EXHIBIT 10.5
CREDIT AGREEMENT
BY AND BETWEEN
BANK ONE, TEXAS, NATIONAL ASSOCIATION
AND
DRIL-QUIP (EUROPE) LIMITED
GOVERNING
$15,000,000.00 REVOLVING CREDIT FACILITY
$1,704,000.00 TERM LOAN
MARCH 30, 1994
TABLE OF CONTENTS
TAB
ARTICLE I Definitions........................................................... 1
Section 1.01. Definitions................................................... 1
Section 1.02. Other Definitional Provisions................................. 11
ARTICLE II Revolving Credit Loan................................................. 11
Section 2.01. Commitment for Revolving Credit Loan.......................... 11
Section 2.02. Revolving Credit Note......................................... 11
Section 2.03. Expiration of Commitment to Lend Under Revolving Credit....... 12
Section 2.04. Procedure for Borrowing Under the Revolving Credit Loan....... 12
Section 2.05. Use of Proceeds of Revolving Credit Loan...................... 13
Section 2.06. Reduction or Termination of Revolving Committed Sum........... 13
Section 2.07. Agreement to Remain in Effect; Revolving Credit............... 13
Section 2.08. Letters of Credit............................................. 13
Section 2.09. Aggregate Amounts Available under Letters of Credit........... 14
Section 2.10. Advances in Respect of Letters of Credit; Reimbursement....... 14
Section 2.11. Purpose of Letters of Credit.................................. 15
Section 2.12. Conflicts in Terms............................................ 15
Section 2.13. Revolving Credit Commitment Fee; Letter of Credit Fee......... 15
Section 2.14. Borrowing Base................................................ 15
Section 2.15. Required Date and Amount of Mandatory Prepayments............. 16
ARTICLE III Term Loan............................................................. 16
Section 3.01. Commitment for Term Loan...................................... 16
Section 3.02. Term Note..................................................... 16
Section 3.03. Use of Proceeds of Term Loan.................................. 17
ARTICLE IV Payments.............................................................. 17
Section 4.01. Method of Payment............................................. 17
Section 4.02. Prepayment.................................................... 17
ARTICLE V Collateral............................................................ 18
Section 5.01. Collateral.................................................... 18
Section 5.02. Setoff........................................................ 18
ARTICLE VI Conditions Precedent.................................................. 19
Section 6.01. Initial Advance............................................... 19
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TAB
Section 6.02. Additional Revolving Credit Advances.......................... 20
ARTICLE VII Representations and Warranties........................................ 20
Section 7.01. Corporate Existence........................................... 21
Section 7.02. Financial Statements.......................................... 21
Section 7.03. Default....................................................... 21
Section 7.04. Authorization and Compliance with Laws and Material Agreements 21
Section 7.05. Litigation and Judgments...................................... 21
Section 7.06. Rights in Properties; Liens................................... 22
Section 7.07. Enforceability................................................ 22
Section 7.08. Approvals..................................................... 22
Section 7.09. Debt.......................................................... 22
Section 7.10. Taxes......................................................... 22
Section 7.11. Use of Proceeds; Margin Securities............................ 22
Section 7.12. ERISA......................................................... 23
Section 7.13. Disclosure.................................................... 23
Section 7.14. Subsidiaries.................................................. 23
Section 7.15. Principal Place of Business................................... 23
Section 7.16. Investment Company Act........................................ 23
Section 7.17. Public Utility Holding Company Act............................ 23
Section 7.18. Contracts..................................................... 24
Section 7.19. Compliance with Law........................................... 24
Section 7.20. Consent....................................................... 24
Section 7.21. Securities Laws............................................... 24
Section 7.22. Existing Loans to Affiliates.................................. 24
Section 7.23. Patents and Trademarks........................................ 24
ARTICLE VIII Affirmative Covenants................................................. 24
Section 8.01. Financial Statements.......................................... 24
Section 8.02. Periodic Miscellaneous Reports................................ 25
Section 8.03. Warehousing Agreements........................................ 26
Section 8.04. Performance of Obligations.................................... 26
Section 8.05. Preservation of Existence and Conduct of Business............. 26
Section 8.06. Maintenance of Properties..................................... 26
Section 8.07. Payment of Taxes and Claims................................... 26
Section 8.08. Audit......................................................... 26
Section 8.09. Keeping Books and Records..................................... 26
Section 8.10. Compliance with Laws.......................................... 27
Section 8.11. Compliance with Agreements.................................... 27
Section 8.12. Further Assurances............................................ 27
Section 8.13. Compliance with ERISA......................................... 27
Section 8.14. Use of Proceeds............................................... 27
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TAB
Section 8.15. Insurance Summary............................................. 27
Section 8.16. Licenses...................................................... 27
Section 8.17. Insurance; Payment of Premiums................................ 27
Section 8.18. Casualty or Damage to Insured Property........................ 28
ARTICLE IX Negative Covenants.................................................... 29
Section 9.01. Limitation on Liens; Debt..................................... 29
Section 9.02. Mergers, Acquisitions and Dissolutions........................ 29
Section 9.03. Section 9.03 Left Blank Intentionally......................... 29
Section 9.04. Section 9.04 Left Blank Intentionally........................ 30
Section 9.05. Section 9.05 Left Blank Intentionally........................ 30
Section 9.06. Section 9.06 Left Blank Intentionally........................ 30
Section 9.07. Section 9.07 Left Blank Intentionally........................ 30
Section 9.08. Loans and Investments......................................... 30
Section 9.09. Transactions With Affiliates.................................. 30
Section 9.10. Disposition of Assets......................................... 30
Section 9.11. Sale and Leaseback............................................ 30
Section 9.12. Prepayment of Debt............................................ 30
Section 9.13. Nature of Business............................................ 30
Section 9.14. Prohibited Transactions....................................... 30
Section 9.15. Contingent Liabilities........................................ 31
Section 9.16. Removal of Collateral......................................... 31
Section 9.17. Compliance with Regulations G, T, U, and X.................... 31
ARTICLE X Default............................................................... 31
Section 10.01. Events of Default............................................. 31
Section 10.02. Occurrence of a Default or an Event of Default................ 33
Section 10.03. Performance by Lender......................................... 35
Section 10.04. Waivers....................................................... 35
Section 10.05. Application of Proceeds....................................... 35
Section 10.06. Cumulative Rights............................................. 35
Section 10.07. Expenditures by Lender or Any Lender.......................... 35
ARTICLE XI Miscellaneous......................................................... 35
Section 11.01. Expenses of Lender............................................ 35
Section 11.02. Foreign Taxes................................................. 36
Section 11.03. Restatement................................................... 36
Section 11.04. No Waiver; Cumulative Remedies................................ 36
Section 11.05. Successors and Assigns........................................ 37
Section 11.06. Survival of Representations and Warranties.................... 37
Section 11.07. Entire Agreement; Amendment................................... 37
Section 11.08. Maximum Interest Rate......................................... 37
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TAB
Section 11.09. Notices....................................................... 37
Section 11.10. Applicable Law................................................ 38
Section 11.11. Counterparts.................................................. 38
Section 11.12. Severability.................................................. 38
Section 11.13. Headings...................................................... 39
Section 11.14. Non-Application of Chapter 15 of Texas Credit Code............ 39
Section 11.15. Controlling Provision Upon Conflict........................... 39
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement"), dated as of March 30, 1994,
is by and among DRIL-QUIP (EUROPE) LIMITED, a private limited company formed
under the Companies Act of the United Kingdom 1948, as amended ("Borrower"), and
BANK ONE, TEXAS, NATIONAL ASSOCIATION, a national banking association
("Lender").
In consideration of the mutual covenants and agreements herein
contained, Borrower, Parent and Lender agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below:
"Accounts" means accounts (as such term is defined in the UCC) and
"Account" means any of the Accounts.
"Advance" means an advance of funds by Lender to Borrower pursuant to
Article II or Article III.
"Affiliate" means any Person directly or indirectly controlling,
controlled by, or under common control with, Borrower.
"Agreement" means this Credit Agreement (including all Exhibits and
Schedules attached hereto), as the same may be amended or supplemented from time
to time.
"Application" means the document between Borrower and Lender relating
to a Letter of Credit and evidencing, inter alia, the agreement of Lender to
issue such Letter of Credit and Borrower's reimbursement obligation with respect
thereto, which Application shall be in form and substance satisfactory to
Lender.
"Authorized Financial Officer" means (i) any Director of Borrower, or
(ii) the Chairman of the Board of Directors, President, Vice President, Chief
Financial Officer, Treasurer or Controller of Parent.
"Available Sum" means, as of the date of any determination thereof,
the Borrowing Base less the sum of (w) the aggregate unpaid balance of the
Revolving Credit Loan plus (x) the aggregate amount of any pending Notice of
Revolving Credit Borrowing plus (y) the aggregate
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contingent liability of Lender under all open Letters of Credit plus (z) the
aggregate amount of any pending Notice of Letter of Credit Issuance.
"Average Daily Unused Balance" means, for any period of time, the
average daily amount during such period of time by which (i) the lesser of (a)
the Revolving Credit Committed Sum or (b) the sum of the Borrowing Base plus the
Parent's Borrowing Base exceeds (ii) the sum of (a) the aggregate unpaid balance
of the Revolving Credit Loan plus (b) the aggregate amount of any pending Notice
of Revolving Credit Borrowings plus (c) the aggregate contingent liability of
Lender under all open Letters of Credit plus (d) the aggregate amount of any
pending Notice of Credit Issuance plus (e) the aggregate unpaid balance of
Parent's Revolving Debt Facility plus (f) the aggregate amount of any pending
request to borrow monies or issue letters of credit under Parent's Revolving
Debt Facility plus (g) the aggregate contingent liability of Lender under all
open letters of credit issued by Lender for the account of Parent under Parent's
Revolving Debt Facility.
"Bank One Texas Base Rate" means at any time the lesser of (i) the
rate of interest per annum then most recently established by Lender as its Bank
One Texas Base Rate in effect from day to day, with each change in the rate of
interest charged as the Bank One Texas Base Rate to become effective, without
notice to Borrower, on the effective date of each change in the Bank One Texas
Base Rate, such Bank One Texas Base Rate to be computed on the basis of a year
composed of 365 days for the actual number of days elapsed (including the first
day but excluding the last day) or (ii) the Maximum Rate (as herein defined).
"Borrowing" means a borrowing hereunder consisting of Loans made to
Borrower by Lender in Advances under this Agreement and the Notes.
"Borrowing Base" means, at any particular time, an amount equal to the
sum of (a) eighty percent (80%) of Eligible Accounts, plus (b) fifty percent
(50%) of Eligible Inventory; provided, however, that fifty percent (50%) of
Eligible Inventory shall never exceed sixty percent (60%) of the Borrowing Base.
"Borrowing Base Deficiency" shall have the meaning set forth in
Section 2.14 hereof.
"Borrowing Base Report" shall have the meaning set forth in Section
2.14 hereof.
"Borrowing Date" means a date upon which an Advance is to be made
hereunder.
"Business Day" means a day when Lender is open for business.
"Closing" means the exchange of the various documents and instruments
by the parties hereto on the Closing Date (as defined in Section 6.01 hereof)
which are required to be exchanged on the Closing Date to consummate the initial
Advances (regardless of whether such initial Advances are then made) and related
transactions in accordance with Article VI hereof.
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"Closing Date" shall have the meaning set forth in Section 6.01
hereof.
"Collateral" shall have the meaning set forth in Section 5.01.
"Commitment" means (i) the commitment of Lender to make available the
Revolving Credit Loan hereunder, (ii) the commitment of Lender to make available
the Term Loan hereunder and (iii) the commitment of Lender to issue the Letters
of Credit hereunder.
"Consolidated" means, with reference to any item, such item of Parent
or any Material Company or, if Parent or any Material Company shall have any
Subsidiary or Subsidiaries which are consolidated for financial reporting
purposes for the date or for the period as of or with respect to which a
determination is made, of Parent, the Material Companies and such Subsidiary or
Subsidiaries, consolidated in accordance with GAAP.
"Debt" means for any Person (i) all indebtedness whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of money borrowed, (ii) all indebtedness representing deferred payment of the
purchase price of property or assets, (iii) all indebtedness under any lease
which, in conformity with GAAP, is required to be capitalized for balance sheet
purposes, (iv) all indebtedness under guaranties, endorsements, assumptions or
other contingent obligations, in respect of, or to purchase or otherwise
acquire, indebtedness of others, and (v) all indebtedness secured by a Lien
existing on property owned, subject to such Lien, whether or not the
indebtedness secured thereby shall have been assumed by the owner thereof.
"Default" means the occurrence of any event which with the giving of
notice or lapse of time, or both, would become an Event of Default.
"DQAP" means Dril-Quip Asia Pacific Pte Ltd, a company incorporated in
the Republic of Singapore.
