Common use of Mandatory Reduction Clause in Contracts

Mandatory Reduction. Cash Collateralization of Letters of -------------------------------------------------------- Credit. ------ (a) If on any day (i) the LC Obligations exceed the combined - Commitments on such day or (ii) the LC Obligations exceed the Borrowing Base on -- such day, the Borrower shall immediately deposit, or cause MRDS to deposit, into the applicable Custody Account Eligible Investments or reduce the LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, the sum of the Fair Market Value or Net Asset Value, as applicable, of each Alternative Investment carried in the applicable Custody Account exceeds the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Borrowing Base required at such time pursuant to this Agreement, the Borrower shall promptly pledge such additional number of Shares pursuant to the Pledge Agreement as shall be necessary to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% of the outstanding LC Obligations and such Collateral shall be placed in a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at the Administrative --------------------- Agent's office in the name of the Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Fronting Bank and the Lenders and the Borrower shall have no interest therein except as set forth in Section 7.

Mandatory Reduction. Cash Collateralization If the Borrower establishes any Accounts Receivable Financing Program(s) during the term of Letters of -------------------------------------------------------- Credit. ------this Agreement: (a) If on any day (i) with respect to the LC Obligations exceed first $200,000,000 (two hundred million dollars) of the combined - Commitments Accounts Receivable Financing Programs of the Borrower (regardless of the amount of accounts receivables securitized thereunder), the 364 Day Revolving Credit Commitment and the Revolving Credit Commitment shall together be reduced by an aggregate amount equal to 50% (fifty percent) of the size of such Accounts Receivable Financing Programs, such aggregate amount of such reduction to be allocated between the 364 Day Revolving Credit Commitment and the Revolving Credit Commitment on such day or a pro rata basis in proportion to the relative size of the 364 Day Revolving Credit Commitment and the Revolving Credit Commitment; and (ii) the LC Obligations 364 Day Revolving Credit Commitment and the Revolving Credit Commitment shall also be reduced by an aggregate amount equal to 100% (one hundred percent) of the size of such Accounts Receivable Financing Programs in excess of such $200,000,000 (two hundred million dollars) referred to in clause (i) above, such aggregate amount of such reduction to be allocated between the 364 Day Revolving Credit Commitment and the Revolving Credit Commitment on a pro rata basis in proportion to the relative size of the 364 Day Revolving Credit Commitment and the Revolving Credit Commitment; provided, however, that to the extent the 364 Day Revolving Credit Commitment is no longer outstanding or has been terminated or the reduction described in this paragraph (c) of Section 2.08 exceeds the outstanding 364 Day Revolving Credit Commitment, the Revolving Credit Commitment under this Agreement will be reduced accordingly. If after giving effect to the reduction of the 364 Day Revolving Credit Commitment or the Revolving Credit Commitment described in this paragraph (c) of this Section 2.08, (x) the total 364 Day Revolving Credit Exposures would exceed the Borrowing Base on -- such day, Total Commitments under (and as defined in) the Borrower shall immediately deposit364 Day Facility, or cause MRDS to deposit, into the applicable Custody Account Eligible Investments or reduce the LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, (y) the sum of the Fair Market Value or Net Asset Value, as applicable, Revolving Credit Exposures plus the aggregate principal amount of each Alternative Investment carried in outstanding Term Loans would exceed the applicable Custody Account exceeds the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Borrowing Base required at such time pursuant to Total Commitments under this Agreement, the Borrower shall promptly pledge such additional number of Shares pursuant immediately repay the loans under the 364 Day Facility and the Revolving Loans, as appropriate, in the amount equal to the Pledge Agreement as shall be necessary to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% of the outstanding LC Obligations and such Collateral shall be placed in a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at the Administrative --------------------- Agent's office in the name of the Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Fronting Bank and the Lenders and the Borrower shall have no interest therein except as set forth in Section 7.

