposed Commitment Increase pursuant to this Section 2.15 to the
Administrative Agent and the Banks.
(b) Any Commitment Increase shall become effective upon (i) the
receipt by the Administrative Agent of (A) an agreement in form and substance
satisfactory to the Administrative Agent signed by the Borrower, each Increasing
Bank and each Additional Bank, setting forth the new Revolving Commitments of
each such Bank and setting forth the agreement of each Additional Bank to become
a party to this Agreement and to be bound by all the terms and provisions hereof
binding upon each Bank, and (B) such evidence of appropriate authorization on
the part of the Borrower with respect to the Commitment Increase and such
opinions of counsel for the Borrower with respect to the Commitment Increase as
the Administrative Agent may reasonably request, (ii) the funding by each
Increasing Bank and Additional Bank of the Advances to be made by each such Bank
described in subsection (c) below and (iii) receipt by the Administrative Agent
of a certificate (the statements contained in which shall be true) of a
Responsible Officer of the Borrower stating that both before and after giving
effect to such Commitment Increase (A) no Event of Default has occurred and is
continuing, and (B) all representations and warranties made by the Borrower in
this Agreement are true and correct in all material respects, unless such
representation or warranty relates to an earlier date.
(c) Upon the effective date of any Commitment Increase, each
Increasing Bank and each Additional Bank shall provide funds to the
Administrative Agent in the manner described in Section 2.2. The funds so
provided by any Bank shall be deemed to be an Advance made by such Bank on the
date of such Commitment Increase, an in an amount such that after giving effect
to such Commitment Increase and the Advances made on the date of such Commitment
Increase, each Borrowing outstanding hereunder shall consist of Advances made by
the Banks ratably in accordance with each Bank's Pro Rata Share.
-33-
(d) Notwithstanding any provision contained herein to the contrary,
from and after the date of any Commitment Increase and the making of any
Advances on such date pursuant to subsection (c) above, all calculations and
payments of interest on the Advances shall take into account the actual
Revolving Commitment of each Bank and the principal amount outstanding of each
Advance made by such Bank during the relevant period of time.
Section 2.16 Bank Replacement.
----------------
(a) Right to Replace. The Borrower shall have the right to replace
----------------
each Bank affected by a condition under Section 2.2(c)(iv), 2.9, 2.11 or 2.12
for more than 30 days (each such affected Bank, an "Affected Bank") in
accordance with the procedures in this Section 2.16 and provided that no
reduction of the total Revolving Commitments occurs as a result thereof.
(b) First Right of Refusal; Replacement.
-----------------------------------
(i) Upon the occurrence of any condition permitting the
replacement of a Bank, each Bank which is not an Affected Bank shall have
the right, but not the obligation, to elect to increase its respective
Revolving Commitment by an amount not to exceed the amount of the Revolving
Commitments of the Affected Banks, which election shall be made by written
notice from each such Bank to the Agent and the Borrower given within 30
days after the date such condition occurs specifying the amount of such
proposed increase in such Bank's Revolving Commitment.
(ii) If the aggregate amount of the proposed increases in
Revolving Commitments of all such Banks making such an election is in
excess of the Revolving Commitments of the Affected Banks, (A) the
Revolving Commitments of the Affected Banks shall be allocated pro rata
among such Banks based on the respective amounts of the proposed increases
to Revolving Commitments elected by each of such Banks, and (B) the
respective Commitments of such Banks shall be increased by the respective
amounts as so allocated so that after giving effect to such termination and
increases the aggregate amount of the Revolving Commitments of the Banks
will be the same as prior to such termination.
(iii) If the aggregate amount of the proposed increases to
Revolving Commitments of all Banks making such an election equals the
Revolving Commitments of the Affected Banks, the respective Revolving
Commitments of such Banks shall be increased by the respective amounts of
their proposed increases, so that after giving effect to such termination
and increase the aggregate amount of the Revolving Commitments of all of
the Banks will be the same as prior to such termination.
(iv) If the aggregate amount of the proposed increases to
Revolving Commitments of all Banks making such an election is less than the
Revolving Commitments of the Affected Banks, (A) the respective Revolving
Commitments of such Banks shall be increased by the respective amounts of
their proposed increases, and (B) the Borrower shall add additional Banks
which are Eligible Assignees to this Agreement to replace such Affected
Banks, which additional Banks would have aggregate Revolving
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Commitments no greater than those of the Affected Banks minus the amounts
thereof assumed by the other Banks pursuant to such increases.
(c) Procedure. Any assumptions of Revolving Commitments pursuant to
---------
this Section 2.16 shall be (i) made by the purchasing Bank or Eligible Assignee
and the selling Bank by entering into an Assignment and Assumption and by
following the procedures in Section 9.6 for adding a Bank. In connection with
the increase of the Revolving Commitments of any Bank pursuant to the foregoing
paragraph (b), each Bank with an increased Revolving Commitment shall purchase
from the Affected Banks at par such Bank's ratable share of the outstanding
Advances of the Affected Banks and assume such Bank's ratable share of the
Affected Banks' Letter of Credit Exposure.
ARTICLE III
CONDITIONS OF LENDING
Section 3.1 Conditions Precedent to Effectiveness of this Agreement. This
-------------------------------------------------------
Agreement shall become effective upon the following conditions precedent having
been satisfied:
(a) Documentation. The Administrative Agent shall have received the
-------------
following duly executed by all the parties thereto, in form and substance
satisfactory to the Administrative Agent, and in sufficient copies for each
Bank:
(i) this Agreement;
(ii) the Revolving Notes and the Swingline Note;
(iii) the Guaranty;
(iv) a certificate from a Responsible Officer of the Borrower
dated as of the Effective Date stating that as of the Effective Date (A)
all representations and warranties of the Borrower and the Guarantors set
forth in this Agreement and the Credit Documents to which it is a party are
true and correct in all material respects; (B) no Default or Event of
Default has occurred and is continuing; (C) no Material Adverse Effect has
occurred since December 31, 2000; and (D) the conditions in this Section
3.1 have been met;
(v) a certificate of the Secretary or an Assistant Secretary of
the Borrower and each Guarantor dated as of the date of this Agreement
certifying as of the date of this Agreement (A) copies of the articles or
certificate of incorporation and bylaws or other organizational documents
of such Person, together with all amendments thereto, (B) resolutions of
the Board of Directors of such Person with respect to the transactions
herein contemplated, and (C) the names and true signatures of officers of
the Borrower and such Guarantor authorized to sign the Credit Documents to
which such Person is a party;
(vi) copies of each of the Senior Note Documents certified by a
Responsible Officer of the Borrower (A) as being true and correct copies of
such
-35-
documents as of the Effective Date, (B) as being in full force and effect
and no material term or condition thereof shall have been amended, modified
or waived after the execution thereof and (C) no default or event of
default thereunder has occurred and is continuing;
(vii) certificates of good standing and existence for the
Borrower and each Guarantor, each certified by the appropriate governmental
officer in its jurisdiction of formation;
(viii) a favorable opinion of each of (A) Xxxxxx and Xxxxx, LLP,
counsel to the Borrower and Guarantors, and (B) Xxxxx X. Xxxxxxx, III,
general counsel of Varco International, Inc., each dated as of the
Effective Date and in form and substance satisfactory to the Administrative
Agent;
(ix) the unaudited Consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries as at September 30, 2001, and the
related Consolidated and consolidating statements of operations,
shareholders' equity and cash flows, of the Borrower and its Subsidiaries
for the nine months then ended, duly certified by the Chief Financial
Officer or of the Borrower; and
(x) such other documents, governmental certificates,
agreements,lien searches as the Administrative Agent may reasonably
request.
(b) Representations and Warranties. The representations and
------------------------------
warranties contained in this Agreement and each other Credit Document shall be
true and correct in all material respects.
(c) Fees.
----
(i) All fees, costs, and expenses of Xxxxx Fargo and its affiliates
for which invoices have been presented (including, without limitation,
legal fees and expenses of counsel to the Administrative Agent) to be paid
on the Closing Date shall have been paid.
(ii) The Borrower shall have paid to the Administrative Agent and the
Arranger, for their respective accounts, the fees agreed to pursuant to the
terms of the Agent's Fee Letter.
(d) Termination of Existing Credit Agreement. The Administrative
----------------------------------------
Agent and the Banks shall have received sufficient evidence indicating that
contemporaneously with the making of the initial Advances, the obligations of
the Borrower under the Existing Credit Agreement will be repaid with the
proceeds of such Advances and thereafter all obligations of the Borrower and the
lenders under the Existing Credit Agreement shall be terminated (including,
without limitation, any obligations of any Subsidiary of the Borrower in respect
of guaranties, security agreements executed in connection with such Existing
Credit Agreement but excluding any obligations which expressly survive the
repayment of the amounts owing under the Existing Credit Agreement).
-36-
(e) Liens. The Administrative Agent shall have received satisfactory
-----
evidence that (i) the Liens granted under the Collateral Documents (A) exist in
favor of the Administrative Agent for its benefit and the ratable benefit of
itself and the Banks, (B) are (or will be upon filing the appropriate financing
statements) superior to all other Liens, except Permitted Liens, (C) secure the
Obligations, (D) are (or will be upon filing the appropriate financing
statements) perfected and enforceable, and (E) are (or will be upon filing the
appropriate financing statements) in full force and effect and (ii) all actions
or filings necessary to protect, preserve and validly perfect such Liens have
been (or will be upon filing the appropriate financing statements) made, taken
or obtained, as the case may be.
