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EXHIBIT 10.3
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the "AGREEMENT") is made effective
the 23rd day of January, 1997, by and among FWA DRILLING COMPANY, INC. ("FWA"),
INTERNATIONAL PETROLEUM SERVICE COMPANY ("IPSCO"), TRIAD DRILLING COMPANY
("TRIAD"), UNIVERSAL WELL SERVICES, INC. ("UNIVERSAL"), USC, INCORPORATED
("USC"), UTI ENERGY CORP. ("UTI"), UTICO, INC. ("UTICO"), VIERSEN & XXXXXXX
DRILLING COMPANY ("VIERSEN") and MELLON BANK, N.A. ("BANK"). FWA, IPSCO,
Triad, Universal, USC, UTI, UTICO and Viersen are hereinafter sometimes
collectively referred to as the "BORROWERS" and individually as a "BORROWER".
BACKGROUND
A. Pursuant to that certain Amended and Restated Loan and
Security Agreement dated December 7, 1995 (as it may be amended from time to
time, the "PRIOR LOAN AGREEMENT"), FWA, IPSCO, Triad, Universal and USC
(collectively, the "PRIOR BORROWERS") requested and Bank agreed to extend to
the Prior Borrowers certain credit facilities as further described in the Prior
Loan Agreement.
B. Pursuant to those certain Surety Agreements dated December 7,
1995 (for UTI and UTICO) and August 15, 1996 (for Viersen) (collectively, the
"PRIOR SURETY AGREEMENTS"), UTI, UTICO and Viersen agreed to act as surety for
and guarantee the obligations of the Prior Borrowers under the Prior Loan
Documents (as hereinafter defined). The Prior Loan Agreement, the Prior Surety
Agreements and all other documents executed in connection therewith may
hereinafter be collectively referred to as the "PRIOR LOAN DOCUMENTS".
C. Borrowers have requested that Bank extend a certain credit
facility to Borrowers, which Bank is willing to do on the terms set forth
herein.
D. Capitalized terms not otherwise defined herein will have the
meanings set forth therefor in SECTION 13 of this Agreement. Capitalized terms
not otherwise defined in SECTION 13 of this Agreement shall have the meanings
set forth therefor in the Prior Loan Agreement.
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any extensions of credit now or hereafter made to or for the
benefit of Borrowers by Bank, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. THE LOAN; USE OF PROCEEDS.
1.1 THE LOAN. Bank will lend to Borrowers and Borrowers will
borrow from Bank the aggregate amount of Four Million Dollars
($4,000,000.00)(the "LOAN"). Borrower's obligation to repay the Loan shall be
evidenced by Borrower's promissory note in the face amount of Four Million
Dollars ($4,000,000.00)(the "NOTE"), which shall be in the form attached hereto
as EXHIBIT "A", with the blanks appropriately filled in.
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1.2 SAVINGS CLAUSE. Anything contained in this Agreement or any
other Loan Documents to the contrary notwithstanding, the obligations of each
Borrower with respect to the repayment of advances under the Loan to another
Borrower shall be limited to the lesser of: (i) the total amount of such
advances, or (ii) a maximum aggregate amount equal to the largest amount that
would not render its obligations with respect thereto subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "FRAUDULENT TRANSFER LAWS"), if and to the extent such Borrower (or trustee
on its behalf) has properly invoked the protections of the Fraudulent Transfer
Laws. In making such determination, all rights of subrogation and contribution
of a Borrower with respect to such obligations shall be deemed to be an asset
of such Borrower.
1.3 USE OF PROCEEDS. The proceeds of the Loan shall be advanced
to Triad on behalf of all Borrowers in accordance with procedures acceptable to
Bank. Borrowers agree that the proceeds of the Loan shall be used to partially
fund the purchase by Triad of certain assets of Xxxxxxx Drilling Corporation
(the "SELLER"), as further described in that certain Asset Purchase Agreement
between UTI and Seller dated December 31, 1996 (the "ASSET PURCHASE
AGREEMENT").
1.4 CLOSING. Closing hereunder will take place at a time and
place mutually acceptable to Borrowers and Bank effective on the date of this
Agreement.
2. INTEREST RATE.
2.1 INTEREST ON THE LOAN. Interest on the unpaid principal
balance of the Loan will accrue until final payment thereof at the rate per
annum which is equal to the Prime Rate in effect from time to time (such
interest rate to change immediately upon any change in the Prime Rate).
2.2 DEFAULT INTEREST. Interest will accrue on the principal
balance of the Loan after the occurrence of an Event of Default at a rate which
is four percent (4%) in excess of the non-default rate otherwise set forth
above for the Loan.
2.3 POST JUDGMENT INTEREST. Any judgment obtained for sums due
hereunder or under the Loan Documents will accrue interest at the applicable
default rate set forth above until paid.
2.4 CALCULATION. Interest will be computed on the basis of a year
of 365/366 days and paid for the actual number of days elapsed.
2.5 LIMITATION OF INTEREST TO MAXIMUM LAWFUL RATE. In no event
will the rate of interest payable hereunder exceed the maximum rate of interest
permitted to be charged by applicable law (including the choice of law rules)
and any interest paid in excess of the permitted rate will be refunded to
Borrowers. Such refund will be made by application of the excessive amount of
interest paid against any sums outstanding hereunder and will be applied in
such order as Bank may determine. If the excessive amount of interest paid
exceeds the sums outstanding, the portion exceeding the sums outstanding will
be refunded in cash by Bank. Any such crediting or refunding will not cure or
waive any default by Borrowers. Borrowers agree, however, that in determining
whether or not any interest payable hereunder exceeds the highest rate
permitted by law, any non-
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principal payment, including without limitation late charges, will be deemed to
the extent permitted by law to be an expense, fee, premium or penalty rather
than interest.
3. PAYMENTS AND FEES.
3.1 INTEREST PAYMENTS ON THE LOAN. Borrowers will pay interest on
the outstanding principal balance of the Loan monthly, on the first day of each
calendar month commencing the first day of the first calendar month following
the date hereof.
3.2 PRINCIPAL PAYMENTS ON THE LOAN. Borrower will pay the
principal of the Loan in seven (7) equal and consecutive quarterly installments
of Five Hundred Thousand Dollars ($500,000.00) each, on January 23, April 23,
July 23 and October 23 of each calendar year commencing on April 23, 1997, and
in one final payment of the remaining principal balance plus all accrued and
unpaid interest thereon on January 23, 1999.