Mandatory Reduction. If the Borrower or any Subsidiary receives any Net Cash Collateralization Proceeds from any of Letters of -------------------------------------------------------- Credit. ------the following events, the Aggregate Revolving Commitment shall be permanently reduced as set forth in this Section 2.07(b): (a) If on any day (i) On the LC Obligations exceed fifth Business Day following the combined - Commitments on such day or (ii) receipt of the LC Obligations exceed Net Cash Proceeds in respect of the Borrowing Base on -- such dayPermitted Senior Note Refinancing Indebtedness, the Borrower shall immediately deposit, or cause MRDS to deposit, into the applicable Custody Account Eligible Investments or reduce the LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, the sum of the Fair Market Value or Net Asset Value, as applicable, of each Alternative Investment carried in the applicable Custody Account exceeds the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Borrowing Base required at such time pursuant to this Agreement, the Borrower shall promptly pledge such additional number of Shares pursuant to the Pledge Agreement as Aggregate Revolving Commitment shall be necessary to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in reduced by an amount equal to 102% fifty percent (50%) of the outstanding LC Obligations and amount by which such Collateral shall be placed in a special collateral Net Cash Proceeds received by the Borrower or any Subsidiary (including without limitation any amounts received by the holders of the Senior Notes on account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at the Administrative --------------------- Agent's office in the name of the Borrower but under or any Subsidiary in connection with such refinancing transaction) exceed $200,000,000 (a “Refinancing Commitment Reduction”); provided that in no event shall the sole dominion and control Aggregate Revolving Commitment be reduced to an amount less than $108,000,000 as a result of any Refinancing Commitment Reduction. For purposes of this Section 2.07(b)(i), any call premium payable in respect of the Administrative Agent, for Senior Notes and all other costs and expenses attendant to the benefit retirement of the Fronting Bank Senior Notes shall be deducted from the calculation of Net Cash Proceeds in addition to (but without duplication of) any other costs that may be deducted in calculation of Net Cash Proceeds under clause (b) of the definition of Net Cash Proceeds. (ii) On the fifth Business Day following the receipt of any Net Cash Proceeds from any federal income tax refund in respect of tax year 2015 or earlier, the Aggregate Revolving Commitment shall be reduced by an amount equal to fifty percent (50%) of such Net Cash Proceeds (a “Refund Commitment Reduction”); provided that (A) in no event shall the Aggregate Revolving Commitment be reduced to an amount less than $108,000,000 as a result of any Refund Commitment Reduction and (B) any Refund Commitment Reduction may be waived or otherwise modified, in whole or in part, with the Lenders and written consent of the Borrower shall have no interest therein except as set forth in Section 7Required Lenders.

Mandatory Reduction. Cash Collateralization of Letters of -------------------------------------------------------- Credit. ------ (a) If on any day (i) the Tranche A LC Obligations exceed the combined - Tranche A Commitments on such day or (ii) the Tranche A LC Obligations exceed the Tranche A Borrowing Base on -- such day, the Borrower shall immediately deposit, or cause MRDS to deposit, deposit into the applicable Custody Account Eligible Investments or reduce the Tranche A LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, excess or (ii) the sum of Tranche B LC Obligations exceed the Fair Market Value combined Tranche B Commitments on such day or Net Asset Value, as applicable, of each Alternative Investment carried in the applicable Custody Account exceeds Tranche B LC Obligations exceed the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Tranche B Borrowing Base required at on such time pursuant to this Agreementday, the Borrower shall promptly pledge such additional number immediately deposit into the Custody Account Private Fund Investments or reduce the Tranche B LC Obligations, or a combination of Shares pursuant to the Pledge Agreement as shall be necessary foregoing, in an amount sufficient to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of ----------- any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% of the outstanding LC Obligations and such Collateral collateral shall be placed in a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at the Administrative --------------------- Agent's office in the --------------------- name of the Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Fronting Bank LC Administrator and the Lenders and the Borrower shall have no interest therein except as set forth in Section 7.-------