Section 3.2 Conditions Precedent for each Borrowing or Letter of
----------------------------------------------------
Credit. The obligation of each Bank to fund an Advance on the occasion of each
------
Borrowing (other than the Conversion or continuation of any existing Borrowing
and other than a Mandatory Revolving Borrowing) and of the Issuing Bank to issue
or increase or extend any Letter of Credit shall be subject to the further
conditions precedent that on the date of such Borrowing or the issuance or
increase or extension of such Letter of Credit the following statements shall be
true (and each of the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Borrowing or the issuance or
increase or extension of such Letter of Credit shall constitute a representation
and warranty by the Borrower that on the date of such Borrowing or the issuance
or increase or extension of such Letter of Credit such statements are true):
(a) the representations and warranties contained in this Agreement and
each of the other Credit Documents are true and correct in all material respects
on and as of the date of such Borrowing or the issuance or increase or extension
of such Letter of Credit, before and after giving effect to such Borrowing or to
the issuance or increase or extension of such Letter of Credit and to the
application of the proceeds from such Borrowing, as though made on and as of
such date, except to the extent that any such representation or warranty
expressly relates solely to an earlier date, in which case it shall have been
true and correct in all material respects as of such earlier date;
(b) nothing shall have occurred (and the Banks shall not have become
aware of any facts or conditions not previously known to them) which the
Administrative Agent or any Bank shall determine has resulted, or will result,
in a Material Adverse Effect; and
(c) no Default has occurred and is continuing or would result from
such Borrowing or from the application of the proceeds therefrom.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.1 Corporate Existence; Subsidiaries. Each of the Borrower and its
---------------------------------
Subsidiaries is a corporation, partnership or limited liability company duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation and in good
-37-
standing and qualified to do business in each jurisdiction where its
ownership or lease of property or conduct of its business requires such
qualification and where a failure to be qualified could reasonably be expected
to have a Material Adverse Effect. The Borrower has no Subsidiaries on the date
of this Agreement other than the Subsidiaries listed on the attached Schedule
4.1. Schedule 4.1 lists the jurisdiction of organization, the percentage of
their respective capital stock or other ownership interests owned by the
Borrower or its other Subsidiaries, and the address of the principal office of
each such Subsidiary as of the date of this Agreement.
Section 4.2 Authorization and Validity. The execution, delivery, and
--------------------------
performance by the Borrower and each Guarantor of the Credit Documents to which
it is a party and the consummation of the transactions contemplated hereby and
thereby (a) are within the Borrower's and the Guarantors' power and authority,
and (b) have been duly authorized by all necessary corporate, partnership or
limited liability action.
Section 4.3 Corporate Power. The execution, delivery, and performance by
---------------
the Borrower and each Guarantor of the Credit Documents to which it is a party
and the consummation of the transactions contemplated hereby and thereby (a) do
not contravene (i) the Borrower's or any Guarantor's organizational documents or
(ii) any Legal Requirement or any contractual restriction binding on or
affecting the Borrower, any Guarantor or its Property, the contravention of
which could reasonably be expected to have a Material Adverse Effect, and (b)
will not result in or require the creation or imposition of any Lien prohibited
by this Agreement. At the time of each Borrowing, such Borrowing and the use of
the proceeds of such Borrowing will be within the Borrower's corporate xxxxxx,
xxxx have been duly authorized by all necessary corporate action, (A) will not
contravene (1) the Borrower's certificate of incorporation or by-laws or (2) any
Legal Requirement or contractual restriction binding on or affecting the
Borrower, the contravention of which could reasonably be expected to have a
Material Adverse Effect, and (B) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.
Section 4.4 Authorization and Approvals. No authorization or approval or
---------------------------
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower or any
Guarantor of the Credit Documents to which it is a party or the consummation of
the transactions contemplated thereby. At the time of each Borrowing, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority will be required for such Borrowing or the use of the
proceeds of such Borrowing.
Section 4.5 Enforceable Obligations. This Agreement, the Notes, and the
-----------------------
other Credit Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower and the Guaranty and the other Credit Documents to
which each Guarantor is a party have been duly executed and delivered by such
Guarantor. Each Credit Document is the legal, valid, and binding obligation of
the Borrower and each Guarantor which is a party to it enforceable against the
Borrower and each such Guarantor in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors' rights generally
and by general principles of equity (whether considered in proceeding at law or
in equity).
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Section 4.6 Financial Statements.
--------------------
(a) The audited Consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as at December 31, 2000, and the related
Consolidated and consolidating statements of operations, shareholders' equity
and cash flows, of the Borrower and its Subsidiaries for the fiscal year then
ended, copies of which have been furnished to the Administrative Agent and each
Bank, fairly present the Consolidated financial condition of the Borrower and
its Subsidiaries as at such date and the results of the operations of the
Borrower and its Subsidiaries for the year ended on such date, and such balance
sheet and statements were prepared in accordance with GAAP.
(b) Since December 31, 2000, there has been no change in the business,
Property, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries, taken as a whole, which could reasonably be
expected to have a Material Adverse Effect.
Section 4.7 True and Complete Disclosure. No information, exhibit, report,
----------------------------
representation, warranty, or other statement furnished or made by the Borrower
or any Subsidiary (or on behalf of the Borrower or any Subsidiary) to the
Administrative Agent or any Bank in connection with the negotiation of, or
compliance with, this Agreement or any other Credit Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which they were made as of the date of this Agreement. There is
no fact known to any Responsible Officer of the Borrower on the date of this
Agreement and on the Effective Date that has not been disclosed to the
Administrative Agent which they reasonably expect to have a Material Adverse
Effect. All projections, estimates, and pro forma financial information
furnished by the Borrower or on behalf of the Borrower were prepared on the
basis of assumptions, data, information, tests, or conditions believed to be
reasonable at the time such projections, estimates, and pro forma financial
information were furnished.
Section 4.8 Litigation. There is no pending or, to the knowledge of any of
----------
their officers, threatened litigation, arbitration, governmental investigation,
inquiry, action or proceeding affecting the Borrower or any of its Subsidiaries
before any court, Governmental Authority or arbitrator, which could reasonably
be expected to have a Material Adverse Effect or which purports to affect the
legality, validity, binding effect or enforceability of this Agreement, any
Note, or any other Credit Document. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect, the Borrower has no material Contingent
Obligations not provided for or disclosed in the financial statements referred
to in Section 4.6.
Section 4.9 Use of Proceeds.
---------------
(a) Advances and Letters of Credit. The proceeds of the Advances and
------------------------------
the Letters of Credit will be used by the Borrower to refinance existing
Indebtedness under the Existing Credit Agreement and for general corporate
purposes of the Borrower and its Subsidiaries.
-39-
(b) Regulations. No proceeds of Advances or Letters of Credit will be
-----------
used to purchase or carry any margin stock in violation of Regulations T, U or X
of the Federal Reserve Board, as the same is from time to time in effect, and
all official rulings and interpretations thereunder or thereof. The Borrower is
not engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Federal Reserve
Board).
Section 4.10 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 4.11 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 4.12 Taxes. All federal, state, local and foreign tax returns,
-----
reports and statements required to be filed (after giving effect to any
extension granted in the time for filing) by the Borrower, its Subsidiaries or
any member of the Controlled Group (hereafter collectively called the "Tax
---
Group") have been filed with the appropriate Governmental Authorities in all
-----
jurisdictions in which such returns, reports and statements are required to be
filed, except where contested in good faith and by appropriate proceedings and
as to which adequate reserves have been established; and all taxes and other
impositions due and payable have been timely paid prior to the date on which any
fine, penalty, interest, late charge or loss may be added thereto for
non-payment thereof except where contested in good faith and by appropriate
proceedings. Neither the Borrower nor any member of the Tax Group has given, or
been requested to give, a waiver of the statute of limitations relating to the
payment of any federal, state, local or foreign taxes or other impositions. The
amounts shown on all tax returns to be due and payable have been paid in full or
adequate provision therefor is included on the books of the appropriate member
of the Tax Group. No tax Liens have been filed and no claims are being asserted
with respect to any such taxes.
Section 4.13 Pension Plans. No Termination Event or Reportable Event has
-------------
occurred with respect to any Plan, and each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. Neither the Borrower nor any member of the
Controlled Group has had a complete or partial withdrawal from any Multiemployer
Plan for which there is any withdrawal liability. Neither the Borrower nor any
member of the Controlled Group has received notice that any Multiemployer Plan
is insolvent, in reorganization or being terminated.
Section 4.14 Condition of Property; Casualties. The Borrower and its
---------------------------------
Subsidiaries will have good title, free of all Liens other than Permitted Liens,
to all of the Property and assets reflected in the Borrower's recent
Consolidated financial statements provided to the Administrative Agent and the
Banks as owned by the Borrower and its Subsidiaries. The Properties used or to
be used in the continuing operations of the Borrower and each of its
-40-
Subsidiaries, taken as a whole, are and will continue to be in good
repair, working order and condition, normal wear and tear excepted. Since
December 31, 2000, neither the business nor the Properties of the Borrower and
its Subsidiaries, taken as a whole, has been affected so to have a Material
Adverse Effect, as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits or concessions by a
Governmental Authority, riot, activities of armed forces or acts of God or of
any public enemy.
Section 4.15 Insurance. The Borrower and each of its Subsidiaries carry
---------
insurance with reputable insurers in respect of such of their respective
Properties, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar businesses or, self-insure
to the extent that is customary for Persons of similar size engaged in similar
businesses.
Section 4.16 No Burdensome Restrictions; No Defaults.
---------------------------------------
(a) Neither the Borrower nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction or provision of
any Legal Requirement which could reasonably be expected to have a Material
Adverse Effect. The Borrower and the Guarantors are not in default under or with
respect to and have not received any notice of default under any contract,
agreement, lease or other instrument to which the Borrower or any Guarantor is a
party and which could reasonably be expected to have a Material Adverse Effect.
(b) No Default or Event of Default has occurred and is continuing.
Section 4.17 Environmental Condition. Except for matters which could not
-----------------------
reasonably be expected to have a Material Adverse Effect:
(a) The Borrower and its Subsidiaries, taken as a whole, (i) have
obtained all Environmental Permits necessary for the ownership and operation of
their respective material Properties and the conduct of their respective
businesses; (ii) have been and are in compliance with all terms and conditions
of such Environmental Permits and with all other material requirements of
applicable Environmental Laws; (iii) have not received notice of any violation
or alleged violation of any Environmental Law or Environmental Permit; and (iv)
are not subject to any actual or contingent material Environmental Claim.
(b) None of the present or previously owned or operated Property of
the Borrower or of any of its present or former Subsidiaries, wherever located,
(i) has been placed on or proposed to be placed on the National Priorities List,
the Comprehensive Environmental Response Compensation Liability Information
System list, or their state or local analogs, or have been otherwise
investigated, designated, listed, or identified as a potential site for removal,
remediation, cleanup, closure, restoration, reclamation, or other response
activity under any Environmental Laws; (ii) is subject to a Lien, arising under
or in connection with any Environmental Laws, that attaches to any revenues or
to any Property owned or operated by the Borrower or any of its Subsidiaries,
wherever located; or (iii) has been the site of any Release of
-41-
Hazardous Substances or Hazardous Wastes from present or past operations
which has caused at the site or at any third-party site any condition.