3.3 LATE CHARGE. In the event that Borrowers fail to pay any
principal, interest or other fees or expenses payable hereunder for a period of
at least fifteen (15) days, in addition to paying such sums, Borrowers will pay
to Bank a late charge equal to five percent (5%), of such past due payment as
compensation for the expenses incident to such past due payment.
3.4 PREPAYMENT OF LOAN. Borrowers may prepay all or any part of
the principal balance of the Loan without any premium or fee, at any time,
following delivery of not less than fifteen (15) days prior written notice to
Bank. All prepayments will be applied to the regularly scheduled payments in
the inverse order in which they are due
3.5 MANDATORY PREPAYMENT. In the event the Line is terminated as a
result of an Event of Default, expiration of the Contract Period, or otherwise,
the outstanding balance of the Term Loan, together with any accrued and unpaid
interest thereon and any other sums due pursuant to the terms hereof shall be
due and payable immediately.
3.6 PAYMENT METHOD. Borrowers irrevocably authorize Bank to debit
all payments required to be made by Borrowers hereunder, under the Loan, on the
date due, from any deposit account maintained by any Borrower with Bank.
Otherwise, Borrowers will be obligated to make such payments directly to Bank.
All payments are to be made in immediately available funds. If Bank accepts
payment in any other form, such payment shall not be deemed to have been made
until the funds comprising such payment have actually been received by or made
available to Bank.
3.7 APPLICATION OF PAYMENTS. Any and all payments on account of
the Loan will be applied to accrued and unpaid interest, outstanding principal
and other sums due hereunder or under the Loan Documents, in such order as
Bank, in its discretion, elects. If Borrowers make a payment or payments and
such payment or payments, or any part thereof, are subsequently invalidated,
declared to be fraudulent or preferential, set aside or are required to be
repaid to a trustee, receiver, or any other person under any bankruptcy act,
state or federal law, common law or equitable cause, then to the extent of such
payment or payments, the obligations or part thereof hereunder intended
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to be satisfied shall be revived and continued in full force and effect as if
said payment or payments had not been made.
3.8 LOAN ACCOUNT. Bank will open and maintain on its books a loan
account (the "LOAN ACCOUNT") with respect to advances made, repayments,
prepayments, the computation and payment of interest and fees and the
computation and final payment of all other amounts due and sums paid to Bank
under this Agreement. Except in the case of manifest error in computation, the
Loan Account will be conclusive and binding on the Borrowers as to the amount
at any time due to Bank from Borrowers under this Agreement or the Note.
3.9 INDEMNITY; LOSS OF MARGIN. Borrowers will indemnify Bank
against any loss or expense which Bank sustains or incurs as a consequence of
an Event of Default, including, without limitation, any failure of Borrowers to
pay when due (at maturity, by acceleration or otherwise) any principal,
interest, fee or any other amount due under this Agreement or the other Loan
Documents. If Bank sustains or incurs any such loss or expense it will from
time to time notify Borrowers in writing of the amount reasonably determined in
good faith by the Bank to be necessary to indemnify Bank for the loss or
expense. Such amount will be due and payable by Borrowers to Bank within ten
(10) days after presentation by Bank of a statement setting forth a brief
explanation of and Bank's calculation of such amount, which statement shall be
conclusively deemed correct absent manifest error. Any amount payable to the
Bank under this section will bear interest at the default rate payable under
the Loan from the due date until paid, both before and after judgment.
In the event that any future law, rule, regulation, treaty or official
directive, interpretation or application by any central bank, monetary
authority or governmental authority, or the future compliance with any
guideline or request of any central bank, monetary authority or governmental
authority (whether or not having the force of law):
(a) subjects Bank to any tax with respect to any amounts
payable under this Agreement or the other Loan Documents by Borrowers or
otherwise with respect to the transactions contemplated under this Agreement or
the other Loan Documents (except for taxes on the overall net income of Bank
imposed by the United States of America or any political subdivision thereof);
or
(b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit, capital maintenance, capital adequacy, or
similar requirement against assets held by, or deposits in or for the account
of, or loans or advances or commitment to make loans or advances by the Bank;
or
(c) imposes upon Bank any other condition with respect to
advances or extensions of credit or the commitment to make advances or
extensions of credit under this Agreement, and the result of any of the
foregoing is to increase the costs of Bank, reduce the income receivable by or
return on equity of Bank or impose any expense upon Bank with respect to any
advances or extensions of credit or commitments to make advances or extensions
of credit under this Agreement, Bank shall so notify Borrowers in writing.
Borrowers agree to pay Bank the amount of such increase in cost, reduction in
income, reduced return on equity or capital, or additional expense within ten
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(10) days after presentation by Bank of a statement concerning such increase in
cost, reduction in income, reduced return on equity or capital, or additional
expense. Such statement shall set forth a brief explanation of the amount and
Bank's calculation of the amount (in determining such amount the Bank may use
any reasonable averaging and attribution methods), which statement shall be
conclusively deemed correct absent manifest error. If the amount set forth in
such statement is not paid within ten (10) days after such presentation of such
statement, interest will be payable on the unpaid amount at the default rate
payable under the Loan from the due date until paid, both before and after
judgment.
4. SECURITY. As security for the full and timely payment and performance
of the Bank Indebtedness, each Borrower hereby ratifies, confirms and grants to
Bank a security interest in all of the following (collectively, the
"COLLATERAL"):
(a) All of such Borrower's present and future accounts,
contract rights, chattel paper, instruments and documents and all other rights
to the payment of money whether or not yet earned, for services rendered or
goods sold, consigned, leased or furnished by such Borrower or otherwise,
together with (i) all goods (including any returned, rejected, repossessed or
consigned goods), the sale, consignment, lease or other furnishings of which
shall be given or may give rise to any of the foregoing, (ii) all of such
Borrower's rights as a consignor, consignee, unpaid vendor or other lienor in
connection therewith, including stoppage in transit, set-off, detinue, replevin
and reclamation, (ill) all general intangibles related thereto, (iv) all
guaranties, mortgages, security interests, assignments, and other encumbrances
on real or personal property, leases and other agreements or property securing
or relating to any accounts, (v) choses-in-action, claims and judgments, (vi)
any return or unearned premiums, which may be due upon cancellation of any
insurance policies, and (vii) all products and proceeds of any of the
foregoing.