"Eligible Accounts" means at any date of determination thereof, all
Accounts of Borrower that are acceptable to Lender in its sole reasonable
discretion and satisfy the following eligibility requirements:
(i) If the Account arises because of the sale of goods, such goods have
been shipped or delivered on an open account basis (or Lender has been provided
with a letter from the customer accepting title for the goods prior to shipment
and accepting risk of loss with respect thereto and confirming its obligation to
pay for such goods on Borrower's regular terms to such customer) and on an
absolute sales basis and not on consignment, on approval or on a sale-or-return
basis or subject to any other repurchase or return agreement and no material
part of such goods has been returned, rejected, lost or damaged;
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(ii) The Account is not evidenced by chattel paper or an instrument of any
kind unless such chattel paper or instrument is assigned and delivered to and is
acceptable to Lender;
(iii) The account debtor obligated on such Account is not insolvent or the
subject of any bankruptcy, reorganization, receivership or insolvency
proceedings of any kind and Lender is reasonably satisfied with the credit
worthiness of such account debtor;
(iv) The Account is a valid, legally enforceable obligation of the relevant
account debtor not subject to any offset, defense or claim denying or limiting
liability thereunder, other than normal discounts and allowances granted in the
ordinary course of Borrower's business on prior notice to Lender, and other than
any amount in dispute or subject to debit memorandum which shall have been
deducted from the total Account to determine what may otherwise be the balance
of the Eligible Account;
(v) The Account is subject to Lender's prior perfected security interest,
or foreign equivalent thereof, and is not subject to any Lien other than any
Permitted Lien;
(vi) The Account has arisen with respect to:
(1) sales invoiced for net payment on terms of thirty (30) days or
less after the date of the invoice and which remain unpaid for no longer than
ninety (90) days after the date of invoice or the due date on the invoice; or
(2) sales invoiced for net payments beyond thirty (30) days, and which
remain unpaid for no longer than thirty (30) days after due date, on the
condition that no invoice will be eligible for more than ninety (90) days before
due date;
(vii) If the Account debtor is located in a jurisdiction which requires
the filing of any tax report or tax return with respect to any Account, such tax
reports and tax returns have been filed by Borrower;
(viii) The Account is not owing from any employee, officer, agent,
director, or a stockholder of Parent, any Material Company, any other
Subsidiary, or from an Affiliate;
(ix) The Account does not arise from a contract containing a prohibition
against granting a security interest, or foreign equivalent thereof, therein;
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(x) If ten percent (10%) or more of Accounts owing from an account debtor
become ineligible for reason of being past-due and Borrower fails to notify
Lender in writing of such fact before such fact is reflected on the Borrowing
Base Report next delivered to Lender pursuant to Section 2.14, then, unless
expressly approved by Lender in writing, all Accounts owed by such account
debtor shall be ineligible;
(xi) If ten percent (10%) or more of Accounts owing from an account debtor
become ineligible for reason of being past-due and Borrower notifies Lender in
writing of such fact before such fact is reflected on the Borrowing Base Report
next delivered to Lender pursuant to Section 2.14, then, unless Lender notifies
Borrower in writing that all Accounts owed by such account debtor are ineligible
(which decision Lender shall make in its sole good faith discretion), all the
Accounts owed by such account debtor which satisfy all of the other eligibility
requirements of this definition, except for clause (vi), shall be Eligible
Accounts; and
(xii) If the Lender has determined, in its sole reasonable discretion,
that the effect of any rebate or other sales program with respect to any
Accounts would be to reduce collections of the face amounts of such Accounts,
then the Lender may reduce the eligibility of the face amount of such Accounts
to the extent of any such rebate or the amount covered by such sales program.
"Eligible Inventory" means at any date of determination thereof, all
Inventory of Borrower that is acceptable to Lender in its sole reasonable
discretion, but not exceeding the lesser of the actual cost or fair market value
of Borrower's Inventory. With respect to Inventory, "actual costs" shall mean
the sum of (i) the purchase price of the materials included in the raw
materials, work in process, and finished goods and (ii) all direct labor costs
attributable to the work in process or finished goods, less any progress
payments or partial xxxxxxxx included in such Inventory as reflected in
Borrower's work orders, if any, for such Inventory. Inventory is "eligible"
only if, on the date as of which the determination is being made, it satisfies
the following eligibility requirements:
(i) The Inventory consists of raw materials, work in process and finished
goods;
(ii) The Inventory does not consist of consigned Inventory;
(iii) The Inventory is in good condition, meets all standards imposed by
any governmental agency, or department or division thereof, having regulatory
authority over such goods, their use and/or sale and is either currently usable
or currently saleable in the normal course of business of Borrower and is not
otherwise unacceptable to the Lender due to age, type, category and/or quantity;
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(iv) Inventory not located at one of the Permitted Locations that otherwise
would be Eligible Inventory hereunder and which exceeds ten percent (10%) of the
value of all Eligible Inventory shall not be Eligible Inventory;
(v) The Inventory is subject to Lender's prior perfected security interest
and is not subject to any other Lien other than Permitted Liens;
(vi) If the lesser of the actual cost or fair market value of Tubular Goods
exceeds thirty percent (30%) of Eligible Inventory, then the amount of such
excess shall be ineligible; and
(vii) Inventory which has been determined by Lender, in its sole
reasonable discretion, to be ineligible because such Inventory is damaged, not
currently usable or currently saleable in the normal course of business of
Borrower, shall not be Eligible Inventory for purposes hereof.
"ERISA" shall have the meaning set forth in Section 7.12 hereof.
"Event of Default" shall have the meaning specified in Section 10.01.
"Excess Amount" shall have the meaning set forth in Section 2.14
hereof.
"Existing Liens" means any Lien on any assets or properties of
Borrower, including all such Liens that secure Debt of Borrower in an amount
(including any amounts which Borrower has the right to borrow under the
documents, agreements and instruments evidencing such Debt and Liens, whether or
not then advanced by such lender), as of the date of this Agreement, at least
equal to $50,000.00, as fully described in Schedule 1 hereto.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their successors which are
applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
observed in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Inventory" means as at the date of determination, all Inventory (as
such term is defined in the UCC) of Borrower.
"Investments" means all loans, advances, capital contributions and
transfers of assets (other than for cash in an amount equal to the fair market
value of the assets transferred) and all
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purchase and other acquisitions for consideration or evidences of indebtedness,
capital stock or other securities of any partnership, corporation, firm or other
Person.
"Letter of Credit" means either a standby letter of credit or a
commercial letter of credit issued by Lender for the account of Borrower in
accordance with the terms of Article II hereof.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.13 hereof.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
encumbrance, or conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of Debt or any other
obligation, whether arising by agreement, or under any statute or law of any
applicable jurisdiction, or otherwise.
"Loans" means, collectively, the Revolving Credit Loan and the Term
Loan, and "Loan" means singly, the Revolving Credit Loan or the Term Loan.
"Loan Papers" means this Agreement and all promissory notes, deeds of
trust, security agreements, or their equivalent under applicable laws, financing
statements, collateral assignments, guaranties, letters of credit, and other
instruments, documents, and agreements executed and delivered pursuant to, in
connection with or as contemplated by this Agreement and any future amendments,
supplements or other modifications hereto or thereto.
"Material Companies" means, collectively, both DQAP and Borrower, and
"Material Company" means, singly, DQAP or Borrower.
"Maximum Rate" has the meaning set forth in Section 2.02 hereof.
"Notes" shall mean the Revolving Credit Note and the Term Note and all
extensions, renewals and modifications thereof.
"Notice of Credit Issuance" shall have the meaning set forth in
Section 2.08 hereof.
"Notice of Revolving Credit Borrowing" shall have the meaning set
forth in Section 2.04 hereof.
"Obligations" means all present and future obligations, liabilities
and indebtedness, and all renewals and extensions thereof, or any part thereof,
of Borrower to Lender arising pursuant to the Loan Papers and all interest
accruing thereon and reasonable attorneys' fees incurred in the enforcement or
collection thereof, regardless of whether such obligations, liabilities and
indebtedness are direct or indirect, primary or secondary, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including, but
not limited to, the indebtedness and obligations evidenced by the Notes, all
reimbursement obligations with respect to the Letters of Credit and all
obligations referred
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to in any and all other Loan Papers. The Revolving Commitment Fee and the Letter
of Credit Fee called for by Section 2.13 hereof shall be included within the
Obligations.
"Parent" means Dril-Quip, Inc., a Texas corporation.
"Parent's Borrowing Base" means the Borrowing Base as defined in that
certain Credit Agreement between Lender and Parent dated of even date herewith
as such Credit Agreement may be hereafter amended, renewed or extended from time
to time.
"Parent's Revolving Debt Facility" means that certain revolving credit
loan in the maximum principal amount of $15,000,000.00 made by Lender to Parent
of even date herewith and governed by that certain Credit Agreement between
Lender and Parent dated of even date herewith as such Credit Agreement may be
hereafter amended, renewed or extended from time to time.
"Payment Notice" shall have the meaning set forth in Section 2.14
hereof.
"Permitted Investments" means any one or more of the following:
(a) readily marketable securities issued or fully guaranteed by the United
States of America;
(b) certificates of deposit, eurodollar or repurchase obligations with
maturities of one year or less from the date of acquisition thereof of any
commercial bank operating in the United States having capital and surplus in
excess of $100,000,000.00;
(c) certificates of deposit or time deposits of any commercial bank
operating in the United States with maturities of one (1) year or less from the
date of such deposit where any and all such deposits are at all times fully
insured at such institution by the Federal Deposit and Insurance Corporation;
(d) commercial paper of a domestic issuer if at the time of purchase such
paper is rated "AA" by Xxxxx'x Investors Service with maturities of not more
than one hundred eighty (180) days.
"Permitted Liens" means any one or more of following:
(i) Liens for taxes, assessments or governmental charges either not yet
delinquent or the validity of which are being contested in good faith by
appropriate proceedings diligently prosecuted and as to which adequate reserves
shall have been set aside in conformity with GAAP;
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(ii) Deposits, pledges or other liens to secure the payment of workers'
compensation, unemployment insurance or other social security benefits or
obligations, or to secure the performance of bids, trade contracts, leases,
public or statutory obligations, surety or appeal bonds and other obligations of
a like nature incurred in the ordinary course of business and in each case to
secure such obligations not yet delinquent, or if delinquent which are being
diligently contested in good faith and as to which adequate reserves shall have
been set aside in conformity with GAAP;
(iii) Materialmen's, mechanics', worker's, repairmen's, employees',
warehousemen's, carrier's or other like statutory or common law liens, in each
case arising in the ordinary course of business to secure obligations not yet
delinquent, or if delinquent which are being diligently contested in good faith
and as to which adequate reserves shall have been set aside in conformity with
GAAP or as to which adequate bonds shall have been obtained;
(iv) Purchase money liens, purchase money security interests, or title
retention arrangements upon or in any property acquired or held by any Person in
the ordinary course of business to secure purchase money indebtedness which is
otherwise permitted by Section 9.01 hereof and is incurred solely for the
purpose of financing the acquisition of such property, or renewals or extensions
thereof;
(v) Existing Liens, or continuations, renewals and extensions thereof;
provided, however, that such Existing Lien shall not secure any additional Debt
(except any amounts which a Person has the right to borrow under the documents,
agreements and instruments evidencing Debt existing as of the Closing Date)
created pursuant to any such continuation, renewal or extension; or
(vi) Lender's Liens.
"Permitted Locations" means the locations listed on Schedule 2
attached hereto, all of which are and shall at all times be locations in
Scotland, Norway or locations where the Lender, in its sole discretion, has made
all filings necessary to perfect a security interest in any Inventory at such
location, and which are and shall at all times be either (i) locations, where
Collateral is located, owned by Borrower; (ii) locations, where Collateral is
located, leased by, in each case for which Borrower shall have obtained
landlords' waivers acceptable in form and substance to Lender; or (iii) public
warehouses for which Borrower shall use its best efforts to have: (1) filed
financing statements, or the foreign equivalent thereof, against such
warehouseman covering the Inventory, which financing statements, or the foreign
equivalent thereof, shall have been assigned to Lender, and (2) obtained
warehouseman's waivers acceptable in form and substance to Lender, except that
Lender shall have the option to exclude from Eligible Inventory, Inventory at
warehouse locations
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having in the aggregate a value less than $30,000.00, but the exclusion of such
Inventory from Eligible Inventory shall be in the sole discretion of Lender.
"Person" means and includes any natural person, corporation, business
trust, association, company, partnership, joint venture, or other entity.
"Revolving Credit Available Loan Amount" means, as of the date of any
determination thereof, the lesser of (i) the Revolving Credit Committed Sum less
the sum of (a) the aggregate unpaid balance of the Revolving Credit Loan plus
(b) the aggregate amount of any pending notice of Revolving Credit Borrowings
plus (c) the aggregate contingent liability of Lender under all open Letters of
Credit plus (d) the aggregate amount of any pending Notice of Credit Issuance
plus (e) the aggregate unpaid balance of Parent's Revolving Debt Facility plus
(f) the aggregate amount of any pending request to borrow moneys or issue
letters of credit under Parent's Revolving Debt Facility plus (g) the aggregate
contingent liability of Lender under all open letters of credit issued by Lender
for the account of Parent under Parent's Revolving Debt Facility or (ii) the
Available Sum.
"Revolving Credit Commitment Fee" shall have the meaning set forth in
Section 2.13 hereof.
"Revolving Credit Commitment Period" means the period commencing on
the Closing Date and ending on the Revolving Credit Termination Date.
"Revolving Credit Committed Sum" means FIFTEEN MILLION AND NO/100
DOLLARS ($15,000,000.00), as such amount may be reduced pursuant to Section
2.06.
"Revolving Credit Loan" means the Loan made by Lender to Borrower, in
one or more Advances, during the Revolving Credit Commitment Period, pursuant to
Section 2.01.
"Revolving Credit Note" means the promissory note in favor of Lender
in substantially the form of Exhibit A hereto, and all extensions, renewals and
modifications thereof.
"Revolving Credit Termination Date" means October 1, 1995, or such
earlier date as the Revolving Credit Commitment terminates as provided in this
Agreement.
"Rights" means with respect to any Person, the rights, remedies
(equitable or legal), claims, causes of action, powers, and privileges granted
to such Person pursuant to any or all of the Loan Papers or any other document,
instrument or other agreement heretofore, now, or hereafter executed in
connection therewith, whether granted or arising pursuant to the express
provisions of any of the foregoing, or at law, or in equity, by constitution,
statute, case or otherwise.
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"Security Documents" means the documents described in Section 5.01
hereof and all other documents now or hereafter existing which provide Lender
with Collateral to secure the Obligations, as the same may be amended or
restated from time to time.
"Subsidiary" means any corporation of which more than fifty percent
(50%) of the issued and outstanding securities having ordinary voting power for
the election of directors is owned or controlled, directly or indirectly, by
Parent, Borrower and/or any other Subsidiary, individually or jointly.
"Term Loan" means the loans made by Lender pursuant to Section 3.01
and evidenced by the Term Note.
"Term Note" means the promissory note described in Section 3.01 hereof
in favor of Lender in substantially the form of Exhibit B hereto, and all
extensions, renewals and modifications thereof.
"Tubular Goods" means all tubular goods of Borrower.
"UCC" means the Uniform Commercial Code as adopted and amended by the
State of Texas.
