FOURTH AMENDMENT TO CREDIT AGREEMENT
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. DOUBLE ASTERISKS DENOTE OMISSIONS.
Exhibit 10.11
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated
as of February 23, 2023, relating to the Credit Agreement referred to below, is made by and among PROFRAC HOLDINGS II, LLC, a Texas limited liability company (the “Borrower”), PROFRAC HOLDINGS, LLC, a Texas limited liability company (“Holdings”), the Guarantors party hereto, each of the Lenders party hereto, the Swingline Lender, the Letter of Credit Issuers and JPMORGAN CHASE BANK, N.A., as the Agent and the Collateral Agent for the Lenders.
RECITALS
WHEREAS, the Borrower, Holdings and the other Obligors from time to time party thereto, the Lenders from time to time party thereto, the Letter of Credit Issuers from time to time party thereto, the Swingline Lender, the Agent and the Collateral Agent have entered into the Credit Agreement dated as of March 4, 2022 (as amended by that certain First Amendment to Credit Agreement dated as of July 25, 2022, that certain Second Amendment to Credit Agreement dated as of November 1, 2022, and that certain Third Amendment to Credit Agreement dated as of December 30, 2022 and as further amended, supplemented, waived or otherwise modified from time to time immediately prior to the effectiveness of this Amendment, the “Existing Credit Agreement”, and, as amended by this Amendment, and as further amended, restated, supplemented or otherwise modified from time to time after the effectiveness of this Amendment, the “Credit Agreement”);
WHEREAS, the Borrower, Holdings, the other obligors from time to time party thereto, the lenders from time to time party thereto (the “Term Lenders”) and Xxxxx Xxxxxxx Finance LLC, as administrative agent and collateral agent for the Term Lenders (in such capacity, the “Term Loan Agent”), have entered into that Term Loan Credit Agreement dated as of March 4, 2022 (as amended by that certain First Amendment to Term Loan Credit Agreement dated as of July 25, 2022, as amended by that certain Second Amendment, Consent and Limited Waiver to Term Loan Credit Agreement dated as of November 1, 2022, as amended by that certain Third Amendment, Consent and Limited Waiver to Term Loan Credit Agreement dated as of December 30, 2022, as amended by that certain Fourth Amendment to Term Loan Credit Agreement dated as of February 1, 2023 and as further amended, restated, amended and restated, extended, supplemented, waived or otherwise modified from time to time immediately prior to the date hereof, the “Existing Term Loan Credit Agreement”);
WHEREAS, the Borrower has notified the Agent, the Lenders, the Term Loan Agent and the Term Lenders that it is seeking, on or substantially concurrently with the Fourth Amendment Effective Date (as defined below), an amendment to the Existing Term Loan Credit Agreement to,
among other things, permit the consummation of the Performance Proppants Acquisition (as defined below) and [**] (the “Fifth Amendment to Term Loan Credit Agreement”);
WHEREAS, the Borrower has advised the Agent and the Lenders that the Borrower and/or Alpine desires to acquire directly or indirectly 100% of the issued and outstanding Stock in (a) Performance Proppants, LLC, a Texas limited liability company (“Performance Proppants”), (b) Red River Land Holdings, LLC, a Louisiana limited liability company (“Red River”), (c) Performance Royalty, LLC, a Louisiana limited liability company (“Performance Royalty”), (d) Performance Proppants International, LLC, a Louisiana limited liability company (“Performance International”) and (e) Sunny Point Aggregates, LLC, a Louisiana limited liability company (“Sunny Point”; Sunny Point together with Performance Proppants, Red River, Performance Royalty, Performance International and each their respective Subsidiaries, collectively, the “Performance Entities”), resulting in the Performance Entities becoming wholly owned direct or indirect Restricted Subsidiaries of the Borrower (such transaction, as further described in the Performance Proppants Acquisition Agreement referred to below, the “Performance Proppants Acquisition”);
WHEREAS, the Borrower has advised the Agent and the Lenders that the Borrower and/or Alpine, as applicable, desires to consummate the Performance Proppants Acquisition pursuant to that certain Membership Interest Purchase Agreement dated as of December 23, 2022, among (a) the Borrower, as “Purchaser” and (b) Performance Holdings I, LLC, a Louisiana limited liability company and Performance Holdings II, LLC, a Louisiana limited liability company, as “Sellers” (as executed, together with any other amendments, restatements, supplements or other modifications thereto in effect as of Fourth Amendment Effective Date, and any other amendments, restatements, supplements or modifications thereto, or any waivers or consents thereunder after the Fourth Amendment Effective Date to the extent not prohibited by the Credit Agreement, the “Performance Proppants Acquisition Agreement”); and
WHEREAS, the Borrower and the other Obligors have requested that the Lenders parties hereto hereby agree to (a) the increase in the Maximum Revolving Amount to $400,000,000, (b) permit the consummation of the Performance Proppants Acquisition, (c) [**] and (d) the other amendments to the Existing Credit Agreement provided for herein, in each case, subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto hereby covenant and agree as follows:
SECTION 1. Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Amendment, shall have the meaning ascribed to such term in the Credit Agreement. Unless otherwise indicated, all section references in this Amendment refer to the Existing Credit Agreement.
SECTION 2. Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, the Existing Credit Agreement shall be amended effective as of the Fourth Amendment Effective Date in the manner provided in this Section 2.
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1.1 of the Existing Credit Agreement is hereby replaced in its entirety with Schedule 1.1 attached hereto, and Schedule 1.1 attached hereto shall be deemed to be attached as Schedule 1.1 to the Credit Agreement as of the Fourth Amendment Effective Date. After giving effect to this Amendment and any Borrowings made on the Fourth Amendment Effective Date, (a) each Lender who holds Loans in an aggregate amount less than its Pro Rata Share of all Loans shall advance new Loans which shall be disbursed to the Agent and used to repay Loans outstanding to each Lender who holds Loans in an aggregate amount greater than its Applicable Percentage of all Loans, (b) each Lender’s participation in each Letter of Credit, if any, shall be automatically adjusted to equal its Pro Rata Share of the Aggregate Revolving Outstandings and (c) such other adjustments shall be made as the Agent shall specify so that the Aggregate Revolving Outstandings applicable to each Lender equals its Pro Rata Share of the Aggregate Revolving Outstandings. Notwithstanding anything to the contrary in Section 5.4 of the Credit Agreement, the Lenders hereby waive, and the Borrower shall not be required to make, any break funding payments owing to such Lender solely as a result of the reallocation of Loans and adjustments described in this Section 2(b).
7.4 to the Existing Credit Agreement is hereby replaced in its entirety with Schedule 7.4 attached hereto, and Schedule 7.4 attached hereto shall be deemed to be attached as Schedule 7.4 to the Credit Agreement as of the Fourth Amendment Effective Date.