(b) All of such Borrower's present and future inventory
(including but not limited to goods held for sale or lease or furnished or to
be furnished under contracts for service, raw materials, work-in-process,
finished goods and goods used or consumed in such Borrower's business) whether
owned, consigned or held on consignment, together with all merchandise,
component materials, supplies, packing, packaging and shipping materials, and
all returned, rejected or repossessed goods sold, consigned, leased or
otherwise furnished by such Borrower, all documents of title covering any of
such goods or inventory and all products and proceeds of any of the foregoing.
(c) All of such Borrower's present and future general
intangibles related to or useful in the sale of such Borrower's inventory or
the collection of such Borrower's accounts or constituting a right or claim by
such Borrower to receive payments of any nature, and all products and proceeds
of any of the foregoing.
(d) All of such Borrower's present and future drilling
rigs, xxxxx and production equipment, machinery, equipment, tools, pipe and
spare parts, together with all parts, substitutions, accretions, accessions,
attachments, accessories, additions, components and replacements thereof, all
documents of title covering any of such items and all manuals of operation,
maintenance or repair, and all products and proceeds of any of the foregoing.
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(e) All of such Borrower's present and future general
ledger sheets, files, records, customer lists, books of account, invoices,
bills, certificates or documents of ownership, bills of sale, business papers,
correspondence, credit files, tapes, cards, computer runs and all other data
and data storage systems whether in the possession of any Borrower or any
service bureau.
(f) All letters of credit now existing or hereafter
issued naming any Borrower as a beneficiary or assigned to any Borrower,
including the right to receive payment thereunder, and all documents and
records associated therewith.
(g) All deposits, funds, instruments, documents,
policies, evidences and certificates of insurance, securities, chattel paper
and other assets of such Borrower or in which such Borrower has an interest and
all proceeds thereof, now or at any time hereafter on deposit with or in the
possession or control of Bank or owing by Bank to such Borrower or in transit
by mail or carrier to Bank or in the possession of any other Person acting on
Bank's behalf, without regard to whether Bank received the same in pledge, for
safekeeping, as agent for collection or otherwise, or whether Bank has
conditionally released the same, and in all assets of such Borrower in which
Bank now has or may at any time hereafter obtain a lien, mortgage, or security
interest for any reason.
In addition to Borrowers' obligations under the Prior Loan Documents,
Borrowers agree that the Collateral shall also secure Borrowers' obligations to
Bank under this Agreement. IT IS THE EXPRESS INTENT OF BORROWERS THAT THE
COLLATERAL SHALL SECURE NOT ONLY THE OBLIGATIONS UNDER THE LOAN DOCUMENTS AND
THE PRIOR LOAN DOCUMENTS, BUT ALSO ALL OTHER PRESENT AND FUTURE OBLIGATIONS OF
EACH BORROWER TO BANK. Borrowers acknowledge and agree that all security
interests granted to Bank pursuant to the Prior Loan Agreement are continued
and remain in effect, that the Bank's lien position with respect to the
Collateral shall relate back to the date referenced in the Prior Loan Agreement
and that all financing statements previously filed with respect to the
Collateral shall remain in full force and effect.
Notwithstanding the foregoing, the security interest granted in this
SECTION 4 shall not include and the Collateral shall not include: (i) drilling
rigs, and all proceeds thereof, in which The CIT Group/Equipment Financing,
Inc. ("CIT") currently holds a security interest under the CIT Loan Documents,
and (ii) the Collateral Assets securing that certain promissory note in the
original principal amount of Eight Million Dollars ($8,000,000.00) dated August
14, 1996 made by UTI payable to the order of Viersen (the "VIERSEN NOTE").
5. REPRESENTATIONS AND WARRANTIES. Borrowers represent and warrant as
follows:
5.1 CONFIRMATION OF PRIOR REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Obligors as set forth in SECTION 5 of the
Prior Loan Agreement are true and complete as of the date hereof.
5.2 TITLE TO ACQUIRED ASSETS. The assets acquired by Triad
pursuant to the Asset Purchase Agreement (collectively, the "ACQUIRED ASSETS")
are and will be owned by Triad free and
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clear of all liens and other encumbrances of any kind, except liens in favor of
the Bank. The Acquired Assets shall constitute part of the Collateral, and
Borrower will defend the Collateral against any claims of all persons or
entities other than the Bank.
5.3 DUE AUTHORIZATION; NO LEGAL RESTRICTIONS. The execution and
delivery by Borrowers of the Loan Documents, the consummation of the
transactions contemplated by the Loan Documents and the fulfillment and
compliance with the respective terms, conditions and provisions of the Loan
Documents: (a) have been duly authorized by all requisite corporate action of
each Borrower, (b) will not conflict with or result in a breach of, or
constitute a default (or might, upon the passage of time or the giving of
notice or both, constitute a default) under, any of the terms, conditions or
provisions of any applicable statute, law, rule, regulation or ordinance or any
Borrower's Certificate or Articles of Incorporation or By-laws, or any
indenture, mortgage, loan or credit agreement or instrument to which any
Borrower is a party or by which it may be bound or affected, or any judgment or
order of any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and (c) will not result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of any Borrower under the terms
or provisions of any such agreement or instrument, except liens in favor of
Bank.
5.4 ENFORCEABILITY. The Loan Documents have been duly executed by
Borrowers and delivered to Bank and constitute legal, valid and binding
obligations of Borrowers, enforceable in accordance with their terms.
5.5 GOVERNMENTAL CONSENTS. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on the
part of Borrowers are required in connection with the execution, delivery or
performance by Borrowers of the Loan Documents or the consummation of the
transactions contemplated thereby.
5.6 CURRENT COMPLIANCE. Borrowers are currently in compliance
with all of the terms and conditions of the Loan Documents.
5.7. INTERRELATEDNESS OF BORROWERS. The business operations of
Borrowers are interrelated and complement one another, and such entities have a
common business purpose, with intercompany bookkeeping and accounting
adjustments used to separate their respective properties, liabilities, and
transactions. To permit their uninterrupted and continuous operations, such
entities now require and will from time to time hereafter require funds and
credit accommodations for general business purposes. The proceeds of advances
under the Loan will directly or indirectly benefit each Borrower hereunder,
severally and jointly, regardless of which Borrower requests or receives part
or all of the proceeds of such advances. The Acquired Assets, although owned
by Triad, will be used by or for the benefit of all Borrowers from time to
time.