Section 1.02. Other Definitional Provisions. All definitions contained
in this Agreement are equally applicable to the singular and plural form of the
term defined. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP as in effect from time to time, applied on a
basis consistent (except for changes disclosed to Lender, consistent with GAAP
and approved by Borrower's independent public accountants) with the most recent
respective financial statements of Borrower delivered to Lender. The words
"herein," "hereof," "hereunder" and other words of similar import refer to this
Agreement as a whole and not to a particular section, paragraph or other
subdivision. The terms defined in Section 1.01 hereof, unless the context
requires otherwise, will have the meaning assigned to them in Section 1.01
hereof, and will include the plural as well as the singular. All other terms
used herein shall have the meanings as otherwise stated herein or as otherwise
defined in the UCC.
ARTICLE II
Revolving Credit Loan
Section 2.01 Commitment for Revolving Credit Loan. Subject to the
terms and conditions of this Agreement, and provided that no Default or Event of
Default has occurred or is continuing or no Default or Event of Default will
have occurred upon the making of such Advance,
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Lender agrees to lend to Borrower, pursuant to this Agreement, such amounts as
the Borrower may request in one or more Advances, from time to time during the
Revolving Credit Commitment Period to and including the Revolving Credit
Termination Date; provided that the aggregate principal amounts available at any
time under the Revolving Credit Loan shall not at any time exceed the Revolving
Credit Available Loan Amount.
Section 2.02. Revolving Credit Note. The obligation of Borrower to
repay the Revolving Credit Loan shall be evidenced by the Revolving Credit Note
executed by Borrower, payable to the order of Lender, in the principal amount of
the Revolving Credit Committed Sum and dated the date of the making of the
Revolving Credit Loan. The principal of the Revolving Credit Loan shall be due
and payable on the Revolving Credit Termination Date. The Revolving Credit Loan
shall bear interest prior to maturity at a varying rate per annum equal from day
to day to the lesser of (a) the maximum rate permitted from day to day by
applicable law ("Maximum Rate"), including as to Article 5069-1.04 Vernon's
Texas Civil Statutes (and as the same may be incorporated by reference in other
Texas statutes), but otherwise without limitation, that rate based upon the
"indicated rate ceiling," or (b) the sum of the Bank One Texas Base Rate in
effect from day to day plus one-half of one percent (1/2%), each such change in
the rate of interest charged hereunder to become effective, without notice to
Borrower, on the effective date of each change in the Bank One Texas Base Rate;
provided, however, if at any time the rate of interest specified in clause (b)
preceding shall exceed the Maximum Rate, thereby causing the interest on the
Revolving Credit Loan to be limited to the Maximum Rate, then any subsequent
reduction in the Bank One Texas Base Rate shall not reduce the rate of interest
on the Revolving Credit Loan below the Maximum Rate until the aggregate amount
of interest accrued on the Revolving Credit Loan equals the aggregate amount of
interest which would have accrued on the Revolving Credit Loan if the interest
rate specified in clause (b) preceding had at all times been in effect. Accrued
and unpaid interest on the Revolving Credit Loan shall be due and payable (a)
quarterly in arrears, on the 1st day of each successive July, October, January
and April commencing on July 1, 1994, until payment in full of the outstanding
principal under the Revolving Credit Note and (b) on the Revolving Credit
Termination Date. All past due principal and interest shall bear interest at the
Maximum Rate.
Section 2.03. Expiration of Commitment to Lend Under Revolving Credit.
The maximum obligation of Lender to make Advances under Section 2.01 hereof or
to issue Letters of Credit under Section 2.08 hereof shall not at any time
exceed in the aggregate the Revolving Credit Committed Sum, and Lender's
obligation to make additional Advances under Section 2.01 hereof or to issue
Letters of Credit under Section 2.08 hereof shall terminate and expire at 11:00
A.M., Houston, Texas time on the Revolving Credit Termination Date; provided
that Borrower's Obligations and the Rights of Lender under the Loan Papers shall
continue in full force and effect until the obligations have been paid and
performed in full.
Section 2.04. Procedure for Borrowing Under the Revolving Credit Loan.
During the Revolving Credit Commitment Period, Borrower shall give Lender a
written notice executed on behalf of Borrower by any Authorized Financial
Officer (the "Notice of Revolving Credit
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Borrowing") of any proposed Borrowing under the Revolving Credit Loan which
shall be irrevocable. Each Notice of Revolving Credit Borrowing shall be
received by Lender not later than 11:00 A.M., Houston, Texas time, at least two
(2) Business Days prior to any proposed Borrowing requested by Borrower. Each
such Notice of Revolving Credit Borrowing shall be in substantially the form of
Exhibit C attached hereto. Lender, at its option, may from time to time accept
telephonic requests for Advances; provided that Borrower shall promptly
thereafter provide Lender with a completed Notice of Revolving Credit Borrowing.
Lender is hereby authorized to act in reliance upon a certificate of incumbency
from any of Borrower's Directors as to the identity of the foregoing officers
and their due appointment and authorization to issue Borrowing requests and
receive proceeds of Advances hereunder on behalf of Borrower unless and until
Lender is in actual receipt of written notice by Borrower of revocation of said
appointment and authorization. If prior to the Borrowing Date, Lender shall
request that Borrower provide additional information on or confirmation of the
Borrowing Base, Borrower agrees to provide same and Lender shall not have any
obligation to make any Advance with respect to a proposed Borrowing until Lender
is satisfied with the Borrower's determination of the Borrowing Base. Prior to
11:00 A.M. (Houston, Texas time) on each Borrowing Date and subject to the
provisions of Section 2.01, Lender shall make available to Borrower in
immediately available funds such requested Advance by deposit to Borrower's
deposit account maintained with Lender or such other reasonable disposition of
such funds as Borrower shall request in writing. Lender may, and is hereby
authorized by Borrower to, endorse on the schedule attached to the Revolving
Credit Note or on a continuation of such schedule attached to and made a part of
such Revolving Credit Note an appropriate notation evidencing the date and
amount of each Advance and payment and prepayment by Borrower of the principal
of and interest on the Revolving Credit Loan evidenced by such Revolving Credit
Note, but the failure of Lender to make any such endorsement or any incorrect
endorsement shall not subject Lender to any liability hereunder and shall not
limit or otherwise affect the obligations of Borrower under such Revolving
Credit Note.
Section 2.05. Use of Proceeds of Revolving Credit Loan. The proceeds
of all Advances comprising the Revolving Credit Loan shall be used for any
legitimate corporate purpose of Borrower which shall include, without
limitation, the repayment of Debt owed by Borrower to Parent and the payment of
a dividend from Borrower to Parent.
Section 2.06. Reduction or Termination of Revolving Committed Sum.
Borrower may at any time by giving at least three (3) Business Days' notice in
writing to Lender terminate or reduce the Revolving Credit Committed Sum;
provided, however, that (i) no such reduction of the Revolving Credit Committed
Sum shall be effective unless the amount by which the Revolving Credit Committed
Sum is reduced shall be ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) or
an integral multiple thereof (ii) no such termination or reduction of the
Revolving Credit Committed Sum shall be effective unless, simultaneously
therewith, all principal outstanding under the Revolving Credit Loan in excess
of the new Revolving Credit Committed Sum, after giving effect to the proposed
reduction, together with all interest accrued thereon, shall be pre-paid in full
by Borrower and (iii) simultaneously with such termination or reduction, Parent
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shall have terminated or reduced by the same amount the maximum amount Lender is
obligated to loan to Parent pursuant to Parent's Revolving Debt Facility. Once
reduced or terminated, the Revolving Credit Committed Sum may not be increased
or reinstated without the prior written consent of Lender.
Section 2.07. Agreement to Remain in Effect; Revolving Credit. This
Agreement shall remain in effect regardless of the aggregate amount of Advances
from time to time outstanding evidenced by the Revolving Credit Note. Subject
to the limitations set forth in this Article II and to the other terms and
provisions of this Agreement, Borrower may borrow, repay, and reborrow under the
Revolving Credit Note.
Section 2.08. Letters of Credit. Subject to the terms and conditions
of this Agreement, and provided that no Default or Event of Default has occurred
and is continuing, Lender will, upon Borrower's request, issue one or more
Letters of Credit during the Revolving Credit Commitment Period for the account
of Borrower; provided that the aggregate face amount of such Letters of Credit
to be issued shall not exceed the Revolving Credit Available Loan Amount; and
further provided that the aggregate face amount of all Letters of Credit issued
pursuant to this Section 2.08 shall not exceed $1,500,000.00 at any one time.
During the Revolving Credit Commitment Period Borrower shall give Lender written
notice executed on behalf of Borrower by any Authorized Financial Officer of
Borrower (the "Notice of Credit Issuance") of any proposed issuance of a Letter
of Credit. Such Notice of Credit Issuance shall be in substantially the form of
Exhibit D attached hereto. Such Notice of Credit Issuance shall be revocable
prior to the issuance of the Letter of Credit; provided, however, if such notice
is revoked, Borrower shall pay to Lender a fee of $300.00. Each Notice of Credit
Issuance, except with respect to Letters of Credit to be opened on the Closing
Date, shall be delivered to Lender not less than two (2) Business Days before
the requested date of issuance thereof. Additionally, each Notice of Letter of
Credit Issuance shall be accompanied by an Application executed by the Company
relating to the subject Letter of Credit. If prior to the issuance of any Letter
of Credit, Lender shall request that Borrower provide additional information on
or confirmation of the Borrowing Base, Borrower agrees to provide same and
Lender shall not issue any Letter of Credit covered by the Notice of Letter of
Credit Issuance until Lender is satisfied with Borrower's determination of the
Borrowing Base. Each Letter of Credit shall be on substantially such terms as
Borrower may specify in the relevant Application and must be in form and
substance satisfactory to Lender and shall have a fixed expiration date no later
than 1:00 P.M. (Houston, Texas time) one (1) year from the issuance thereof. The
Existing Letters of Credit shall for all purposes be deemed to have been issued
pursuant to this Section 2.08.
Section 2.09. Aggregate Amounts Available under Letters of Credit. The
reimbursement obligation of Borrower to Lender with respect to the Letters of
Credit shall be evidenced by the Revolving Credit Note and the Application
relating to the subject Letter of Credit. Any amounts paid by Lender with
respect to such Letter of Credit shall be deemed to be an Advance by Lender
under the Revolving Credit Note as set forth in Section 2.10 hereof.
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Section 2.10. Advances in Respect of Letters of Credit; Reimbursement.
(a) Prior to the expiration or termination of the Revolving Credit Commitment
Period, if Borrower does not provide Lender with funds, in the amount and on the
date necessary to settle such Lender's obligations under any draft drawn or
demand made under a Letter of Credit issued by Lender (whether at or prior to
the expiration of such Letter of Credit), Lender shall make and Borrower shall
accept, an Advance under the Revolving Credit Note in the amount disbursed or to
be disbursed by Lender pursuant to such draft on demand, such Advance to be made
as of the date of such settlement of the Letters of Credit. The obligations and
indebtedness of Borrower to the Lender pursuant to such Advances shall be
evidenced by the Revolving Credit Note and the Application relating to the
subject Letter of Credit. Anything herein to the contrary notwithstanding, in no
event shall any Advance be made under the Revolving Credit Note which, together
with the outstanding balance thereunder, would exceed the Revolving Credit
Available Loan Amount, and any such excess shall be payable to Lender on demand.
(b) After the expiration or termination of the Revolving Credit
Commitment Period, if any Letter of Credit is outstanding, Borrower agrees (i)
to deposit in an interest-bearing cash collateral account opened by Lender an
amount equal to the aggregate undrawn amount of such Letters of Credit and (ii)
to reimburse Lender in immediately available funds (which may be drawn by Lender
from such cash collateral account, including interest accrued thereon) upon
demand of Lender at any time, the amount necessary to settle Lender's
obligations under any draft drawn or demand made under a Letter of Credit issued
by Lender (whether at or prior to the expiration of such Letter of Credit) which
has not been paid by the proceeds of Revolving Credit Loans made pursuant to
Section 2.10(a) hereof. After the respective expiry dates of the Letters of
Credit and after the Obligations are paid in full, Lender shall return the
unused portion of such cash collateral described above, together with all
interest earned thereon, to the Borrower.
(c) In order to induce Lender to issue a Letter of Credit, Borrower
agrees that (i) Lender shall not be responsible or liable for, and the
obligation of Borrower to reimburse Lender for any payment made by Lender under
such Letter of Credit shall not be affected by, (A) the validity, enforceability
or genuineness of any note or other document (or any endorsement thereof)
presented to Lender under such Letter of Credit, even if such note or other
document (or such endorsement) is proven to be invalid, unenforceable,
fraudulent or forged, or (B) any dispute between Borrower and the beneficiary
under such Letter of Credit, and (ii) any action taken or omitted to be taken by
Lender in connection with such Letter of Credit, if taken in good faith and with
reasonable care, shall be binding upon Borrower and shall not create any
liability for Lender to Borrower.
Section 2.11. Purpose of Letters of Credit. Subject to the other terms
and conditions of this Agreement, Lender shall issue Letters of Credit for any
corporate purpose of Borrower.
Section 2.12. Conflicts in Terms. In case of any conflict between the
terms of any Application with respect to a Letter of Credit and the terms
hereof, the terms of this Agreement shall
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control, except to the extent the Application states that certain specified
provisions thereof control, in which case those specified provisions of the
Application in question shall control.
Section 2.13. Revolving Credit Commitment Fee; Letter of Credit Fee.
Borrower agrees to pay to Lender a fee (the "Revolving Credit Commitment Fee")
on the Average Daily Unused Balance from the date of this Agreement to and
including the Revolving Credit Termination Date, at the rate of one-half of one
percent (1/2%) per annum, based on a 365 day year and the actual number of days
elapsed, payable quarterly in arrears, on the 1st day of July, October, January
and April commencing July 1, 1994, and on the Revolving Credit Termination Date.
Upon issuance of any Letter of Credit, Borrower agrees to pay to Lender a fee
(the "Letter of Credit Fee") equal to the greater of $300.00 or one and one-half
of one percent (1-1/2%) per annum of the amount of the Letter of Credit for the
period of time from the date of issuance thereof to the stated expiry date.