(c) Without limiting the foregoing, the present and, to the best
knowledge of any Responsible Officer of the Borrower, future liability, if any,
of the Borrower and its Subsidiaries, taken as a whole.
Section 4.18 Permits, Licenses, etc. The Borrower and its Subsidiaries
----------------------
possess all certificates of public convenience, authorizations, permits,
licenses, patents, patent rights or licenses, trademarks, trademark rights,
trade names rights and copyrights which are material to the conduct of its
business. The Borrower and its Subsidiaries manage and operate their business in
accordance with all applicable Legal Requirements which the failure to so manage
or operate could reasonably be expected to have a Material Adverse Effect.
Section 4.19 Compliance with Laws. The Borrower and its Subsidiaries have
--------------------
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.
Section 4.20 Capitalization. Except as disclosed on Schedule 4.20, all
--------------
outstanding shares of any foreign Subsidiary which is a Material Subsidiary have
been duly and validly issued, are fully paid and nonassessable. Except as
disclosed on Schedule 4.20, none of any foreign Subsidiary which is a Material
Subsidiary has outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
Section 4.21 Existing Indebtedness. Schedule 4.21 contains a complete list
---------------------
of all Indebtedness in excess of $25,000 (other than the Obligations hereunder,
but including any Hedging Obligations) of the Borrower and its Subsidiaries on
the Effective Date in each case showing the aggregate principal amount thereof,
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such Indebtedness and the scheduled payments of such
Indebtedness.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Revolving Commitment hereunder, the Borrower agrees, unless the Majority
Banks shall otherwise consent in writing, to comply with the following
covenants.
Section 5.1 Compliance with Laws, Etc. The Borrower will, and will cause
-------------------------
each of its Subsidiaries to, comply in all material respects with all Legal
Requirements to which it may be subject; provided, however, that this Section
--------
5.1 shall not prevent the Borrower, or any of its
-42-
Subsidiaries from, in good faith and with reasonable diligence, contesting the
validity or application of any such laws or regulations by appropriate legal
proceedings.
Section 5.2 Insurance. The Borrower will, and will cause each of its
--------
Subsidiaries to, maintain insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates,
provided that the Borrower or such Subsidiary may self-insure to the extent and
--------
in the manner normal for similarly situated companies of like size, type and
financial condition that are part of a group of companies under common control.
Upon request of the Administrative Agent, the Borrower shall deliver
certificates evidencing such insurance and copies of the underlying policies to
the Administrative Agent and any Bank as they are available.
Section 5.3 Preservation of Existence, Etc. The Borrower will, and will
------------------------------
cause each of its Material Subsidiaries to, preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its formation, and
qualify and remain qualified, and cause each such Material Subsidiary to qualify
and remain qualified, as a foreign entity in each jurisdiction in which
qualification is necessary or desirable in view of its business and operations
or the ownership of its properties, and, in each case, where failure to qualify
or preserve and maintain its rights and franchises could reasonably be expected
to have a Material Adverse Effect; provided, however, that nothing contained in
--------
this Section 5.3 shall prevent any transaction permitted by Sections 6.5 or 6.7.
Section 5.4 Payment of Taxes, Etc. The Borrower will, and will cause each
---------------------
of its Material Subsidiaries to, timely file complete and correct United States
federal and applicable foreign, state and local tax returns required by
applicable Legal Requirements and pay when due (a) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, profits or
Property prior to the date on which penalties attach thereto, and (b) all lawful
claims which, if unpaid, might by law become a Lien upon its Property; provided,
--------
however, that neither the Borrower nor any such Subsidiary shall be required to
-------
pay or discharge any such tax, assessment, charge, levy, or claim which is being
contested in good faith and by appropriate proceedings, and with respect to
which reserves in conformity with GAAP have been provided.
Section 5.5 Visitation Rights. The Borrower will, and will cause its
-----------------
Material Subsidiaries to, permit the Administrative Agent and any Bank or any of
its agents or representatives thereof, to inspect any of the Property, books and
financial records of the Borrower and each Material Subsidiary, to examine and
make copies of and abstracts from the records and books of account of the
Borrower and each Material Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Material Subsidiary with, and to be advised as
to the same by, any of their respective officers or directors upon reasonable
prior written notice and at such reasonable times and intervals as may be
mutually agreed upon by the Administrative Agent or such Bank, as applicable,
and the Borrower.
Section 5.6 Reporting Requirements. The Borrower will furnish to the
----------------------
Administrative Agent and each Bank:
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(a) Quarterly Financials. As soon as available and in any event not
--------------------
later than 45 days after the end of each quarter of each fiscal year of the
Borrower, the unaudited Consolidated and consolidating balance sheets of
Borrower and its Subsidiaries as of the end of such quarter and the related
unaudited statements of income, shareholders' equity and cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous year and ending with the end of such quarter, and the corresponding
figures as at the end of, and for, the corresponding period in the preceding
fiscal year, all in reasonable detail and duly certified with respect to such
statements (subject to year-end audit adjustments) by a senior financial officer
of the Borrower as having been prepared in accordance with GAAP, together with a
Form 10Q and a Compliance Certificate duly executed by a Responsible Officer;
(b) Annual Financials. As soon as available and in any event not later
-----------------
than 90 days after the end of each fiscal year of the Borrower, an unqualified
(except for qualifications relating to changes in accounting principles or
practices reflecting changes in generally accepted accounting principles and
required or approved by the Borrower's independent certified public accountants)
audit report for such year for the Borrower and its Subsidiaries, including
therein audited Consolidated and consolidating balance sheets of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related Consolidated and consolidating statements of income, shareholders'
equity and cash flows of the Borrower and its Subsidiaries for such fiscal year,
and the corresponding figures as at the end of, and for, the preceding fiscal
year, and, in the case of such Consolidated financial statements certified by
independent certified public accountants of recognized standing acceptable to
the Administrative Agent and including any management letters delivered by such
accountants to the Borrower in connection with such audit together with a
certificate of such accounting firm to Administrative Agent and the Banks
stating that, in the course of the regular audit of the business of the Borrower
and its Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm has
obtained no knowledge that a Default has occurred and is continuing, or if, in
the opinion of such accounting firm, a Default has occurred and is continuing, a
statement as to the nature thereof, together with a Form 10K and a Compliance
Certificate;
(c) Annual Projections. As soon as available and in any event not
------------------
later than 90 days after the end of each fiscal year of the Borrower (commencing
with fiscal year 2003), the Consolidated annual projections of the Borrower and
its Subsidiaries for such year in reasonable detail and duly certified by a
senior financial officer of the Borrower as the projections presented or to be
presented to the Borrower's Board of Directors for their review;
(d) Securities Law Filings. Promptly and in any event within 10 days
----------------------
after the sending or filing thereof, copies of all proxy material, reports and
other information which the Borrower or any of its Subsidiaries sends to or
files with the United States Securities and Exchange Commission or sends to any
shareholder of the Borrower or of any of its Subsidiaries;
(e) Defaults. As soon as possible and in any event within five days
--------
after the occurrence of each Default known to a Responsible Officer of the
Borrower or any of its Material Subsidiaries, a statement of a Responsible
Officer of the Borrower setting forth the details of such Default and the
actions which the Borrower has taken and proposes to take with respect thereto;
-44-
(f) ERISA Notices. Except as to any matter which could not reasonably
-------------
be expected to have a Material Adverse Effect, as soon as possible and in any
event (i) within 10 days after the Borrower or any of its Subsidiaries knows or
has reason to know that any Termination Event or Reportable Event has occurred,
(ii) within 10 days after receipt thereof by the Borrower or any of its
Subsidiaries from the PBGC, copies of each notice received by the Borrower or
any such Subsidiary of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan; and (iii) within 10 days after receipt
thereof by the Borrower or any of its Subsidiaries from a Multiemployer Plan
sponsor, a copy of each notice received by the Borrower or any of its
Subsidiaries concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA;
(g) Environmental Notices. Promptly upon the knowledge of any
---------------------
Responsible Officer of the Borrower of receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any form of notice, summons or citation received
from the United States Environmental Protection Agency, or any other
Governmental Authority directly engaged in protection of the Environment,
concerning (i) material violations or alleged violations of Environmental Laws,
which seeks to impose liability therefor and which, based upon information
reasonably available to the Borrower at the time or after such violation, could
reasonably be expected to have a Material Adverse Effect, (ii) any action or
omission on the part of the Borrower or any of its present or former
Subsidiaries in connection with Hazardous Waste or Hazardous Substances which,
based upon information reasonably available to the Borrower at the time of such
receipt, could reasonably be expected to have a Material Adverse Effect, (iii)
any notice of potential responsibility under any Environmental Law which could
reasonably be expected to have a Material Adverse Effect, or (iv) concerning the
filing of a Lien other than a Permitted Lien upon, against or in connection with
the Borrower, its present or former Subsidiaries, or any of their leased or
owned Property, wherever located;
(h) Other Governmental Notices or Actions. Promptly and in any event
-------------------------------------
within five Business Days after receipt thereof by the Borrower or any of its
Subsidiaries, and the knowledge of such receipt by a Responsible Officer of the
Borrower or any inside counsel of the Borrower, a copy of any written notice,
summons, citation, or proceeding from any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect;
(i) Material Litigation. As soon as possible and in any event within
-------------------
five days of any Responsible Officer of the Borrower or any of its Subsidiaries
having knowledge thereof, notice of (A) any pending or threatened litigation,
claim or any other action asserting any claim or claims against the Borrower or
any of its Subsidiaries in excess of $10,000,000 in the aggregate, (B) the
occurrence of any mandatory prepayment event, default or event of default under
the Senior Note Documents, and (C) any litigation or governmental proceeding of
the type described in Section 4.8;
(j) Material Changes. Prompt written notice of any condition or event
----------------
of which the Borrower or any Subsidiary has knowledge, which condition or event
has resulted or may reasonably be expected to have in a Material Adverse Effect;
(k) Indebtedness. Upon the request of the Administrative Agent from
------------
time to time, detail of any other Indebtedness for borrowed money of the
Borrower and its Subsidiaries,
-45-
including, without limitation, any bilateral facilities between the Borrower or
any of its Subsidiaries and any bank, financial institution or other lender, and
an update of Schedule 4.21 from time to time; and
(l) Other Information. Such other information respecting the business
-----------------
or Properties, or the condition or operations, financial or otherwise, of the
Borrower, or any of its Subsidiaries, as any Bank through the Administrative
Agent may from time to time reasonably request.