5.8 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No representation
or warranty by Borrowers contained herein or in any certificate or other
document furnished by Borrowers pursuant hereto or in connection herewith fails
to contain any statement of material fact necessary to make such representation
or warranty not misleading in light of the circumstances under which it was
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made. There is no fact which any Borrower knows and has not disclosed to Bank,
which does or may materially and adversely affect any Borrower or any of their
operations.
5.9 DRILLING RIGS AND RELATED EQUIPMENT. All drilling rigs and
related drilling equipment (collectively, the "DRILLING EQUIPMENT") used by
Borrowers in drilling operations on their own behalf or on behalf of their
customers are owned by the entities described on SCHEDULE 5.9 attached hereto.
SCHEDULE 5.9 sets forth the owner of the Drilling Equipment, the states in
which the Drilling Equipment is located and any Person that holds a lien or
encumbrance against the Drilling Equipment. Except for liens permitted under
SECTION 6.9 of the Prior Loan Agreement, such Drilling Equipment is free and
clear of all other liens and encumbrances.
6. GENERAL COVENANTS. Except with the prior written consent of Bank,
Borrowers will comply with the following:
6.1 CONFIRMATION OF PRIOR GENERAL COVENANTS. Borrowers
acknowledge, confirm and agree to comply with all covenants of Obligors as set
forth in SECTION 6 of the Prior Loan Agreement.
6.2 RESTRICTIONS ON USE OF PROCEEDS. No Borrower will carry or
purchase with the proceeds of the Loan any "margin security" within the meaning
of Regulations U, G, T or X of the Board of Governors of the Federal Reserve
System.
6.3 DRILLING EQUIPMENT. With respect to the Drilling Equipment:
(i) Bank may at any reasonable time inspect the Drilling
Equipment in which Bank now has or may hereafter acquire a security interest
(collectively, the "ENCUMBERED EQUIPMENT").
(ii) The Encumbered Equipment shall at all times remain
separately identifiable personal property and shall not become affixed to real
property so as to become a fixture.
(iii) If requested by Bank, in writing, Borrowers will
attach to the Encumbered Equipment a notice satisfactory to Bank, disclosing
Bank's security interest in the Encumbered Equipment.
(iv) Borrowers will not move any of the Encumbered
Equipment owned by a Borrower out of any of the states described in SCHEDULE
5.9 attached hereto or any of the other states in which Bank has filed UCC
financing statements naming the owner of such Encumbered Equipment, as debtor,
and describing such Encumbered Equipment as collateral, unless such Borrower
notifies Bank and provides Bank with duly executed financing statements to
perfect Bank's security interest in such Encumbered Equipment upon filing in
such new state.
7. FINANCIAL COVENANTS. Except with the prior written consent of Bank,
Borrowers will comply with the financial covenants of Obligors as set forth in
SECTION 7 of the Prior Loan Agreement.
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8. ACCOUNTING RECORDS, REPORTS AND FINANCIAL STATEMENTS.
8.1 CONFIRMATION OF PRIOR REPORTING REQUIREMENTS. Borrowers agree
to comply with the financial reporting and other requirements of Obligors as
set forth in SECTION 8 of the Prior Loan Agreement.
9. ENVIRONMENTAL REPRESENTATIONS AND COVENANTS.
9.1 CONFIRMATION OF PRIOR REPRESENTATIONS. Borrowers represent
and warrant that all representations of Obligors as set forth in SECTION 9 of
the Prior Loan Agreement are true and complete as of the date hereof.
9.2 CONFIRMATION OF PRIOR COVENANTS. Borrowers acknowledge,
confirm and agree to comply with all environmental covenants and other
obligations of Obligors as set forth in SECTION 9 of the Prior Loan Agreement.
10. CONDITIONS OF CLOSING. The obligation of Bank to make available the
Loan is subject to the performance by Borrowers of all of their agreements to
be performed hereunder and to the following further conditions (any of which
may be waived by Bank):
10.1 LOAN DOCUMENTS. Borrowers and all other required persons and
entities will have executed and delivered to Bank the Loan Documents.
10.2 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Borrowers set forth in the Loan Documents and the Prior Loan
Documents will be true at and as of the date hereof.
10.3 NO DEFAULT. No condition or event shall exist or have
occurred which would constitute an Event of Default hereunder or under the
Prior Loan Documents (or would, upon the giving of notice or the passage of
time or both, constitute such an Event of Default).
10.4 PROCEEDINGS AND DOCUMENTS. All proceedings taken by Borrowers
in connection with the transactions contemplated by this Agreement and all
documents incident to such transactions shall be satisfactory in form and
substance to Bank and Bank's counsel, and Bank shall have received all
documents or other evidence which it reasonably may request in connection with
such proceedings and transactions. Each Borrower shall have delivered to Bank
a certificate, in form and substance satisfactory to Bank, dated the date
hereof and signed on behalf of that Borrower by an officer of that Borrower,
certifying (a) true copies of the Articles of Incorporation and Bylaws of that
Borrower in effect on such date, (b) true copies of all corporate actions taken
by that Borrower relative to the Loan Documents, and (c) the names, true
signatures and incumbency of the officers of that Borrower authorized to
execute and deliver this Agreement and the other Loan Documents. Bank may
conclusively rely on such certificate unless and until a later certificate
revising the prior certificate has been received by Bank.
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10.5 DELIVERY OF OTHER DOCUMENTS. The following documents shall
have been delivered by or on behalf of Borrowers to Bank:
(a) GOOD STANDING CERTIFICATES. A good standing
certificate certifying to the good standing and corporate status of each
Borrower in its state of incorporation, good standing/foreign qualification
certificates from all other jurisdictions in which Borrowers are required to be
qualified to do business, as the Bank may require.
(b) AUTHORIZATION DOCUMENTS. Evidence of
authorization of each Borrower's execution and full performance of this
Agreement, the Loan Documents and all other documents and actions required
hereunder.
(c) LANDLORD'S RELEASE AND WAIVER AGREEMENTS.
Bank shall have received a landlord's release and waiver agreement,
satisfactory in form and substance to Bank, from each landlord for each
location leased by any Borrower at which the Acquired Assets are located.
(d) OPINION OF COUNSEL. An opinion of counsel
for Borrowers in form and content satisfactory to Bank.
(e) ASSET PURCHASE AGREEMENT. A copy of the
fully executed Asset Purchase Agreement.