8.11 to the Existing Credit Agreement is hereby replaced in its entirety with Schedule 8.11 attached hereto, and Schedule 8.11 attached hereto shall be deemed to be attached as Schedule 8.11 to the Credit Agreement as of the Fourth Amendment Effective Date.
SECTION 3. Conditions to Effectiveness. This Amendment shall become effective on the first date when, and only when, each of the conditions set forth below shall have been satisfied or waived in accordance with the terms herein (such date, the “Fourth Amendment Effective Date”):
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reasonably satisfactory to the Agent, certifying: (a) that attached to such certificate are a true and complete copy of the certificate of incorporation or formation and the limited liability company agreement or other organizational document of each Obligor, as in full force and effect on the Fourth Amendment Effective Date; (b) that attached to such certificate is a true and complete copy of resolutions duly adopted by the members or managers (or equivalent governing body) of each Obligor authorizing the transactions contemplated by this Amendment and the execution, delivery and performance of each Loan Document to be executed on the Fourth Amendment Effective Date (including this Amendment) to which such Obligor is a party; and (c) as to the incumbency and specimen signature of each officer and/or authorized signatory of the Obligors executing any Loan Document on the Fourth Amendment Effective Date;
By executing and delivering its signature page to this Amendment, each Lender acknowledges and agrees that the conditions precedent set forth in this Section 3 have been satisfied.
SECTION 4. Representations and Warranties of the Obligors. To induce the Agent and the Lenders party hereto to enter into this Amendment, each of the Borrower, Holdings and the
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other Obligors hereby represents and warrants to the Agent and each Lender that as of the Fourth Amendment Effective Date:
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any such representation or warranty which relates to a specified prior date, in which case such representations and warranties were true and correct in all material respects as of such prior date.
SECTION 5. Expenses. The Borrower hereby reconfirms the obligations of the Borrower to pay all reasonable and documented or invoiced out- of-pocket costs and expenses incurred by the Agent in connection with this Amendment, in each case, pursuant to Section 14.7 of the Credit Agreement.
SECTION 6. No Other Amendments or Waivers; Reaffirmation of the Obligors.
(i) the Credit Agreement and the other Loan Documents shall be unmodified and shall continue to be in full force and effect in accordance with their terms, (ii) the consents and agreements of the Agent and the Lenders set forth herein shall be limited strictly as written and shall not constitute a consent or agreement to any transaction not specifically described in connection with any such consent and/or agreement, and (iii) this Amendment shall not be deemed a waiver of any term or condition of any Loan Document and shall not be deemed to prejudice any right or rights which the Agent or any Lender may now have or may have in the future under or in connection with any Loan Document or any of the instruments or agreements referred to therein, as the same may be amended from time to time.
SECTION 8. No Reliance, Etc. For the avoidance of doubt, and without limitation of any other provisions of the Credit Agreement or the other Loan Documents, JPMorgan Chase Bank, N.A., in its capacity as Agent, shall be entitled to the benefits of Sections 13.3, 13.4 and 14.18 of the Credit Agreement as if such provisions were set forth in full herein mutatis mutandis.
SECTION 9. Amendment, Modification and Waiver. This Amendment may not be amended, modified or waived except in accordance with Section 12.1 of the Credit Agreement.
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SECTION 10. Integration; Effect of Modifications. This Amendment represents the entire agreement of the Borrower, the other Obligors, the Agent and the Lenders party hereto with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Credit Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. It is understood and agreed that each reference in each Loan Document to the Credit Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Credit Agreement as modified hereby and that this Amendment is a Loan Document.
SECTION 11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVERS; PROCESS AGENTS. THIS AMENDMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 14.3 OF THE CREDIT AGREEMENT IS HEREBY INCORPORATED BY REFERENCE INTO THIS AMENDMENT AS IF SUCH PROVISION WERE SET FORTH IN FULL HEREIN MUTATIS MUTANDIS AND SHALL APPLY HERETO.
SECTION 12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION 12 AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AMENDMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AMENDMENT.
SECTION 13. Severability. The illegality or unenforceability of any provision of this Amendment or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Amendment, the Credit Agreement, or any instrument or agreement required hereunder.
SECTION 14. Counterparts. This Amendment may be executed in any number of counterparts, and by each party hereto in separate counterparts, each of which shall be an original, but all of which shall together constitute one and the same agreement; signature pages may be
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detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Delivery of an executed counterpart of a signature page of this Amendment by facsimile transmission or other electronic transmission (e.g., a “pdf”, “tif” or similar format by electronic mail) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law. The Agent may require that any such documents and signatures be confirmed by a manually-signed original thereof, provided that the failure to request or deliver the same shall not limit the effectiveness of any facsimile or other electronic signature.
[Remainder of Page Intentionally Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Amendment as of the date first written above.
PROFRAC HOLDINGS II, LLC,
as the Borrower
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
PROFRAC HOLDINGS, LLC,
as Holdings
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
PROFRAC SERVICES, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
PROFRAC MANUFACTURING, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
BEST PUMP AND FLOW, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
ALPINE SILICA, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
FTS INTERNATIONAL SERVICES, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
FTS INTERNATIONAL MANUFACTURING, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
ALPINE MONAHANS, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
ALPINE MONAHANS II, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
AG PSC FUNDING LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
MONARCH SILICA, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
U.S. WELL SERVICES HOLDINGS, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
U.S. WELL SERVICES, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
USWS HOLDINGS LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
USWS FLEET 10, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
USWS FLEET 11, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
REV ENERGY HOLDINGS, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
REV ENERGY SERVICES, LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
PRODUCERS SERVICE HOLDINGS LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
PRODUCERS SERVICE COMPANY LLC
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
PRODUCERS SERVICE COMPANY – WEST LLC,
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
PRODUCERS SERVICE I, LLC
as a Guarantor
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
JPMORGAN CHASE BANK, N.A.,
as the Agent, the Swingline Lender, a Letter of Credit Issuer and a Xxxxxx
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Authorized Officer
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
BANK OF AMERICA, N.A.,
as a Letter of Credit Issuer and a Lender
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
FIFTH THIRD BANK, NATIONAL ASSOCIATION,
as a Letter of Credit Issuer and a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
XXXXXXX BUSINESS CREDIT A DIVISION OF XXXXXXX BANK, N.A.,
as a Lender
By: /s/ Xxxxxxxxxx Xxxxx
Name: Xxxxxxxxxx Xxxxx
Title: Director
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
BOKF, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxx Xxxxxxx Xxxx
Name: Xxxx Xxxxxxx Xxxx
Title: Vice President
[Signature Page to Fourth Amendment to Credit Agreement – ProFrac Holdings II, LLC]
EXHIBIT A
Conformed Credit Agreement (see attached)
Exhibit A to Fourth Amendment to Credit Agreement
CREDIT AGREEMENT
Dated as of March 4, 2022 among
PROFRAC HOLDINGS, LLC,
as Holdings,
PROFRAC HOLDINGS II, LLC,
as the Borrower,
THE OTHER GUARANTORS FROM TIME TO TIME PARTY HERETO,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO,
JPMORGAN CHASE BANK, N.A.,
as the Agent, the Collateral Agent, a Letter of Credit Issuer and the Swingline Lender, and
JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A.
