EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF JULY 10, 2002
AMONG
XXXXX INTERNATIONAL, INC.
AND
M-I L.L.C.,
THE LENDERS FROM TIME TO TIME PARTY HERETO
AND
COMERICA BANK,
AS ADMINISTRATIVE AGENT
ABN AMRO BANK N.V.,
AS SYNDICATION AGENT
DEN NORSKE BANK ASA,
AS DOCUMENTATION AGENT
X.X. XXXXXX SECURITIES INC.,
AND
CREDIT LYONNAIS NEW YORK BRANCH,
AS CO-LEAD ARRANGERS AND JOINT BOOKRUNNERS
ARTICLE I Definitions.....................................................................1
SECTION 1.01 Defined Terms.......................................................1
SECTION 1.02 Classification of Loans and Borrowings.............................14
SECTION 1.03 Terms Generally....................................................14
SECTION 1.04 Accounting Terms; GAAP.............................................14
ARTICLE II The Credits...................................................................15
SECTION 2.01 Revolving Commitments..............................................15
SECTION 2.02 Loans and Borrowings...............................................15
SECTION 2.03 Requests for Borrowings............................................16
SECTION 2.04 Letters of Credit..................................................17
SECTION 2.05 Funding of Borrowings..............................................21
SECTION 2.06 Interest Elections.................................................22
SECTION 2.07 Termination, Reduction and Increase of Revolving Commitments.......23
SECTION 2.08 Repayment of Loans; Evidence of Debt...............................24
SECTION 2.09 Prepayment of Loans................................................25
SECTION 2.10 Fees...............................................................25
SECTION 2.11 Interest...........................................................26
SECTION 2.12 Alternate Rate of Interest.........................................27
SECTION 2.13 Increased Costs....................................................28
SECTION 2.14 Break Funding Payments.............................................29
SECTION 2.15 Taxes..............................................................29
SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs........31
SECTION 2.17 Mitigation Obligations; Replacement of Lenders.....................32
SECTION 2.18 Defaulting Lender..................................................33
SECTION 2.19 Xxxxx Guaranty of Obligations of M-I LLC...........................34
ARTICLE III Representations and Warranties...............................................35
SECTION 3.01 Organization; Powers...............................................35
SECTION 3.02 Authorization; Enforceability......................................35
SECTION 3.03 Governmental Approvals; No Conflicts...............................36
SECTION 3.04 Financial Condition................................................36
SECTION 3.05 Properties.........................................................36
SECTION 3.06 Litigation and Environmental Matters...............................36
SECTION 3.07 Compliance with Laws and Agreements................................37
SECTION 3.08 Investment and Holding Company Status..............................37
SECTION 3.09 Taxes..............................................................37
SECTION 3.10 ERISA..............................................................37
SECTION 3.11 Disclosure.........................................................37
ARTICLE IV Conditions....................................................................38
SECTION 4.01 Effective Date.....................................................38
SECTION 4.02 Each Credit Event..................................................39
ARTICLE V Affirmative Covenants...........................................................39
SECTION 5.01 Financial Statements; Ratings Change and Other Information..........39
SECTION 5.02 Notices of Material Events..........................................41
SECTION 5.03 Existence; Conduct of Business......................................41
SECTION 5.04 Payment of Obligations..............................................41
SECTION 5.05 Maintenance of Properties; Insurance................................42
SECTION 5.06 Books and Records; Inspection Rights................................42
SECTION 5.07 Compliance with Laws................................................42
SECTION 5.08 Use of Proceeds and Letters of Credit...............................42
SECTION 5.09 Financial Covenants.................................................42
ARTICLE VI Negative Covenants.............................................................42
SECTION 6.01 Subsidiary Indebtedness.............................................43
SECTION 6.02 Liens...............................................................43
SECTION 6.03 Fundamental Changes.................................................44
SECTION 6.04 Transactions with Affiliates........................................44
SECTION 6.05 Restrictive Agreements..............................................44
SECTION 6.06 Restrictions on M-I LLC Dividends...................................45
ARTICLE VII Events of Default.............................................................45
ARTICLE VIII The Administrative Agent.....................................................47
ARTICLE IX Miscellaneous..................................................................49
SECTION 9.01 Notices.............................................................49
SECTION 9.02 Waivers; Amendments.................................................50
SECTION 9.03 Expenses; Indemnity; Damage Waiver..................................51
SECTION 9.04 Successors and Assigns..............................................52
SECTION 9.05 Survival............................................................55
SECTION 9.06 Counterparts; Integration; Effectiveness............................56
SECTION 9.07 Severability........................................................56
SECTION 9.08 Right of Setoff.....................................................56
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process..........56
SECTION 9.10 WAIVER OF JURY TRIAL................................................57
SECTION 9.11 Headings............................................................57
SECTION 9.12 Confidentiality.....................................................57
SECTION 9.13 Interest Rate Limitation............................................58
Schedule 1.01 -- Applicable Margin
Schedule 2.01--Revolving Commitments
Schedule 6.01 -- Existing Subsidiary Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.05 -- Existing Restrictive Agreements
Exhibit A -- Assignment and Assumption
Exhibit B-1 -- Tranche A Revolving Note
Exhibit B-2 -- Tranche B Revolving Note
CREDIT AGREEMENT
CREDIT AGREEMENT (as amended, modified, restated, supplemented and in
effect from time to time, herein called this "Agreement") dated as of July ____,
2002, among XXXXX INTERNATIONAL, INC., a Delaware corporation, M-I L.L.C., a
Delaware limited liability company, the LENDERS party hereto, ABN AMRO BANK
N.V., as Syndication Agent, DEN NORSKE BANK ASA, as Documentation Agent, X.X.
XXXXXX SECURITIES INC. and CREDIT LYONNAIS
NEW YORK BRANCH, as Co-Lead Arrangers
and Joint Bookrunners, and COMERICA BANK, as Administrative Agent for the
Lenders.
ARTICLE I
Definitions
The parties hereto agree as follows:
SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Comerica Bank, in its capacity as
administrative agent for the Lenders hereunder, and its successors in that
capacity.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1% or (b) the Prime Rate in effect on such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the
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Revolving Commitments have terminated or expired, the Applicable Percentages
shall be determined based upon the Revolving Commitments most recently in
effect, giving effect to any assignments.
"Applicable Margin" means, for any day with respect to any ABR Loan or
Eurodollar Loan or with respect to the commitment fees payable hereunder, as the
case may be, the applicable margin per annum set forth on Schedule 1.01 hereto
under the caption "ABR Applicable Margin", "Adjusted LIBO Applicable Margin" or
"Commitment Fee", as the case may be, based upon the ratings by Xxxxx'x and S&P,
respectively, applicable on such date to the Index Debt. For purposes of the
foregoing, (i) if both Xxxxx'x and S&P shall not have in effect a rating for the
Index Debt (other than by reason of the circumstances referred to in the last
sentence of this definition), then such rating agencies shall be deemed to have
established a rating in Category 7, and if either (but not both), Xxxxx'x and
S&P shall not have in effect a rating for the Index Debt (other than by reason
of the circumstances referred to in the last sentence of this definition), then
the remaining rating shall control; (ii) if the ratings established or deemed to
have been established by Xxxxx'x and S&P for the Index Debt shall fall within
different Categories, the Applicable Margin shall be based on the higher of the
two ratings unless one of the two ratings is two or more Categories lower than
the other, in which case the Applicable Margin shall be determined by reference
to the Category next below that of the higher of the two ratings; and (iii) if
the ratings established or deemed to have been established by Xxxxx'x and S&P
for the Index Debt shall be changed (other than as a result of a change in the
rating system of Xxxxx'x or S&P), such change shall be effective as of the date
on which it is first announced by the applicable rating agency, irrespective of
when notice of such change shall have been furnished to the Agent and the
Lenders pursuant to Section 5.01 or otherwise. Each change in the Applicable
Margin shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Xxxxx'x or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrowers and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Margin shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"Approved Fund" has the meaning assigned to such term in Section 9.04.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America and any successor entity performing similar
functions.
"Borrower" means (i) as to the Tranche A Revolving Commitments, Xxxxx
and (ii) as to the Tranche B Revolving Commitments, M-I LLC. The term
"Borrowers" means Xxxxx and M-I LLC.