(f) ASSIGNMENT OF RIGHTS. An Assignment of
Rights, satisfactory to Bank, assigning Triad's rights under the Asset Purchase
Agreement to Bank.
(g) LIEN SEARCH. Copies of record searches
(including UCC searches and judgments, suits, tax and other lien searches)
confirming that Bank has a first priority security interest in the Acquired
Assets acceptable to Bank.
(h) OTHER DOCUMENTS. Such other documents as may
be required to be submitted to Bank by the terms hereof or of any of the Loan
Documents.
10.6 NON-WAIVER OF RIGHTS. By completing the closing hereunder,
or by making advances hereunder, Bank does not thereby waive a breach of any
warranty or representation made by any Borrower hereunder or any agreement,
document, or instrument delivered to Bank or otherwise referred to herein, and
any claims and rights of Bank resulting from any breach or misrepresentation by
any Borrower are specifically reserved by Bank.
11. DEFAULT AND REMEDIES.
11.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event or Events of Default hereunder:
(a) the failure of Borrowers to pay any amount of
principal or interest on the Note, or any fee or other sums payable hereunder,
or any other Bank Indebtedness on the date on
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which such payment is due, whether on demand, at the stated maturity or due
date therefor by reason of any requirement for the prepayment thereof, by
acceleration or otherwise, provided that, with respect to payments of sums
other than principal and interest, such failure to pay continues unremedied for
a period of ten (10) days after such sums are first due;
(b) The failure of any Borrower to duly perform or
observe any obligation, covenant or agreement on its part contained herein,
under the Prior Loan Agreement, or in any other Loan Document, provided that,
notwithstanding the foregoing, Borrowers' failure to comply with the provisions
of SECTIONS 6.4, 6.11, 6.12 (other than the requirement that insurance coverage
be maintained at all times), 8.3 AND 8.8 of the Prior Loan Agreement shall not
constitute an Event of Default hereunder unless such failure to comply
continues unremedied for a period of fifteen (15) days after the earlier of (i)
any Borrower receives notice from Bank of such failure, or (ii) a responsible
officer of any Borrower has actual notice of such failure; or
(c) Any Event of Default (as defined in the Prior Loan
Agreement) shall occur.
11.2 REMEDIES. At the option of the Bank, upon the occurrence of
an Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Loan, all other
Bank Indebtedness, or any part thereof, all interest accrued thereon, all fees
due hereunder and all other obligations of Borrowers to Bank hereunder or under
any other agreement, note or otherwise arising will become immediately due and
payable without any further demand or notice;
(b) Bank may increase the interest rate on the Loan to
the default rate set forth herein, without notice;
(c) Bank may exercise each and every right and remedy
granted to it under the Prior Loan Documents.
(d) Bank may enter the premises occupied by any Borrower
and take possession of the Collateral and any records relating thereto; and/or
(e) Bank may exercise each and every right and remedy
granted to it under the Loan Documents, the Prior Loan Documents, under the
Uniform Commercial Code and under any other applicable law or at equity.
If an Event of Default occurs under SECTION 12.1(E) or (F) of the
Prior Loan Agreement, all Bank Indebtedness shall become immediately due and
payable.
11.3 SET-OFF. Without limiting the rights of Bank under applicable
law, Bank has and may exercise a right of set-off, a lien against and a
security interest in all property of any Borrower now or at any time in Bank's
possession in any capacity whatsoever, including but not limited to any balance
of any deposit, trust or agency account, or any other bank account with Bank,
as security for all Bank Indebtedness. At any time and from time to time
following the occurrence of an Event
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of Default, or any event which with the giving of notice or passage of time or
both would constitute an Event of Default, Bank may without notice or demand,
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by Bank to or for the credit of any Borrower against any or all of the Bank
Indebtedness and each Borrower's obligations under the Loan Documents.
11.4 TURNOVER OF PROPERTY HELD BY BANK. Each Borrower irrevocably
authorizes any Affiliate of Bank, upon and following the occurrence of an Event
of Default, at the request of Bank and without further notice, to turnover to
Bank any property of any Borrower held by such Affiliate, including without
limitation, funds and securities for any Borrower's account and to debit, for
the benefit of Bank, any deposit account maintained by any Borrower with such
Affiliate (even if such deposit account is not then due or there results a loss
or reduction of interest or the imposition of a penalty in accordance with law
applicable to the early withdrawal of time deposits), in the amount requested
by Bank up to the amount of the Bank Indebtedness, and to pay or transfer such
amount or property to Bank for application to the Bank Indebtedness.
11.5 DELAY OR OMISSION NOT WAIVER. Neither the failure nor any
delay on the part of Bank to exercise any right, remedy, power or privilege
under the Loan Documents upon the occurrence of any Event of Default or
otherwise shall operate as a waiver thereof or impair any such right, remedy,
power or privilege. No waiver of any Event of Default shall affect any later
Event of Default or shall impair any rights of Bank. No single, partial or
full exercise of any rights, remedies, powers and privileges by the Bank shall
preclude further or other exercise thereof. No course of dealing between Bank
and Borrowers shall operate as or be deemed to constitute a waiver of Bank's
rights under the Loan Documents or affect the duties or obligations of
Borrowers.
11.6 REMEDIES CUMULATIVE; CONSENTS. The rights, remedies, powers
and privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the
sole and absolute discretion of Bank.
11.7 CERTAIN FEES, COSTS, EXPENSE EXPENDITURES AND INDEMNIFICATION.
Each Borrower agrees to pay on demand all costs and expenses of Bank, including
without limitation:
(a) all costs and expenses in connection with (i) the
preparation, review, negotiation, execution, delivery and administration of the
Loan Documents, and the other documents to be delivered in connection
therewith, or any waivers, consents, amendments, extensions and increases to
any of the foregoing, (ii) the preparation for, negotiations regarding,
consultations concerning, or the defense or prosecution of legal proceedings
involving any claims made or threatened against Bank arising out of or related
to the Loan Documents, the transactions contemplated hereunder as to the
protection of any of the Collateral, or (iii) obtaining any appraisals or
reappraisals of Collateral, periodic lien searches and tax clearance
certificates, as Bank in its discretion deems necessary (including in all
cases, without limitation, attorney's fees and expenses);
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(b) all losses, costs and expenses in connection with the
interpretation, enforcement, protection and preservation of the Bank's rights
or remedies under the Loan Documents, or any other agreement relating to any
Bank Indebtedness, or in connection with legal advice relating to the rights or
responsibilities of Bank (including without limitation court costs, attorney's
fees, expenses of accountants and appraiser and the cost of all appeals); and
(c) any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of the
Loan Documents, and all liabilities to which Bank may become subject as the
result of delay in paying or omission to pay such taxes.