and
FIFTH THIRD BANK, NATIONAL ASSOCIATION
as the Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
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ARTICLE II
LOANS AND LETTERS OF CREDIT
ARTICLE III INTEREST AND FEES
ARTICLE IV PAYMENTS AND PREPAYMENTS
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ARTICLE V
TAXES, YIELD PROTECTION AND ILLEGALITY
ARTICLE VI
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
ARTICLE VII
GENERAL WARRANTIES AND REPRESENTATIONS
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ARTICLE VIII
AFFIRMATIVE AND NEGATIVE COVENANTS
ARTICLE IX
4
CONDITIONS OF LENDING
Closing Date 208
ARTICLE X DEFAULT; REMEDIES
ARTICLE XI
TERM AND TERMINATION
ARTICLE XII
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
ARTICLE XIII
THE APPOINTED AGENTS
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ARTICLE XIV MISCELLANEOUS
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EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B FORM OF NOTICE OF BORROWING
EXHIBIT C FORM OF NOTICE OF CONTINUATION/CONVERSION EXHIBIT D FORM OF COMPLIANCE CERTIFICATE
EXHIBIT E FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT EXHIBIT F PERFECTION CERTIFICATES
EXHIBIT G FORM OF SOLVENCY CERTIFICATE
EXHIBIT H FORM OF CLOSING CERTIFICATE
EXHIBIT I [RESERVED]
EXHIBIT J-1 FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign
Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT J-2 FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign
Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT J-3 FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign
Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT J-4 FORM OF U.S. TAX COMPLIANCE CERTIFICATE (For Foreign
Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
EXHIBIT K FORM OF REVOLVING NOTE
EXHIBIT L FORM OF MONTHLY REPORT
EXHIBIT M FORM OF SHARED SERVICES AGREEMENT
EXHIBIT N FORM OF HOLDINGS LLC AGREEMENT
SCHEDULE 1.1 COMMITMENTS
SCHEDULE 1.1(a) EXISTING LETTERS OF CREDIT SCHEDULE 1.1(b) PERMITTED INVENTORY LOCATIONS SCHEDULE 1.1(c) SPECIFIED EXCLUDED ASSETS
SCHEDULE 1.1(d) SPECIFIED EXCLUDED ASSETS (THIRD AMENDMENT) SCHEDULE 1.2 GUARANTORS
SCHEDULE 1.3 IMMATERIAL SUBSIDIARIES SCHEDULE 1.4 UNRESTRICTED SUBSIDIARIES SCHEDULE 1.5 CLOSING DATE SECURITY DOCUMENTS SCHEDULE 6.4 COLLATERAL REPORTING
SCHEDULE 7.4 SUBSIDIARIES; STOCK SCHEDULE 8.11 PERMITTED INVESTMENTS SCHEDULE 8.12 DEBT
SCHEDULE 8.14 AFFILIATE TRANSACTIONS SCHEDULE 8.15 BUSINESSES CONDUCTED SCHEDULE 8.16 LIENS
SCHEDULE 8.17 RESTRICTIVE AGREEMENTS SCHEDULE 8.23 DEPOSIT ACCOUNTS SCHEDULE 8.27 HOLDINGS’ OPERATIONS
SCHEDULE 8.29 CERTAIN POST-CLOSING OBLIGATIONS
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SCHEDULE 9.1 EXISTING DEBT
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of March 4, 2022, among PROFRAC HOLDINGS, LLC, a Texas limited liability company (“Holdings,” as hereinafter further defined), PROFRAC HOLDINGS II, LLC, a Texas limited liability company (the “Borrower”), the other Guarantors (as hereinafter defined) party hereto, the Lenders (as hereinafter defined) and Letter of Credit Issuers (as hereinafter defined) from time to time party hereto and JPMORGAN CHASE BANK, N.A., as the Agent, the Collateral Agent and the Swingline Lender.
RECITALS:
WHEREAS, capitalized terms used and not defined herein shall have the respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, the Borrower has requested that, immediately upon the satisfaction in full (or waiver) of the applicable conditions precedent set forth in Section 9.1 below, the Lenders and Letter of Credit Issuers extend credit to the Borrower in the form of an asset-based revolving credit facility in an initial aggregate principal amount of $100,000,000 of Revolving Credit Commitments (the “Revolving Credit Facility”);
WHEREAS, the Lenders have indicated their willingness to extend such credit and the Letter of Credit Issuers have indicated their willingness to issue Letters of Credit, in each case on the terms and subject to the conditions set forth below;
WHEREAS, in connection with the foregoing and as an inducement for the Lenders and the Letter of Credit Issuers to extend the credit contemplated hereunder, the Borrower has agreed to secure all of its Obligations by granting to the Collateral Agent, for the benefit of the Secured Parties, a first priority lien (such priority subject to certain Xxxxx permitted hereunder and the Intercreditor Agreement) on substantially all of its assets with certain limited exceptions specifically set forth in the Loan Documents; and
WHEREAS, in connection with the foregoing and as an inducement for the Lenders and the Letter of Credit Issuers to extend the credit contemplated hereunder, each Guarantor has agreed to guarantee all of its Obligations and to secure its guarantees by granting to the Collateral Agent, for the benefit of the Secured Parties, a first priority lien (such priority subject to certain Liens permitted hereunder and the Intercreditor Agreement) on substantially all of its assets with certain limited exceptions specifically set forth in the Loan Documents.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
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ARTICLE I DEFINITIONS
meanings specified below unless the context otherwise requires:
“Account Debtor” means each Person obligated in any way on or in connection with an Account.
“Accounts” means, with respect to each Obligor, all of such Xxxxxxx’s now owned or hereafter acquired or arising accounts, as defined in the UCC, including any rights to payment of a monetary obligation for the sale or lease of goods or rendition of services, whether or not they have been earned by performance.