Section 2.14. Borrowing Base. The restriction on the aggregate
outstanding principal amount of Advances up to the Revolving Credit Available
Loan Amount contained in Section 2.01 hereof shall be cumulative of other
limitations and conditions contained in this Agreement or any other Loan Papers.
If at any time during the term of this Agreement for whatever reason the
Borrowing Base then in effect is less than an amount equal to the sum of (i) the
unpaid balance under the Revolving Credit Loan plus (ii) the aggregate
contingent liability of Lender under all Letters of Credit (the amount by which
the sum of (i) and (ii) exceeds the Borrowing Base being called the "Excess
Amount"), Borrower shall, within three (3) days after the determination of such
fact, give notice thereof to Lender (a "Payment Notice") and, unless waived by
Lender in writing upon the written request of Borrower, Borrower shall, within
thirty (30) days after giving of notice to Lender, make mandatory prepayments in
accordance with the terms of Section 2.15. Borrower shall compute the Borrowing
Base at the Closing as of the last day of the preceding month. Thereafter
Borrower shall compute the Borrowing Base, at least monthly (and more often
should Lender require), using the Borrowing Base Report in substantially the
form attached hereto as Exhibit E (the "Borrowing Base Report"), for the
immediately preceding calendar month, which Borrower is obligated to furnish to
Lender within twenty (20) days after the end of each calendar month through the
term of this Agreement, and more frequent reports if and as Lender may require.
The Borrowing Base Report shall be certified by an Authorized Financial Officer
of Borrower and shall contain statements to the effect that, as of the date of
such Borrowing Base Report, the representations and warranties contained in
Article VII hereof, are true except as disclosed in such report, and there
exists no Default under the Loan Papers. Notwithstanding anything to the
contrary herein contained, if the Borrowing Base Report shows a Borrowing Base
less than an amount equal to the sum of (i) the unpaid balance under the
Revolving Credit Loan plus (ii) the aggregate contingent liability of Lender
under all Letters of Credit (a "Borrowing Base Deficiency"), and Borrower fails
to timely deliver the Payment Notice required by this Section 2.14, Lender may
demand that Borrower make, within thirty (30) days, mandatory prepayments in
accordance with the terms of Section 2.15.
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Section 2.15. Required Date and Amount of Mandatory Prepayments.
Within thirty (30) Business Days after Lender has received a Payment Notice or
the Borrowing Base Report which reflects a Borrowing Base Deficiency, unless
waived by Lender in writing upon the written request of Borrower, Borrower shall
make a prepayment on the Revolving Credit Loan equal to the lesser of (i) the
Excess Amount or (ii) the unpaid balance under the Revolving Credit Loan.
ARTICLE III
Term Loan
Section 3.01. Commitment for Term Loan. Subject to the terms and
conditions of this Agreement, and provided that no Default or Event of Default
has occurred and is continuing on the Closing Date, Lender agrees to make the
Term Loan to Borrower under the Term Note, in the amount of ONE MILLION SEVEN
HUNDRED FOUR THOUSAND AND NO/100 DOLLARS ($1,704,000.00).
Section 3.02. Term Note. The obligation of Borrower to repay the Term
Loan shall be evidenced by the Term Note executed by Borrower, payable to the
order of Lender, in the principal amount of the Term Loan and dated of even date
herewith. The principal of the Term Loan, plus accrued and unpaid interest
thereon, shall be due and payable in: (a) thirteen (13) consecutive installments
each equal to SEVENTY-ONE THOUSAND AND NO/100 DOLLARS ($71,000.00) of principal,
together with all accrued and unpaid interest, the first of such installments
being due and payable on or before July 1, 1994 and like installments being due
and payable on the first day of each succeeding third calendar month thereafter
through and including July 1, 1997; and (b) a final installment due and payable
on October 1, 1997 in an amount equal to the remaining unpaid principal amount
outstanding on the Term Loan, together with all accrued and unpaid interest. The
Term Loan shall bear interest prior to maturity at a varying rate per annum
equal from day to day to the lesser of (a) the Maximum Rate or (b) the sum of
the Bank One Texas Base Rate in effect from day to day plus three-quarters of
one and percent (3/4%), each such change in the rate of interest charged
hereunder to become effective, without notice to Borrower, on the effective date
of each change in the Bank One Texas Base Rate; provided, however, if at any
time the rate of interest specified in clause (b) preceding shall exceed the
Maximum Rate, thereby causing the interest on the Term Loan to be limited to the
Maximum Rate, then any subsequent reduction in the Bank One Texas Base Rate
shall not reduce the rate of interest on the Term Loan below the Maximum Rate
until the aggregate amount of interest accrued on the Term Loan equals the
aggregate amount of interest which would have accrued on the Term Loan if the
interest rate specified in clause (b) preceding had at all times been in effect.
All past due principal and interest shall bear interest at the Maximum Rate.
Section 3.03. Use of Proceeds of Term Loan. The proceeds of all of the
Term Loan shall be used immediately by Borrower to repay certain existing Debt
of Borrower owed to Parent.
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ARTICLE IV
Payments
Section 4.01. Method of Payment. All payments of principal, interest,
and other amounts to be made by Borrower hereunder and under the Notes shall be
made to Lender at its office at 000 Xxxxxx, Xxxxxxx, Xxxxx 00000, in lawful
currency of the United States of America and in immediately available funds.
Whenever any Payment hereunder or under the Notes shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day and interest or commitment fee, as the case may be, shall continue
to accrue during such extension.
Section 4.02. Prepayment. Borrower may, on at least three (3) Business
Days' notice to Lender, prepay all or any portion of any of the Notes at any
time or from time to time without premium or penalty but with accrued interest
to the date of prepayment on the amount so prepaid, provided that each partial
prepayment shall be in the principal amount of FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00) or an integral multiple thereof and in the case of the Term Note,
such prepayment shall be applied to installments of principal thereof in the
inverse order of maturity. All prepayments made pursuant to Sections 2.06 or
2.14 shall be similarly applied.
ARTICLE V
Collateral
Section 5.01. Collateral. To secure full and complete payment and
performance of the Obligations, Borrower shall execute and deliver or cause to
be executed and delivered the documents described below covering the property
and collateral described in this Section 5.01 (which, together with any other
property and collateral which may now or hereafter secure the Obligations or any
portion thereof are sometimes herein called the "Collateral").
(a) Borrower shall grant, to Lender a Scottish law equivalent and a
Norwegian law equivalent of a first priority security interest in all of its
accounts, accounts receivable, equipment, machinery, fixtures, raw materials,
work-in-process, inventory, chattel paper, documents, instruments, and general
intangibles, whether now owned or hereafter acquired, and all products and
proceeds thereof, pursuant to reasonable documentation acceptable to Lender in
its sole good faith discretion.
(b) Borrower shall execute and deliver and cause to be executed and
delivered such further documents and instruments, including, without limitation,
Uniform Commercial Code financing statements, as Lender, in its sole discretion,
18
deems necessary or desirable to evidence and perfect its Liens and security
interests in the Collateral.
Section 5.02. Setoff. After the occurrence of any Default and so long
as such Default is continuing, Lender shall have the right to setoff and apply
against the Obligations, without notice to Borrower, any and all deposits
(general or special, time or demand, provisional or final) or other sums at any
time credited by or owing from Lender to Borrower for application against any of
the Obligations whether or not any portion of the Obligations are then due and
payable. As further security for the Obligations, Borrower hereby grants to
Lender a security interest in all money, instruments, and other property of
Borrower now or hereafter held by Lender, including, without limitation,
property held in safekeeping. In addition to Lender's right of setoff and as
further security for the Obligations, Borrower hereby grants to Lender a
security interest in all deposits (general or special, time or demand,
provisional or final) and other accounts of Borrower now or hereafter on deposit
with or held by Lender and all of the sums at any time credited by or owing from
Lender to Borrower. The rights and remedies of Lender hereunder are in addition
to other rights and remedies (including, without limitation, other rights of
setoff) which Lender may have.
ARTICLE VI
Conditions Precedent
Section 6.01. Initial Advance. The obligation of Lender to make the
initial Advances is subject to the condition precedent that Lender shall have
received from Borrower on or before the day (the "Closing Date") of such
Advances all of the following, each dated (unless otherwise indicated) the day
of the Advance, in form and substance satisfactory to Lender:
(a) Resolutions. Resolutions of the Board of Directors of Borrower
certified by one of its Directors, which authorize the execution, delivery and
performance by Borrower of this Agreement and the other Loan Papers to which
Borrower is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency certified by
a Director of Borrower certifying the names of the Directors of Borrower
authorized to sign this Agreement and each of the other Loan Papers to which
Borrower is or is to be a party (including the certificates contemplated herein)
together with specimen signatures of such Directors;
(c) Memorandum and Articles of Association. The Memorandum and
Articles of Association of Borrower certified by the relevant governmental
authority of the jurisdiction of incorporation, dated within ten (10) days prior
to the date of the initial Advance;
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(d) Governmental Certificates. Certificates of the appropriate
government officials of the jurisdiction of incorporation of Borrower as to its
existence and good standing, each dated within ten (10) days prior to the date
of the initial Advance;
(e) Foreign Qualification. Certificates of the appropriate
governmental officials of each jurisdiction in which Borrower is qualified to do
business to the effect that Borrower is so qualified and is in good standing
under the laws of such jurisdiction, dated within ten (10) days prior to the
date of the initial Advance;
(f) Notes. The Notes executed by Borrower;
(g) Security Documents. The Security Documents executed by Borrower;
(h) Insurance Policies. Copies of all casualty insurance policies
required by Section 8.19, showing Lender as loss payee;
(i) Lien Searches. The results of a Lien search showing all Lien
documents or instruments on file against Borrower in the United Kingdom, such
search to be as of a date no more than ten (10) days prior to the date of the
initial Advance;
(j) Opinion of Counsel. A favorable opinion or opinions of legal
counsel to Borrower as of the Closing Date;
(k) Other Documents. Such other documents, opinions, certificates,
and evidence as Lender or Lender's counsel may reasonably request; and
(1) Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be satisfactory in form and substance to Lender and Lender's counsel, and
Lender shall have received copies of all documents which it may reasonably
request in connection with such transactions and all corporate proceedings with
respect thereto in form and substance satisfactory to Lender and Lender's
counsel.
Section 6.02. Additional Revolving Credit Advances. The obligation of
Lender to make any additional Advance pursuant to Article II hereof is subject
to the following additional conditions precedent:
(a) Advance Request Form. Lender shall have received, not later than
11:00 A.M., Houston, Texas time, at least two (2) Business Days prior to the
date of such Advance, an appropriate form of Notice of Revolving Credit
Borrowing or Notice of Credit Issuance as applicable, dated the date of such
Advance, executed by
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an authorized officer of Borrower, all of the statements in which shall be
true and correct on and as of such date;
(b) Additional Information. Lender shall have received such
additional documents, instruments, and information as Lender or its legal
counsel may request; and
(c) Other Matters. All corporate proceedings taken in connection with
the transactions contemplated by this Agreement and all documents,
instruments, and other legal matters incident thereto shall be satisfactory
to Lender and its legal counsel.
ARTICLE VII
Representations and Warranties
To induce Lender to enter into this Agreement, Borrower represents and
warrants to Lender that:
Section 7.01. Corporate Existence. Borrower (a) is a corporation
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite corporate power to own
assets and carry on its business as now being or as proposed to be conducted;
and (c) is qualified to do business in all jurisdictions in which the nature of
the business conducted by it makes such qualification necessary and where
failure to so qualify would have a material adverse effect on its business,
financial condition, or operations. Borrower has the corporate power and
authority to execute, deliver, and perform its obligations under the Loan Papers
to which it is or may become a party.
Section 7.02. Financial Statements. Parent has delivered to Lender
the audited Consolidated financial statements of Parent and the Subsidiaries as
at and for the fiscal year ended December 31, 1992, and the unaudited
Consolidated financial statements of Parent and the Subsidiaries for the nine
(9) month period ended September 30, 1993. Such financial statements are true
and correct in all material respects, have been prepared in accordance with
GAAP, and fairly and accurately present, on a consolidated basis, the financial
condition of Parent and the Subsidiaries as of the respective dates indicated
therein and the results of operations for the respective periods indicated
therein. Neither Parent, Borrower nor any other Subsidiary has any material
contingent liabilities, liabilities for taxes, material forward or long-term
commitments, or unrealized or anticipated losses from any unfavorable
commitments not reflected in such financial statements. There has been no
material adverse change in the condition, financial or otherwise, or operations
of Parent, Borrower or any other Subsidiaries, on a consolidated basis, since
the date of the most recent financial statements referred to in this
Section 7.02.
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Section 7.03. Default. Borrower is not in default in any material
respect under the provisions of any instrument evidencing any material
obligation, indebtedness, or liability of Borrower or of any agreement relating
thereto, or under any order, writ, injunction, or decree of any tribunal, or in
default in any material respect under or in violation of any order, regulation,
or demand of any tribunal, which default or, violation could have a material
adverse effect on Borrower.
Section 7.04. Authorization and Compliance with Laws and Material
Agreements. The execution, delivery, and performance by Borrower of this
Agreement, the Borrowings, and the execution, delivery and performance of the
Notes and the other Loan Papers to which Borrower is or may become a party have
been duly authorized by all requisite action on the part of Borrower and do not
and will not violate the articles of incorporation or bylaws, or their
equivalent, of Borrower or any law or any order of any court, governmental
authority or arbitrator and do not and will not conflict with, result in a
breach of, or constitute a default under, or result in the imposition of any
Lien (except as provided in Article V) upon any assets of Borrower pursuant to
the provisions of any indenture, mortgage, deed of trust, security agreement,
franchise, permit, license, or other instrument or agreement to which Borrower
or its properties is bound.
Section 7.05. Litigation and Judgments. Except as disclosed on
Schedule 4 hereto, there is no action, suit, or proceeding before any court,
governmental authority or arbitrator pending, or to the knowledge of Borrower,
threatened against or affecting Borrower that would, if adversely determined,
have a material adverse effect on the financial condition or operations of
Borrower or the ability of Borrower to pay and perform the Obligations under
this Agreement. There are no outstanding judgments against Borrower.