Section 5.7 Maintenance of Property. The Borrower will, and will cause
-----------------------
each of its Material Subsidiaries to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working order and
condition (normal wear and tear excepted), and make all necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times; provided, however that nothing
-------- -------
in this Section 5.7 shall prevent the Borrower or any of its Subsidiaries from
discontinuing the operation or maintenance of any of such Property if such
discontinuance is, in the judgment of the Borrower or any of its Subsidiaries,
as applicable, desirable in the conduct of their businesses and not materially
disadvantageous to the Banks.
Section 5.8 Conduct of Business. The Borrower will, and will cause each of
-------------------
its Material Subsidiaries to, carry on and conduct its business in substantially
the same manner as it is presently conducted and in Permitted Businesses and do
all things necessary to remain duly incorporated or organized, validly existing
and (to the extent such concept applies to such entity) in good standing as a
domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted.
Section 5.9 Use of Proceeds. The Borrower will, and will cause each
---------------
Subsidiary to, use the proceeds of the Advances for general corporate purposes.
The Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Advances to purchase or carry any "margin stock" (as defined in
Regulation U).
Section 5.10 New Subsidiaries; Foreign Subsidiaries.
--------------------------------------
(a) The Borrower will cause any direct or indirect domestic Subsidiary
of the Borrower (i) which Subsidiary is formed or acquired after the Closing
Date and which is a Material Subsidiary, or (ii) which Subsidiary becomes a
Material Subsidiary after the Closing Date, to become a Guarantor with respect
to, and jointly and severally liable with all other Guarantors for, all of the
Obligations under this Agreement and the Notes within thirty (30) days following
such formation or acquisition pursuant to a Guaranty substantially in the form
of Exhibit C hereto, together with such evidence of corporate authority to enter
into such Guaranty as the Administrative Agent may reasonably request, including
without limitation, opinions of legal counsel regarding such corporate authority
and the enforceability of such Guaranty.
(b) The Borrower will cause the capital stock of any foreign Material
Subsidiary to be owned at all times directly or indirectly by it or by a
domestic Subsidiary of the Borrower which shall be a Guarantor hereunder.
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(c) Subject to the provisions in Section 5.10(d) of this Agreement, if
at the end of any fiscal quarter the Interest Charge Coverage Ratio falls below
4.00 to 1.00, the Borrower or such applicable Subsidiary shall, within 90 days,
(i) pledge all of the capital stock directly owned by it, but in no event more
than 66-2/3% of the capital stock, of any foreign Subsidiary which is a Material
Subsidiary or which becomes a Material Subsidiary after the Closing Date
pursuant to a Pledge Agreement, and (ii) deliver to the Administrative Agent
within 90 days any certificates representing such stock, together with stock
powers duly executed in blank, or such other documentation as necessary to
perfect the pledge of such stock, together with such evidence of corporate
authority to enter into such pledge as the Administrative Agent may reasonably
request, including without limitation, opinions of legal counsel regarding such
corporate authority and the enforceability and perfection of such pledge.
(d) If the pledge of such capital stock required by Section 5.10(c) of
this Agreement would directly cause or result in a material adverse tax or
financial consequence to the Borrower or such applicable Subsidiary, the
Borrower may, within 60 days after the Interest Charge Coverage Ratio falls
below 4.00 to 1.00, provide to the Administrative Agent and the Banks evidence
of such potential material adverse tax or financial consequence. The
Administrative Agent and Majority Banks shall in their reasonable discretion
determine, within 30 days, which such pledges of capital stock of foreign
Material Subsidiaries are to be required under this Agreement.
Section 5.11 Pari Passu. The Obligations under this Agreement and the other
----------
Credit Documents of the Borrower and the Guarantors shall rank at least pari
passu with and be equally and ratably secured as the Senior Notes and all other
senior unsecured Indebtedness of the Borrower.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Revolving Commitment, the Borrower agrees, unless the Majority Banks
otherwise consent in writing, to comply with the following covenants.
Section 6.1 Liens, Etc. The Borrower will not, or permit any of its
----------
Subsidiaries to, create, assume, incur, or suffer to exist, any Lien of any kind
on or in respect of any Property of the Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired, except for the following ("Permitted
Liens"):
(a) Liens securing the Obligations;
(b) Liens securing Indebtedness in an aggregate principal amount not
to exceed 10% of the Borrower's Consolidated Net Worth;
(c) Liens arising in the ordinary course of business by operation of
law in connection with workers' compensation, unemployment insurance, old age
benefits, social security obligations, taxes, assessments, statutory obligations
or other similar charges, good faith
-47-
deposits, pledges or other Liens in connection with (or to obtain letters of
credit in connection with) bids, performance bonds, contracts or leases to which
the Borrower or its Subsidiaries are a party or other deposits required to be
made in the ordinary course of business; provided, that in each case the
--------
obligation secured is not Indebtedness and is not overdue or, if overdue, is
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor;
(d) mechanics', workmen, materialmen, landlords', carriers' or other
similar Liens arising in the ordinary course of business (or deposits to obtain
the release of such Liens) related to obligations not due or, if due, that are
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor;
(e) Inchoate Liens under ERISA and liens for Taxes not yet due or
which are being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP have been provided therefor;
(f) Liens arising out of judgments or awards against the Borrower or
any of its Subsidiaries, or in connection with surety or appeal bonds or the
like in connection with bonding such judgments or awards, the time for appeal
from which or petition for rehearing of which shall not have expired or for
which the Borrower or such Subsidiary shall be prosecuting on appeal or
proceeding for review, and for which it shall have obtained a stay of execution
or the like pending such appeal or proceeding for review; provided that the
--------
aggregate amount of uninsured or underinsured liabilities (including interest,
costs, fees and penalties, if any) of the Borrower and its Subsidiaries secured
by such Liens shall not exceed $15,000,000 in the aggregate at any one time
outstanding and provided further that there is adequate assurance, in the sole
-------- -------
discretion of the Majority Banks that the insurance proceeds attributable
thereto shall be paid promptly upon the expiration of such time period or
resolution of such proceeding if necessary to remove such Liens;
(g) Liens existing on the date hereof and listed on Schedule 6.1;
(h) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in the
foregoing subsections (b) through (h), provided, however, that the principal
-------- -------
amount of Indebtedness secured thereby does not exceed the principal amount
secured at the time of such extension, renewal or replacement and such
extension, renewal or replacement is limited to the property already subject to
the Lien so extended, renewed or replaced;
(i) rights reserved to or vested in any municipality or governmental,
statutory or public authority by the terms of any right, power, franchise,
grant, license or permit, or by any provision of law, to terminate such right,
power, franchise, grant, license or permit or to purchase, condemn, expropriate
or recapture or to designate a purchaser of any of the property of a Person;
(j) rights reserved to or vested in any municipality or governmental,
statutory or public authority to control, regulate or use any property of a
Person;
-48-
(k) rights of a common owner of any interest in property held by a
Person and such common owner as tenants in common or through other common
ownership;
(l) encumbrances (other than to secure the payment of Indebtedness),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any property or rights-of-way of a Person for the purpose of
roads, pipelines, transmission lines, transportation lines, distribution lines,
removal of gas, oil, coal, metals, steam, minerals, timber or other natural
resources, and other like purposes, or for the joint or common use of real
property, rights-of-way, facilities or equipment, or defects, irregularity and
deficiencies in title of any property or rights-of-way;
(m) zoning, planning and Environmental Laws and ordinances and
municipal regulations;
(n) financing statements filed by lessors of property (but only with
respect to the property so leased) and Liens under any conditional sale or title
retention agreements entered into in the ordinary course of business;
(o) rights of lessees of equipment owned by the Borrower or any of its
Subsidiaries;
(p) upon the occurrence of a triggering event under Section 5.10(c) of
this Agreement, Liens in favor of the holders of the Senior Notes, provided that
the rights and remedies of the holders of such Liens and the Liens securing the
Obligations are governed by an intercreditor agreement between the holders of
the Senior Notes (or the indenture trustee thereof) and the Administrative
Agent, such intercreditor agreement to be in form and substance satisfactory to
the Administrative Agent and the Majority Banks.
Section 6.2 Indebtedness.
------------
(a) The Borrower will not, and will not permit any of its Subsidiaries
to, incur or permit to exist any Indebtedness, unless the Borrower and its
Subsidiaries shall be in compliance, on a pro forma basis after giving effect to
such transactions, with the covenants contained in this Article VI recomputed as
of the last day of the most recently ended fiscal quarter of the Borrower and
its Subsidiaries as if the transaction in question had occurred on the first day
of each relevant period for testing such compliance.
(b) Notwithstanding Section 6.2(a), the aggregate principal amount of
all Indebtedness of Subsidiaries of the Borrower that are not also Guarantors;
shall not exceed 10% of the Borrower's Consolidated Net Worth at any time.
Section 6.3 Amendment of Organizational Documents; Senior Notes. The
---------------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, amend, modify
or change its organizational documents or any agreement entered into by it
related to its capital stock or equivalent ownership interest or enter into any
new agreement related to its capital stock or equivalent ownership interest,
each in any way materially adverse to the interests of the Banks; provided that
--------
the Borrower may adopt poison pill provisions in the exercise of its reasonable
business judgment. The Borrower will not, and will not permit any Subsidiary to,
make any
-49-
amendment or modification to the Senior Note Documents other than any such
amendment, supplement, change or modification that is ministerial or immaterial
or non-substantive in nature, not adverse to the Banks and with respect to which
the Borrower has provided to the Administrative Agent and the Banks a copy of
the amendment no more than five Business Days after the effective date or the
date such amendment is executed, if later.
Section 6.4 Limitation on Certain Restrictions. The Borrower will not, nor
----------------------------------
will it permit any of its Subsidiaries to, directly or indirectly, create or
otherwise permit to exist or become effective any restriction on the ability of
any of their Subsidiaries to (i) pay dividends or make any other distributions
on its capital stock, or any other interest or participation in its profits,
owned by the Borrower or pay any Indebtedness owed to the Borrower, or (ii) make
loans or advances to the Borrower or any of its Subsidiaries, except in either
case for restrictions existing under or by reason of any applicable Legal
Requirement, this Agreement and the other Credit Documents or in the Senior Note
Documents and except for any restrictions existing in connection with any
Subsidiary acquired by the Borrower after the Effective Date, in which case the
Borrower shall either promptly cause the removal or release of any such
restrictions or not advance the proceeds of any Borrowing to such Subsidiary
even if otherwise permitted by this Agreement. The Borrower and its Subsidiaries
shall not enter into any agreement other than this Agreement, the Credit
Documents and the Senior Note Documents prohibiting the creation or assumption
of any Lien upon its properties, revenues or assets, whether now owned or
hereafter acquired (except in connection with any Permitted Liens provided that
restriction is limited to the property already subject to the Lien), or
prohibiting or restricting the ability of the Borrower or any of its
Subsidiaries to amend or otherwise modify this Agreement or any Credit Document.