“Acquired EBITDA” means, with respect to any Acquired Entity or Business or any Converted Restricted Subsidiary for any period, the amount for such period of Consolidated EBITDA of such Acquired Entity or Business or any Converted Restricted Subsidiary (determined as if references to Holdings and the Restricted Subsidiaries in the definition of the term “Consolidated EBITDA” were references to such Acquired Entity or Business or any Converted Restricted Subsidiary and its subsidiaries that will become Restricted Subsidiaries), all as determined on a consolidated basis for such Acquired Entity or Business or any Converted Restricted Subsidiary in accordance with GAAP.
“Acquired Entity or Business” has the meaning specified in the definition of the term “Consolidated EBITDA.”
“Additional Lender” has the meaning specified in Section 2.6(d).
“Adjusted Daily Simple SOFR” means, with respect to any RFR Borrowing, an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) 0.10%; provided that if the Adjusted Daily Simple SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for purposes of this Agreement.
“Adjusted Term SOFR” means, with respect to any Term Benchmark Borrowing for any Interest Period, an interest rate per annum equal to (a) the Term SOFR for such Interest Period, plus (b) 0.10%; provided that if the Adjusted Term SOFR as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
“Adjustment Date” means the first day of each April, July, October and January, as applicable.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliated Insurance Entity” means an Affiliate of the Borrower that (a) is domiciled in the State of Texas, (b) is a captive insurance company, (c) is registered and licensed by all
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applicable federal, state and local insurance agencies or regulators, including the Texas
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Department of Insurance and (d) provides insurance policies to Holdings, the Borrower and its Restricted Subsidiaries at or below market rates.
“Affiliate” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise. The terms “controlling” and “controlled” shall have meanings correlative thereto.
“Agent” means JPMorgan, in its capacity as the administrative agent for the Lenders under this Agreement, or any successor agent appointed in accordance with this Agreement and the other Loan Documents.
“Agent Advances” has the meaning specified in Section 2.4(g).
“Aggregate Revolver Outstandings” means, at any date of determination and without duplication, the sum of (a) the unpaid principal balance of Revolving Loans, (b) one hundred percent (100%) of the aggregate undrawn face amount of all outstanding Letters of Credit and
(c) the aggregate amount of any Unpaid Drawings in respect of Letters of Credit. “Agreement” means this Credit Agreement.
“Agreement Date” means the date of this Agreement.
“Alpine” means Alpine Silica, LLC, a Texas limited liability company.
“Alpine Acquisition” means the acquisition by Holdings and/or its Affiliate(s) of 100% of the Stock of Alpine.
“Anti-Terrorism Laws” means the USA PATRIOT Act and any Executive Order administered by the U.S. Treasury Department Office of Foreign Assets Control (OFAC), and other laws and regulations relating to anti-money laundering, anti-corruption or economic sanctions, including without limitation all published economic sanctions imposed, administered or enforced from time to time by the U.S. Department of State and OFAC.
“Applicable Entities” has the meaning specified in Section 14.18.
“Applicable Margin” means a percentage per annum equal to (a) until the end of the first full Fiscal Quarter completed after the Closing Date, (i) for Term Benchmark Loans or RFR Loans (to the extent applicable), 1.75%, and (ii) for Base Rate Loans, 0.75% and (b) thereafter, the following percentages per annum, based upon Average Historical Availability as of the most recent
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Adjustment Date:
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Average Historical Availability |
|
Applicable Margin for Term Benchmark Loans and RFR Loans |
|
Applicable Margin for Base Rate Loans |
˃ 66.66% |
|
1.50% |
|
0.50% |
≤ 66.66% but > 33.33% |
|
1.75% |
|
0.75% |
< 33.33% |
|
2.00% |
|
1.00% |
The Applicable Margin shall be adjusted quarterly in accordance with the table above on each Adjustment Date for the period beginning on such Adjustment Date based upon the Average Historical Availability as the Agent shall determine in good faith within ten (10) Business Days after such Adjustment Date (with any such change, for the avoidance of doubt, being given retroactive effect to the Adjustment Date) and the Agent shall notify the Borrower promptly after such determination. Any increase or decrease in the Applicable Margin resulting from a change in the Average Historical Availability shall become effective on the Adjustment Date.
“Applicable Unused Line Fee Margin” means, for any day, a percentage per annum equal to (a) initially, 0.375% per annum and (b) following the end of the first Fiscal Quarter ending after the Closing Date, the following percentages per annum, based upon Average Revolving Loan Utilization as of the most recent Adjustment Date:
Average Revolving Loan Utilization |
|
Applicable Unused Line Fee Margin |
≤ 50% |
|
0.375% |
˃ 50% |
|
0.250% |
“Appointed Agents” has the meaning specified in Section 13.1. “Appraisal” has the meaning specified in Section 8.4.
“Approved Account Bank” means a financial institution at which any Obligor maintains an Approved Deposit Account.
“Approved Deposit Account” means each Deposit Account (other than any Designated Account) in respect of which an Obligor shall have entered into a Control Agreement.
“Approved Fund” means any Person (other than a natural person) that is engaged in making, holding or investing in extensions of credit in its ordinary course of business and is administered or managed by a Lender, an entity that administers or manages a Lender, or an Affiliate of either.
“Arrangers” means (a) JPMorgan, Bank of America, N.A. and Fifth Third Bank National Association, each in their capacity as a joint lead arranger of the Revolving Credit Facility and
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(b) JPMorgan, Bank of America, N.A. and Fifth Third Bank, National Association, each in their capacity as a joint bookrunner of the Revolving Credit Facility.
“Assignee” has the meaning specified in Section 12.2(a).
“Assignment and Acceptance” means an assignment and acceptance agreement entered into by one or more Xxxxxxx and Eligible Assignees (with the consent of any party whose consent is required by Section 12.2(a)), and accepted by the Agent, in substantially the form of Exhibit E or any other form approved by the Agent.
“Attorney Costs” means and includes all reasonable and documented or invoiced fees, expenses and other charges of (a) Xxxxxx & Xxxxxx L.L.P., as counsel to the Agent, (b) after the Closing Date, one additional counsel selected by, and as counsel for, the Required Lenders and their Affiliates, taken as a whole, and (c) if necessary, a single firm of local counsel in each relevant jurisdiction, or any other counsel selected by the Agent (in addition to Xxxxxx & Xxxxxx L.L.P. as counsel for the Agent and any additional counsel for the Required Lenders and their Affiliates, taken as a whole) otherwise retained with the Borrower’s consent (such consent not to be unreasonably withheld, conditioned or delayed).
“Attributable Indebtedness” when used with respect to any Sale Leaseback Transaction, as at the date of determination, the present value (discounted at a rate equivalent to the Borrower’s then-current weighted average cost of funds for borrowed money as at such date of determination, compounded on a semi-annual basis) of the total obligations of Holdings and each of its Restricted Subsidiaries that is the lessee under the applicable lease for payments of base or fixed rent under such lease for the then remaining term thereof (excluding any renewal terms, except to the extent Holdings and each of its Restricted Subsidiaries has exercised its right to renew such lease term for any such renewal term).