Mandatory Reduction. Cash Collateralization Effective as of Letters the Second Amendment Effective Date, the Revolving Credit Commitments shall be reduced to $100,000,000 and each Lender’s Revolving Credit Commitment shall be reduced ratably in proportion to such Lender’s Ratable Share and such reduction shall be accompanied by any necessary prepayment of -------------------------------------------------------- Creditthe Notes, together with accrued Commitment Fees, and the full amount of interest accrued on the principal sum to be prepaid, if any (and all amounts referred to in Section 5.10 [Indemnity] hereof) to the extent necessary to cause the aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced. ------ Effective as of , the date of the Income Tax Refund Reduction Event, the Revolving Credit Commitments shall be further reduced by an amount equal to $25,000,000 and each Lender’s Revolving Credit Commitment shall be reduced ratably in proportion to such Lender’s Ratable Share and such reduction shall be accompanied by any necessary prepayment of the Notes, together with accrued Commitment Fees, and the full amount of interest accrued on the principal sum to be prepaid, if any (aand all amounts referred to in Section 5.10 [Indemnity] hereof) If on any day to the extent necessary to cause the aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced. Effective as of the date of the Initial SWSI Sale Reduction Event, the Revolving Credit Commitments shall be further reduced by an amount equal to (i) $25,000,000 if such Initial SWSI Sale Reduction Event involves the LC Obligations exceed sale of SWSI Fluids, LLC or all or substantially all of the combined - Commitments on such day assets of SWSI Fluids, LLC or (ii) the LC Obligations exceed the Borrowing Base on -- such day, the Borrower shall immediately deposit, or cause MRDS to deposit, into the applicable Custody Account Eligible Investments or reduce the LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, the sum of the Fair Market Value or Net Asset Value, as applicable, of each Alternative Investment carried in the applicable Custody Account exceeds the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Borrowing Base required at such time pursuant to this Agreement, the Borrower shall promptly pledge such additional number of Shares pursuant to the Pledge Agreement as shall be necessary to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% the greater of $12,500,000 or the net book value of all assets then being sold if such Initial SWSI Sale Reduction Event involves the sale of a portion of the outstanding LC Obligations assets of SWSI Fluids, LLC, and each Lender’s Revolving Credit Commitment shall be reduced ratably in proportion to such Lender’s Ratable Share and such Collateral reduction shall be placed accompanied by any necessary prepayment of the Notes, together with accrued Commitment Fees, and the full amount of interest accrued on the principal sum to be prepaid, if any (and all amounts referred to in a special collateral account pursuant to arrangements satisfactory Section 5.10 [Indemnity] hereof) to the Administrative Agent (extent necessary to cause the "LC Collateral Account") at aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Administrative --------------------- Agent's office in Revolving Credit Commitments as so reduced. In the name event that the Initial SWSI Sale Reduction Event involved a sale of only a portion of the Borrower but assets of SWSI Fluids, LLC, upon the occurrence of the Subsequent SWSI Sale Reduction Event, the Revolving Credit Commitments shall be further reduced by an amount equal to the difference between $25,000,000 and the amount of the Revolving Credit Commitment reduction under the sole dominion and control Initial SWSI Sale Reduction Event so that the aggregate amount of the Administrative AgentRevolving Credit Commitment reductions under the Initial SWSI Sale Reduction Event and the Subsequent SWSI Sale Reduction Event equals $25,000,000, for the benefit and each Lender’s Revolving Credit Commitment shall be reduced ratably in proportion to such Lender’s Ratable Share and such reduction shall be accompanied by any necessary prepayment of the Fronting Bank Notes, together with accrued Commitment Fees, and the Lenders full amount of interest accrued on the principal sum to be prepaid, if any (and all amounts referred to in Section 5.10 [Indemnity] hereof) to the extent necessary to cause the aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced. Commitment Fees shall be accrued from and based upon the reduced Revolving Credit Commitments from each of the Second Amendment Effective Date, the date of the Income Tax Refund Reduction Event, the Initial SWSI Sale Reduction Event and the Borrower shall have no interest therein except Subsequent SWSI Sale Reduction Event, as set forth in Section 7appropriate.”

Mandatory Reduction. Cash Collateralization of Letters of -------------------------------------------------------- Credit. ------ (a) If on any day (i) the LC Obligations exceed the combined - Commitments on such day or (ii) the LC Obligations exceed the Borrowing Base on -- such day, the Borrower shall immediately deposit, or cause MRDS to deposit, into the applicable Custody Account Eligible Investments or reduce the LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, the sum of the Fair Market Value or Net Asset Valuei The Facility A Committed Sums and Facility B Committed Sums, as applicable, of each Alternative Investment carried in shall be permanently reduced to the applicable Custody Account exceeds amounts specified below on the Fair Market Value corresponding reduction date set forth below: MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS: The following amounts shall be applied to prepay the Facilities. (1) 100% of the Shares at net proceeds of any sale or issuance of equity of the time pledged Borrower, except as provided in CLAUSE (3) below or for Securities issued pursuant to employee stock options or similar plans; (2) 100% of the Pledge Agreementnet proceeds of any sale or other disposition by the Borrower or any of its subsidiaries of any assets (except for sales permitted under Section 9.10); (3) 100% of the first $25,000,000 of net proceeds resulting from the issuance by Borrower of convertible preferred securities or subordinated debt, thenand 75% of the net proceeds of any subordinated debt issued thereafter, shall be applied FIRST, to the extentprepayment of Facility B Principal Debt and reduction of Facility B Committed Sum and, if anySECOND, to the prepayment of Facility A Principal Debt and reduction of Facility A Committed Sum, each in accordance with this SECTION 3.2(C). All such proceeds shall be applied in the following priority: (A) first, to the permanent reduction of the Facility B Principal Debt and such amount shall be applied ratably to each remaining principal payment so that it is the Facility B Note matures on the Facility B Maturity Date, and (B) second, all remaining proceeds shall be applied to the reduction of the Facility A Principal Debt and shall permanently reduce the Facility A Committed Sum. 26 (ii The Facility B Committed Sum shall be permanently reduced on the last day of each calendar quarter by an amount necessary for Alternative Investments having to satisfy the scheduled reduction with a Fair Market Value or Net Asset Value, as applicable, final payment to be made on the Facility B Maturity Date equal to such excess to be taken into account in order to support the Borrowing Base required at such time pursuant to this Agreement, the Borrower shall promptly pledge such additional number of Shares pursuant to the Pledge Agreement as shall be necessary to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% of the all amounts then outstanding LC Obligations and such Collateral shall be placed in a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at the Administrative --------------------- Agent's office in the name of the Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Fronting Bank and the Lenders and the Borrower shall have no interest therein except as set forth in Section 7.Facility B.