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"Borrowing" means Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by a Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which national banks in
New York City or Detroit, Michigan are authorized
or required by law to remain closed; provided that, when used in connection with
a Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the London interbank
market.
"Capital Expenditures" means, for any period, expenditures by a Person
which are properly classified as fixed or capital assets in accordance with GAAP
(including the capital portion of lease payments made in respect of Capital
Lease Obligations), reduced for (i) proceeds from disposal of fixed or capital
assets and (ii) proceeds from insurance policies to replace capital equipment
damaged or destroyed.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board, as amended) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13). Capital Lease Obligations shall not include the interest
component of any applicable rental payment.
"Ceiling Rate" means, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable federal or
New York
(or any jurisdiction whose usury laws are deemed to apply to the Notes or any
other Loan Documents despite the intention and desire of the parties to apply
the usury laws of the State of
New York) laws permits the higher interest rate,
stated as a rate per annum. On each day, if any, that the Texas Finance Code
establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly ceiling" (as
defined in the Texas Finance Code) for that day. Administrative Agent may from
time to time, as to current and future balances, implement any other ceiling
under the Texas Finance Code by notice to the Borrowers, if and to the extent
permitted by the Texas Finance Code. Without notice to the Borrowers or any
other Person, the Ceiling Rate shall automatically fluctuate upward and downward
as and in the amount by which such maximum nonusurious rate of interest
permitted by applicable law fluctuates.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of Xxxxx; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of Xxxxx by Persons who
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were neither (i) nominated by the board of directors of Xxxxx nor (ii) appointed
by directors so nominated; or (c) the acquisition of direct or indirect Control
of Xxxxx by any Person or group.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.13(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"CLO" has the meaning assigned to such term in Section 9.04.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Debt to Capitalization Ratio" shall mean, as of any day, without
duplication, the ratio of (a) interest bearing Indebtedness (including
Indebtedness bearing imputed interest as a result of having been issued at a
discount and including the principal component of Capital Lease Obligations) to
(b) the sum of (i) such interest bearing Indebtedness plus (ii) stockholders'
equity as determined in accordance with GAAP plus (iii) minority interests in
majority-owned Subsidiaries. For purposes of this definition, the term
"Indebtedness" shall not include intercompany debt which is held by a Borrower
or any of their Subsidiaries.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" shall mean, without duplication, for any period (a) net income
after taxes plus (b) the sum of (i) Interest Expense for such period, (ii)
income taxes deducted in determining such net income, (iii) depreciation,
depletion and obsolescence of property and (iv) other non-cash expenses and
intangibles (including, without limitation, deferred financing costs and debt
discount) deducted in determining such net income minus (c) non-cash income, in
each case, determined in accordance with GAAP.
"Effective Date" means the first date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or
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reclamation of natural resources or the management, release or threatened
release of any Hazardous Material.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of a Borrower or any Material Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with a Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by a Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by a Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by a
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by a Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from a Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
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"Eurodollar Office" means with respect to any Lender the office or
offices of such Lender which shall be making or maintaining the Eurodollar
Borrowing of such Lender hereunder. A Eurodollar Office of any Lender may be, at
the option of such Lender, either a domestic or foreign office.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of a Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the applicable Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by a
Borrower under Section 2.17(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.15(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the applicable Borrower with respect to such withholding
tax pursuant to Section 2.15(a).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of
New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the applicable Borrower.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrowers are located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising
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executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" shall mean and include with respect to any Person (a)
all items which in accordance with GAAP would be included on the liability side
of a balance sheet of such Person on the date as of which Indebtedness is to be
determined (excluding capital stock, surplus, surplus reserves and deferred
credits); (b) all guaranties, letter of credit contingent reimbursement
obligations, endorsements and other contingent obligations in respect of, or any
obligations to purchase or otherwise acquire, Indebtedness of others, and (c)
all Indebtedness secured by any Lien existing on any interest of such Person in
property owned subject to such Lien whether or not the Indebtedness secured
thereby shall have been assumed; provided, that the term "Indebtedness" shall
not mean or include any Indebtedness in respect of which monies sufficient to
pay and discharge the same in full (either on the expressed date of maturity
thereof or on such earlier date as such Indebtedness may be duly called for
redemption and payment) shall be deposited, in a manner and with a depository,
agency or trustee reasonably acceptable to the Agent, in trust for the payment
thereof. "Indebtedness" shall not include trade payables and expense accruals
incurred in the ordinary course of the applicable Person's business provided
that such payables have not remained unpaid for a period of ninety (90) days
after the same became due. Expenses which are classified as "operating lease
expenses" under GAAP shall not constitute "Indebtedness" under this Agreement.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of Xxxxx that is not guaranteed by any other Person or subject to
any other credit enhancement.
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"Interest Coverage Ratio" shall mean, as of any day, the ratio of (a)
EBITDA for the preceding four (4) fiscal quarter period less Capital
Expenditures made during such period, less income or franchise taxes (to the
extent paid in cash) for such period, plus net cash received from, and minus net
cash paid to, M-I LLC during such period to (b) the Interest Expense for such
period. As it relates to cash receipts from, and payments to, M-I LLC, any
proceeds from equity offerings that are distributed or contributed, as the case
may be, in the form of cash, shall be excluded from the Interest Coverage Ratio
calculation.
"Interest Election Request" means a request by a Borrower to convert or
continue a Revolving Loan in accordance with Section 2.06.
"Interest Expense" shall mean, for any period, the sum of (a) the cash
interest payments by an obligor made or accrued in accordance with GAAP during
such period in connection with all of its interest-bearing Indebtedness and (b)
the interest component of any Capital Lease Obligations.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
first day of each January, April, July and October, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as a Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (ii) any Interest
Period that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"Issuing Bank" means Comerica Bank (or any other Lender which agrees to
issue any Letter of Credit upon request by a Borrower), in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.04(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
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"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrowers at such time. The LC Exposure of any Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"LIBO Rate", with respect to any Eurodollar Borrowing for any Interest
Period: (a) a rate per annum equal to the offered rate for deposits in Dollars
for a period equal or comparable to such Interest Period which appears on Page
BBAM of the Bloomberg Financial Markets Information Service as of 11:00 A.M.
(Detroit time) two Business Days prior to the first day of such Interest Period,
or (b) in the event the rate referenced in the preceding subsection (a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum equal to the rate determined by the Administrative
Agent as the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
or (c) in the event the rates referenced in the preceding subsections (a) and
(b) are not available, the rate per annum determined by the Administrative Agent
(in its reasonable discretion) as the rate of interest at which Dollar deposits
(for delivery on the first day of such Interest Period) in same day funds in the
approximate amount of the applicable Eurodollar Borrowing and with a term
equivalent to such Interest Period would be offered by the Administrative
Agent's Eurodollar Office to major banks in the offshore Dollar market at their
request at approximately 11:00 a.m. (Detroit time) two Business Days prior to
the first day of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Notice of Entire Agreement, all instruments, certificates and agreements now or
hereafter executed or delivered to the Administrative Agent or any Lender
pursuant to any of the foregoing or in connection with the obligations of the
Borrowers under this Agreement and the other Loan Documents or any commitment
regarding such obligations, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
"Loans" means the loans made by the Lenders to a Borrower pursuant to
this Agreement.
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"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of Xxxxx and
its Subsidiaries, taken as a whole, (b) the validity or enforceability against
the Borrowers of any of the Loan Documents or (c) the rights of or benefits
available to the Administrative Agent or the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any Borrower or any of their Material Subsidiaries in an aggregate principal
amount exceeding $7,500,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations in respect of any Swap Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Swap Agreement were
terminated at such time.
"Material Subsidiary" means M-I LLC and each other Subsidiary of Xxxxx
with assets comprising 5% or more of the aggregate fair market value of all
assets of Xxxxx and its Subsidiaries on a consolidated basis or with a tangible
net worth comprising 5% or more of the tangible net worth of Xxxxx and its
Subsidiaries on a consolidated basis.
"M-I LLC" means M-I L.L.C., a Delaware limited liability company.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Notes" shall have the meaning assigned to such term in Section 2.02(a)
hereof.
"Notice of Entire Agreement" means a notice of entire agreement
executed by Borrowers and the Administrative Agent, as the same may from time to
time be amended, modified, supplemented or restated.