Section 6.5 Merger or Consolidation; Asset Sales. The Borrower will not,
------------------------------------
and will not permit any of its Subsidiaries to,
(a) enter into any Acquisition for consideration that exceeds
$10,000,000, or sell all or substantially all of its assets or stock, other
than:
(i) the Borrower or any of its Subsidiaries may enter into any
such Acquisition if upon the consummation of any such Acquisition, (A) the
Borrower or such Subsidiary is the surviving corporation to any such
Acquisition (or the other Person will thereby become a Subsidiary); (B)
Sections 5.10 and 6.4 are complied with to the extent applicable; (C) the
Borrower or such Subsidiary has the power and authority under the pertinent
agreement and under applicable Legal Requirements to subject the assets of
such acquired Person to the provisions of this Agreement and such assets
are so subjected to the provisions of this Agreement; (D) such acquired
Person engages in Permitted Businesses; (E) such Acquisition is non-hostile
in nature; (F) the Borrower shall have delivered to the Administrative
Agent within ten (10) Business Days prior to the consummation of any
Acquisition a report signed by a Responsible Officer of the Borrower that
shall contain calculations demonstrating on a pro forma basis the
Borrower's compliance with Sections 6.13 and 6.14; and (G) no Default or
Event of Event shall have occurred and be continuing or would otherwise be
existing as a result of such merger, consolidation, or Acquisition;
provided however (x) no domestic Material Subsidiary may enter into an
--------
Acquisition with any foreign Subsidiary unless the domestic Material
Subsidiary shall be the surviving corporation; and (y) no direct foreign
Material
-50-
Subsidiary may enter into an Acquisition with any indirect foreign
Subsidiary, unless the direct foreign Material Subsidiary shall be the
surviving corporation; and
(ii) any majority ownership of the Borrower or any of its
Subsidiaries in a foreign joint venture or foreign Subsidiary may decrease
to a minority ownership as necessary to comply with any applicable Legal
Requirement to doing business in such foreign jurisdiction; and
(b) sell, transfer or otherwise dispose of any of the Borrower's or
such Subsidiary's Property (unless, in the case of a Subsidiary, such assets are
sold, leased, transferred or otherwise conveyed to another Subsidiary which is a
Guarantor) except for (i) sales, transfers and dispositions in the ordinary
course of business for a fair and adequate consideration, (ii) sales, transfers
or dispositions of assets which are obsolete or are no longer in use and which
are not significant to the continuation of the Borrower or any of its
Subsidiaries business; or (iii) dispositions not otherwise permitted hereunder
which are made for fair market value; provided that (A) at the time of any
disposition, no Default or Event of Default shall exist or shall result from
such disposition, (B) the aggregate sales price from such disposition shall be
paid in cash or otherwise for non-cash consideration or on payment terms
satisfactory to the applicable Borrower or Subsidiary, and (C) the aggregate
book value of all assets of the Borrower and its Subsidiaries, taken as a whole,
shall not be reduced at any time to an amount which is less than 80% of the
aggregate book value of all assets of the Borrower and its Subsidiaries, taken
as a whole, on September 30, 2001, as reflected on the Borrower's Consolidated
balance sheet dated September 30, 2001, provided however that (x) no Material
-------- -------
Subsidiary may sell, transfer or otherwise dispose of any assets to a
non-Material Subsidiary.
Except as otherwise permitted in this Section 6.5, the Borrower shall not issue,
sell or dispose of any capital stock of any Material Subsidiaries.
Section 6.6 Restricted Payments. The Borrower will not, and will not permit
-------------------
any of its Subsidiaries to, make any Restricted Payment, except that (a) a
wholly-owned Subsidiary of the Borrower may make a Restricted Payment to the
Borrower or another wholly-owned Subsidiary of the Borrower, (b) provided no
Default has occurred and is continuing or would result therefrom, (i) the
Borrower may redeem, purchase or otherwise acquire its capital stock or declare
and pay dividends on its capital stock; (ii) scheduled interest payments,
optional redemptions or other prepayments may be made on the Senior Notes;
provided, however that without the prior written consent of the Administrative
-------- -------
Agent and the Banks, (A) the payment of such Indebtedness may not be guaranteed
by any Subsidiary of the Borrower which is not a Guarantor hereunder and the
terms and provisions of any guaranties of such Indebtedness shall be no more
onerous than the terms and provisions of the Guaranty or (B) the Borrower shall
not take any action that could result in the Obligations' failing to be pari
passu to Indebtedness under the Senior Notes; (iii) any Subsidiary of the
Borrower may make payments to the Borrower for all reasonable amounts owing to
the Borrower in the ordinary course of business for the Borrower's and their
Subsidiaries' pro rata share of such ordinary course items as insurance, taxes
and professional fees and expenses, provided that such ordinary course items are
incurred in compliance with the arm's length requirements of Section 6.8 and
(iv) capital stock of the Borrower may be purchased (or the purchase thereof
funded) or otherwise acquired by the
-51-
Borrower or its Subsidiaries for any Code Section 401(k) plan, Code Section 423
plan or Plan of the Borrower or any of its Subsidiaries.
Section 6.7 Investments, Loans, Advances. The Borrower will not, and will
----------------------------
not permit any of its Subsidiaries to, make or permit to exist any loans,
advances or capital contributions to, or make any investment in, or purchase or
commit to purchase any stock or other securities or evidences of Indebtedness of
or interests in any Person, except the following:
(a) Liquid Investments;
(b) receivables owing to the Borrower or its Subsidiaries created or
acquired in the ordinary course of business and payable on customary trade terms
of the Borrower or such Subsidiary and in compliance with the arm's-length
requirements of Section 6.8;
(c) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(d) Hedging Transactions entered into in compliance with Section 6.2;
(e) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases;
(f) unsecured intercompany loans, advances and capital contributions
from the Borrower to any of its Subsidiaries from any of its Subsidiaries to the
Borrower or any other such Subsidiaries except as expressly restricted
hereunder;
(g) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries for (i) short-term loans in an
aggregate amount of no greater than $1,000,000 at any one time outstanding and
in an amount no greater than $100,000 for any Person, (ii) moving and travel
expenses and other similar expenses; in each case incurred in the ordinary
course of business, and (iii) loans in an aggregate amount of no greater than
$5,000,000 for purchases of stock of the Borrower by officers of the Borrower or
its Subsidiaries;
(h) joint ventures between any foreign Subsidiary of the Borrower and
any other Person;
(i) the purchase of stock in, or an investment by a foreign Subsidiary
of the Borrower in, an insurance company for the purpose of obtaining credit and
political risk insurance for export sales;
(j) the purchase or acquisition of stock in the Borrower for a Code
Section 401(k) plan, Code Section 423 plan or Plan of the Borrower or any of its
Subsidiaries;
(k) as permitted by Sections 6.5 and 6.6; and
(l) Investments in Unrestricted Subsidiaries and Investments in
minority interests in entities engaged primarily in a Permitted Business,
provided that none of the
-52-
Borrower or its Subsidiaries shall be liable for any Indebtedness or other
obligations of any such Unrestricted Subsidiaries or entities and all such
Investments (including any future required capital contributions) do not exceed
in the aggregate $25,000,000 at any time outstanding, the value of such
Investments if not made in cash to be based upon the fair market value thereof
as reasonably determined by the Borrower's Board of Directors;
(m) other Investments not to exceed $15,000,000 in the aggregate at
any time.
Section 6.8 Affiliate Transactions. The Borrower will not, and will not
----------------------
permit any of its Subsidiaries to, make, directly or indirectly: (a) any
transfer, sale, lease, assignment or other disposal of any assets to any
Affiliate of the Borrower or any purchase or acquisition of assets from any such
Affiliate; or (b) any arrangement or other transaction directly or indirectly
with or for the benefit of any such Affiliate (including without limitation,
guaranties and assumptions of obligations of an Affiliate); provided that the
--------
Borrower and its Subsidiaries (i) may enter into any arrangement or other
transaction with any such Affiliate providing for the leasing of property, the
rendering or receipt of services or the purchase or sale of inventory and other
assets in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Borrower and its Subsidiaries as the monetary or business consideration which it
would obtain in a comparable arm's length transaction with a Person not such an
Affiliate, and (ii) the Borrower and any of its Subsidiaries may guaranty or
otherwise assume obligations of an Affiliate to the extent permitted under
Section 6.2 hereof.
Section 6.9 Other Businesses. The Borrower will not, and will not permit
----------------
any of its Material Subsidiaries to, engage in any line of business other than
the oilfield services and oilfield equipment manufacturing businesses and except
for the application of acquired, existing and developed technologies to
industries and markets outside of such business (each, a "Permitted Business").
------------------
Section 6.10 Capital Expenditures. The Borrower will not, nor will it
--------------------
permit any Subsidiary to, expend, or be committed to expend, Capital
Expenditures for any purpose other than in connection with a Permitted Business.
Section 6.11 Sale and Leaseback Transactions and other Off-Balance Sheet
-----------------------------------------------------------
Liabilities. The Borrower will not, nor will it permit any Subsidiary to, enter
-----------
into or suffer to exist any (a) Sale and Leaseback Transaction, or (b) any other
transaction pursuant to which it incurs or has incurred Off-Balance Sheet
Liabilities, other than (i) those transactions described on Schedule 6.11 and
(ii) Sale and Leaseback Transactions or other Off-Balance Sheet Liabilities in
the aggregate for the Borrower and its Subsidiaries not to exceed $50,000,000.
Section 6.12 Contingent Obligations. The Borrower will not, nor will it
----------------------
permit any Subsidiary to, enter into or suffer to exist any Contingent
Obligations in excess of $50,000,000.
Section 6.13 Maximum Leverage Ratio. The Borrower will not permit its
----------------------
Leverage Ratio to be greater than 0.50 to 1.0 at the end of any fiscal quarter.