Mandatory Reduction. Cash Collateralization of Letters of -------------------------------------------------------- Credit. --------------------------------------------------------------------- (a) If on any day (i) the Tranche A LC Obligations exceed the combined - Tranche A Commitments on such day or (ii) the Tranche A LC Obligations exceed the Tranche A Borrowing Base on -- such day, the Borrower shall immediately deposit, or cause MRDS to deposit, deposit into the applicable Custody Account Eligible Investments or reduce the Tranche A LC Obligations, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. If, at any time, excess or (ii) the sum of Tranche B LC Obligations exceed the Fair Market Value combined Tranche B Commitments on such day or Net Asset Value, as applicable, of each Alternative Investment carried in the applicable Custody Account exceeds Tranche B LC Obligations exceed the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Tranche B Borrowing Base required at on such time pursuant to this Agreementday, the Borrower shall promptly pledge such additional number immediately deposit into the Custody Account Private Fund Investments or reduce the Tranche B LC Obligations, or a combination of Shares pursuant to the Pledge Agreement as shall be necessary foregoing, in an amount sufficient to eliminate such excess. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% of the outstanding LC Obligations and such Collateral collateral shall be placed in a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at ---------------------- the Administrative --------------------- Agent's office in the name of the Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Fronting Bank LC Administrator and the Lenders and the Borrower shall have no interest therein except as set forth in Section 7.

Mandatory Reduction. Cash Collateralization Effective as of Letters the First Amendment Effective Date, the Revolving Credit Commitments shall be reduced to $175,000,000 and each Lender’s Revolving Credit Commitment shall be reduced ratably in proportion to such Lender’s Ratable Share and such reduction shall be accompanied by any necessary prepayment of -------------------------------------------------------- Creditthe Notes, together with accrued Commitment Fees, and the full amount of interest accrued on the principal sum to be prepaid, if any (and all amounts referred to in Section 5.10 [Indemnity] hereof) to the extent necessary to cause the aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced. ------Effective as of January 1, 2010, the Revolving Credit Commitments shall be further reduced to $125,000,000 and each Lender’s Revolving Credit Commitment shall be reduced ratably in proportion to such Lender’s Ratable Share and such reduction shall be accompanied by any necessary prepayment of the Notes, together with accrued Commitment Fees, and the full amount of interest accrued on the principal sum to be prepaid, if any (and all amounts referred to in Section 5.10 [Indemnity] hereof) to the extent necessary to cause the aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced. Commitment Fees shall be accrued from and based upon the reduced Revolving Credit Commitments from each of the First Amendment Effective Date and January 1, 2010, as appropriate.” (av) If on any day (i) the LC Obligations exceed the combined - Commitments on such day or (ii) the LC Obligations exceed the Borrowing Base on -- such day, the Borrower shall immediately deposit, or cause MRDS to deposit, into the applicable Custody Account Eligible Investments or reduce the LC Obligations, or do a combination Section 2.11 [Increase in Revolving Credit Commitments] of the foregoing, Credit Agreement is hereby deleted in an amount sufficient to eliminate such excess. If, at any time, the sum of the Fair Market Value or Net Asset Value, as applicable, of each Alternative Investment carried in the applicable Custody Account exceeds the Fair Market Value of the Shares at the time pledged pursuant to the Pledge Agreement, then, to the extent, if any, that it is necessary for Alternative Investments having a Fair Market Value or Net Asset Value, as applicable, equal to such excess to be taken into account in order to support the Borrowing Base required at such time pursuant to this Agreement, the Borrower shall promptly pledge such additional number of Shares pursuant to the Pledge Agreement as shall be necessary to eliminate such excessits entirety. (b) On the Final Maturity Date or, if earlier, the date the Obligations are accelerated pursuant to Section 7.2, and until the final ----------- expiration date of any Letter of Credit and thereafter so long as any Obligations are payable hereunder, the Borrower shall immediately cash collateralize such Letters of Credit with Cash and Cash Equivalents in an amount equal to 102% of the outstanding LC Obligations and such Collateral shall be placed in a special collateral account pursuant to arrangements satisfactory to the Administrative Agent (the "LC Collateral Account") at the Administrative --------------------- Agent's office in the name of the Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the Fronting Bank and the Lenders and the Borrower shall have no interest therein except as set forth in Section 7.