“Available Tenor” means, as of any date of determination and with respect to the then- current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 5.5(c)(iv).
“Availability” means, at any time (a) the lesser of (i) the Maximum Revolver Amount and
(ii) the Borrowing Base, minus (b) the sum of the Aggregate Revolver Outstandings.
“Available Equity Amount” means, at any time (the “Available Equity Amount Reference Time”), an amount equal to, without duplication, the sum of the following (but only to the extent Not Otherwise Applied) (a) the amount of any capital contributions or proceeds from equity issuances received as cash equity by the Borrower (from issuance of Stock of Holdings or Parent Entity) and applied for usage as Available Equity Amount no later than 270 days after receipt of such amounts in cash, but excluding all proceeds from the issuance of Disqualified Stock, Cure Amounts and the IPO, plus (b) the aggregate amount of all dividends, returns, interests, profits,
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distributions, income and similar amounts (in each case, to the extent paid in cash or Cash Equivalents) received by the Borrower or any Restricted Subsidiary on Investments made using the Available Equity Amount during the period from and including the Business Day immediately following the Closing Date through and including the Available Equity Amount Reference Time and applied for usage as Available Equity Amount no later than 270 days after receipt of such amounts in cash, minus (c) the sum, without duplication, and, without taking into account the proposed portion of the Available Equity Amount calculated above to be used at the applicable Available Equity Amount Reference Time, of:
provided that during a Cash Dominion Period (or if a Cash Dominion Period would result after giving effect such usage of the Available Equity Amount) (A) the Available Equity Amount shall not be available to be used and (B) the period of time for use set forth in clause (a) above shall be tolled until after such Cash Dominion Period (or, in the event that the Available Equity Amount is not available for usage because it would cause a Cash Dominion Period to occur, until after such Available Equity Amount is available for such usage without causing the occurrence of a Cash Dominion Period); provided further that the proceeds from the equity issuance in connection with the Alpine Acquisition and Best Pump Acquisition shall, in each case, not increase the Available Equity Amount.
“Available Equity Amount Reference Time” has the meaning specified in the definition of “Available Equity Amount.”
“Average Historical Availability” means, at any Adjustment Date, the average daily Availability for the three-month period immediately preceding such Adjustment Date, divided by the Maximum Credit at such time.
“Average Liquidity” means, for any period, the sum of the aggregate amount of Liquidity for each day in such period divided by the number of days in such period.
“Average Revolving Loan Utilization” means, at any Adjustment Date, the average daily Aggregate Revolver Outstandings (excluding any Aggregate Revolver Outstandings resulting from any outstanding Swingline Loans) for the three-month period immediately preceding such Adjustment Date (or, if less, the period from the Closing Date to such Adjustment Date), divided by the Maximum Revolver Amount at such time.
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“Back Stop Note” means that certain unsecured subordinated promissory note dated as of the Agreement Date, issued by Holdings to THRC Holdings, LP and/or its Affiliates (other than any Obligor) in the aggregate principal amount of $27,070,000.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank Product Reserve” means a reserve equal to the aggregate amount of Obligations in respect of any Noticed Hedge, up to the Swap Termination Value thereunder, as specified by the applicable Hedge Bank in writing to the Agent (with a copy to the Borrower), which amount may be increased with respect to any existing Secured Hedge Agreement at any time by further written notice from such Hedge Bank to the Agent (with a copy to the Borrower) (which shall at all times include a reserve for the aggregate Swap Termination Values for all Noticed Xxxxxx outstanding at that time).
“Bankruptcy Code” means Title 11 of the United State Code, as amended, or any similar federal or state law for the relief of debtors.
“Base Rate” means for any day a fluctuating rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1/2% of 1% and
(c) the Adjusted Term SOFR for a one month Interest Period as published two (2) U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day), plus 1.0%; provided that, for the purpose of this definition, the Adjusted Term SOFR for any day shall be based on the Term SOFR Reference Rate at approximately 6:00 a.m. New York City time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). If the Base Rate is being used as an alternate rate of interest pursuant to Section 5.5 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 5.5(c)), then the Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Base Rate as determined pursuant to the foregoing would be less than 1.00%, such rate shall be deemed to be 1.00% for purposes of this Agreement.
“Base Rate Loan” means any Loan during any period for which it bears interest based on the Base Rate, and all Agent Advances and Swingline Loans.
“Base Rate Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
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“Basel III” means, collectively, those certain agreements on capital requirements, leverage ratios and liquidity standards contained in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems,” “Basel III: International Framework for Liquidity Risk Measurement, Standards and Monitoring,” and “Guidance for National Authorities Operating the Countercyclical Capital Buffer,” each as published by the Basel Committee on Banking Supervision in December 2010 (as revised from time to time), and as implemented by a Lender’s primary U.S. federal banking regulatory authority or primary non-U.S. financial regulatory authority, as applicable.
“Basin Purchase and Sale Agreement” mean a Purchase and Sale Agreement dated as of February 9, 2022 by and among CSP IV Connect Acquisition, LLC, a Delaware limited liability company, Basin Special Situations LLC, a Delaware limited liability company, Basin Holdings LLC, a Delaware limited liability company, Basin Production and Completion LLC, a Delaware limited liability company, and Holdings, as amended, restated, supplemented and/or modified from time to time.
“Basin Units Acquisition” means the acquisition by Holdings of the Purchased BPC Units pursuant to the Basin Purchase and Sale Agreement.
“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 5.5(c)(i).
“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Agent for the applicable Benchmark Replacement Date:
provided that, if the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the
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spread adjustment, or method for calculating or determining such spread adjustment (which may
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be a positive or negative value or zero), that has been selected by the Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the appliable Benchmark Replacement Date and/or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice for the administration of any such Benchmark exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:
For the avoidance of doubt, (A) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the
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Reference Time for such determination and (B) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
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“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Best Pump” means Best Pump & Flow, LLC, a Texas limited liability company.
“Best Pump Acquisition” means the acquisition by Holdings and/or its Affiliate(s) of 100% of the Stock of Best Pump.
“Board of Directors” means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person, (b) in the case of any limited liability company, the sole manager or the board of managers or managing member, of such Person, (c) in the case of any partnership, the board of directors of the general partner of such Person and (d) in any other case, the functional equivalent of the foregoing.
“Book Value” means book value as determined in accordance with GAAP. “Borrower” has the meaning set forth in the preamble of this Agreement.