In the event any Borrower shall fail to pay taxes, insurance,
assessments, costs or expenses which it is required to pay hereunder, or fails
to keep the Collateral free from security interests or lien (except as
expressly permitted herein), or fails to maintain or repair the Collateral as
required hereby, or otherwise breaches any obligations under the Loan
Documents, Bank in its discretion, may make expenditures for such purposes and
the amount so expended (including attorney's fees and expenses, filing fees and
other charges) shall be payable by Borrowers on demand and shall constitute
part of the Bank Indebtedness.
With respect to any amount required to be paid by Borrowers under this
section, in the event Borrowers fails to pay such amount on demand, Borrowers
shall also pay to Bank interest thereon at the default rate set forth for the
Loan.
Borrowers agree to indemnity and hold harmless, Bank and Bank's
officers, directors, shareholders, employees and agents, from and against any
and all claims, liabilities, losses, damages, costs and expenses (whether or
not such Person is a party to any litigation), including attorney's fees and
costs and costs of investigation, document production, attendance at
depositions or other discovery with respect to or arising out of this
Agreement, the use of any proceeds advanced hereunder, the transactions
contemplated hereunder, or any claim, demand, action or cause of action being
asserted against any Borrower or any of its Affiliates.
Borrowers' obligations under this section shall survive termination of
this Agreement and repayment of the Bank Indebtedness.
11.8 TIME IS OF THE ESSENCE. Time is of the essence in Borrowers'
performance of their obligations under the Loan Documents.
11.9 ACKNOWLEDGEMENT OF CONFESSION OF JUDGMENT PROVISIONS.
BORROWERS ACKNOWLEDGE AND AGREE THAT THE NOTE AND THE LOAN DOCUMENTS CONTAIN
PROVISIONS WHEREBY BANK MAY ENTER JUDGMENT BY CONFESSION AGAINST BORROWERS.
BEING FULLY AWARE OF THEIR RIGHTS TO PRIOR NOTICE AND HEARING ON THE QUESTION
OF THE VALIDITY OF ANY CLAIMS THAT MAY BE ASSERTED AGAINST THEM BY BANK UNDER
THE NOTE AND LOAN DOCUMENTS, BEFORE JUDGMENT CAN BE ENTERED, BORROWERS HEREBY
WAIVE THESE RIGHTS AND AGREE AND CONSENT TO BANK ENTERING JUDGMENT AGAINST
BORROWERS BY CONFESSION. ANY PROVISION IN A CONFESSION OF JUDGMENT IN ANY OF
THE
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LOAN DOCUMENTS FOR AN ATTORNEY'S COLLECTION COMMISSION SHALL IN NO WAY LIMIT
BORROWERS' LIABILITY TO REIMBURSE BANK FOR ALL LEGAL FEES ACTUALLY INCURRED BY
BANK, EVEN IF SUCH FEES ARE IN EXCESS OF THE ATTORNEY'S COLLECTION COMMISSION
PROVIDED FOR IN SUCH CONFESSION OF JUDGMENT.
12. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with the Loan Documents shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division
or department to whose attention notices to a party are to be addressed, or by
private carrier, or registered or certified mail, return receipt requested, in
all cases, with charges prepaid, addressed as follows, until some other address
(or individual or division or department for attention) shall have been
designated by notice given by one party to the other:
To Borrower:
UTI Energy Corp.
000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxx XxXxxx, Chief Financial Officer
To Bank:
Mellon Bank, N.A.
Plymouth Meeting Executive Campus
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, First Vice President
ALL "PAYMENT IN FULL" CHECKS OR OTHER MEDIA OF PAYMENT MUST BE SENT TO
BANK ONLY TO THE ABOVE ADDRESS.
13. DEFINITIONS. The following words and phrases as used in capitalized
form in this Agreement, whether in the singular or plural, shall have the
meanings indicated:
13.1 "ACCOUNTING TERMS". As used in this Agreement, or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined elsewhere in this Agreement shall have
the respective meanings given to them under GAAP.
13.2 "AFFILIATE", as to any Person, means each other Person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person in question.
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13.3 "BANK INDEBTEDNESS" shall mean all obligations and
Indebtedness of any Borrower to Bank, whether now or hereafter owing or
existing, including, without limitation, all obligations under the Loan
Documents and the Prior Loan Documents, all obligations to reimburse Bank for
payments made by Bank pursuant to any letter of credit issued for the account
or benefit of any Borrower by Bank, all other obligations or undertakings now
or hereafter made by or for the benefit of any Borrower to or for the benefit
of Bank under any other agreement, promissory note or undertaking now existing
or hereafter entered into by any Borrower with Bank, including, without
limitation, all obligations of any Borrower to Bank under any guaranty or
surety agreement and all obligations of any Borrower to immediately pay to Bank
the amount of any overdraft on any deposit account maintained with Bank,
together with all interest and other sums payable in connection with any of the
foregoing.
13.4 "BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in Pennsylvania are authorized by law to
close.
13.5 "COLLATERAL ASSETS" means the Assets, as defined in the Stock
Purchase Agreement, securing the Viersen Note.
13.6 "CORPORATION" means a corporation, partnership, trust,
unincorporated organization, association, joint stock company, limited
liability company or other legal entity.
13.7 "EVENT OF DEFAULT" means each of the events specified in
SECTION 11.1.
13.8 "GAAP" means generally accepted accounting principles in the
United States of America, in effect from time to time, consistently applied and
maintained.
13.9 "INDEBTEDNESS", as applied to a Person, means:
(a) all items (except items of capital stock or of
surplus) which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined;
(b) to the extent not included in the foregoing, all
indebtedness, obligations, and liabilities secured by any mortgage, pledge,
lien, conditional sale or other title retention agreement or other security
interest to which any property or asset owned or held by such Person is
subject, whether or not the indebtedness, obligations or liabilities secured
thereby shall have been assumed by such Person; and
(c) to the extent not included in the foregoing, all
indebtedness, obligations and liabilities of others which such Person has
directly or indirectly guaranteed, endorsed (other than for collection or
deposit in the ordinary course of business), sold with recourse, or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire or
in respect of which such Person has agreed to supply or advance funds (whether
by way of loan, stock purchase, capital contribution or otherwise) or otherwise
to become directly or indirectly liable.