Section 6.14 Minimum Interest Charge Coverage Ratio. The Borrower shall not
--------------------------------------
permit, as of the end of any fiscal quarter, permit the Interest Charge Coverage
Ratio for the Borrower and its Subsidiaries on a Consolidated basis to be less
than 3.50 to 1.00.
-53-
ARTICLE VII
REMEDIES
Section 7.1 Events of Default. The occurrence of any of the following
-----------------
events shall constitute an "Event of Default" under any Credit Document:
(a) Payment. The Borrower shall fail to pay any principal of
-------
any Note or any Reimbursement Obligation when the same becomes due and payable
as set forth in this Agreement, or any interest on any Note or any fee or other
amount payable hereunder or under any other Credit Document within five days
after the same becomes due and payable;
(b) Representation and Warranties. Any representation or
-----------------------------
warranty made or deemed to be made (i) by the Borrower in this Agreement or in
any other Credit Document, (ii) by the Borrower (or any of its officers) in
connection with this Agreement or any other Credit Document, or (iii) by any
Guarantor in any Credit Document shall prove to have been incorrect in any
material respect when made or deemed to be made;
(c) Covenant Breaches. (i) The Borrower shall fail to perform
-----------------
or observe any covenant contained in Sections 5.3, 5.4, 5.6, or 5.10(c) or
Article VI of this Agreement, or (ii) the Borrower or any Guarantor shall fail
to perform or observe any term or covenant set forth in any Credit Document
which is not covered by clause (i) above or any other provision of this Section
7.1 if such failure shall remain unremedied for 30 days after the earlier of the
date written notice of such default shall have been given to the Borrower or
such Guarantor by the Administrative Agent or any Bank or the date a Responsible
Officer of the Borrower or any Guarantor has actual knowledge of such default;
(d) Cross-Defaults. (i) The Borrower or any its Subsidiaries
--------------
shall fail to pay any principal of or premium or interest on its Indebtedness
which is outstanding in a principal amount of at least $5,000,000 individually
or when aggregated with all such Indebtedness of the Borrower or its
Subsidiaries so in default (but excluding Indebtedness evidenced by the Notes)
when the same becomes due and payable (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; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to Indebtedness
which is outstanding in a principal amount of at least $5,000,000 individually
or when aggregated with all such Indebtedness of the Borrower and its
Subsidiaries so in default, and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or (iii) 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;
(e) Insolvency. The Borrower or any of its Subsidiaries shall
----------
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a
-54-
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any Legal Requirements relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee or other similar official for it or
for any substantial part of its property and, in the case of any such proceeding
instituted against the Borrower or any such Subsidiary, either such proceeding
shall remain undismissed for a period of 30 days or any of the actions sought in
such proceeding shall occur; or the Borrower or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this paragraph (e);
(f) Judgments. Any one or more judgments or orders for the
---------
payment of money in excess of $15,000,000 in the aggregate (reduced for purposes
of this paragraph for the amount in respect of any such judgment or order that a
reputable insurer has acknowledged being payable under any valid and enforceable
insurance policy) shall be rendered against the Borrower or any of its
Subsidiaries which, within 30 days from the date any such judgment is entered,
shall not have been discharged or execution thereof stayed pending appeal;
(g) ERISA. (i) Any Person shall engage in any "prohibited
-----
transaction" (as defined in Section 406 of ERISA or Section 1106 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is likely to result in the termination
of such Plan for purposes of Title IV of ERISA, unless such Reportable Event,
proceedings or appointment are being contested by the Borrower in good faith and
by appropriate proceedings, (iv) any Plan shall terminate for purposes of Title
IV of ERISA, (v) the Borrower or any member of the Controlled Group shall incur
any liability in connection with a withdrawal from a Multiemployer Plan or the
insolvency (within the meaning of Section 4245 of ERISA) or reorganization
(within the meaning of Section 4241 of ERISA) of a Multiemployer Plan, unless
such liability is being contested by the Borrower in good faith and by
appropriate proceedings, or (vi) any other event or condition shall occur or
exist, with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could subject the Borrower or any Guarantor to any tax,
penalty or other liabilities in the aggregate exceeding $5,000,000;
(h) Guaranty. Any provision of the Guaranty requiring the
--------
payment of the Guaranteed Obligations (as defined in the Guaranty) shall for any
reason cease to be valid and binding on any Guarantor or any Guarantor shall so
state in writing;
(i) Change of Control. Any Change in Control shall occur;
-----------------
(j) Collateral Document. Any Collateral Document shall for any
-------------------
reason fail to create a valid and perfected first priority security interest in
any collateral purported to be covered thereby, except as permitted by the terms
of any Collateral Document, or any Collateral Document shall fail to remain in
full force or effect or any action shall be taken to discontinue or
-55-
to assert the invalidity or unenforceability of any Collateral Document, or the
Borrower shall fail to comply with any of the terms or provisions of any
Collateral Document.
Section 7.2 Optional Acceleration of Maturity. If any Event of Default
---------------------------------
(other than an Event of Default pursuant to paragraph (e) of Section 7.1) shall
have occurred and be continuing, then, and in any such event,
(a) the Administrative Agent (i) shall at the request, or may
with the consent, of the Majority Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances and the obligation of the Issuing Bank
to issue, increase, or extend Letters of Credit to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare the Notes,
all interest thereon, the Letter of Credit Obligations, and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Notes, all such interest, all such Letter of Credit Obligations and all such
amounts shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind (including, without
limitation, any notice of intent to accelerate or notice of acceleration), all
of which are hereby expressly waived by the Borrower, and
(b) the Borrower shall, on demand of the Administrative Agent at
the request or with the consent of the Majority Banks, deposit with the
Administrative Agent into the Cash Collateral Account an amount of cash equal to
the Letter of Credit Exposure as security for the Obligations to the extent the
Letter of Credit Obligations are not otherwise paid at such time.
(c) Automatic Acceleration of Maturity. If any Event of Default
----------------------------------
pursuant to paragraph (e) of Section 7.1 shall occur,
(d) the obligation of each Bank to make Advances and the
obligation of the Issuing Bank to issue, increase, or extend Letters of Credit
shall immediately and automatically be terminated and the Notes, all interest on
the Notes, all Letter of Credit Obligations, and all other amounts payable under
this Agreement shall immediately and automatically become and be due and payable
in full, without presentment, demand, protest or any notice of any kind
(including, without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower and
(e) to the extent permitted by law or court order, the Borrower
shall deposit with the Administrative Agent into the Cash Collateral Account an
amount of cash equal to the outstanding Letter of Credit Exposure as security
for the Obligations to the extent the Letter of Credit Obligations are not
otherwise paid at such time.
Section 7.3 Cash Collateral Account.
-----------------------
(a) Pledge. The Borrower hereby pledges, and grants to the
------
Administrative Agent for the benefit of the Banks, a security interest in all
funds held in the Cash Collateral Account from time to time and all proceeds
thereof, as security for the payment of the Obligations, including without
limitation all Letter of Credit Obligations owing to the Issuing Bank or any
other Bank due and to become due from the Borrower to the Issuing Bank or any
other Bank under this Agreement in connection with the Letters of Credit.
-56-
(b) Application against Letter of Credit Obligations. The
------------------------------------------------
Administrative Agent may, at any time or from time to time apply funds then held
in the Cash Collateral Account to the payment of any Letter of Credit
Obligations owing to the Issuing Bank, in such order as the Administrative Agent
may elect, as shall have become or shall become due and payable by the Borrower
to the Issuing Bank under this Agreement in connection with the Letters of
Credit.
(c) Duty of Care. The Administrative Agent shall exercise
------------
reasonable care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Administrative
Agent accords its own property, it being understood that the Administrative
Agent shall not have any responsibility for taking any necessary steps to
preserve rights against any parties with respect to any such funds.
Section 7.4 Non-exclusivity of Remedies. No remedy conferred upon the
---------------------------
Administrative Agent or the Banks is intended to be exclusive of any other
remedy, and each remedy shall be cumulative of all other remedies existing by
contract, at law, in equity, by statute or otherwise.
Section 7.5 Right of Set-off. Upon (a) the occurrence and during the
----------------
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 7.2 to authorize the
Administrative Agent to declare the Notes and any other amount payable hereunder
due and payable pursuant to the provisions of Section 7.2 or the automatic
acceleration of the Notes and all amounts payable under this Agreement pursuant
to Section 7.3, each Bank 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 such Bank to or for the credit
or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement, the Note held by such
Bank, and the other Credit Documents, irrespective of whether or not such Bank
shall have made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured. Each Bank agrees to
promptly notify the Borrower and the Administrative Agent after any such set-off
and application made by such Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Bank under this Section are in addition to any other rights and remedies
(including, without limitation, other rights of set-off) which such Bank may
have.
ARTICLE VIII
AGENCY AND ISSUING BANK PROVISIONS
Section 8.1 Authorization and Action. Each Bank hereby appoints and
------------------------
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Credit Documents
as are delegated to the Administrative Agent by the terms hereof and of the
other Credit Documents, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement or any
other Credit Document (including, without limitation, enforcement or collection
of the
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Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks, and such instructions shall be
binding upon all Banks and all holders of Notes; provided, however, that the
--------
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement, any other Credit Document, or applicable Legal Requirements.
Section 8.2 Administrative Agent's Reliance, Etc. Neither the
------------------------------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken (including the
Administrative Agent's own negligence) by it or them under or in connection with
this Agreement or the other Credit Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations made
in or in connection with this Agreement or the other Credit Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or any other
Credit Document on the part of the Borrower or its Subsidiaries or to inspect
the property (including the books and records) of the Borrower or its
Subsidiaries; (e) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Credit Document; and (f) shall incur no liability under
or in respect of this Agreement or any other Credit Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
Section 8.3 The Administrative Agent and Its Affiliates. With respect
-------------------------------------------
to its Revolving Commitment, the Advances made by it and the Notes issued to it,
the Administrative Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Administrative Agent. The term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower or any of its Subsidiaries, and any Person
who may do business with or own securities of the Borrower or any such
Subsidiary, all as if the Administrative Agent were not an agent hereunder and
without any duty to account therefor to the Banks.