Section 7.06. Rights in Properties; Liens. Borrower has good and
indefeasible title or valid leasehold interests in its properties and assets,
real and personal reflected in the financial statements described in Section
7.01, and none of the properties, assets, or leasehold interests of Borrower is
subject to any Lien, except as permitted by Section 9.01. Borrower represents
and warrants that substantially all of its tangible properties and assets
reflected in said financial statements are located in Scotland or Norway.
Section 7.07. Enforceability. This Agreement constitutes and the
other Loan Papers to which Borrower is a party, when delivered, shall
constitute, legal, valid, and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditor's rights.
Section 7.08. Approvals. No authorization, approval, or consent of,
and no filing or registration with, any court, governmental authority, or third
party is necessary for the execution, delivery, or performance by Borrower of
this Agreement or the other Loan Papers to which Borrower is or may become a
party or the validity or enforceability thereof.
22
Section 7.09. Debt. Borrower does not have any Debt other than (i)
the Debt disclosed on Schedule 5 attached hereto, (ii) Debt reflected in the
financial statements most recently delivered to Lender and (iii) Debt owed to
Lender.
Section 7.10. Taxes. Borrower has filed all tax returns (federal,
state, local and foreign) required to be filed, including all income, franchise,
employment, property and sales taxes, and have paid all of their respective tax
liabilities, and except as disclosed on Schedule 10 attached hereto, Borrower
knows of no pending investigation of Borrower by any taxing authority or of any
pending but unassessed tax liability of Borrower.
Section 7.11. Use of Proceeds; Margin Securities. Borrower is not
engaged principally, or as one of its important activities, in the business of
extending credit for the purposes of purchasing or carrying margin stock (within
the meaning of Regulations G, T, U, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any extension of credit
under this Agreement will be used to purchase or carry any such margin stock or
to extend credit to others for the purpose of purchasing or carrying any such
margin stock. Neither Borrower nor any Person acting on its behalf has taken
any action that might cause the transactions contemplated by this Agreement or
the Notes to violate Regulations G, T, U, or X or to violate the Securities
Exchange Act of 1934, as amended.
Section 7.12. ERISA. With respect to each employee pension benefit
plan as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1984, as amended ("ERISA"), Borrower has complied with all applicable minimum
funding requirements and all other applicable and material requirements of
ERISA, and there are no existing conditions which would give rise to any
liability thereunder (other than routine claims for benefits payable
thereunder). No Reportable Event (as defined in Section 4043 of ERISA) has
occurred in connection with any such plan which might constitute grounds for the
termination thereof by the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States District Court of a trustee to
administer such plan.
Section 7.13. Disclosure. No representation or warranty made by
Borrower in this Agreement or in any other Loan Papers contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading. There is no fact known to
Borrower which has a material adverse effect, or which might in the future have
a material adverse effect, on the business, assets, financial condition or
operations of Borrower.
Section 7.14. Subsidiaries. There are no Subsidiaries of Parent or
any Subsidiary other than those listed on Schedule 6 attached hereto, and
Schedule 6 sets forth the jurisdiction of incorporation of each Subsidiary and
the percentage of Parent's or each Subsidiary's ownership of the outstanding
voting stock of each Subsidiary. Except as disclosed on Schedule 7, there are
no outstanding contracts, instruments, documents, or agreements binding upon
Parent or any Subsidiary granting to any Person or groups of Persons any right
to purchase or acquire shares of the capital
23
stock of any of such Subsidiary which would in the event that the rights granted
thereby were acted upon, result in Parent or any Subsidiary retaining ownership
of less than the majority of the issued and outstanding voting stock of such
Subsidiary, and the stockholders (other than Parent or any Subsidiary) of any
such Subsidiary are not entitled to any preemptive rights with respect to the
issuance of any capital stock of an such Subsidiary which would in the event
that the rights granted thereby were acted upon result in Parent or any
Subsidiary, retaining ownership of less than the majority of the issued and
outstanding voting stock of such Person.
Section 7.15. Principal Place of Business. The principal place of
business and chief executive office of Borrower and the place where Borrower
keeps its books and records is located at Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx,
Xxxx, Xxxxxxxx, XX0 ODF.
Section 7.16. Investment Company Act. Neither Parent, Borrower nor
any other Subsidiary is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Section 7.17. Public Utility Holding Company Act. Neither Parent,
Borrower nor any other Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" or a
"public utility" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 7.18. Contracts. To the best of Borrower's knowledge
Borrower is not a party to, or bound by, any agreement, condition, contract, or
arrangement which might in the future have a material adverse effect on the
business, operations, or financial condition of Borrower.
Section 7.19. Compliance with Law. Borrower has all necessary
operating licenses and is in compliance with all laws, rules, regulations,
orders and decrees which are applicable to Borrower or any of its properties
necessary to enable it to carry on its business in all material respects. No
event which with either the passage of time or the giving of notice or both,
will cause either of the foregoing representations to become untrue.
Section 7.20. Consent. Except as set forth on Schedule 8 attached
hereto and except for the filing with public officials in order to perfect
Lender's Liens, no consent of any Person and no consent, license, permit,
approval or authorization of, or registration or declaration with, any tribunal
is required in connection with the execution, delivery and performance of this
Agreement, the Notes, and the other Loan Papers to which Borrower is a party, or
to the extent that any such consent or other action may be required, it has been
validly procured.
Section 7.21. Securities Laws. Except with respect to Lender,
Borrower has not directly or indirectly offered the Notes for sale to, or
solicited any offer to buy the Notes, or otherwise negotiated in respect thereof
with, any Person (except Lender) and has not done (or omitted to do) any other
act, so as to bring the issuance or sale thereof within the registration
24
requirements of the Securities Act of 1933, as amended, and the Borrower has
complied with or is exempt from the registration provisions of all state
securities or "blue sky" laws applicable to the issuance or sale of the Notes.
Section 7.22. Existing Loans to Affiliates. Except for loans listed
on Schedule 9 attached hereto, Borrower has no loans to an Affiliate.
Section 7.23. Patents and Trademarks. Borrower owns no patents or
trademarks.
ARTICLE VIII
Affirmative Covenants
Parent covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any commitment hereunder, Borrower
will perform and observe the following positive covenants, unless the Lender
shall otherwise consent in writing:
Section 8.01. Financial Statements. Furnish to Lender:
(a) Financial statements of Borrower, all prepared in accordance with
GAAP, all in form and detail as reasonably requested by Lender, audited or
unaudited but certified by an Authorized Financial Officer as reasonably
requested by Lender, and delivered on or before such date and covering such
period of time as reasonably requested by Lender;
(b) Concurrently with the delivery of the financial statements
described in subsection (a) above, a certificate by an Authorized Financial
Officer certifying to Lender that, based upon his examination of the
affairs of Borrower in connection with the preparation of said financial
statements, he is not aware of any Default or Event of Default or, if he is
aware of such Default or Event of Default, the nature thereof and
specifying the steps taken or proposed to remedy such condition or event;
(c) As soon as available, but not later than twenty (20) calendar days
after the end of each calendar month, a Borrowing Base Report, accompanied
by a certificate by an Authorized Financial Officer certifying to Lender
that, based upon his examination of the affairs of Borrower performed in
connection with the preparation of said Borrowing Base Report, he is not
aware of any Default or Event of Default or, if he is aware of such Default
or Event of Default, the nature thereof;
25
(d) All management and other reports to Borrower's financial condition
or the Collateral or any part thereof, including drafts if no final report
is issued, submitted to Parent or Borrower by the independent public
accounting firm employed by Parent or Borrower; and
(e) Such other data and information (financial and otherwise), as
Lender, from time to time, may reasonably request, bearing upon or related
to the Collateral, Borrower's financial condition and/or results of
operations.
Section 8.02. Periodic Miscellaneous Reports. Promptly, but in no
event later than five (5) Business Days after Borrower's learning thereof,
Borrower shall inform Lender, in writing, of (i) as to any Accounts where the
aggregate amount in question is in excess of $100,000.00; (x) any material delay
in Borrower's performance of any of its obligations to any account debtor and of
any assertion of any disputes, claims, credits, offsets or counterclaims by any
account debtor and of any allowances, credits or other monies granted by
Borrower to any account debtor; (y) any material adverse information relating to
the financial condition of any account debtor; and (z) any material adverse
facts relating to any Account; (ii) any litigation affecting Borrower if any
claims are made for amounts in excess of $250,000.00 or if such litigation
involves an account debtor if any claims are made for amounts in excess of
$100,000.00, whether or not the claim is to be covered by insurance, and of the
institution of any litigation which might have a material adverse effect on
Borrower or Lender's Lien on the Collateral; (iii) any default under, or
delinquency in the payment of any rent pursuant to the terms of, any lease of
warehouse or storage facilities leased by Borrower for the storage of any
Collateral; (iv) any Default or an Event of Default hereunder; (v) any default
under any material agreement which could have a material adverse effect on
Borrower; (vi) any other matter that might have a material adverse effect on the
business, financial condition, or operations of Borrower; and (vii) the change
in the title or identification of any office, officer or Person who has
authority to sign certificates or requests for advances, accompanied by a
certificate of such officer's incumbency certified by the secretary or assistant
secretary, or its equivalent, of Borrower which certificate shall contain a
signature exemplar certified by such secretary or assistant secretary, or its
equivalent, as being true and correct.
Section 8.03. Warehousing Agreements. Borrower shall, upon request
of Lender, provide Lender with copies of all agreements between Borrower and any
other Person covering any Permitted Location at which Collateral may from time
to time be kept and all lease or similar agreements with respect to any
Permitted Location between Borrower and any other Person, whether Borrower is
lessor or lessee thereunder.
Section 8.04. Performance of Obligations. Borrower will duly and
punctually pay and perform the Obligations, including, without limitation,
Borrower's obligations under this Agreement and the other Loan Papers.
26
Section 8.05. Preservation of Existence and Conduct of Business.
Borrower will (i) preserve and maintain its corporate existence and all of its
leases, privileges, franchises, and rights that are necessary or desirable in
the ordinary conduct of its business, and (ii) conduct its business as presently
conducted in an orderly and efficient manner in accordance with good business
practices.
Section 8.06. Maintenance of Properties. Borrower will maintain its
assets and properties in good condition and repair.
Section 8.07. Payment of Taxes and Claims. Borrower will pay or
discharge at or before maturity or before they become delinquent (i) all taxes,
levies, assessments, and governmental charges imposed on it or any of its
property, and (ii) all lawful claims for labor, material, and supplies, which,
if unpaid, might become a Lien upon any of its property; provided, however, that
Borrower shall not be required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued and if Borrower shall have set aside on its books
and in cash adequate reserves in respect thereof, which deferment of payment is
permissible so long as the title to and any right to use the Collateral is not
materially adversely affected thereby and Lender's Lien and the priority of
Lender's Lien on the Collateral are not affected, altered or impaired thereby.
Section 8.08. Audit. Lender shall have the right to require at any
time, but not more frequently than once every one hundred eighty (180) days, an
audit of all Inventory of Borrower. Such audit shall be conducted by a Person
mutually acceptable to Borrower and Lender. All such audits shall be paid for
by Borrower, provided, however, Borrower shall not be obligated to pay in excess
of $2,000.00 for any such audit.
Section 8.09. Keeping Books and Records. Borrower will maintain
proper books of record and account in which full, timely and complete entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its business and activities.
Section 8.10. Compliance with Laws. Borrower will comply with all
material applicable laws, rules, regulations, and orders of any court or
governmental authority or arbitration.
Section 8.11. Compliance with Agreements. Borrower will comply in
all material respects with all agreements, indentures, mortgages, deeds of
trust, and other documents binding on it or affecting its properties or
business.
Section 8.12. Further Assurances. Borrower will execute such further
instruments as may be deemed necessary or desirable by Lender to carry out the
provisions and purposes of this Agreement and the other Loan Papers and to
preserve and perfect the Liens of Lender in the Collateral.
27
Section 8.13. Compliance with ERISA. Borrower will comply with all
minimum funding requirements, and all other material requirements, of ERISA, if
applicable, so as not to give rise to any liability thereunder. Promptly after
the filing thereof, Borrower shall furnish to Lender with regard to each
employee benefit plan of Borrower, copies of each annual report required to be
filed pursuant to Section 103 of ERISA in connection with each such plan for
each plan year. Borrower will notify Lender immediately of any fact, including,
but not limited to, any "Reportable Event", as that term is defined in Section
4043 of ERISA, arising in connection with any such plan which might constitute
grounds for the termination thereof by the Pension Benefit Guaranty Corporation
or for the appointment by the appropriate United States district court of a
trustee to administer such plan and furnish to Lender, promptly upon its request
therefor, such additional information concerning any such plan as may be
reasonably requested.
Section 8.14. Use of Proceeds. Borrower shall at all times during
the term hereof comply with the terms and conditions of Sections 2.05, 2.11 and
3.03 hereof.
Section 8.15. Insurance Summary. Borrower shall, not later than once
every twelve months, deliver to Lender a summary of the insurance coverage
maintained by Borrower accompanied by a certificate from an Authorized Financial
Officer to the effect that the summary is a true, correct and complete summary
of all insurance coverage maintained by Borrower, all premiums have been paid on
the policies described thereon, the policies described thereon conform to the
requirements set forth in Section 8.17 hereof and that all such policies are in
full force and effect.
Section 8.16. Licenses. Borrower shall maintain all material
licenses to do business or conduct operations in all countries, states and
provinces in which the laws thereof require Borrower to be so licensed, and
Borrower shall obtain and keep in force all material licenses to do business or
conduct operations in any additional countries, states and provinces in which
the laws thereof require Borrower to be so licensed in the future.