"Obligations" means, as at any date of determination thereof, the sum
of the following: (i) the aggregate principal amount of Loans outstanding
hereunder, plus (ii) the aggregate amount of the LC Exposure.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Participant" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
10
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with the provisions of this Agreement;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) Liens, pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure insurance obligations and the performance of
bids, trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment and similar liens in respect of judgments that do not
constitute an Event of Default under this Agreement; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances and restrictions on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of a Borrower or any of their Subsidiaries;
(g) Liens arising from Swap Agreements;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which a Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means, on any day, the prime rate of Comerica Bank in
effect for that day at the principal offices of Comerica Bank in Detroit,
Michigan. The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate or a favored rate, and Administrative Agent and each
Lender disclaims any statement, representation or warranty to the contrary.
Administrative Agent or any Lender may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
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"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures and unused Revolving Commitments representing more than 50% of the sum
of the total Revolving Exposures and unused Revolving Commitments at such time.
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the applicable Revolving Commitment.
"Revolving Commitment" means a Tranche A Revolving Commitment or a
Tranche B Revolving Commitment.
"Revolving Exposure" means Tranche A Revolving Exposure or Tranche B
Revolving Exposure.
"Revolving Loan" means a Tranche A Revolving Loan or a Tranche B
Revolving Loan made pursuant to Section 2.01.
"Revolving Maturity Date" means July ____, 2005.
"S&P" means Standard & Poor's Ratings Group.
"Xxxxx" means Xxxxx International, Inc., a Delaware corporation.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject, for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
12
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, Controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more Subsidiaries of the parent or
by the parent and one or more Subsidiaries of the parent.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of a Borrower or any of their Subsidiaries shall be a Swap
Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Tranche A Revolving Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make Tranche A Revolving Loans and to
acquire participations in Letters of Credit issued at the request of Xxxxx,
expressed as an amount representing the maximum aggregate amount of such
Lender's Tranche A Revolving Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Tranche A Revolving Commitment
is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to
which such Lender shall have assumed its Tranche A Revolving Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche A Revolving
Commitments is $400,000,000. The aggregate Tranche A Revolving Commitments shall
be automatically reduced from time to time by the aggregate Tranche B Revolving
Exposure of the Lenders.
"Tranche B Revolving Commitment" means, with respect to each Lender,
the commitment, if any, of such Lender to make Tranche B Revolving Loans and to
acquire participations in Letters of Credit issued at the request of M-I LLC,
expressed as an amount representing the maximum aggregate amount of such
Lender's Tranche B Revolving Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Tranche B Revolving Commitment
is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to
which such Lender shall have assumed its Tranche B Revolving Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche B Revolving
Commitments is $150,000,000.
"Tranche A Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Tranche A
Revolving Loans and its LC Exposure at such time attributable to Letters of
Credit requested by Xxxxx.
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"Tranche B Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Tranche B
Revolving Loans and its LC Exposure at such time attributable to Letters of
Credit requested by M-I LLC.
"Tranche A Revolving Loan" means a Loan made pursuant to Section
2.01(a).
"Tranche B Revolving Loan" means a Loan made pursuant to Section
2.01(b).
"Transactions" means (a) the execution, delivery and performance by
each Borrower of the Loan Documents to which it is to be a party, the borrowing
of Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder and (b) the execution, delivery and performance by the Borrowers of
each other document and instrument required to satisfy the conditions precedent
to the initial Loan hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.03 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with
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GAAP, as in effect from time to time; provided that, if a Borrower notifies the
Administrative Agent that such Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrowers that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits
SECTION 2.01 Revolving Commitments.
(a) Subject to the terms and conditions set forth herein, each Lender
agrees to make Tranche A Revolving Loans to Xxxxx from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Tranche A Revolving Exposure exceeding such Lender's
Tranche A Revolving Commitment. Within the foregoing limits and subject to the
terms and conditions set forth herein, Xxxxx may borrow, prepay and reborrow
Tranche A Revolving Loans.
(b) Subject to the terms and conditions set forth herein, each Lender
agrees to make Tranche B Revolving Loans to M-I LLC from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Tranche B Revolving Exposure exceeding such Lender's
Tranche B Revolving Commitment. Within the foregoing limits and subject to the
terms and conditions set forth herein, M-I LLC may borrow, prepay and reborrow
Tranche B Revolving Loans.
(c) The Borrowers, Administrative Agent and the Lenders agree pursuant
to Chapter 346 ("Chapter 346") of the Texas Finance Code, that Chapter 346
(which relates to open-end line of credit revolving loan accounts) shall not
apply to this Agreement, the Notes or any Revolving Loan and that neither the
Notes nor any Revolving Loan shall be governed by Chapter 346 or subject to its
provisions in any manner whatsoever.
SECTION 2.02 Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
of the same Type made by the Lenders ratably in accordance with their respective
Revolving Commitments. The failure of any Lender to make any Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Revolving Commitments of the Lenders are several and no Lender
shall be responsible for any other Lender's failure to make Loans as required.
The Tranche A Revolving Loans made by each Lender shall be evidenced by a single
Note of Xxxxx in substantially the form of Exhibit B-1 payable to the order of
such Lender in a principal amount equal to the applicable Tranche A Revolving
Commitment of such Lender, and otherwise duly completed and the Tranche B
Revolving Loans made by each Lender shall be
15
evidenced by a single Note of M-I LLC in substantially the form of Exhibit B-2
payable to the order of such Lender in a principal amount equal to the
applicable Tranche B Revolving Commitment of such Lender, and otherwise duly
completed (such notes, together with all renewals, extensions, modifications and
replacements thereof and substitutions therefor, being herein called a "Note"
and collectively called the "Notes"). Each Lender is hereby authorized by the
applicable Borrower to endorse on the schedule (or a continuation thereof) that
may be attached to each Note of such Lender, to the extent applicable, the date,
amount, type of and the applicable period of interest for each Loan made by such
Lender to such Borrower hereunder, and the amount of each payment or prepayment
of principal of such Loan received by such Lender, provided, that any failure by
such Lender to make any such endorsement shall not affect the obligations of
such Borrower under such Note or hereunder in respect of such Loan.
(b) Subject to Section 2.12, each Revolving Loan shall be comprised
entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the applicable Borrower to repay such Loan in accordance with the
terms of this Agreement or otherwise result in an increased cost to the
Borrowers.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is equal to
$2,000,000 or an increment of $100,000 in excess thereof. At the time that each
ABR Revolving Loan is made, such Borrowing shall be in an aggregate amount that
is equal to $2,000,000 or an increment of $100,000 in excess thereof; provided
that an ABR Revolving Loan may be in an aggregate amount that is equal to the
entire unused balance of the total Tranche A Revolving Commitments or Tranche B
Revolving Commitments, as the case may be, or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e).
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of fourteen (14)
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date.
SECTION 2.03 Requests for Borrowings. To request a Revolving Loan, the
applicable Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than noon,
Detroit, Michigan time, three Business Days before the date of the proposed
Borrowing and (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
Detroit, Michigan time, on the date of the proposed Borrowing; provided that any
such notice of an ABR Revolving Loan to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e) may be given not later than
11:00 a.m., Detroit, Michigan time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed by
hand delivery or telecopy to the Administrative Agent on the same day as the
telephonic request of a written Borrowing Request in a form approved by the
16
Administrative Agent and signed by the applicable Borrower. Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the applicable Borrower's
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Loan, then the applicable Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing. Notwithstanding the foregoing, Borrowers acknowledge that
the applicable Borrower shall bear all risk of loss resulting from disbursements
made upon telephonic request.
SECTION 2.04 Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, any
Borrower may request the issuance of Letters of Credit for its own account, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Revolving Availability Period. In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by the applicable Borrower to, or entered into by the
applicable Borrower with, the Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the applicable
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this
17
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the applicable Borrower also shall submit a letter of credit application on the
Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
applicable Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure
shall not exceed $25,000,000 and (ii) in the case of a Letter of Credit
requested by Xxxxx, the total Tranche A Revolving Exposures shall not exceed the
total Tranche A Revolving Commitments or, in the case of a Letter of Credit
requested by M-I LLC, the total Tranche B Revolving Exposures shall not exceed
the total Tranche B Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date; provided that
any Letter of Credit with a one-year tenor may provide for the renewal thereof
for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (ii) above).