Section 8.4 Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Administrative Agent, the Arranger
or any other Bank and based on the financial statements referred to in Section
4.6 and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon
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the Administrative Agent, the Arranger or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
Section 8.5 Indemnification. The Banks severally agree to indemnify the
---------------
Administrative Agent, the Arranger and the Issuing Bank (to the extent not
reimbursed by the Borrower), according to their respective Pro Rata Shares from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent, the Arranger or the Issuing Bank in any way relating to or
arising out of this Agreement or any action taken or omitted by the
Administrative Agent, the Arranger or the Issuing Bank under this Agreement or
any other Credit Document (including the Administrative Agent's, the Arranger's
or the Issuing Bank's own negligence), provided that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's, the Arranger's and the Issuing Bank's gross negligence
or willful misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any other Credit Document,
to the extent that the Administrative Agent is not reimbursed for such expenses
by the Borrower.
Sectionm 8.6 Successor Administrative Agent and Issuing Bank. The
-----------------------------------------------
Administrative Agent or the Issuing Bank may resign at any time by giving
written notice thereof to the Banks and the Borrower and may be removed at any
time with or without cause by the Majority Banks upon receipt of written notice
from the Majority Banks to such effect. Upon receipt of notice of any such
resignation or removal, the Majority Banks shall have the right to appoint a
successor Administrative Agent or Issuing Bank with, if an Event of Default has
not occurred and is not continuing, the consent of the Borrower, which consent
shall not be unreasonably withheld. If no successor Administrative Agent or
Issuing Bank shall have been so appointed, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's or Issuing
Bank's giving of notice of resignation or the Majority Banks' removal of the
retiring Administrative Agent or the Issuing Bank, then the retiring
Administrative Agent or Issuing Bank may, on behalf of the Banks and the
Borrower, appoint a successor Administrative Agent or Issuing Bank, which shall
be a commercial bank meeting the financial requirements of an Eligible Assignee
and, in the case of the Issuing Bank, a Bank. Upon the acceptance of any
appointment as Administrative Agent or Issuing Bank by a successor
Administrative Agent or Issuing Bank, such successor Administrative Agent or
Issuing Bank shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent or Issuing
Bank, and the retiring Administrative Agent or Issuing Bank shall be discharged
from its duties and obligations under this Agreement and the other Credit
Documents, except that the retiring Issuing Bank shall remain the Issuing Bank
with respect to any Letters of Credit issued by the Issuing Bank and outstanding
on the effective date of its resignation or removal and the provisions affecting
the Issuing Bank with respect to such Letters of Credit shall inure to the
benefit of the retiring Issuing Bank until the termination of all such
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Letters of Credit. After any retiring Administrative Agent's or Issuing Bank's
resignation or removal hereunder as Administrative Agent or Issuing Bank, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent or Issuing
Bank under this Agreement and the other Credit Documents.
Section 8.7 Execution of Collateral Documents. The Banks hereby empower
---------------------------------
and authorize the Administrative Agent to execute and deliver to the Borrower on
their behalf the Pledge Agreement and all related financing statements and any
financing statements, agreements, documents or instruments as shall be necessary
or appropriate to effect the purposes of the Pledge Agreement.
Section 8.8 Collateral Releases. The Banks hereby empower and authorize
-------------------
the Administrative Agent to execute and deliver to the Borrower on their behalf
any agreements, documents or instruments as shall be necessary or appropriate to
effect any releases of Collateral which shall be permitted by the terms hereof
or of any other Credit Document or which shall otherwise have been approved by
the Majority Banks (or, if required by the terms of Section 9.1, all of the
-----------
Banks) in writing.
Section 8.9 Syndication Agent; Documentation Agent. Neither the
--------------------------------------
Syndication Agent nor the Documentation Agent shall have any duties, obligations
or liabilities in its capacity as Syndication Agent or Documentation Agent, as
applicable, the Banks shall have no right to replace the Syndication Agent or
the Documentation Agent if the Syndication Agent or Documentation Agent, as
applicable, is no longer a Bank, and neither the Syndication Agent nor the
Documentation Agent may assign its status as Syndication Agent or Documentation
Agent, as applicable, to any Person.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Banks
and the Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
--------
however, that no amendment shall increase the Revolving Commitment of any Bank
without the written consent of such Bank, and no amendment, waiver or consent
shall, unless in writing and signed by all the Banks, do any of the following:
(a) except as provided in Section 2.15, increase the aggregate Revolving
Commitments of the Banks, (b) reduce the principal of, or interest on, the Notes
or any fees or other amounts payable hereunder or under any other Credit
Document, (c) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, (d) amend
Section 2.14 or this Section 9.1, (e) release any Guarantor from its obligations
under the Guaranty, (f) release any Lien in favor of the Administrative Agent
for the benefit of the Banks on Property of the Borrower or Guarantors, (g)
amend the definition of "Majority Banks"; and provided, further, that (i) no
--------
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent, the Arranger or the Issuing Bank in addition to the Banks
required above
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to take such action, affect the rights or duties of the Administrative Agent,
the Arranger or the Issuing Bank, as the case may be, under this Agreement or
any other Credit Document, and (ii) no waiver or consent to departure from any
of the conditions specified in Section 3.1 or 3.2 shall be effective unless in
writing and signed by the Majority Banks and the Administrative Agent.
Section 9.2 Notices, Etc. All notices and other communications shall be in
------------
writing (including telecopy or telex) and mailed, telecopied, telexed, hand
delivered or delivered by a nationally recognized overnight courier, if to the
Borrower, at its address at 2000 Xxx Houston Parkway South, Suite 1700, Xxxxxxx,
Xxxxx 00000, Attention: Chief Financial Officer, with a copy to the General
Counsel (telecopy: (000) 000-0000; telephone: (000) 000-0000); if to any Bank at
its Domestic Lending Office specified opposite its name on Schedule 9.2; if to
the Administrative Agent or to Xxxxx Fargo in its capacity as Administrative
Agent or as the Issuing Bank, at its address at 0000 Xxxxxxxx, X0000-000,
Xxxxxx, Xxxxxxxx 00000, Attention: Agency Syndication (telecopy: (000) 000-0000;
telephone: (000) 000-0000), with a copy to 0000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Relationship Manager (telecopy: (000) 000-0000;
telephone: (000) 000-0000); and if a Notice of Borrowing or a Notice of
Conversion or Continuation to the Administrative Agent at the Domestic Lending
Office for the Administrative Agent specified opposite its name on Schedule 9.2
or, as to each party, at such other address or teletransmission number as shall
be designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telexed or hand
delivered or delivered by overnight courier, be effective three days after
deposited in the mails, when telecopy transmission is completed, when confirmed
by telex answer-back or when delivered, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II or VIII shall
not be effective until received by the Administrative Agent.
Section 9.3 No Waiver; Remedies. No failure on the part of any Bank, the
-------------------
Administrative Agent, or the Issuing Bank to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided in this Agreement and the other Credit Documents are
cumulative and not exclusive of any remedies provided by law.
Section 9.4 Costs and Expenses. The Borrower agrees to pay on demand all
------------------
out-of-pocket costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, the Notes and the other Credit Documents including, without
limitation, (a) all reasonable out-of-pocket costs and expenses, if any, of the
Administrative Agent, the Arranger, the Issuing Bank, and each Bank (including,
without limitation, reasonable counsel fees and expenses of the Administrative
Agent, the Arranger, the Issuing Bank, and each Bank) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement and the other Credit Documents after an Event of Default has
occurred and is continuing, and (b) to the extent not included in the foregoing,
the costs of any Uniform Commercial Code financing statement or continuation
statement, and any related title or Uniform Commercial Code search conducted
subsequent to such recordation, and other costs usual and customary in
connection with the taking of a Lien.
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Section 9.5 Binding Effect. This Agreement shall become effective when it
--------------
shall have been executed by the Borrower and the Administrative Agent, and when
the Administrative Agent shall have, as to each Bank, either received a
counterpart hereof executed by such Bank or been notified by such Bank that such
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent, the Arranger, the Issuing
Bank, and each Bank and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or delegate its duties
under this Agreement or any interest in this Agreement without the prior written
consent of each Bank.
Section 9.6 Bank Assignments and Participations.
-----------------------------------
(a) Assignments. Any Bank may assign to one or more banks or other
-----------
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Revolving Commitment,
the Advances owing to it, the Notes held by it, and the participation interest
in the Letter of Credit Obligations held by it); provided, however, that (i)
-------- -------
each such assignment shall be of a constant, and not a varying, percentage of
all of such Bank's rights and obligations under this Agreement and shall involve
a ratable assignment of such Bank's Revolving Commitment and such Bank's
Revolving Advances, (ii) the amount of the resulting Revolving Commitment and
Revolving Advances of the assigning Bank (unless it is assigning all its
Revolving Commitment) and the assignee Bank pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000, (iii) each such
assignment shall be to an Eligible Assignee, (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with the Revolving Note subject to such assignment, and (v) each Eligible
Assignee (other than the Eligible Assignee of the Administrative Agent or an
Eligible Assignee which is an Affiliate of the assigning Bank) shall pay to the
Administrative Agent a $4,000 administrative fee. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least three Business
Days after the execution thereof, (A) the assignee thereunder shall be a party
hereto for all purposes and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder and (B) such Bank thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such Bank's
rights and obligations under this Agreement, such Bank shall cease to be a party
hereto). Notwithstanding anything herein to the contrary, any Bank may assign,
as collateral or otherwise, any of its rights under the Credit Documents to any
Federal Reserve Bank.
(b) Granting Bank; SPC.
------------------
(i) Notwithstanding anything to the contrary contained herein,
the Granting Bank may grant to an SPC, identified as such in writing from
time to time by the Granting Bank to the Administrative Agent and the
Borrower, the option to provide to the Borrower all or any part of any
Advance that the Granting Bank would otherwise be obligated to make to the
Borrower pursuant to this Agreement; provided that (A) nothing
-------------
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herein shall constitute a commitment by any SPC to make any Advance, (B) if
an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Advance, the Granting Bank shall be obligated to make
such Advance pursuant to the terms hereof. The making of an Advance by an
SPC hereunder shall utilize the Commitment of the Granting Bank to the same
extent, and as if, such Advance were made by such Granting Bank. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which
shall remain with the Granting Bank). Notwithstanding anything to the
contrary contained in this Section 9.6(b), any SPC may (A) with notice to,
but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefore,
assign all or a portion of its interests in any Advances to the Granting
Bank or to any financial institutions (consented to by the Borrower and the
Administrative Agent) providing liquidity and/or credit support to or for
the account of the such SPC to support the funding or maintenance of
Advanced and (B) disclose on a confidential basis any non-public
information relating to the Advances to any credit rating agency,
commercial paper dealer or provider of any surety, guarantee, or credit or
liquidity enhancement to such SPC. This Section 9.6(b) may not be amended
without the written consent of such SPC.