Section 8.17. Insurance; Payment of Premiums. Borrower shall keep
adequately insured by reputable insurers, which, if requested by Lender, shall
be acceptable to Lender, all the Collateral and such other assets which either
owns or possesses for its full insurable value, subject to customary
deductibles, against loss or damage by fire, theft, tornado, flood, explosion,
sprinklers and all other hazards and risks ordinarily insured against by other
owners or users of such properties in similar businesses, and notify Lender
promptly of any event of occurrence causing a material loss or decline in value
of the Collateral and such other assets and the estimated (or actual, if
available) amount of such loss or decline. All policies of insurance on the
Collateral and such other assets shall be in form and with insurers recognized
as adequate by prudent business persons and all such policies shall be in such
amounts as may be satisfactory to Lender. Borrower shall deliver or cause to be
delivered to Lender the original (or certified copy) of each policy of insurance
covering any Collateral and evidence of payment of all premiums for all policies
of insurance. If requested by Lender, Borrower shall deliver or cause to be
delivered to Lender the original (or certified copy) of
28
each other policy of insurance. The policies of insurance shall contain an
endorsement, in form and substance acceptable to Lender, providing for the
payment of all losses to Lender. Such endorsement or any independent instrument
furnished to Lender, shall provide that the insurance companies will give Lender
at least thirty (30) days prior written notice before any such policy or
policies of insurance shall be altered or cancelled, and that no act or default
of the insured or any other Person shall affect the right of Lender to recover
under such policy or policies of insurance in case of loss or damage. Borrower
hereby directs, to the full extent permitted by law, all insurers under policies
of insurance covering Collateral with a value in excess of $300,000.00 to pay
all proceeds payable thereunder directly to Lender. In the event Borrower, at
any time hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay any premium in whole or in part relating
thereto, then Lender, without waiving or releasing any obligations or Default by
Borrower hereunder, may at any time thereafter (but Lender shall be under no
obligation to) obtain and maintain such policies of insurance and pay such
premium and take any other action with respect thereto which Lender deems
advisable. All sums so disbursed by Lender, including any related expenses and
other charges relating thereto, shall be payable on demand to Lender and shall
be additional Obligations hereunder secured by the Collateral.
Section 8.18. Casualty or Damage to Insured Property.
Notwithstanding the provisions of the foregoing Section 8.17, if a casualty or
any damage occurs at the property of Borrower, insurance for such casualty or
damage shall be used to restore the property in question in the former condition
unless:
(a) There shall be existing a Default or an Event of Default; or
(b) Lender shall otherwise consent in writing.
If the insurance proceeds are utilized to repair a casualty or damage,
Borrower will cause the insurance proceeds paid for any such casualty or damage
to be disbursed by the insurance company in question periodically as the work
progresses on a time and materials basis upon receipt of invoices for work
performed and materials provided, if the insurance proceeds to be paid shall be
less than $250,000.00, such proceeds may be paid as Borrower may direct to
restore the property in question subject to the conditions in this Section 8.18
(a) and (b) hereof. All work paid for with insurance proceeds shall be
performed by reputable contractors, which shall, if Lender request, be
reasonably acceptable to Lender, and pursuant to plans and specifications which,
if Lender request, shall be reasonably acceptable to Lender. All work done to
restore property damaged to its former condition shall be done in accordance
with the plans and specifications in good and workmanlike fashion with first
quality materials and, if Lender requests, Borrower shall provide Lender with
evidence satisfactory to Lender of the same. If the cost of the work to restore
the property in question shall exceed the available insurance proceeds, Borrower
shall expend the necessary funds to complete the restoration. If the insurance
proceeds should exceed the final cost to complete the restoration, and there
shall be existing a Default or an Event of Default, any excess shall at the
election of Lender be used to repay any amounts owing hereunder or shall be held
as security for the
29
Obligations. If the insurance proceeds are not utilized to restore the property
in question because of the operation of Section 8.18 (a) or (b) hereof, Lender
shall have the right, at its option, to hold the insurance proceeds as security
for the Obligations, apply such proceeds to any Obligations then due and owing
or to the Notes in such order and manner as Lender may determine in its sole
discretion or apply such proceeds to the restoration of the Collateral.
ARTICLE IX
Negative Covenants
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any commitment hereunder, it will
not, unless the Lender shall otherwise consent in writing:
Section 9.01. Limitation on Liens; Debt. Incur, create, assume
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except Permitted Liens, or incur any
additional Debt in excess of $100,000.00 in the aggregate except (i) Debt
associated with a Permitted Lien (provided that such Permitted Lien shall not
secure any Debt in excess of the amount initially incurred with respect to such
Permitted Lien described in subparts (v)-(vi) in the definition of "Permitted
Liens" contained herein [except any amounts which Borrower has the right to
borrow under the documents, agreements and instruments evidencing Debt existing
as of the Closing Date]), (ii) any amounts which Borrower has the right to
borrow under the documents, agreements and instruments evidencing Debt existing
as of the Closing Date, (iii) trade accounts payable in the ordinary course of
business, (iv) accrued expenses incurred in the ordinary course of business, (v)
taxes, (vi) guaranties required or permitted to be extended by law, (vii) Debt
incurred in connection with capitalized expenditures including capitalized
leases and (viii) additional Debt owed Lender.
Section 9.02. Mergers, Acquisitions and Dissolutions. Become a
party to a merger or consolidation, or purchase or otherwise acquire all or a
substantial part of the assets of any Person or any shares or other evidence of
beneficial ownership of any Person, or dissolve or liquidate.
Section 9.03. Section 9.03 Left Blank Intentionally.
Section 9.04. Section 9.04 Left Blank Intentionally.
Section 9.05. Section 9.05 Left Blank Intentionally.
Section 9.06. Section 9.06 Left Blank Intentionally.
Section 9.07. Section 9.07 Left Blank Intentionally.
30
Section 9.08. Loans and Investments. Make any material
advance, loan, extension of credit, or capital contribution to any Person,
except for inter-company loans between Borrower and Parent, or invest in or
purchase any stock, bonds, notes, debentures, or other securities of any Person,
except Permitted Investments.
Section 9.09. Transactions With Affiliates. Enter into any
transaction with any director, officer, employee or shareholder of Parent,
Borrower, any other Subsidiary or any Affiliate, except under fair and
reasonable terms no less favorable than could be obtained in an arm's length
transaction with a Person not an Affiliate.
Section 9.10. Disposition of Assets. Sell, lease, assign,
transfer or otherwise dispose of any of its assets, except (i) dispositions of
inventory in the ordinary course of business, (ii) assets with a value of less
than $75,000.00, provided, however, such assets permitted to be sold pursuant to
this clause (ii) shall not exceed $100,000.00 in the aggregate during any fiscal
year, or (iii) sales, leases, assignments, transfers or other dispositions of
assets from Borrower to Parent.
Section 9.11. Sale and Leaseback. Enter into any arrangement
with any Person pursuant to which it leases from such Person real or personal
property that has been or is to be sold or transferred, directly or indirectly,
by it to such Person.
Section 9.12. Prepayment of Debt. Prepay any Debt, except (i)
the Obligations, (ii) Debt of Borrower owed to Parent, or (iii) prepayments of
less than $50,000.00, provided, however, such prepayments permitted to be made
pursuant to this clause (iii) shall not exceed $50,000.00 in the aggregate
during any fiscal year.
Section 9.13. Nature of Business. Engage in any business other
than the business in which they are engaged as of the date hereof, unless such
business is of the same or similar nature.
Section 9.14. Prohibited Transactions. Enter into any
transaction which has a material adverse effect on the Collateral, Borrower's
business, or Borrower's ability to repay the Obligations, or permit or agree to
any extension, compromise or settlement in excess of $250,000.00 or make any
change or modification of any kind or nature with respect to any Accounts in the
aggregate in excess of $250,000.00 owing by any account debtor, including any of
the terms relating thereto.
Section 9.15. Contingent Liabilities. Guarantee or otherwise,
in any way, become liable with respect to the obligations or liabilities of any
Person except (i) by endorsement of instruments or items of payment for deposit
to the general account of Borrower or for delivery to Lender on account of the
Obligations, (ii) for the indemnification provisions contained in the
certificate or articles of incorporation or by-laws, or its equivalent, of
Borrower for the directors, officers, employees and others acting in a capacity
benefiting the general corporate purposes or
31
business of Borrower or indemnification contracts entered into for the benefit
of such persons and in conformity with applicable Law, and (iii) other Debt
permitted by Section 9.01 hereof.
Section 9.16. Removal of Collateral. Remove its books and
records and/or the Collateral (the value of which shall exceed, in the aggregate
$50,000.00) from the locations set forth on Schedule 2 hereto, except for
removal of Inventory upon its sale or consignment, or keep any of such books and
records and/or the Collateral at any other office(s) or location(s) unless
Borrower gives Lender written notice thereof and of the new location of said
books and records and/or the Collateral (accompanied by Security Documents
satisfactory to Lender covering such Collateral and which comply with the Laws
of the jurisdiction(s) where such Collateral is to be relocated) at least thirty
(30) calendar days prior thereto.
Section 9.17. Compliance with Regulations G, T, U, and X. Take
any action which might cause this Agreement or any of the Loan Papers to
violate, and will take all actions necessary to comply with, Regulations G, T,
U, and X of the Board of Governors of the Federal Reserve System and the
Securities Exchange Act of 1934, in each case as now in effect or as the same
may hereafter be in effect.
ARTICLE X
Default
Section 10.01. Events of Default. The term "Event of Default,"
as used herein, means the occurrence of any one or more of the following events
(including the giving of notice and/or passage of time, if any specified
therefor) and the term "Default", as used herein, means the occurrence of any
one or more of the following events which, with notice or lapse of time or both,
would become an Event of Default (provided that, if any such event occurs, and
(i) prior to the exercise of any Rights or remedies under this Agreement
triggered by such event, such event has been remedied or cured, or both, or (ii)
Lender subsequently agrees in writing that they will not exercise any remedies
hereunder as a result thereof, the specific occurrence of such event shall no
longer be deemed a "Default" or "Event of Default", as applicable, hereunder
insofar as the state of facts giving rise to such event is concerned):
(a) Borrower shall fail to pay when due the Obligations or any
part thereof and such failure shall continue for three (3) Business Days
after notice has been given by Lender to Borrower.
(b) Any representation or warranty made or deemed made by
Borrower (or its directors or officers) in any Loan Papers or in any
certificate, report, notice, or financial statement furnished at any time
in connection with this Agreement shall be false, misleading, or erroneous
in any material respect when made or deemed to have been made.
32
(c) Subsection 10.01(c) is left blank intentionally.
(d) Parent, Borrower or any other Subsidiary (if the other
Subsidiary, in the Lender's sole reasonable discretion, is material to the
financial condition, business or operations of Parent and the Material
Companies, on a Consolidated basis) shall commence a voluntary proceeding
seeking liquidation, reorganization, or other relief with respect to itself
or its debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial
part of its property or shall consent to any such relief or to the
appointment of or taking possession by any such official in such a
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they
become due or shall take any corporate action to authorize any of the
foregoing.
(e) An involuntary proceeding or shall be commenced against
Parent, Borrower or any other Subsidiary (if the Subsidiary, in the
Lender's sole reasonable discretion, is material to the financial
condition, business or operations of Parent and the Material Companies, on
a Consolidated basis) seeking liquidation, reorganization, or other relief
with respect to it or its debts under any bankruptcy, insolvency, or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
a substantial part of its property, and such proceeding shall remain
undismissed and unstayed for a period of ninety (90) days.
(f) Parent or any Material Company shall fail to discharge within
a period of thirty (30) days after the commencement thereof any attachment,
sequestration, or similar proceeding involving an amount in excess of FIFTY
THOUSAND AND NO/100 DOLLARS ($50,000.00) against any of the assets or
properties.
(g) Parent or any Material Company shall fail to satisfy and
discharge promptly any final, non-appealable judgment against it for the
payment of money in an aggregate amount in excess of FIFTY THOUSAND AND
NO/100 DOLLARS ($50,000.00).
(h) Parent or any Material Company shall default in the payment
of any Debt in excess of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00)
beyond any applicable grace period, or shall default in the performance of
any other material agreement binding upon it or its property.
33
(i) This Agreement or any other Loan Paper shall cease to be in
full force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by Borrower or any
of its shareholders, or Borrower shall deny that it has any further
liability or obligation under any of the Loan Papers.
(j) Any two of J. Xxxx Xxxxxx, Xxxxx X. Xxxxxxx or Xxxx X. Xxxxx
shall have died or have been declared incompetent by a court of proper
jurisdiction.
(k) Any two of J. Xxxx Xxxxxx, Xxxxx X. Xxxxxxx or Xxxx X. Xxxxx
shall cease to be active in the management of Borrower or Parent.
(1) The occurrence of any event which is material and adverse to
the financial condition, business or operations of Parent and the Material
Companies on a Consolidated basis or which materially and adversely impairs
the ability of Borrower or Parent to perform their respective obligations
under the Loan Papers.
(m) An "Event of Default", as defined in any of the Loan Papers.
(n) An "Event of Default", as defined in that certain Credit
Agreement dated of even date herewith by and between Lender and Parent (as
may be amended from time to time).
(o) At any time the sum of (a) the aggregate unpaid balance of
the Revolving Credit Loan plus (b) the aggregate amount of any pending
Notice of Revolving Credit Borrowings plus (c) the aggregate contingent
liability of Lender under all open Letters of Credit plus (d) the aggregate
amount of any pending Notice of Credit Issuance plus (e) the aggregate
unpaid balance of the Parent's Revolving Debt Facility plus (f) the
aggregate amount of any pending request to borrow moneys or issue letters
of credit under the Parent's Revolving Debt Facility plus (g) the aggregate
contingent liability of Lender under all open letters of credit issued by
Lender for the account of Parent or any Material Company under Parent's
Revolving Credit Facility shall be in excess of the Revolving Credit
Committed Sum.
Section 10.02. Occurrence of a Default or an Event of Default.
If a Default shall occur and be continuing, the obligation of the Lender to make
Advances or issue Letters of Credit shall immediately cease until such Default
shall have been cured or corrected. If an Event of Default shall occur and be
continuing (provided, however, that there shall be no right of cure after
acceleration of the Obligations), Lender may do any one or more of the
following:
34
(a) Acceleration. Declare the entire unpaid balance of the
Obligations, or any part thereof, immediately due and payable, whereupon it
shall be due and payable without demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, notice of intent to
demand, or protest, all of which are hereby expressly waived.