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13.10 "LOAN DOCUMENTS" means this Agreement, the Note and all other
documents, executed or delivered by Borrower pursuant to this Agreement, as
they may be amended from time to time.
13.11 "PERSON" means an individual, a Corporation or a government or
any agency or subdivision thereof, or any other entity.
13.12 "PRIME RATE" means the annual interest rate established from
time to time by Bank and generally known by Bank as its "prime rate", whether
published by it publicly or only for the internal guidance of its loan
officers. The Prime Rate is used merely as a pricing index and is not and
should not be considered to represent the lowest or best rate available to a
borrower.
13.13 "STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated August 14, 1996 between the Xxx X. Xxxxxxx, Xx. Revocable Trust
and UTI, as amended.
13.14 "SUBSIDIARY" means a Corporation (a) which is organized under
the laws of the United States or any State thereof, or any other county or
jurisdiction, (b) which conducts substantially all of its business and has
substantially all of its assets within the United States, and (c) of which more
than fifty percent (50%) of its outstanding voting stock of every class (or
other voting equity interest) is owned by Borrower or one or more of its
Subsidiaries.
14. WAIVERS.
14.1 WAIVERS. IN CONNECTION WITH ANY PROCEEDINGS UNDER THE LOAN
DOCUMENTS, INCLUDING WITHOUT LIMITATION ANY ACTION BY BANK IN REPLEVIN,
FORECLOSURE OR OTHER COURT PROCESS OR IN CONNECTION WITH ANY OTHER ACTION
RELATED TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREUNDER,
BORROWERS WAIVE:
(a) ALL ERRORS, DEFECTS AND IMPERFECTIONS IN SUCH
PROCEEDINGS;
(b) ALL BENEFITS UNDER ANY PRESENT OR FUTURE LAWS
EXEMPTING ANY PROPERTY, REAL OR PERSONAL, OR ANY PART OF ANY PROCEEDS THEREOF
FROM ATTACHMENT, LEVY OR SALE UNDER EXECUTION, OR PROVIDING FOR ANY STAY OF
EXECUTION TO BE ISSUED ON ANY JUDGMENT RECOVERED UNDER ANY OF THE LOAN
DOCUMENTS OR IN ANY REPLEVIN OR FORECLOSURE PROCEEDING, OR OTHERWISE PROVIDING
FOR ANY VALUATION, APPRAISAL OR EXEMPTION;
(c) ALL RIGHTS TO INQUISITION ON ANY REAL ESTATE, WHICH
REAL ESTATE MAY BE LEVIED UPON PURSUANT TO A JUDGMENT OBTAINED UNDER ANY OF THE
LOAN DOCUMENTS AND SOLD UPON ANY WRIT OF EXECUTION ISSUED THEREON IN WHOLE OR
IN PART, IN ANY ORDER DESIRED BY BANK;
(d) PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF DEMAND,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST OF ANY OF THE LOAN
DOCUMENTS, INCLUDING THE NOTE;
(e) ANY REQUIREMENT FOR BONDS, SECURITY OR SURETIES
REQUIRED BY STATUTE, COURT RULE OR OTHERWISE;
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(f) ANY DEMAND FOR POSSESSION OF COLLATERAL PRIOR TO
COMMENCEMENT OF ANY SUIT; AND
(g) ALL RIGHTS TO CLAIM OR RECOVER ATTORNEY'S FEES AND
COSTS IN THE EVENT THAT ANY BORROWER IS SUCCESSFUL IN ANY ACTION TO REMOVE,
SUSPEND OR PREVENT THE ENFORCEMENT OF A JUDGMENT ENTERED BY CONFESSION.
14.2 FORBEARANCE. Bank may release, compromise, forbear with
respect to, waive, suspend, extend or renew any of the terms of the Loan
Documents, without notice to any Borrower .
14.3 LIMITATION ON LIABILITY. Borrowers shall be responsible for
and Bank is hereby released from any claim or liability in connection with:
(a) Safekeeping any Collateral;
(b) Any loss or damage to any Collateral;
(c) Any diminution in value of the Collateral; or
(d) Any act or default of another Person.
Bank shall only be liable for any act or omission on its part
constituting gross negligence or wilful misconduct. In the event that Bank
breaches its required standard of conduct, Borrowers agree that Bank's
liability shall be only for direct damages suffered and shall not extend to
consequential or incidental damages. In the event any Borrower brings suit
against Bank in connection with the transactions contemplated hereunder and
Bank is found not to be liable, Borrowers will indemnify and hold Bank harmless
from all costs and expenses, including attorney's fees, incurred by Bank in
connection with such suit. This Agreement is not intended to obligate Bank to
take any action with respect to the Collateral or to incur expenses or perform
any obligation or duty of any Borrower.
14.4 SUBROGATION; SUBORDINATION. Any and all rights of subrogation
that any Borrower may have against another Borrower or against any collateral
or security for any Bank Indebtedness, and any and all rights of contribution,
indemnity and/or substitution that any Borrower may have against another
Borrower shall be junior and subordinate to all Bank Indebtedness, to any
rights that Bank may have against all Borrowers, and to all right, title and
interest that Bank may have in any such collateral or security for the Bank
Indebtedness. Bank may use, sell or dispose of any item of collateral or
security for the Bank Indebtedness as it sees fit without regard to any
subrogation rights any Borrower may have, and upon any such disposition or sale
of such collateral or security any rights of subrogation that any Borrower may
have with respect to such collateral or security shall terminate.
Until the Bank Indebtedness shall have been indefeasibly paid in full,
no Borrower shall take, or permit to be taken, any action to exercise (a) any
right of subrogation arising in respect of the Bank Indebtedness, (b) any right
of contribution arising in respect of the Bank Indebtedness that any
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Borrower may have, (c) any right to enforce any remedy which Bank now has or
may hereafter have against any Borrower or (d) any benefit of, and any right to
participate in, any security now or hereafter held by Bank. If any amount
shall be paid to any Borrower on account of such subrogation or contribution
rights at any time when all Bank Indebtedness shall not have been paid in full,
such amount shall be held in trust for Bank and shall forthwith be paid over to
Bank to be credited and applied against the Bank Indebtedness, whether matured
or unmatured, in accordance with the terms hereof.