(ii) Limited Recourse. No recourse under any obligation,
----------------
covenant, or agreement of the SPC contained in this Agreement shall be had
against any shareholder, officer, agent, or director of the SPC as such, by
the enforcement of any assessment or by any proceeding, by virtue of any
statute otherwise; it being expressly agreed and understood that this
Agreement is a corporate obligation of the SPC and no personal liability
shall attach to or be incurred by any officer, agents or member of the SPC
as such, or any of them under or by reason of any obligations, covenants or
agreements of the SPC contained in this Agreement, or implied therefrom,
and that any and all personal liability for breaches by the SPC of any such
obligations, covenants or agreements, either at law or by statute or
constitution, of every such shareholder, officer, agent or director is
hereby expressly waived by all parties to this Agreement as a condition of
and consideration for the SPC entering into this Agreement; provided,
however, that the foregoing shall not relieve any such Person of any
liability they might otherwise have as a result of fraudulent acts or
omissions taken by them. All parties to this Agreement acknowledge and
agree that the SPC shall only be liable for any claims that each of them
may have against the SPC only to the extent of the SPC's assets. The
provisions of this clause shall survive the termination of this Agreement.
(iii) This Section 9.6(b) is subject to the following
limitations:
(A) The Borrower and the Administrative Agent will deal
directly with the Granting Bank, not through its SPC or any other
Person, in delivering any notices, payments or other related documents;
(B) the Granting Bank, rather than the SPC or any other
Person, shall have the authority to approve any waivers or amendments
to this Agreement or any other Credit Documents;
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(C) the Granting Bank's signature shall bind the SPC,
and the Administrative Agent, the other Banks and the Borrower are
entitled to rely on any such actions taken by the Granting Bank for or
on behalf of the SPC;
(D) no SPC arrangement shall have the effect of
extending any time frame for the Granting Bank or any SPC to make
Advances under this Agreement; and
(E) the Granting Bank shall remain obligated for all
other Obligations as a Bank under this Agreement and the Credit
Documents.
(c) Term of Assignments. By executing and delivering an Assignment and
-------------------
Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
Guarantors or the performance or observance by the Borrower or the Guarantors of
any of their obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.6 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such Bank or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Bank.
(d) The Register. The Administrative Agent shall maintain at its
------------
address referred to in Section 9.2 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Banks and the Revolving Commitments of, and principal
amount of the Advances owing to, each Bank from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent, the Issuing
Bank, and the Banks may treat each Person whose name is recorded in the Register
as a Bank hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(e) Procedures. Upon its receipt of an Assignment and Acceptance
----------
executed by a Bank and an Eligible Assignee, together with the Revolving Note
or, in the case of an
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assignment to another Bank, Revolving Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of the attached Exhibit A, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register, and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
such Note or Notes, a new Revolving Note payable to the order of such Eligible
Assignee in amount equal to the Revolving Commitment assumed by it pursuant to
such Assignment and Acceptance, and if the assigning Bank has retained any
Revolving Commitment hereunder, a new Revolving Note payable to the order of
such Bank in an amount equal to, respectively, the Revolving Commitment retained
by it hereunder. Such new Notes shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the attached Exhibit G.
(f) Participations. Each Bank may sell participations to one or more
--------------
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Revolving Commitment, the Advances owing to it, its participation interest in
the Letter of Credit Obligations, and the Revolving Note held by it); provided,
--------
however, that (i) such Bank's obligations under this Agreement (including,
-------
without limitation, its Revolving Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Bank shall
remain the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Administrative Agent, and the Issuing Bank and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, (v) such Bank shall not
require the participant's consent to any matter under this Agreement, except for
change in the principal amount of any Note in which the participant has an
interest, reductions in fees or interest, or extending the Maturity Date, and
(vi) such Bank shall give prompt prior notice to the Borrower of each such
participation to be sold by such Bank. The Borrower hereby agrees that
participants shall have the same rights under Sections 2.8, 2.9, 2.11(c), 9.4
and 9.7 hereof as the Bank to the extent of their respective participations.
Notwithstanding the foregoing, upon the receipt of notice by the Borrower of the
sale of a participation by any Bank to one or more banks or other entities
(other than an Affiliate of such Bank) in or to all or a portion of its rights
and obligations under this Agreement (each such bank or other entity, a
"Proposed Participant"), the Borrower shall have the right, but not the
obligation, to select additional banks to replace such Proposed Participant on
the same terms and conditions as the Proposed Participant upon prompt written
notice from the Borrower to the Administrative Agent and the Bank selling such
participation. The Borrower shall have ten days from the date of its receipt of
notice of the proposed sale of such participation to the Proposed Participant to
select replacement banks to replace such Proposed Participant. If the Borrower
does not select any replacement banks or does not elect to select any
replacement banks the applicable Bank may sell such participation to the
Proposed Participant.
(g) Confidentiality. Each Bank may furnish any information concerning
---------------
the Borrower and its Subsidiaries in the possession of such Bank from time to
time to assignees and participants (including prospective assignees and
participants); provided that, prior to any such disclosure, the assignee or
--------
participant or proposed assignee or participant shall agree in writing
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to preserve the confidentiality of any confidential information relating to
the Borrower and its Subsidiaries received by it from such Bank. Such Bank shall
promptly deliver a signed copy of any such confidentiality agreement to the
Borrower.
Section 9.7 Indemnification. The Borrower shall indemnify the
---------------
Administrative Agent, the Arranger, the Banks (including any lender which was a
Bank hereunder prior to any full assignment of its Revolving Commitment), the
Issuing Bank, and each affiliate thereof and their respective directors,
officers, employees and agents from, and discharge, release, and hold each of
them harmless against, any and all losses, liabilities, claims or damages to
which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from (i) any actual or proposed use by
the Borrower or any Affiliate of the Borrower of the proceeds of any Advance or
Letter of Credit, (ii) any breach by the Borrower or any Guarantor of any
provision of this Agreement or any other Credit Document, (iii) any
investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to the foregoing, or (iv) any
Environmental Claim or requirement of Environmental Laws concerning or relating
to the present or previously-owned or operated properties, or the operations or
business, of the Borrower or any of its Subsidiaries, and the Borrower shall
reimburse the Administrative Agent, the Arranger, the Issuing Bank, and each
Bank, and each affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any reasonable out-of-pocket expenses
(including legal fees) incurred in connection with any such investigation,
litigation or other proceeding; and EXPRESSLY INCLUDING ANY SUCH LOSSES,
LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF THE PERSON BEING
INDEMNIFIED'S OWN NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES,
CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
Section 9.8 Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 9.9 Survival of Representations, etc. All representations and
--------------------------------
warranties contained in this Agreement or made in writing by or on behalf of the
Borrower in connection herewith shall survive the execution and delivery of this
Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Banks, none of which investigations
shall diminish any Bank's right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.8, 2.9, 2.11(c), 9.4
and 9.7 shall survive any termination of this Agreement and repayment in full of
the Obligations.
Section 9.10 Severability. In case one or more provisions of this Agreement
------------
or the other Credit Documents shall be invalid, illegal or unenforceable in any
respect under any applicable Legal Requirement, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
be affected or impaired thereby.
Section 9.11 Usury Not Intended. It is the intent of the Borrower and each
------------------
Bank in the execution and performance of this Agreement and the other Credit
Documents to contract in
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strict compliance with applicable usury laws, including conflicts of law
concepts, governing the Advances of each Bank including such applicable Legal
Requirements of the State of Texas and the United States of America from time to
time in effect. In furtherance thereof, the Banks and the Borrower stipulate and
agree that none of the terms and provisions contained in this Agreement or the
other Credit Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Maximum Rate and that for purposes hereof "interest" shall
include the aggregate of all charges which constitute interest under such laws
that are contracted for, charged or received under this Agreement. In the event
that the maturity of the Notes is accelerated by reason of any election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the Maximum
Rate and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable Notes
(or, if the applicable Notes shall have been paid in full, refunded to the
Borrower). The provisions of this Section shall control over all other
provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.
Section 9.12 Governing Law. This Agreement, the Notes and the other Credit
-------------
Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas.
Section 9.13 Waiver of Jury Trial. THE BORROWER, THE ISSUING BANK, THE
--------------------
SWINGLINE BANK, THE LENDERS AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING,
DIRECTLY OR INDIRECTLY (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE),
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 9.14 Headings Descriptive. The headings of the several Sections and
--------------------
paragraphs of the Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
Section 9.15 Entire Agreement. Pursuant to Section 26.02 of the Texas
----------------
Business and Commerce Code, a loan agreement in which the amount involved in the
loan agreement exceeds $50,000 in value is not enforceable unless the loan
agreement is in writing and signed by the party to be bound or that party's
authorized representative.
The rights and obligations of the parties to an agreement
subject to the preceding paragraph shall be determined solely from the written
loan agreement, and any prior oral agreements between the parties are superseded
by and merged into the loan agreement. This written agreement and the Credit
Documents, as defined in this Agreement, represent the final agreement among the
parties and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties.
[Remainder of page left intentionally blank]
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EXECUTED as of the date first referenced above.
BORROWER:
--------
VARCO INTERNATIONAL, INC.
By: /s/ X.X. Xxxxxxx III
-------------------------------
Name: X.X. Xxxxxxx III
-----------------------------
Title: Vice President
----------------------------
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ADMINISTRATIVE AGENT:
-------------- -----
XXXXX FARGO BANK TEXAS,
NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxxxxxx
-----------------------------
Title: Vice President
----------------------------
BANKS:
-----
XXXXX FARGO BANK TEXAS,
NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxxxxxxx
-----------------------------
Title: Vice President
----------------------------
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BANK ONE, NA
By: /s/ J. Xxxxxxx Xxxxx, Xx.
--------------------------------
Name: J. Xxxxxxx Xxxxx, Xx.
------------------------------
Title: Director, Capital Markets
-----------------------------
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CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxx Xxxxx X. Xxxxxx
--------------------------------------------
Title: Director Associate
-------------------------------------------
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FROST BANK
By: Authorized Signatory
----------------------------
Name:
--------------------------
Title:
-------------------------
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BARCLAYS BANK
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxxx
-------------------------
Title: Director
------------------------
-00-
XXXXX XXXX XX XXXXXXXXXX
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: Regional Vice President
----------------------------
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