(b) Termination of Commitments. Terminate the Commitment of
Lender hereunder.
(c) Judgment. Reduce any claim to judgment.
(d) Foreclosure. Take such steps as Lender may deem appropriate
to foreclose or otherwise enforce any Liens which may at any time hereafter
be granted to Lender, for the benefit of Lender to secure payment and
performance of the Obligations.
(e) Rights. Exercise any and all Rights afforded by the Laws of
the State of Texas or any other jurisdiction, as Lender shall deem
appropriate, including, but not limited to, the UCC or of such other
jurisdiction or by any of the Loan Papers, or by law or equity, or
otherwise.
Provided, however, that upon occurrence of an Event of Default under Section
10.01(d) and (e) hereof, the Commitment shall automatically terminate, and the
Obligations shall become immediately due and payable without notice of any kind
whatsoever including, without limitation, notice of intent to accelerate or
notice of acceleration, demand, presentment, notice of dishonor or protest,
which are hereby expressly waived. Borrower acknowledges and understands that
under the laws of the State of Texas, unless waived, Borrower has the right to
notice of Lender's intent to accelerate the Obligations evidenced by the Notes,
the right to notice of the actual acceleration of the Obligations evidenced by
the Notes, and the right to presentment of the Notes by Lender's demand for
payment. Borrower acknowledges that it understands that it can waive these
rights and by Borrower's execution of this Agreement it agrees to waive its
right to notice of intent to accelerate, its rights to notice of acceleration
and its right to presentment or other demand for payment. Upon the occurrence
of any such Event of Default as described in the immediately preceding sentence,
Lender may exercise all Rights available to it in law or in equity, under the
Loan Papers or otherwise. With respect to all Letters of Credit that shall not
have matured or with respect to which presentment for honor shall not have
occurred, Borrower shall deposit in a cash collateral account with Lender an
amount equal to the aggregate undrawn amount of Letters of Credit, and the
unused portion thereof, if any, shall be returned to Borrower, after the
respective expiry dates of the Letters of Credit and after all Obligations are
paid in full.
Section 10.03. Performance by Lender. If any covenant, duty,
or agreement of Borrower should fail to be performed in accordance with the
terms of the Loan Papers, Lender shall
35
perform, or attempt to perform, such covenants, duty, or agreement on behalf of
Borrower. In such event, Borrower shall, at the request of Lender, promptly pay
any reasonable amounts expended by Lender on behalf of Borrower in such
performance or attempted performance to Lender at its principal office in
Houston, Xxxxxx County, Texas, together with interest thereon at the Maximum
Rate from the date of such expenditure by Lender (as appropriate) until paid and
which amounts until paid shall be Obligations hereunder secured by the
Collateral. Notwithstanding the foregoing, it is expressly understood that
Lender shall not assume or have, except by its express written consent, any
liability or responsibility for the performance of any duties of Borrower or any
other Person hereunder.
Section 10.04. Waivers. The acceptance by Lender at any time
and from time to time of part payment on the Obligations shall not be deemed to
be a waiver of any Default or Event of Default then existing. No waiver by
Lender of any Default or Event of Default shall be deemed to be a waiver of any
other then existing or subsequent Default or Event of Default. No delay or
omission by Lender in exercising any Rights under the Loan Papers shall impair
such Rights or be construed as a waiver thereof or any acquiescence therein, nor
shall any single or partial exercise of any such Rights preclude other or
further exercise thereof, or the exercise of any other Rights under the Loan
Papers or otherwise.
Section 10.05. Application of Proceeds. Any and all proceeds
ever received by Lender from the exercise of any Rights pursuant to this Article
X, shall be applied promptly when received by Lender to the Obligations in such
order and manner as Lender, in its sole discretion, may deem appropriate.
Borrower shall remain liable to Lender for any deficiency.
Section 10.06. Cumulative Rights. All Rights available to
Lender under the Loan Papers shall be cumulative of and in addition to all other
rights granted to Lender at law or in equity, whether or not the Obligation be
due and payable and whether or not Lender shall have instituted any suit for
collection or other action in connection with the Loan Papers.
Section 10.07. Expenditures by Lender or Any Lender. Any
reasonable sums spent by Lender pursuant to the exercise of any Right provided
herein shall become part of the Obligations, except as otherwise provided by
Law.
ARTICLE XI
Miscellaneous
Section 11.01. Expenses of Lender. Borrower agrees to pay on
demand all reasonable costs and expenses incurred by Lender in connection with
the preparation, negotiation, and execution of this Agreement and the other Loan
Papers and any and all amendments, modifications, and supplements thereto,
including, without limitation, all reasonable costs and fees of Lender's legal
counsel, and all reasonable costs and expenses incurred by Lender in connection
with the
36
enforcement or preservation of any rights under this Agreement or any other Loan
Papers, including, without limitation, all reasonable costs and fees of Lender's
legal counsel.
Section 11.02. Foreign Taxes. All taxes, income taxes,
assessments, filing or other fees, levies, imposts, duties, deductions,
withholdings, stamp taxes, interest equalization taxes, capital transaction
taxes, foreign exchange taxes or charges, or other charges of any nature
whatsoever from time to time or at any time imposed on the transactions governed
by this Agreement (including, without limitation, interest and fees paid to
Lender by Borrower) by any governmental entity other than the United States of
America, a State of the United States of America or any agency or department
thereof shall be paid by Borrower or shall be reimbursed to Lender by Borrower
if Lender is obligated to pay any such taxes. If Lender has an obligation to
file a tax return or report of any kind with any governmental entity other than
the United States of America, any State of the United States of America or any
agency or department thereof solely because of the transactions governed by this
Agreement, Borrower shall reimburse Lender for all costs and expenses in the
preparation and filing of such return or report (including, without limitation,
all attorney and accountant fees). Lender hereby agrees and covenants with
Borrower that it will take all reasonable actions, and execute such documents,
as may be, from time to time, reasonably requested by Borrower to attempt to
eliminate or minimize the payment of any taxes, assessments, fees, levies,
imposts, duties, deductions, withholding requirements or charges imposed upon
Lender and covered by the provisions of this Section 11.02, such actions and
documents to include, without limitation, the execution and filing of a Claim on
Behalf of a United States Domestic Corporation to Relief from United Kingdom
Income Tax on Interest and Royalties in the United Kingdom.
Section 11.03. Restatement. The delivery of each statement,
report, and certificate to Lender pursuant to this Agreement and each request by
Borrower for an Advance hereunder (whether by Notice of Revolving Credit
Borrowing, Notice of Credit Issuance or otherwise) shall by virtue of such
delivery or request alone constitute a restatement of the representations and
warranties contained in Article VII hereof on and as of the date of delivery or
the date requested for the Advance, except that the representations and
warranties contained in Section 7.02 shall in each instance be deemed to be made
with respect to the financial statements most recently furnished to Lender
pursuant to Section 7.02 or 8.01, as the case may be. Each such delivery or
request shall also constitute a representation and warranty at the time of said
delivery or on the date requested for the Advance that no Event of Default has
occurred and is continuing and that no event has occurred that, with notice or
lapse of time or both would be an Event of Default, has occurred and is
continuing.
Section 11.04. No Waiver; Cumulative Remedies. No failure on
the part of Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement and the other
Loan Papers are cumulative and not exclusive of any rights and remedies provided
by law.
37
Section 11.05. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of Lender, Borrower and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of Lender.
Section 11.06. Survival of Representations and Warranties. All
representations and warranties made in this Agreement or any other Loan Document
or in any document, statement, or certificate furnished in connection with this
Agreement shall survive the execution and delivery of this Agreement and the
other Loan Papers, and no investigation by Lender or any closing shall affect
the representations and warranties or the right of Lender to rely upon them.
Section 11.07. Entire Agreement; Amendment. This Agreement
embodies the entire agreement among the parties hereto and supersedes all prior
agreements and understandings, if any, relating to the subject matter hereof.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. The provisions of this Agreement
and the other Loan Papers to which Borrower, Parent or any other Person is a
party may be amended or waived only by an instrument in writing signed by the
parties hereto.
Section 11.08. Maximum Interest Rate. No provision of this
Agreement or of any Note shall require the payment or the collection of interest
in excess of the maximum permitted by applicable law. If any excess of interest
in such respect is hereby provided for, or shall be adjudicated to be so
provided, in any Note or otherwise in connection with this loan transaction, the
provisions of this Section 11.07 shall govern and prevail and neither Borrower
nor the sureties, guarantors, successors, or assigns of Borrower shall be
obligated to pay the excess amount of such interest or any other excess sum paid
for use, forbearance, or detention of sums loaned pursuant hereto. In the event
Lender ever receives, collects, or applies as interest any such sum, such amount
which would be in excess of the maximum amount permitted by applicable law shall
be applied as a payment and reduction of the principal of the indebtedness
evidenced by the Notes; and, if the principal of the Notes has been paid in
full, any remaining excess shall forthwith be paid to Borrower.
Section 11.09. Notices. Any notice, consent, or other
communication required or permitted to be given under any of the Loan Papers to
Lender or Borrower must be in writing and delivered in person or mailed by
registered or certified mail, return receipt requested, postage prepaid, as
follows:
38
To Lender: BANK ONE, TEXAS, NATIONAL ASSOCIATION
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
To Borrower: Dril-Quip (Europe) Limited
c/o Dril-Quip, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: J. Xxxx Xxxxxx
with a copy to:
Dril-Quip (Europe) Limited
c/o Dril-Quip, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxx
and if the notice is pursuant to Section 10.01 or 10.02 hereof
with a copy to:
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
or such other address as shall be set forth in a notice from the appropriate
party given in compliance with this Section 11.09. Any such notice, consent, or
other communications shall be deemed given when delivered in person or, if
mailed, when duly deposited in the mails.
SECTION 11.10. APPLICABLE LAW. THIS AGREEMENT, THE NOTES, AND
THE OTHER LOAN PAPERS SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN
HOUSTON, XXXXXX COUNTY, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 11.11. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
39
Section 11.12. Severability. Any provision of this Agreement
held by a court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Agreement and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 11.13. Headings. The headings, captions, and
arrangements used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.
Section 11.14. Non-Application of Chapter 15 of Texas Credit
Code. The provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas
Civil Statutes, Article 5069-15) are specifically declared by the parties hereto
not to be applicable to this Agreement or any of the Loan Papers or to the
transactions contemplated hereby.
Section 11.15. Controlling Provision Upon Conflict. In event
of a conflict between the provisions of this Agreement those of the Notes, the
Security Documents or any other Loan Paper, the provisions of this Agreement
shall control.
IN WITNESS WHEREOF, the parties hereto have duly executed Agreement as
of the day and year first above written.
BORROWER:
DRIL-QUIP (EUROPE) LIMITED,
a private limited company formed under
the Companies Act of the United
Kingdom 1948, as amended
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Xxxxx X. Xxxxxxx, Director
By: /s/ X. X. XXXXXX
----------------------------------
X. X. Xxxxxx, Director
40
LENDER:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
By: /s/ XXXX X. XXXXX
----------------------------------
Xxxx X. Xxxxx
Senior Vice President
41
EXHIBIT A
PROMISSORY NOTE
$15,000,000.00 Houston, Texas March __, 1994
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP (EUROPE) LIMITED, a
private limited company formed under the Companies Act of the United Kingdom
1948, as amended ("Maker"), hereby promises to pay to the order of BANK ONE,
TEXAS, NATIONAL ASSOCIATION, a national banking association ("Payee"), at its
offices at 910 Travis, Houston, Xxxxxx County, Texas, on October 1, 1995, in
lawful money of the United States of America, the principal sum of FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00), or so much thereof as may be
advanced and outstanding hereunder, together with interest on the outstanding
principal balance hereof, at a varying rate per annum which shall from day to
day be equal to the lesser of (a) the maximum rate permitted by applicable law
as the same exists from day to day during the term hereof ("Maximum Rate"),
including, as to Article 5069-1.04, Vernon's Texas Civil Statutes (and as the
same may be incorporated by reference in other Texas statutes), but otherwise
without limitation, that rate based upon the "indicated rate ceiling" or (b) the
sum of the Bank One Base Rate (hereinafter defined) of Payee in effect from day
to day plus one-half of one percent ( 1/2%), each such change in the rate of
interest charged hereunder to become effective, without notice to Maker, on the
effective date of each change in the Bank One Base Rate; provided however, if at
any time the rate of interest specified in clause (b) preceding shall exceed the
Maximum Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Bank One Base Rate will not
reduce the rate of interest hereon below the Maximum Rate until the total amount
of interest accrued hereon equals the amount of interest which would have
accrued hereon if the rate specified in clause (b) preceding had at all times
been in effect.
Accrued and unpaid interest shall be due and payable quarterly in
arrears during the term hereof, on the 1st day of each successive July, October,
January and April commencing on July 1, 1994, until payment in full of the
outstanding principal hereunder. All principal hereof, together with all
accrued and unpaid interest thereon, shall be due and payable on maturity. All
past due principal and interest shall bear interest at the Maximum Rate.
As used herein, the term "Bank One Base Rate" means, at any time the
lesser of (i) the rate of interest per annum then most recently established by
Payee as its Bank One Base Rate in effect from day to day, with each change in
the rate of interest charged as the Bank One Base Rate to become effective,
without notice to Maker, on the effective date of each change in the Bank One
Page 1 of a 3 Page Note ---------------------
Initialled for
Identification
Base Rate, such Bank One Base Rate to be computed on the basis of a year
composed of 365 days for the actual number of days elapsed (including the first
day but excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Revolving Credit Note provided for and as defined in
that certain Credit Agreement dated of even date herewith by and between Maker
and Payee (such instrument as the same may be amended or modified from time to
time, is hereinafter referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and
conditions specified in the Agreement. Maker may borrow, repay and reborrow
hereunder upon the terms and conditions specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this note or otherwise in connection with this loan transaction the provisions
of this paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker.