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the applicable
Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the applicable Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the applicable Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., Detroit, Michigan time, on the date that
such LC Disbursement is made, if the applicable Borrower shall have received
notice of such LC Disbursement prior to 11:00 a.m., Detroit, Michigan time, on
such date, or, if such notice has not been received by the applicable Borrower
prior to such time on such date, then not later than 1:00 p.m., Detroit,
Michigan time, on (i) the Business Day that the applicable Borrower receives
such notice, if such notice is received prior
18
to 11:00 a.m., Detroit, Michigan time, on the day of receipt, or (ii) the
Business Day immediately following the day that the applicable Borrower receives
such notice, if such notice is not received prior to such time on the day of
receipt; provided that the applicable Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.02 or Section
2.18 that such payment be financed with an ABR Revolving Loan in an equivalent
amount and, to the extent so financed, the applicable Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Loan. If the applicable Borrower fails to make such payment when due,
the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the applicable Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the applicable Borrower, in
the same manner as provided in Section 2.05 with respect to Loans made by such
Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the applicable
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans as contemplated
above) shall not constitute a Loan and shall not relieve the applicable Borrower
of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The applicable Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the applicable Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the applicable Borrower
to the extent of any direct damages (as opposed to consequential damages, claims
in respect of which are hereby waived by the Borrowers to the extent permitted
by
19
applicable law) suffered by the applicable Borrower that are caused by the
Issuing Bank's failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the applicable Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the applicable Borrower of its
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the applicable Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the applicable Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the applicable Borrower fails to reimburse
such LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.11(c) shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Bank shall be for the account of such Lender to
the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrowers, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the respective Borrowers
shall pay all applicable unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.10(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank
20
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that a Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, such Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the LC Exposure attributable to such
Borrower as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
described in clause (h) or (i) of Article VII. Each such deposit shall be held
by the Administrative Agent as collateral for the payment and performance of the
obligations of the applicable Borrower under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the applicable Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the applicable Borrower for the LC Exposure at such time or, if
the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the applicable Borrower
under this Agreement. If a Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to such
Borrower within three Business Days after all Events of Default have been cured
or waived.
SECTION 2.05 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 1:00
p.m., Detroit, Michigan time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to an account of
the applicable Borrower maintained with the Administrative Agent and designated
by the applicable Borrower in the applicable Borrowing Request; provided that
ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.04(e) shall be remitted by the Administrative Agent to the
Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may
21
assume that such Lender has made such share available on such date in accordance
with paragraph (a) of this Section and may, in reliance upon such assumption,
make available to the applicable Borrower a corresponding amount. If a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to the applicable Borrower to but excluding
the date of payment to the Administrative Agent, at (i) in the case of such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of a Borrower, the interest rate applicable to
ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.06 Interest Elections.
(a) Each Revolving Loan initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the applicable Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this Section.
The applicable Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the applicable
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if such
Borrower were requesting a Revolving Loan of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed by hand
delivery or telecopy to the Administrative Agent on the same day as such
telephonic request of a written Interest Election Request in a form approved by
the Administrative Agent and signed by the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
22
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the applicable Borrower shall be
deemed to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the applicable Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrowers, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.07 Termination, Reduction and Increase of Revolving
Commitments.
(a) Unless previously terminated, the Revolving Commitments shall
terminate on the Revolving Maturity Date.
(b) Xxxxx may at any time terminate, or from time to time reduce, the
Tranche A Revolving Commitments; provided that (i) each reduction of the Tranche
A Revolving Commitments shall be in an amount that is an integral multiple of
$5,000,000, (ii) Xxxxx shall not terminate the Tranche A Revolving Commitments
unless the Tranche B Revolving Commitments shall be terminated concurrently and
Xxxxx shall not reduce the Tranche A Revolving Commitments to an amount less
than the then current aggregate amount of the Tranche B Revolving Commitments,
and (iii) Xxxxx shall not terminate or reduce the Tranche A Revolving
Commitments if, after giving effect to any concurrent prepayment of the
applicable Revolving Loans in accordance with Section 2.09, the sum of the
Tranche A Revolving Exposures would exceed the total Tranche A Revolving
Commitments.
(c) M-I LLC may at any time terminate, or from time to reduce, the
Tranche B Revolving Commitments; provided that (i) each reduction of the Tranche
B Revolving Commitments shall be in an amount that is an integral multiple of
$5,000,000, (ii) M-I LLC may not reduce the Tranche B Revolving Commitments more
than once in any period of three (3) months, and (iii) M-I LLC shall not
terminate or reduce the Tranche B Revolving Commitments
23
if, after giving effect to any concurrent prepayment of the applicable Revolving
Loans in accordance with Section 2.09, the sum of the Tranche B Revolving
Exposures would exceed the total Tranche B Revolving Commitments.
(d) Provided further that no Default or Event of Default has occurred
and is continuing, the Borrowers may elect to increase the aggregate of the
Tranche B Revolving Commitments to an amount not exceeding $200,000,000 (or such
greater amount as the Required Lenders may approve in writing); provided that in
no event may the aggregate of the Tranche B Revolving Commitments exceed the
then current aggregate of the Tranche A Revolving Commitments.
(e) The applicable Borrower shall notify the Administrative Agent of
any election to terminate or reduce the Revolving Commitments under paragraph
(b) or paragraph (c) of this Section, at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. The Borrowers shall notify the Administrative Agent
of any election to increase the Revolving Commitments under paragraph (d) of
this Section, at least thirty days prior to the effective date of such
increases, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by a Borrower pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by a Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the applicable Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Tranche A
Revolving Commitments and any termination of the Tranche B Revolving Commitments
shall be permanent, but reductions or increases of the Tranche B Revolving
Commitments shall not. Each reduction and increase of the Revolving Commitments
shall be made ratably among the Lenders in accordance with their respective
Revolving Commitments.
SECTION 2.08 Repayment of Loans; Evidence of Debt.
(a) Xxxxx hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Tranche A Revolving Loan of such Lender on the Revolving Maturity Date and M-I
LLC hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Tranche B
Revolving Loan of such Lender on the Revolving Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received
24
by the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
SECTION 2.09 Prepayment of Loans.
(a) Each Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to the requirements of
this Section.
(b) The applicable Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Loan, not later than noon, Detroit,
Michigan time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Revolving Loan, not later than noon, Detroit,
Michigan time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid; provided that, if a notice
of optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.07, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.07. Promptly following receipt of any such
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount equal to
$2,000,000 or an increment of $100,000 in excess thereof.
SECTION 2.10 Fees.
(a) Xxxxx agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee, which shall accrue at the Applicable Margin on the
average daily unused amount of the Tranche A Revolving Commitment of such Lender
during the period from and including the date hereof to but excluding the date
on which such Tranche A Revolving Commitment terminates and M-I LLC agrees to
pay to the Administrative Agent for the account of each Lender a commitment fee,
which shall accrue at the Applicable Margin on the average daily unused amount
of the Tranche B Revolving Commitment of such Lender during the period from and
including the date hereof to but excluding the date on which such Tranche B
Revolving Commitment terminates. For purposes of computing such commitment fees,
a Tranche A Revolving Commitment of a Lender shall be deemed to be used to the
extent of the Tranche A Revolving Exposure plus the Tranche B Revolving Exposure
of such Lender plus the then current unused balance of the Tranche B Revolving
Commitments of such Lender and a Tranche B Revolving Commitment of a Lender
shall be deemed to be used to the extent of the Tranche B Revolving Exposure of
such Lender. Accrued commitment fees shall be payable in arrears on the first
day of January, April, July and October of each year and on the date on which
the applicable Revolving Commitments terminate, commencing on the first such
date to occur after
25
the date hereof. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(b) Each Borrower requesting a Letter of Credit hereunder agrees to pay
(i) to the Administrative Agent for the account of each Lender a participation
fee with respect to its participations in Letters of Credit requested by such
Borrower, which shall accrue at the same Applicable Margin as used to determine
the interest rate applicable to Eurodollar Revolving Loans on the average daily
amount of such Lender's applicable LC Exposure (excluding any portion thereof
attributable to applicable unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's applicable Revolving Commitment terminates and the date on which
such Lender ceases to have any applicable LC Exposure, and (ii) to the Issuing
Bank a fronting fee, which shall accrue at the rate of 1/8% per annum on the
average daily amount of the applicable LC Exposure (excluding any portion
thereof attributable to applicable unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date of termination of the applicable Revolving Commitments and the date on
which there ceases to be any applicable LC Exposure (with a minimum fronting fee
for each Letter of Credit of $250), as well as the Issuing Bank's standard fees
with respect to the amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Accrued participation fees and fronting fees
shall be due and payable on the first day of January, April, July and October of
each year, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the applicable
Revolving Commitments terminate and any such fees accruing after the date on
which the applicable Revolving Commitments terminate shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) Each Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between such Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances, absent manifest error in
the calculation or assessment of such fees.