15. SUBMISSION TO JURISDICTION. Borrowers hereby consent to the
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agree that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts. Borrowers waive any
objection which they may have based on lack of personal jurisdiction, improper
venue or forum non conveniens to the conduct of any proceeding in any such
court and waive personal service of any and all process upon them, and consent
that all such service of process be made by mail or messenger directed to them
at the address set forth in SECTION 12. Nothing contained in this SECTION 15
shall affect the right of Bank to serve legal process in any other manner
permitted by law or affect the right of Bank to bring any action or proceeding
against any Borrower or their property in the courts of any other jurisdiction.
16. MISCELLANEOUS.
16.1 BROKERS. The transaction contemplated hereunder was brought
about and entered into by Bank and Borrowers acting as principals and without
any brokers, agents or finders being the effective procuring cause hereof.
Borrowers represent to Bank that Borrowers have not committed Bank to the
payment of any brokerage fee or commission in connection with this transaction.
If any such claim is made against Bank by any broker, finder or agent or any
other Person, Borrowers agree to indemnify, defend and hold Bank harmless
against any such claim, at Borrowers' own cost and expense, including Bank's
attorneys' fees. Borrowers further agree that until any such claim or demand
is adjudicated in Bank's favor, the amount claimed and/or demanded shall be
deemed part of the Bank Indebtedness secured by the Collateral.
16.2 USE OF BANK'S NAME. No Borrower shall use Bank's name or the
name of any of Bank's Affiliates in connection with any of its business or
activities except as may otherwise be required by the rules and regulations of
the Securities and Exchange Commission or any like regulatory body and except
as may be required in its dealings with any governmental agency.
16.3 NO JOINT VENTURE. Nothing contained herein is intended to
permit or authorize any Borrower to make any contract on behalf of Bank, nor
shall this Agreement be construed as creating a partnership, joint venture or
making Bank an investor in any Borrower.
16.4 SURVIVAL. All covenants, agreements, representations and
warranties made by Borrowers in the Loan Documents or made by or on their
behalf in connection with the transactions contemplated herein shall be true at
all times this Agreement is in effect and shall survive the execution and
delivery of the Loan Documents, any investigation at any time made by Bank or
on
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its behalf and the making by Bank of the loans or advances to Borrowers. All
statements contained in any certificate, statement or other document delivered
by or on behalf of any Borrower pursuant hereto or in connection with the
transactions contemplated hereunder shall be deemed representations and
warranties by Borrowers.
16.5 NO ASSIGNMENT BY BORROWERS. No Borrower may assign any of its
rights hereunder without the prior written consent of Bank, and Bank shall not
be required to lend hereunder except to Borrowers as they presently exist.
16.6 ASSIGNMENT OR SALE BY BANK. Bank may sell, assign or
participate all or a portion of its interest in the Loan Documents and in
connection therewith may make available to any prospective purchaser, assignee
or participant any information relative to any Borrower in its possession. Any
such sale or assignment shall be in connection with an internal reorganization
of Bank or as part of a sale of assets of the bank and not an isolated sale or
assignment of this loan facility.
16.7 BINDING EFFECT. This Agreement and all rights and powers
granted hereby will bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns.
16.8 SEVERABILITY. The provisions of this Agreement and all other
Loan Documents are deemed to be severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.
16.9 NO THIRD PARTY BENEFICIARIES. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
16.10 MODIFICATIONS. No modification of this Agreement or any of
the Loan Documents shall be binding or enforceable unless in writing and signed
by or on behalf of the party against whom enforcement is sought.
16.11 HOLIDAYS. If the day provided herein for the payment of any
amount or the taking of any action falls on a Saturday, Sunday or public
holiday at the place for payment or action, then the due date for such payment
or action will be the next succeeding Business Day.
16.12 LAW GOVERNING. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
16.13 INTEGRATION. The Loan Documents shall be construed as
integrated and complementary of each other, and as augmenting and not
restricting Bank's rights, powers, remedies and security. The Loan Documents
contain the entire understanding of the parties thereto with respect to the
matters contained therein and supersede all prior agreements and understandings
between the parties with respect to the subject matter thereof and do not
require parol or extrinsic evidence in order to reflect the intent of the
parties. In the event of any inconsistency between the terms of this Agreement
and the terms of the other Loan Documents, the terms of this Agreement shall
prevail.
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16.14 EXHIBITS AND SCHEDULES. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
16.15 HEADINGS. The headings of the Articles, Sections, paragraphs
and clauses of this Agreement are inserted for convenience only and shall not
be deemed to constitute a part of this Agreement.
16.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
16.17 JOINT AND SEVERAL LIABILITY. If there is more than one
Borrower hereunder, all agreements, conditions, covenants and provisions of the
Loan Documents shall be the joint and several obligation of each Borrower.
16.18 WAIVER OF RIGHT TO TRIAL BY JURY. BORROWERS AND BANK WAIVE
ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER ANY OF THE LOAN DOCUMENTS OR (B) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWERS OR BANK WITH RESPECT TO ANY
OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWERS AND BANK
AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF BORROWERS AND BANK TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY. BORROWERS ACKNOWLEDGE THAT THEY HAVE HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT THEY FULLY
UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND
KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FWA DRILLING COMPANY, INC.
By: /s/ P. Xxxxx Xxxxxx
------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM THE PRECEDING PAGE]
INTERNATIONAL PETROLEUM
SERVICE COMPANY
By: /s/ P. Xxxxx Xxxxxx
----------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
TRIAD DRILLING COMPANY
By: /s/ P. Xxxxx Xxxxxx
----------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
UNIVERSAL WELL SERVICES, INC.
By: /s/ P. Xxxxx Xxxxxx
----------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
USC, INCORPORATED
By: /s/ P. Xxxxx Xxxxxx
----------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM THE PRECEDING PAGE]
UTI ENERGY CORP.
By: /s/ P. Xxxxx Xxxxxx
---------------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
UTICO, INC.
By: /s/ P. Xxxxx Xxxxxx
---------------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
VIERSEN & XXXXXXX
DRILLING COMPANY
By: /s/ P. Xxxxx Xxxxxx
---------------------------------------
P. Xxxxx XxXxxx, Vice President
(CORPORATE SEAL)
MELLON BANK, N.A.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx, First Vice President
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EXHIBIT
Exhibit "A" - Note
SCHEDULE
Schedule 5.9 - Location of Drilling Equipment
23