If default be made in the payment of principal or interest under this
note and such default shall continue for three (3) Business Days after notice
thereof to Maker pursuant to the Agreement, as defined in the Agreement, or upon
the occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
Page 2 of a 3 Page Note ---------------------
Initialled for
Identification
This note is performable in Houston, Xxxxxx County, Texas, and Maker
and each surety, guarantor, endorser and other party ever liable for payment of
any sums of money payable on this note, jointly and severally waive the right to
be sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable
for payment of any sums of money payable on this note jointly and severally
waive presentment and demand for payment, protest, notice of protest and non-
payment of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, and grace, and consent to
all extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other indulgences or forbearances whatsoever, without
notice to any other party and without in any way affecting the personal
liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof , all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to make
endorsement shall not limit or otherwise affect the obligations of Maker under
the Agreement or this note.
DRIL-QUIP (EUROPE) LIMITED
By:
------------------------------------
_____________________________, Director
By:
-----------------------------------
____________________________, Director
Page 3 of a 3 Page Note ---------------------
Initialled for
Identification
SCHEDULE 1
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, NATIONAL ASSOCIATION
EXISTING LIENS
Description of Property Covered Lienholder
------------------------------- ----------
1. Land & building at Stoneywood Park, Bank of Scotland
Stoneywood Road, Dyce, Aberdeen, Scotland
SCHEDULE 2
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, NATIONAL ASSOCIATION
PERMITTED LOCATIONS
-------------------
Address Landlord
------- --------
1. Stoneywood Park Not applicable
Stoneywood Road Owned by Dril-Quip (Europe) Ltd.
Dyce, Aberdeen AB2 ODF
Scotland
2. Xxxx 0 & 0 Xxxxxxxxx Xxxxxxxxx Xxx.
Xxxxxxxxxx Xxxxxx 0 Xxxxx Xxxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxx Xxxxx Xxxxxxxx
Great Yarmouth, Norfolk Norfolk, England
Xxxxxxx XX00, 0XX
Xxxxxx Xxxxxxx
3. Ryfylkegaten 70 KS Xxxxxxxxxxxx
0000 Xxxxxxxxx X.X. Xxx 000
Xxxxxx 0000 Xxxxxxxxx, Xxxxxx
SCHEDULE 3
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
[This Schedule is being left blank intentionally. There is no reference to a
"Schedule 3" in the Credit Agreement to which this is attached.]
SCHEDULE 4
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED
AND BANK ONE, TEXAS, N.A.
EXISTING LITIGATION
-------------------
None.
SCHEDULE 5
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
DEBT
----
None.
SCHEDULE 6
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
SUBSIDIARIES
------------
Subsidiaries of Dril-Quip. Inc.
-------------------------------
Name Jurisdiction % Owned
---- ------------ -------
DQE United Kingdom 100%
DQAP Singapore 100%
Dril-Quip Trade Corp. Virgin Islands 100%
PT Dril-Quip Indonesia Indonesia 80%
Subsidiaries of Other Material Companies
----------------------------------------
None
SCHEDULE 7
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
CONTRACTS
---------
With respect to P.T. Dril-Quip Indonesia ("PTDQI") , Parent is
obligated to sell, transfer and assign a sufficient portion of its equity
interest in PTDQI to Ir. Iman Taufik, Parent's current minority co-equity owner
in PTDQI, to bring his ownership interest in PTDQI to 51% in the 15th year
following commencement of commercial production in Indonesia. Such sale will be
made at a mutually agreed upon price or as may be determined as the then fair
value by an internationally recognized and independent firm of public
accountants.
SCHEDULE 8
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
CONSENTS
--------
None.
SCHEDULE 9
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
LOANS TO AFFILIATES
-------------------
None.
SCHEDULE 10
TO CREDIT AGREEMENT
BY AND BETWEEN DRIL-QUIP (EUROPE) LIMITED AND
BANK ONE, TEXAS, N.A.
TAXES
-----
None.
EXHIBIT B
---------
PROMISSORY NOTE
---------------
$1,704,000.00 Houston, Texas March , 1994
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP (EUROPE) LIMITED, a
private limited company formed under the Companies Act of the United Kingdom
1948, as amended ("Maker"), hereby promises to pay to the order of BANK ONE,
TEXAS, NATIONAL ASSOCIATION, a national banking association ("Payee"), at its
offices at 910 Travis, Houston, Xxxxxx County, Texas, on October 1, 1997, in
lawful money of the United States of America, the principal sum of ONE MILLION
SEVEN HUNDRED FOUR THOUSAND AND NO/100 DOLLARS ($1,704,000.00), plus accrued and
unpaid interest thereon as hereinafter calculated, as follows:
(a) thirteen (13) quarterly installments each in the principal
amount of SEVENTY-ONE THOUSAND AND NO/100 DOLLARS ($71,000.00), together
with all accrued and unpaid interest, with the first of such installments
due and payable on July 1, 1994, and like successive installments of
principal plus accrued and unpaid interest due and payable on the 1st day
of each succeeding April, July, October and January thereafter, through and
including July 1, 1997; and
(b) a fourteenth (14th) and final installment in the amount of
all outstanding principal, plus accrued and unpaid interest, due and
payable on the maturity of this note, October 1, 1997.
The outstanding principal balance hereof shall bear interest prior to
maturity at a varying rate per annum which shall from day to day be equal to the
lesser of (a) the maximum rate permitted by applicable law as the same exists
from day to day during the term hereof ("Maximum Rate"), including, as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling" or (b) the sum of
the Bank One Base Rate (hereinafter defined) of Payee in effect from day to day
plus three-quarters of one percent (3/4%), each such change in the rate of
interest charged hereunder to become effective, without notice to Maker, on the
effective date of each change in the Bank One Base Rate; provided however, if at
any time the rate of interest specified in clause (b) preceding shall exceed the
Maximum Rate, thereby causing the interest rate hereon to be limited to the
Maximum Rate, then any subsequent reduction in the Bank One Base Rate will not
reduce the rate of interest hereon below the Maximum Rate until the total amount
of interest accrued hereon equals the amount of interest which would have
accrued hereon if the rate specified in clause (b) preceding had at all times
been in effect. All past due principal and interest shall bear interest at the
Maximum Rate.
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Page 1 of a 3 Page Note Identification
As used herein, the term "Bank One Base Rate" means, at any time the
lesser of (i) the rate of interest per annum then most recently established by
Payee as its Bank One Base Rate in effect from day to day, with each change in
the rate of interest charged as the Bank One Base Rate to become effective,
without notice to Maker, on the effective date of each change in the Bank One
Base Rate, such Bank One Base Rate to be computed on the basis of a year
composed of 365 days for the actual number of days elapsed (including the first
day but excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Term Note provided for and as defined in that certain
Amended and Restated Credit Agreement dated of even date herewith by and between
Maker and Payee (such instrument as the same may be amended or modified from
time to time, is hereinafter referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and
conditions specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this note or otherwise in connection with this loan transaction the provisions
of this paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker.
If default be made in the payment of principal or interest under this
note and such default shall continue for three (3) Business Days after notice
thereof to Maker pursuant to the Agreement, as defined in the Agreement, or upon
the occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys, fees.
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Page 2 of a 3 Page Note Identification
This note is performable in Houston, Xxxxxx County, Texas, and Maker
and each surety, guarantor, endorser and other party ever liable for payment of
any sums of money payable on this note, jointly and severally waive the right to
be sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable
for payment of any sums of money payable on this note jointly and severally
waive presentment and demand for payment, protest, notice of protest and non-
payment of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, and grace, and consent to
all extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other indulgences or forbearances whatsoever, without
notice to any other party and without in any way affecting the personal
liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof, all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to make
endorsement shall not limit or otherwise affect the obligations of Maker under
the Agreement or this note.
DRIL-QUIP (EUROPE) LIMITED
By:
--------------------------------
_________________________, Director
By:
--------------------------------
_________________________, Director
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EXHIBIT C
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FORM OF NOTICE OF REVOLVING
CREDIT BORROWING
______________________, 00___
XXXX XXX, XXXXX, NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: __________________________________________________
Gentlemen:
The undersigned is an Authorized Financial Officer, and as such is
authorized to make and deliver this Notice of Revolving Credit Borrowing
pursuant to Section 2.04 of that certain Credit Agreement dated March ___, 1994
(as may be amended, the "Credit Agreement"), by and between Bank One, Texas,
National Association ("Lender") and Dril-Quip (Europe) Limited ("Borrower"). All
terms defined in the Credit Agreement shall have the same meaning herein.
Borrower hereby requests a Borrowing under the Revolving Credit Loan from Lender
in accordance with Section 2.04 of the Credit Agreement.
In connection with the foregoing and pursuant to the terms and
provisions of the Credit Agreement, the undersigned hereby certifies that:
(i) Except as disclosed in Schedule I attached hereto, the
representations and warranties contained in Article VII of the Credit
Agreement are true and correct in all material respects at and as of the
date hereof as though made as of the date hereof.
(ii) No Default or Event of Default has occurred and is
continuing.
(iii) The amount of the Revolving Credit Loan to be made
pursuant to this request does not exceed the Revolving Credit Available
Loan Amount.
(iv) All information supplied herein is true and accurate as of
the date hereof.
BANK ONE, TEXAS, NATIONAL ASSOCIATION
Page 2
The Borrowing Date shall be __________________________, 19___.
DRIL-QUIP (EUROPE) LIMITED
By:
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Name:
------------------------------------
Title:
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EXHIBIT D
FORM OF NOTICE OF CREDIT ISSUANCE
____________________, 00___
XXXX XXX, XXXXX, NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention:
Gentlemen:
The undersigned is an Authorized Financial Officer, and as such is
authorized to make and deliver this Notice of Credit Issuance pursuant to
Section 2.08 of that certain Credit Agreement dated March __, 1994 (as may be
amended, the "Credit Agreement"), by and between Bank One, Texas, National
Association ("Lender") and Dril-Quip (Europe) Limited ("Borrower"). All terms
defined in the Credit Agreement shall have the same meaning herein. Borrower
hereby notifies Lender of the proposed issuance of a Letter of Credit, the terms
of which are fully described on Schedule I attached hereto, and the purpose of
which is fully described on Schedule II attached hereto, in accordance with
Section 2.08 of the Credit Agreement.
In connection with the foregoing and pursuant to the terms and
provisions of the Credit Agreement, the undersigned hereby certifies that:
(i) Except as disclosed in Schedule III attached hereto, the
representations and warranties contained in Article VII of the Credit
Agreement are true and correct in all material respects at and as of the
date hereof as though made as of the date hereof.
(ii) No Default or Event of Default has occurred and is
continuing.
(iii) The amount of the Letter of Credit to be issued pursuant
to this request does not exceed the Revolving Credit Available Loan Amount.
(iv) The amount of the Letter of Credit to be issued pursuant to
this request, together with all other outstanding Letters of Credit does
not exceed $3,000,000.00.
(v) All information supplied herein is true and accurate as of
the date hereof.
The issuance date of the Letter of Credit shall be ________________,
19___.
DRIL-QUIP (EUROPE) LIMITED
By:
-------------------------------------
Name:
-------------------------------------
Title:
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EXHIBIT E
FORM OF BORROWING BASE REPORT
TO: BANK ONE, TEXAS, N.A.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention:_______________________________________________
Gentlemen:
This Borrowing Base Report (this "Report") for the month ending
________________, 19___, is executed and delivered by DRIL-QUIP (EUROPE) LIMITED
(the "Borrower") to BANK ONE, TEXAS, NATIONAL ASSOCIATION (the "Lender")
pursuant to that certain Credit Agreement (the "Credit Agreement") dated as of
March ___, 1994, between the Borrower and the Lender. All terms used herein
shall have the meanings assigned to them in the Credit Agreement.
The Borrower represents and warranties to the Lender that all
information contained herein is true, correct and complete, and that below
represent the Eligible Accounts and Eligible Inventory that qualify for purposes
of determining the Borrowing Base under the Credit Agreement. The Borrower
further represents and warrants to the Lender that attached hereto as Schedule I
is a list of the Eligible Accounts for the month ending _________________,
19___, showing all Eligible Accounts aged in thirty-day intervals and as
Schedule II is the amount of Eligible Accounts, Eligible Inventory and
calculation of the Borrowing Base on a consolidating basis.
ACCOUNTS RECEIVABLE:
1. Total Accounts Receivable per Financial Statement $_______
2. Eligible Accounts $_______
INVENTORY:
3. Total Inventory per Financial Statements $_______
4. Eligible Inventory $_______
BORROWING BASE:
5. 80% of line 2 $_______
6. 50% of line 4 $_______
(not to exceed 60% of the total Borrowing Base)
7. Borrowing Base (line 5 plus line 6) $_______
OUTSTANDING SUM OF BORROWER:
8. Outstanding Principal of Revolving Credit Loan plus
Amount of Open Letters of Credit Outstanding $_______
9. Amount of Any Pending Notice of Revolving
Credit Borrowing $_______
10. Amount of Any Pending Notice of Credit Issuance $_______
11. Aggregate Amount of Pending Notices
(sums of lines 9 and 10) $_______
12. Outstanding Sum of Borrower (line 8 plus line 11) $_______
OUTSTANDING SUM OF DRIL-QUIP, INC.:
13. Outstanding Principal of Revolving Credit plus amount
of open Letters of Credit Outstanding $_______
14. Amount of any Pending Notice of Revolving Credit Borrowing $________
15. Amount of Pending Notice of Letter of Credit Insurance $_______
16. Aggregate Amount of Pending Notices
(sum of line 14 and 15) $_______
AVAILABILITY:
17. Outstanding Sum of Dril-Quip, Inc. (line 13 plus line 16) $_______
18. Available Sum (the lesser of (i)$15,000,000.00 minus
line 12 minus line 17, or (ii) line 7 minus line 12) $________
The Borrower further represents and warrants to the Lender that the
representation and warranties contained in Article VII of the Credit Agreement
(as modified, if appropriate, in accordance with Section 11.02 of the Agreement)
are true and correct in all material respects on and as of the date of this
Report as if made on and as of the date hereof, and that no Default or Event of
Default has occurred and is continuing.
Date:
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BORROWER:
DRIL-QUIP (EUROPE) LIMITED
By:
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Printed Name:
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Title:
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