SECTION 2.11 Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
lesser of (i) the Alternate Base Rate plus the Applicable Margin or (ii) the
Ceiling Rate.
26
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the lesser of (i) the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin or (ii) the Ceiling Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by any Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to the lesser of (i) the Ceiling Rate or (ii) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided in the preceding paragraphs of this Section or in the case of
any other amount, 2% plus the rate applicable to ABR Revolving Loans as provided
in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the applicable Revolving Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.12 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any
27
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as an ABR Borrowing; provided that if the circumstances giving rise to such
notice affect only one Type of Borrowings, then the other Type of Borrowings
shall be permitted.
SECTION 2.13 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
applicable Borrower will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the applicable Borrower will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender's or
the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the applicable Borrower and shall be
conclusive absent manifest error. The applicable Borrower shall pay such Lender
or the Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
28
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that no Borrower shall be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the applicable Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.14 Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked and is revoked
in accordance with the terms of this Agreement), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by a Borrower pursuant to Section 2.17, then,
in any such event, the applicable Borrower shall compensate each Lender for the
loss, cost and expense attributable to such event. Such loss, cost or expense to
any Lender shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for Dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the applicable Borrower and shall be conclusive
absent manifest error. The applicable Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.15 Taxes.
(a) Any and all payments by or on account of any obligation of any
Borrower hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; provided that
if any Borrower shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the applicable Borrower
shall make such
29
deductions and (iii) the applicable Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any applicable Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any applicable Indemnified Taxes or applicable Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of such Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the applicable Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrowers are located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrowers (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrowers as will permit such payments to be
made without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes or
"gross-up" payment as to which it has been indemnified by a Borrower or with
respect to which a Borrower has paid additional amounts pursuant to this Section
2.15, it shall pay over such refund to the applicable Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the applicable
Borrower under this Section 2.15 with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
applicable Borrower, upon the request of the Administrative Agent or such
Lender, agrees to repay the amount paid over to such Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be
30
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to any Borrower or any other Person.
SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.13,
2.14 or 2.15, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 1:00 p.m., Detroit, Michigan time), on the date
when due, in immediately available funds, without set-off, deduction or
counterclaim. Any amounts payable to the Administrative Agent that are received
after such time on any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 000 Xxxxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.13,
2.14, 2.15 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in Dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements,
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans and participations in LC Disbursements; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is
31
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to a Borrower or
any of their Subsidiaries or any of their Affiliates (as to which the provisions
of this paragraph shall apply). Each Lender agrees that it will not exercise any
right of set-off or counterclaim or otherwise obtain payment in respect of any
Obligation owed to it other than principal of and interest accruing on the Loans
and participations in the LC Disbursements, unless all of the outstanding
principal of and accrued interest on the Loans and LC Disbursements have been
paid in full. Each Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
applicable Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
applicable Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
without obligation, in reliance upon such assumption, distribute to the Lenders
or the Issuing Bank, as the case may be, the amount due. If the applicable
Borrower has not in fact made such payment when due, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to this Agreement, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations hereunder until all such unsatisfied
obligations are fully paid.
SECTION 2.17 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13, or if a
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or Affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not
32
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The applicable Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or if a
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
applicable Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04, including without limitation Section 9.04(f)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the applicable Borrower shall have
received the prior written consent of the Administrative Agent, which consent
shall not unreasonably be withheld, (ii) such assignor Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrowers
(in the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.13 or payments required
to be made pursuant to Section 2.15, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the applicable Borrower to
require such assignment and delegation cease to apply.
SECTION 2.18 Defaulting Lender.
(a) Notwithstanding anything to the contrary contained herein, in the
event any Lender (x) has refused (which refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available its portion of
any Loan or (y) notifies either the Administrative Agent or the applicable
Borrower that such Lender does not intend to make available its portion of any
Loan (if the actual refusal would constitute a breach by such Lender of its
obligations under this Agreement) (each, a "Lender Default"), all rights and
obligations hereunder of such Lender (a "Defaulting Lender") as to which a
Lender Default is in effect and of the other parties hereto shall be modified to
the extent of the express provisions of this Section while such Lender Default
remains in effect.
(b) Loans shall be made pro rata by Lenders (the "Non-Defaulting
Lenders") which are not Defaulting Lenders based on their respective Revolving
Commitments) and no Revolving Commitment of any Lender or any pro rata share of
any Loans required to be advanced by any Lender shall be increased as a result
of such Lender Default. Amounts received in respect of principal of any type of
Loans shall be applied to reduce the applicable Loans of each Lender pro rata
based on the aggregate of the outstanding Loans of that type of all Lenders at
the time of such application; provided, that, such amount shall not be applied
to any Loans of a Defaulting Lender at any time when, and to the extent that,
the aggregate amount of Loans of any Non-
33
Defaulting Lender exceeds such Non-Defaulting Lender's Revolving Commitment of
all Loans then outstanding.
(c) A Defaulting Lender shall not be entitled to give instructions to
the Administrative Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the other Loan Documents. All amendments,
waivers and other modifications of this Agreement and the other Loan Documents
may be made without regard to a Defaulting Lender and, for purposes of the
definition of "Required Lenders," a Defaulting Lender shall be deemed not to be
a Lender and not to have Loans outstanding.
(d) Other than as expressly set forth in this Section, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify the
Administrative Agent) and the other parties hereto shall remain unchanged.
Nothing in this Section shall be deemed to release any Defaulting Lender from
its obligations under this Agreement and the other Loan Documents, shall alter
such obligations, shall operate as a waiver of any default by such Defaulting
Lender hereunder, or shall prejudice any rights which any Borrower, the
Administrative Agent or any Lender may have against any Defaulting Lender as a
result of any default by such Defaulting Lender hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of the Administrative Agent the breach which caused a Lender to
become a Defaulting Lender, such Defaulting Lender shall no longer be a
Defaulting Lender and shall be treated as a Lender under this Agreement and the
other Loan Documents.
SECTION 2.19 Xxxxx Guaranty of Obligations of M-I LLC. Xxxxx, as a
primary obligor and not as a surety, unconditionally guarantees to
Administrative Agent for the ratable benefit of Lenders the full, prompt and
punctual payment of the Tranche B Revolving Loans, together with accrued and
unpaid interest attributable thereto, and the LC Exposure attributable to
Letters of Credit requested by M-I LLC and all other liabilities and
obligations, now or hereafter created or incurred, of M-I LLC under this
Agreement and the other Loan Documents (herein collectively called the
"Guaranteed Debt") when due (whether at its stated maturity, by acceleration or
otherwise) in accordance with the Loan Documents. The foregoing guaranty is
irrevocable, unconditional and absolute, and if for any reason all or any
portion of the Guaranteed Debt shall not be paid when due, Xxxxx will
immediately pay the Guaranteed Debt to Administrative Agent or other Person
entitled to it, in Dollars, regardless of (a) any defense, right of set-off or
counterclaim which M-I LLC may have or assert and (b) whether Administrative
Agent or any Lender or any other Person shall have taken any steps to enforce
any rights against any obligor or any other Person to collect any of the
Guaranteed Debt. The Guaranteed Debt shall include, to the extent permitted by
applicable law, interest and other liabilities accruing or arising in connection
with the applicable obligations after (a) commencement of any case under any
bankruptcy or similar laws by or against M-I LLC or (b) the obligations of M-I
LLC shall cease to exist by operation of law or for any other reason. The
liability of Xxxxx under this Section shall be unconditional irrespective of (i)
any lack of enforceability of the applicable obligations, (ii) any change of the
time, manner or place of payment, or any other term, of the applicable
obligations, provided, however, that unless Xxxxx expressly consents in writing
to an extension of the Revolving Maturity Date, the guaranty provided under this
Section shall not apply to any principal advances made or Letters of Credit
issued after the Revolving Maturity Date last
34
consented to in writing by Xxxxx; provided further, however, that the guaranty
provided under this Section shall continue in full force and effect as to all
other amounts comprising the Guaranteed Debt, (iii) any exchange, release, or
non-perfection of any collateral securing payment of the applicable obligations,
(iv) any law, regulation or order of any jurisdiction affecting any term of the
applicable obligations or the rights of Administrative Agent or any Lender with
respect thereto, and (v) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, M-I LLC, save and except any
circumstances involving fraud, bad faith, or gross negligence on the part of
Administrative Agent or any Lender. Xxxxx waives promptness, diligence, and
notices with respect to the applicable obligations and the guaranty provided
under this Section and any requirement that Administrative Agent or any Lender
exhaust any right to take any action against M-I LLC or any collateral security.