“Borrowing” means a borrowing hereunder consisting of Loans of one Type and Class made on the same day by Xxxxxxx to the Borrower (or by the Swingline Lender, in the case of a Borrowing consisting of Swingline Loans, or by the Agent, in the case of a Borrowing consisting of an Agent Advance, by a Letter of Credit Issuer, in the case of the issuance of a Letter of Credit hereunder).
“Borrowing Base” means, at any time, an amount in Dollars equal to:
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of such an Appraisal up to the lesser of (x) 50% of Eligible Inventory of the Obligors, valued at the lower of cost or market value, determined on a “first-in, first-out” basis and
(y) 10% of the Maximum Credit; minus
Subject to the last paragraph in this definition, the initial Borrowing Base shall be as set forth in the Borrowing Base Certificate delivered on the Closing Date. The Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Agent pursuant to Section 6.4, as adjusted to give effect to Reserves following such delivery established pursuant to Section 2.5.
Notwithstanding anything to the contrary herein, no Accounts (subject to clause (r) of the definition of Eligible Accounts) or Inventory (other than any Eligible Inventory to extent set forth in the proviso in clause (c) above and clause (q) of the definition of Eligible Inventory) acquired in connection with a Permitted Acquisition (including the Permitted FTS Acquisition) will be included in the determination of the Borrowing Base until the Agent shall have conducted an Appraisal and/or Field Examination of such Accounts or Inventory, as the case may be, the results of which shall be satisfactory to the Agent in its Reasonable Credit Judgment; provided that, any Accounts acquired by the Obligors directly or indirectly pursuant to the Permitted FTS Acquisition on the Closing Date (and any Accounts of the FTS Subsidiaries subsequently arising) may be included in the Borrowing Base regardless of whether a Field Examination reasonably satisfactory to the Agent has been conducted with respect thereto until such time as such Field Examination is required to be delivered pursuant to Section 8.29 (it being understood that during such period prior to the Agent’s receipt of such Field Examination, such Accounts may only be included in the calculation of the Borrowing Base to the extent such Accounts satisfy all of the criteria set forth in the definition of “Eligible Accounts” other than the requirement for such Accounts to be subject to a Field Examination reasonably satisfactory to the Agent).
“Borrowing Base Certificate” means a certificate by a Responsible Officer of the Borrower, substantially in the form of Exhibit A (or another form reasonably acceptable to the Agent) setting forth the calculation of the Borrowing Base, including a calculation of each component thereof, all in such detail as shall be reasonably satisfactory to the Agent, as adjusted pursuant to Section 2.5. All calculations of the Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall originally be made by the Borrower and certified to the Agent; provided, that the Agent shall have the right to review and adjust, in the exercise of its Reasonable Credit Judgment, any such calculation to the extent that such calculation is not in accordance with this Agreement and to adjust for Reserves in accordance with Section 2.5; provided, further, that the Agent shall provide the Borrower prior written notice of any such adjustment.
“BPC” means Basin Production and Completion LLC, a Delaware limited liability company.
“Business Day” means any day (other than a Saturday or a Sunday) on which banks are open for business in New York City; provided that, in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other
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dealings of such RFR Loan, any such day that is only an U.S. Government Securities Business Day.
“Capital Adequacy Regulation” means any guideline, request or directive of any central bank or other Governmental Authority, or any other Law, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.
“Capital Expenditures” means, with respect to Holdings and its Restricted Subsidiaries for any period, the aggregate of all expenditures incurred by Holdings and its Restricted Subsidiaries during such period for purchases of property, plant and equipment or similar items which, in accordance with GAAP (other than repairs in the ordinary course), are or should be included in the statement of cash flows of Holdings and its Restricted Subsidiaries during such period; provided that the term “Capital Expenditures” shall not include:
31
expenditure actually is made and (y) such book value shall have been included in capital expenditures when such asset was originally acquired.
“Capital Lease” means, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases on the balance sheet of such Person.
“Capital Lease Obligation” means, with respect to any Capital Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital Lease.
“Cash Dominion Period” means (a) any period commencing upon the date that Availability shall have been less than the greater of (i) 12.5% of the Maximum Credit and (ii) $30,000,000, for five (5) consecutive Business Days and continuing until the date on which Availability shall have been at least the greater of (y) 12.5% of the Maximum Credit and (z) $30,000,000 for twenty (20) consecutive calendar days or (b) any period commencing upon the occurrence of a Specified Event of Default, and continuing during the period that such Specified Event of Default shall be continuing.
“Cash Equivalents” means:
U.S. banks or other U.S. financial institutions and $100.0 million (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks or other non-U.S.
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financial institutions;
33
Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.
“Cash Management Bank” means (x) any Person that is a Lender, the Agent, an Arranger or any Affiliate of the foregoing at the time it provided or incurred any Cash Management Obligations or (y) any Person that shall have become a Lender, the Agent, an Arranger or an Affiliate of the foregoing at any time after it has provided or incurred any Cash Management Obligations.
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“Cash Management Document” means any certificate, agreement or other document executed by any Obligor or any of its Restricted Subsidiaries in respect of the Cash Management Obligations of any such Person.
“Cash Management Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of cash management or related services (including treasury, depository, return item, overdraft, controlled disbursement, credit, merchant store value or debit card, purchase card, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the ACH processing of electronic funds transfers through the Federal Reserve Fedline system) and other cash management arrangements) provided by any Cash Management Bank, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.
“Cash Receipts” has the meaning specified in Section 8.23(c).
“Casualty Event” means any event that gives rise to the receipt by Holdings, the Borrower or any Restricted Subsidiary of any insurance proceeds or any condemnation awards in respect of any Property (other than Stock).
“CAT Equipment Lease Agreement” means that certain Master Rental and Services Agreement for Well Services effective as of February 5, 2021, between REV Energy Services, LLC and Caterpillar Oil and Gas Services, LLC, as amended from time to time, together with that certain Schedule No. 1 Master Rental and Services Agreement, between REV Energy Services, LLC and Caterpillar Oil and Gas Services, LLC and effective on February 23, 2021.
“CAT Equipment Loan Documents” means, (a) collectively, that certain Second Amended and Restated Loan and Security Agreement dated as of March 8, 2022, between REV Energy Services, LLC, as borrower, and Caterpillar Financial Services Corporation, as lender, and all related promissory notes, instruments or similar documents entered into in connection therewith, in an aggregate original principal amount not to exceed $5,500,000, (b) the guaranty of the CAT Equipment Loan Documents by REV Energy Holdings, LLC, and (c) any Refinancing Debt incurred to Refinance such debt.
“CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the
Code.
“Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration or interpretation thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (x) the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith (but solely to the extent the relevant increased costs would have been included if they had been imposed under applicable increased cost provisions) and (y) Basel III and all requests, rules, guidelines or directives thereunder or issued in connection therewith (but solely to the extent the relevant increased costs would have been included if they had been imposed under applicable increased cost provisions),
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shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Change of Control” means and will be deemed to have occurred if:
“Charter Documents” means, with respect to any Person, the certificate or articles of incorporation or organization, memoranda of association, by-laws or operating agreement, and other organizational or governing documents of such Person.
“Chattel Paper” means all of the Obligors’ now owned or hereafter acquired chattel paper, as defined in the UCC, including electronic chattel paper.
“Class” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Extended Revolving Loans (of the same Extension Series and any related swing line loans thereunder) or Swingline Loans, and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Credit Commitment, an Extended Revolving Credit Commitment (of the same Extension Series and any related swing line commitment thereunder) or a Swingline Commitment and when used in reference to any Lender, refers to whether such Lender has a Loan or Commitment of such Class. A FILO Tranche may be treated as a separate Class of Loans or Commitments under this Agreement.
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“Closing Date” means the date on which all of the applicable conditions set forth in Section 9.1 have been fulfilled (or waived in writing by the Agent and the Arrangers).
“Closing Date Note” means that certain unsecured subordinated promissory note, dated as of the Agreement Date, issued by Holdings to THRC Holdings LP and/or its Affiliates (other than any Obligor) in the aggregate principal amount of $23,441,859.92.
“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term SOFR (or a successor administrator).
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by any Obligor or its Subsidiaries in or upon which a Lien is granted by such Person in favor of Collateral Agent under any of the Loan Documents; provided, however, that at no time shall the term “Collateral” include any Excluded Assets; provided, further, that for avoidance of doubt, “Collateral” shall include the Purchased BPC Units so long as one or more of the Obligors own the Purchased BPC Units.
“Collateral Access Agreement” means a landlord waiver or other agreement, in a form as shall be reasonably satisfactory to the Collateral Agent, between the Collateral Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any premises where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, or otherwise modified from time to time.
“Collateral Agent” means JPMorgan, in its capacity as the collateral agent for the Secured Parties, or any successor collateral agent appointed in accordance with this Agreement and the other Loan Documents.
“Collateral Agent’s Liens” means the Liens on the Collateral granted to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the Security Documents and securing the Obligations.
“Collateral and Guarantee Requirement” means, at any time, the requirement that (in each case, as applicable, subject to the Initial Intercreditor Agreement, the Monarch Intercreditor Agreement, the REV Energy Intercreditor Agreement and any other Intercreditor Agreement):
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(ii) all Stock (other than Excluded Stock) held directly by the Borrower or any Guarantor in any Subsidiary (and, in each case, the Term Loan Agent or any applicable agent or trustee with respect to the Debt incurred pursuant to Section 8.12(q), (r) or [**], as applicable, shall have received all such certificates or other instruments representing all such Stock (if any), together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank, if applicable);
(ii) in addition, upon and after the incurrence of Debt pursuant to Section 8.12(q), (r) or [**], as applicable (and solely to the extent that such Debt is still outstanding), substantially all other tangible and intangible personal property of the Borrower and each Guarantor not covered in clause (i) above (including, without limitation, accounts receivable, inventory, equipment, investment property, Intellectual Property, intercompany notes, contracts, instruments, chattel paper and documents, letter of credit rights, Commercial Tort Claims, cash, deposit accounts, securities and commodity accounts, other General Intangibles, books and records related to the foregoing and, in each case, proceeds of the foregoing), in each case with the priority, required by the Security Documents provided that, (A) any such security interests in the Collateral shall be subject to the terms of the applicable Intercreditor Agreement, if any, (B) the Obligations and the Guarantees shall be secured by second-priority liens on the Fixed Assets Collateral, junior to the liens securing such Debt under Section 8.12(q)(x), (r) or [**], as applicable (as set forth in more detail in the Intercreditor Agreement) and (C) the Collateral Agent’s Liens shall only attach to the Fixed Assets Collateral (to the same extent (but not priority) and subject to the same exceptions) that is subject to the liens securing the Debt incurred under Section 8.12(q)(x), (r) or [**], as applicable;
Liens;
that is owing to any Obligor and such Debt is evidenced by a promissory note, the Collateral Agent shall have received such promissory note, together with undated instruments of transfer with respect thereto endorsed in blank and (ii) with respect to intercompany Debt, all Debt of Holdings, the Borrower and each of its Restricted Subsidiaries that is owing to any Obligor (or Person required to become an Obligor) shall be evidenced by the Subordinated Intercompany Note, and the Collateral Agent shall have received such Subordinated Intercompany Note duly executed by Holdings, the Borrower, each such Restricted Subsidiary and each such other Obligor, together with undated
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instruments of transfer with respect thereto endorsed in blank, subject, in each of clauses (i) and (ii), to the terms of the Intercreditor Agreement;
(A) executing on behalf of such Person title or ownership applications for filing with the appropriate Governmental Authority to enable Titled Goods now owned or hereafter acquired by such Person to be amended to reflect the Collateral Agent listed as lienholder thereof, (B) filing such applications with such Governmental Authority, and (C) executing such other documents and instruments on behalf of, and taking such other action in the name of, such Person as the Collateral Agent may reasonably deem necessary to accomplish the purposes of this clause (h) (including, without limitation, for the purpose of creating in favor of the Collateral Agent a perfected Lien on such Titled Goods and exercising the rights and remedies of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and is irrevocable until the Termination Date;
(i) searches of UCC filings in the jurisdiction of incorporation or formation, as applicable, of each Obligor and each jurisdiction where a filing (including a fixture filing) would need to be made in order to perfect the Collateral Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens
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exist other than Permitted Liens, (ii) tax lien, judgment and bankruptcy searches or other evidence reasonably satisfactory to it that all taxes, filing fees, recording fees related to the perfection of the Liens on the Collateral have been paid and (iii) to the extent required pursuant any [**] or the loan and/or bond documents and/or other Debt documents evidencing the Debt incurred under Section 8.12(q)(x), (r) or [**], as applicable hereof, searches of ownership of Intellectual Property in the appropriate governmental offices and such patent/trademark/copyright filings as requested by the Collateral Agent in order to perfect the Collateral Agent’s security interest in the Intellectual Property;
(i) delivered to the Collateral Agent with respect to each deposit account, securities account, and commodity account (other than any Excluded Account), in each case, a Control Agreement with respect to such deposit account, securities account, and commodity account and (ii) not maintained, and not permitted any of its Restricted Subsidiaries to have maintained, cash, Cash Equivalents or other amounts in any deposit account, securities account, or commodity account, unless the Collateral Agent shall have received a Control Agreement in respect of such deposit account, securities account, and commodity account (in each case, other than any Excluded Account).