Xxxxx agrees that it shall never be entitled to be subrogated to any of
Administrative Agent's or any Lender's rights against any obligor or any other
Person or any other collateral or offset rights held by Administrative Agent or
any Lender for payment of the applicable obligations until final termination of
the guaranty provided under this Section. Xxxxx agrees that, if at any time all
or any part of any payment previously applied by Administrative Agent or any
Lender to the Guaranteed Debt is or must be returned by Administrative Agent or
any Lender--or recovered from Administrative Agent or any Lender--for any reason
(including the order of any bankruptcy court), the guaranty provided under this
Section shall automatically be reinstated to the same effect as if the prior
application had not been made. Subject to the automatic reinstatement provisions
of the preceding sentence, the guaranty provided under this Section shall
terminate and be of no further force or effect upon full payment of the
Guaranteed Debt and final termination of the obligation--if any--to make any
further advances to, or to issue any further Letters of Credit at the request
of, M-I LLC under the Loan Documents.
ARTICLE III
Representations and Warranties
The Borrowers represent and warrant to the Lenders that:
SECTION 3.01 Organization; Powers. Each of the Borrowers and their
Material Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required.
SECTION 3.02 Authorization; Enforceability. The Transactions to be
entered into by each Borrower are within such Borrower's powers and have been
duly authorized by all necessary action. This Agreement has been duly executed
and delivered by the Borrowers and constitutes, and each other Loan Document to
which any Borrower is to be a party, when executed and delivered by such
Borrower, will constitute, a legal, valid and binding obligation of the
applicable Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
35
SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a)
do not require any material consent or approval of, registration or filing with,
or any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of any Borrower or any of their Material Subsidiaries or any order of
any Governmental Authority, (c) will not violate or result in a default under
any material indenture, agreement or other instrument binding upon any Borrower
or any of their Material Subsidiaries or their assets, or give rise to a right
thereunder to require any payment to be made by any Borrower or any of their
Material Subsidiaries, and (d) will not result in the creation or imposition of
any Lien on any asset of any Borrower or any of their Material Subsidiaries.
SECTION 3.04 Financial Condition. Xxxxx has heretofore furnished to the
Administrative Agent its consolidated balance sheet and statements of
operations, stockholders' equity and cash flows as of and for the fiscal years
ended December 31, 2000 and December 31, 2001, reported on by Xxxxxx Xxxxxxxx
LLP, independent public accountants. Xxxxx has also furnished to the
Administrative Agent its consolidated balance sheet and statements of operations
and cash flows as of and for the fiscal quarter ended March 31, 2002, certified
by the chief financial officer of Xxxxx. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of Xxxxx and its consolidated Subsidiaries as of such
dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the March 31, 2002
statements referred to above. Since December 31, 2001 through the date of
Borrowers' execution of this Agreement, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of Xxxxx and its Subsidiaries, taken as a whole, other than as a
result of industry conditions generally.
SECTION 3.05 Properties.
(a) Each of the Borrowers and their Material Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Borrowers and their Material Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrowers and their Material Subsidiaries does not infringe upon the rights of
any other Person, except for any such infringements that could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.06 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrowers, threatened against or affecting any Borrower or any of their Material
Subsidiaries (i) as to which, in the reasonable judgment of the Borrowers, there
is a reasonable possibility of an adverse
36
determination and that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect or (ii) that involve any of the Loan
Documents or the Transactions.
(b) Except with respect to any other matters that, in the reasonable
judgment of the Borrowers, could not reasonably be expected to result in a
Material Adverse Effect, neither any Borrower nor any of their Material
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
SECTION 3.07 Compliance with Laws and Agreements. Each of the Borrowers
and their Material Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing.
SECTION 3.08 Investment and Holding Company Status. Neither any
Borrower nor any of their Material Subsidiaries is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.09 Taxes. Each of the Borrowers and their Material
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the applicable Borrower or Material
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans, in each of such cases so as to cause a Material Adverse Effect.
SECTION 3.11 Disclosure. Each of the Borrowers has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
such Borrower or any of its Material Subsidiaries is subject, and all other
matters known to the Borrowers, that could
37
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in the light of the circumstances under which they were made, not
misleading.
ARTICLE IV
Conditions
SECTION 4.01 Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) counterparts of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed counterparts of this Agreement.
(b) The Administrative Agent (or its counsel) shall have received from
the Borrowers an original of each applicable Note signed on behalf of the
applicable Borrower.
(c) The Administrative Agent (or its counsel) shall have received from
Borrowers and from each other party to the Loan Documents (other than the Notes)
either (i) counterparts of each applicable Loan Document signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of the
applicable Loan Document) that such party has signed counterparts of such Loan
Document.
(d) The Administrative Agent shall have received written opinions
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of (i) Xxxx Xxxxxx, General Counsel of Xxxxx, (ii) Xxxxxxx Xxxxxxxx,
General Counsel of M-I LLC and (iii) Gardere Xxxxx Xxxxxx LLP, counsel for the
Borrowers, in form and substance satisfactory to the Administrative Agent and
its counsel, covering such other matters relating to the Borrowers, the Loan
Documents or the Transactions as the Required Lenders shall reasonably request.
(e) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Borrower, the
authorization of the Transactions and any other legal matters relating to the
Borrowers, the Loan Documents or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(f) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a Financial
Officer of each of the
38
Borrowers, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.
(g) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be reimbursed
or paid by any Borrower hereunder or under any other Loan Document.
(h) The Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the existing syndicated credit facilities of
Xxxxx and M-I LLC (under
credit agreements, each dated as of April 4, 1996, as
amended) shall have been terminated.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02 Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to receipt of the request
therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Borrower set forth in
the Loan Documents shall be true and correct in all material respects on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing and
there shall have occurred no event which would be reasonably likely to have a
Material Adverse Effect.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
applicable Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Revolving Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrowers covenant and
agree with the Lenders that:
SECTION 5.01 Financial Statements; Ratings Change and Other
Information. The Borrowers will furnish to the Administrative Agent and each
Lender:
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(a) within 105 days after the end of each fiscal year, Xxxxx'x audited
consolidated balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by Deloitte & Touche LLP or other independent public accountants of
recognized national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
Xxxxx and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;
(b) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(c) within 60 days after the end of each fiscal quarter of each fiscal
year, Xxxxx'x unaudited (i) consolidated balance sheets as of the end of such
fiscal quarter and the preceding fiscal year-end period, (ii) related statements
of operations for such fiscal quarter and the then elapsed portion of the fiscal
year, and (iii) related statements of cash flows for the then elapsed portion of
the fiscal year, in the case of (ii) and (iii), setting forth in comparative
form the figures for the corresponding period of the previous fiscal year. The
quarterly financial statements should be certified by a Financial Officer of
Xxxxx as presenting fairly in all material respects the financial condition and
results of operations of the applicable Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(d) concurrently with any delivery of financial statements under clause
(a) or (c) above, a consolidating balance sheet and statement of operations of
M-I LLC for such period, certified by a Financial Officer of Xxxxx as presenting
fairly in all material respects the financial condition and results of
operations of M-I LLC in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(e) concurrently with any delivery of financial statements under clause
(a) or (c) above, a certificate of a Financial Officer of Xxxxx (i) certifying
as to whether, to the knowledge of such officer, a Default has occurred and, if
such officer has knowledge of the occurrence of a Default, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Section 5.09 and (iii) to the extent that any change in GAAP or
in the application thereof has occurred since the date of the audited financial
statements referred to in Section 3.04 which affects the financial statements
accompanying such certificate, specifying the effect of such change on such
financial statements;
(f) promptly after the same become publicly available, copies of each
Form 10-Q and Form 10-K filed by Xxxxx with the Securities and Exchange
Commission or with any Governmental Authority succeeding to any or all of the
functions of said Commission;
40
(g) promptly after Xxxxx'x or S&P shall have announced a change in the
rating established or deemed to have been established for the Index Debt,
written notice of such rating change; and
(h) promptly following any request therefore, such other information
regarding the operations, business affairs and financial condition of any
Borrower or any of their Subsidiaries, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02 Notices of Material Events. The Borrowers will, promptly
after becoming aware of the same, furnish to the Administrative Agent and each
Lender written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any
Borrower or any of their Affiliates that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, results in, or could reasonably be
expected to result in, a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03 Existence; Conduct of Business. The Borrowers will, and
will cause each of their Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.04 Payment of Obligations. The Borrowers will, and will cause
each of their Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) a
Borrower or its applicable Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
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SECTION 5.05 Maintenance of Properties; Insurance. The Borrowers will,
and will cause each of their Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. The Borrowers will,
and will cause each of their Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrowers will, and
will cause each of their Material Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice to the Borrowers, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07 Compliance with Laws. The Borrowers will, and will cause
each of their Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of the
Loans will be used only to refinance existing Indebtedness and for other working
capital needs and general corporate purposes. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations T, U
and X.
SECTION 5.09 Financial Covenants. Xxxxx will have and maintain, on a
consolidated basis:
(a) Debt to Capitalization Ratio - a Debt to Capitalization Ratio of
not greater than 40%.
(b) Interest Coverage Ratio - an Interest Coverage Ratio of not less
than 2.00 to 1.00.
ARTICLE VI
Negative Covenants
Until the Revolving Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrowers covenant and agree with
the Lenders that:
42
SECTION 6.01 Subsidiary Indebtedness. The Borrowers will not permit any
Subsidiary of Xxxxx (including without limitation M-I LLC) to create, incur,
assume or permit to exist any Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Schedule
6.01, all Indebtedness issuable under the instruments and documents set forth in
Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof;
(c) Indebtedness of any such Subsidiary to any other such Subsidiary;
(d) Indebtedness of any such Subsidiary as an account party in respect
of trade letters of credit;
(e) Indebtedness arising under Swap Agreements which have been entered
into for bona fide hedging purposes and not for speculative purposes; and
(f) other Indebtedness in an aggregate principal amount not exceeding,
at any one time outstanding, $150,000,000 minus secured Indebtedness of Xxxxx.
SECTION 6.02 Liens. The Borrowers will not, and will not permit any of
their Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of a Borrower or any of their
Subsidiaries existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or asset of a
Borrower or any of their Subsidiaries (other than proceeds of such property or
asset) and (ii) such Lien shall secure only those obligations which it secures
on the date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(c) any Lien existing on any property or asset prior to the acquisition
thereof by a Borrower or any of their Subsidiaries or existing on any property
or asset of any Person that becomes a Subsidiary of a Borrower after the date
hereof prior to the time such Person becomes a Subsidiary of a Borrower;
provided that (i) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Subsidiary of a Borrower, as the
case may be, (ii) such Lien shall not apply to any other property or assets of a
Borrower or any Subsidiary of a Borrower (other than proceeds of such property
or asset) and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary of a Borrower, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
43
(d) Liens on fixed or capital assets acquired, constructed or improved
by a Borrower or any of their Subsidiaries; provided that (i) such security
interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
a Borrower or any of their Subsidiaries (other than proceeds of such property or
asset); and
(e) other Liens securing Indebtedness in an aggregate principal amount
not exceeding, at any one time outstanding, $150,000,000 minus Indebtedness of
Subsidiaries of Xxxxx incurred under the exception set forth in Section 6.01(f)
hereof.
SECTION 6.03 Fundamental Changes.
(a) The Borrowers will not, and will not permit any of their
Subsidiaries to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets, or all or substantially all of the stock of any
of their Subsidiaries (in each case, whether now owned or hereafter acquired),
or liquidate or dissolve, except that, so long as at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing, (i) any Subsidiary of a Borrower may merge into Xxxxx in a
transaction in which Xxxxx is the surviving corporation, (ii) any Subsidiary of
a Borrower (other than M-I LLC) may merge into any other Subsidiary of a
Borrower in a transaction in which the surviving entity is a Subsidiary of a
Borrower, (iii) any Subsidiary of a Borrower may sell, transfer, lease or
otherwise dispose of its assets to a Borrower or to another Subsidiary of a
Borrower and (iv) any Subsidiary of a Borrower (other than M-I LLC) may
liquidate or dissolve if Xxxxx determines in good faith that such liquidation or
dissolution is in the best interests of Xxxxx and is not materially
disadvantageous to the Lenders.
(b) The Borrowers will not, and will not permit any of their
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrowers and their Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04 Transactions with Affiliates. The Borrowers will not, and
will not permit any of their Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the applicable Borrower or the applicable
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties and (b) transactions between or among a Borrower and its wholly owned
Subsidiaries not involving any other Affiliate.
SECTION 6.05 Restrictive Agreements. The Borrowers will not, and will
not permit any of their Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any
44
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of a Borrower or any Subsidiary of a Borrower to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary of a Borrower to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to a Borrower or any other Subsidiary of a Borrower or
to Guarantee Indebtedness of a Borrower or any other Subsidiary of a Borrower;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
6.05 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary of a Borrower pending such
sale, provided such restrictions and conditions apply only to the Subsidiary of
a Borrower that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness and (v) clause (a) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.
SECTION 6.06 Restrictions on M-I LLC Dividends. So long as there shall
be any outstanding Tranche B Revolving Exposure, M-I LLC will not make
distributions to the owners of its Equity Interests as such; provided, however,
that distributions of proceeds from equity offerings by M-I LLC shall not be
restricted by this Section.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of five Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of any Borrower in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been materially incorrect when made or deemed
made;
45
(d) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Sections 5.01 or 5.09 or in Article VI;
(e) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure shall
continue unremedied for a period of 30 days after the earlier of (i) such
Borrower becoming aware of such failure and (ii) notice thereof from the
Administrative Agent to such Borrower (which notice will be given at the request
of any Lender);
(f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity (other than the
voluntary prepayment, repurchase, redemption or defeasance thereof);
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of any Borrower or any of their Material Subsidiaries or the debts,
or of a substantial part of the assets, of any of them under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Borrower or any of their
Material Subsidiaries or for a substantial part of the assets of any of them,
and, in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;
(h) any Borrower or any of their Material Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Borrower or any of their
Material Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;
(i) any Borrower or any of their Material Subsidiaries shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;
(j) one or more judgments for the payment of money in an aggregate
amount in excess of $7,500,000 (exclusive of amounts covered by insurance) shall
be rendered against any Borrower or any of their Material Subsidiaries and the
same shall remain undischarged for a period of 45 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of any Borrower or any
of their Material Subsidiaries to enforce any such judgment;
46
(k) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
(l) a Change in Control shall occur;
(m) M-I LLC shall cease to be a Subsidiary of Xxxxx (unless all Tranche
B Revolving Exposure shall have been paid in full (or in respect of Letters of
Credit requested by M-I LLC, appropriate cash collateral shall have been
provided) and the right of M-I LLC to request additional Tranche B Revolving
Loans or Letters of Credit shall have been terminated);
then, and in every such event (other than an event described in clause (g) or
(h) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrowers, take either or both of the following actions,
at the same or different times: (i) terminate the Revolving Commitments, and
thereupon the Revolving Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrowers; and in case of any
event described in clause (g) or (h) of this Article, the Revolving Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Borrower or any of their Subsidiaries or any of
their other Affiliates as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have
47
any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by the Loan
Documents that the Administrative Agent is required to exercise in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Borrower or any of their Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct, BUT
REGARDLESS OF THE PRESENCE OF ORDINARY NEGLIGENCE. The Administrative Agent
shall not be deemed to have knowledge of any Default unless and until written
notice thereof is given to the immediate officers of the Administrative Agent
responsible for this Agreement by a Borrower or a Lender and is called a "notice
of default", and the Administrative Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for a Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may (and, in the
event (i) neither the
48
Administrative Agent nor any Affiliate, as a Lender, has any Revolving Exposure
or unused Revolving Commitment and (ii) the Required Lenders so request, the
Administrative Agent shall) resign at any time by notifying the Lenders, the
Issuing Bank and the Borrowers. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor, with the prior written consent of
the Borrowers (unless an Event of Default shall have occurred which is
continuing, in which event the Borrowers' consent shall not be required). If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent which shall be a bank with an office in
New York City, or an Affiliate of
any such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrowers and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01 Notices.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to Xxxxx or to M-I LLC, to 00000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000-0000, Attention: Xxxxxxxx Xxxxxx (Telecopy No.
281-233-5505);
(ii) if to the Administrative Agent, to Comerica Bank, 000
Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx
X. Xxxxxxx (Telecopy No. 313-222-5594); and
49
(iii) if to any other Lender, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or a
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 9.02 Waivers; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing Bank
or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Borrowers that are parties thereto, in
each case with the consent of the Required Lenders; provided that no such
agreement shall (i) except as expressly provided in Section 2.07(d), increase
the Tranche A Revolving Commitment or the Tranche B Revolving Commitment of any
Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration
50
of any Revolving Commitment, without the written consent of each Lender affected
thereby, (iv) change Section 2.16(b) or (c) in a manner that would alter the pro
rata sharing of payments required thereby or change Section 2.07(e) in a manner
that would alter the pro rata treatment required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vi) release Xxxxx from
any liability under Section 2.19 hereof without the written consent of each
Lender or (vii) terminate or modify any indemnity provided to a Lender hereunder
or under any other Loan Document without the written consent of such Lender;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or the Issuing Bank without the
prior written consent of the Administrative Agent or the Issuing Bank, as the
case may be.
SECTION 9.03 Expenses; Indemnity; Damage Waiver.
(a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrowers shall indemnify the Administrative Agent, the Issuing
Bank and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby or the enforcement of any obligations hereunder or under any
of the other Loan Documents, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property currently or formerly owned or operated
51
by any Borrower or any of their Subsidiaries, or any Environmental Liability
related in any way to any Borrower or any of their Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee (or any of its Related
Parties), BUT THE PRESENCE OF ORDINARY NEGLIGENCE SHALL NOT AFFECT THE
AVAILABILITY OF SUCH INDEMNITY.
(c) To the extent that any Borrower fails to pay any amount required to
be paid by it to the Administrative Agent or the Issuing Bank under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender's pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Issuing Bank in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon (without
duplication) its share of the sum of the total Revolving Exposures and unused
Revolving Commitments at the time.
(d) To the extent permitted by applicable law, neither any Borrower nor
any of their Subsidiaries shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than
three Business Days after written demand therefor.
SECTION 9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) no Borrower may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by any Borrower without
such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
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(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Revolving Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of: (A) the
Borrowers, provided that no consent of any Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined
below) or, if an Event of Default has occurred and is continuing, any other
assignee; and (B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee that is
a Lender immediately prior to giving effect to such assignment or an Affiliate
of such a Lender.
(ii) Assignments shall be subject to the following additional
conditions: (A) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the assigning
Lender's Revolving Commitment, neither the amount of the Revolving Commitment
retained by the assigning Lender nor the amount of the Revolving Commitment
being assigned (in each case, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent) shall be less than $10,000,000 unless the Borrowers and the
Administrative Agent otherwise consent, provided that no such consent of any
Borrower shall be required if an Event of Default has occurred and is
continuing; (B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement; (C) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; (D) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and (E) in the case of an assignment to a CLO (as defined below),
the assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, provided that the
Assignment and Assumption between such Lender and such CLO may provide that such
Lender will not, without the consent of such CLO, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such CLO.
For the purposes of this Section 9.04(b), the terms "Approved Fund" and "CLO"
have the following meanings:
"Approved Fund" means (a) a CLO and (b) with respect to any
Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in
the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the
53
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 9.04 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, absent manifest error, and the Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrowers, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of any Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Revolving Commitment and the Loans owing to it); provided that (A) such Lender's
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (C) the Borrowers, the Administrative Agent, the Issuing Bank
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and (D) no such participation may be sold to any entity which is
engaged principally in the oilfield products and services business unless the
Borrowers shall have given their prior written consent. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that
54
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.16(c) as though it were a
Lender.
(d) A Participant shall not be entitled to receive any greater payment
under Section 2.13 or 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers'
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.15 unless the
Borrowers are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.15(e) as though it were a Lender.
(e) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
(f) No Lender may pledge, assign or convey a participation interest in
its Tranche A Revolving Commitment, Tranche A Revolving Loans or LC Exposure
attributable to Letters of Credit requested by Xxxxx unless such Lender shall,
concurrently therewith pledge, assign or convey a participation in (as the case
may be) an equivalent share of its Tranche B Revolving Commitment, Tranche B
Revolving Loans or LC Exposure attributable to Letters of Credit requested by
M-I LLC (as the case may be).
SECTION 9.05 Survival. All covenants, agreements, representations and
warranties made by the Borrowers in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement
or any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Revolving Commitments have not expired or terminated. The
provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the
55
expiration or termination of the Letters of Credit and the Revolving Commitments
or the termination of this Agreement or any provision hereof.
SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of
Process.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF
NEW YORK.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of
New York sitting in
New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any
56
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Borrower or its properties
in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent required by any regulatory authority, (c) to
the extent required in the opinion of legal counsel by applicable
57
laws or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
any Borrower and its obligations, (g) with the consent of the Borrowers or (h)
to the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) is disclosed to the Administrative
Agent, the Issuing Bank or any Lender on a nonconfidential basis by a source
other than the Borrowers, which disclosure is not the result of a breach of a
duty of confidentiality owed by the discloser to a Borrower if such breach was
reasonably discoverable by the Administrative Agent, the Issuing Bank or the
applicable Lender, as the case may be. For the purposes of this Section,
"Information" means all information received from any Borrower relating to any
Borrower or its business, other than any such information that is known to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the applicable Borrower. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13 Interest Rate Limitation. Borrowers and the Lenders intend
to strictly comply with all applicable federal and New York laws, including
applicable usury laws (or the usury laws of any jurisdiction whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of New
York). Accordingly, the provisions of this Section shall govern and control over
every other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section, even if such provision declares
that it controls. As used in this Section, the term "interest" includes the
aggregate of all charges, fees, benefits or other compensation which constitute
interest under applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest, and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, using the actuarial method, during the full term of the
Notes. In no event shall any Borrower or any other Person be obligated to pay,
or any Lender have any right or privilege to reserve, receive or retain, (a) any
interest in excess of the maximum amount of nonusurious interest permitted under
the laws of the State of New York or the applicable laws (if any) of the United
States or of any other jurisdiction, or (b) total interest in excess of the
amount which such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Notes at the Ceiling Rate. The daily interest rates to be used in calculating
interest at the Ceiling Rate shall be determined by dividing the applicable
Ceiling Rate per annum by the number of days in the calendar year for which such
calculation is being made. None of the terms and provisions contained in this
Agreement or in any other Loan Document (including, without limitation, Article
VII hereof) which directly or indirectly relate to interest shall ever be
construed without reference to this Section, or be construed to create a
contract to pay for the use, forbearance or
58
detention of money at any interest rate in excess of the Ceiling Rate. If the
term of any Note is shortened by reason of acceleration or maturity as a result
of any Default or by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason any Lender at any time,
including but not limited to, the stated maturity, is owed or receives (and/or
has received) interest in excess of interest calculated at the Ceiling Rate,
then and in any such event all of any such excess interest shall be canceled
automatically as of the date of such acceleration, prepayment or other event
which produces the excess, and, if such excess interest has been paid to such
Lender, it shall be credited pro tanto against the then-outstanding principal
balance of the applicable Borrower's obligations to such Lender, effective as of
the date or dates when the event occurs which causes it to be excess interest,
until such excess is exhausted or all of such principal has been fully paid and
satisfied, whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.
59
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXX INTERNATIONAL, INC.,
a Delaware corporation
By:
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Name: Xxxxxxxx X. Xxxxxx
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Title: SVP, CFO and Treasurer
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M-I L.L.C.,
a Delaware limited liability company
By:
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Name: C.I.S. Rivers
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Title: VP, CFO and Treasurer
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