The foregoing definition shall not require the creation or perfection of pledges of, or security interests in, or the obtaining of opinions with respect to, particular assets if and for so long as the Agent and the Borrower agree in writing that the cost of creating or perfecting such pledges or security interests in such assets, or obtaining such legal opinions or other deliverables in respect of such assets, or providing such guarantees, in respect of such assets (in each case, taking into account any material adverse tax consequences to Holdings and its Subsidiaries) shall be excessive in view of the benefits to be obtained by the Secured Parties therefrom.
The Agent may grant extensions of time for the provision or perfection of security interests in particular assets (including extensions beyond the Closing Date for the perfection of security interests in the assets of the Obligors on such date) where it reasonably determines, in consultation with the Borrower, that provision or perfection cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or the Security Documents.
Notwithstanding the foregoing provisions of this definition or anything in this Agreement or any other Loan Document to the contrary, (a) with respect to leases of Real Estate entered into by any Obligor, such Obligor shall not be required to take any action with respect to creation or perfection of security interests with respect to such leases (including requirements to deliver landlord lien waivers, estoppel and collateral access letters), (b) Liens required to be granted from time to time pursuant to the Collateral and Guarantee Requirement shall be subject to exceptions and limitations set forth in the Security Documents, (c) the Collateral and Guarantee Requirement shall not apply to any of the following assets (and the following assets shall not constitute
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Collateral for any purpose hereunder and the other Loan Documents): (i) any fee-owned Real Estate and any leasehold interests in Real Estate; provided that no Equipment attached or affixed to or located on such Real Estate to the extent such Equipment constitutes a fixture shall be excluded from Collateral, unless such Equipment otherwise constitutes an Excluded Asset under any other subclause of this clause (c), (ii) any governmental licenses or state or local franchises, charters or authorizations, to the extent a security interest in any such licenses, franchise, charter or authorization would be prohibited or restricted thereby (including any legally effective prohibition or restriction) after giving effect to the applicable anti-assignment clauses of the UCC and applicable Laws, other than the proceeds and receivables thereof the assignment of which is expressly deemed effective under the UCC or any similar applicable laws notwithstanding such prohibition, (iii) assets and personal property for which a pledge thereof or a security interest therein is prohibited by applicable Laws (including any legally effective requirement to obtain the consent of any Governmental Authority), rule, regulation or contractual obligation with an unaffiliated third party (in each case, (y) only so long as such contractual obligation was not entered into in contemplation of the acquisition thereof and (z) except to the extent such prohibition is unenforceable or ineffective after giving effect to the applicable provisions of the Uniform Commercial Code or other applicable law), (iv) Excluded Stock (other than Stock that is Excluded Stock solely as a result of having been issued by Immaterial Subsidiaries), (v) to the extent that the obligations of Holdings, the Borrower and certain Subsidiaries of Holdings under the First Financial Loan Documents remain outstanding, certain tractors identified on Exhibit A to the First Financial 2021 Loan Agreement, as in effect on the date hereof, and any replacement tractors therefor and accessions thereto, having an aggregate Fair Market Value of not more than
$30,000,000, pledged to First Financial Bank, N.A. pursuant to the First Financial Loan Documents provided that any inflationary increases in value shall not cause the violation of this cap, (vi) any intent-to-use trademark application prior to the filing and acceptance of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal Law, it being agreed that for purposes of this Agreement and the Loan Documents, no Lien granted to Collateral Agent on any “intent-to-use” United States trademark applications is intended to be a present assignment thereof, (vii) any lease, license, contract or other agreements or any property (including personal property) subject to a purchase money security interest, Capital Lease Obligation or similar arrangements, in each case to the extent permitted under the Loan Documents, to the extent that a pledge thereof or a security interest therein would violate or invalidate such lease, license, contract or agreement, purchase money, Capital Lease or similar arrangement, or create a right of termination in favor of any other party thereto (other than the Borrower or a Guarantor) after giving effect to the applicable anti-assignment clauses of the UCC and applicable Laws, other than the proceeds and receivables thereof the assignment of which is expressly deemed effective under the UCC or any similar applicable Laws notwithstanding such prohibition, (viii) any assets as to which the Agent and the Borrower reasonably agree in writing that the cost or other consequence of obtaining a security interest or perfection thereof is excessive in relation to the benefit to the Lenders of the security to be afforded thereby, (ix) the assets of an Excluded Subsidiary, (x)(I) all of U.S. Well Services Holdings, LLC’s interests under the Enterprise Equipment Lease Agreement and all of the vehicles at any time leased thereunder and (II) to the extent the obligations of U.S. Well Services LLC under the Paccar Equipment Loan Documents remain outstanding, certain equipment identified on Schedule 1.1(c) hereto, and (xi)(I) to the extent the obligations of REV
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Energy and its Subsidiaries under the CAT Equipment Loan Documents remain outstanding, certain equipment identified under the heading “CAT Equipment” on Schedule 1.1(d) hereto, together with any related software (embedded therein or otherwise) and any and all related general intangibles, replacements, repairs, additions, attachments, accessories and accessions, (II) to the extent the obligations of REV Energy and its Subsidiaries under the Xxxxxxx Bros Installment Agreement remain outstanding, certain equipment identified under the heading “Xxxxxxx Bros Equipment” on Schedule 1.1(d), together with any related software (embedded therein or otherwise) and any and all related general intangibles, replacements, repairs, additions, attachments, accessories and accessions, and (III) all of REV Energy and its Subsidiaries’ interests under the CAT Equipment Lease Agreement and all of the equipment, together with any attachments, accessories, additions, replacements or substitutions, at any time leased thereunder (the assets excluded pursuant to this clause (c), collectively, the “Excluded Assets”; provided that notwithstanding anything herein to the contrary, Excluded Assets shall not include any proceeds, replacements or substitutions of Collateral (unless such proceeds, replacements or substitutions otherwise constitute Excluded Assets)), (d) the original Flotek Notes shall not be required to be delivered to the Agent (or the Term Loan Agent to the extent required in the Initial Intercreditor Agreement) until June 30, 2022 (to the extent that the Flotek Notes have not been converted into Flotek Stock by such date), (e) share certificates of Immaterial Subsidiaries and Unrestricted Subsidiaries shall not be required to be delivered, (f) no perfection actions shall be required (i) with respect to letter of credit rights, except to the extent perfection is accomplished solely by the filing of a UCC financing statement (it being understood that no actions shall be required to perfect a security interest in letter of credit rights, other than the filing of a UCC financing statement) and
(ii) in regards to any Commercial Tort Claim (in addition to filing the financing statements (which cover “commercial tort claims”) filed on the Closing Date and/or in connection with the joinder of Obligors after the Closing Date), unless (x) Debt is outstanding in regards to Debt permitted under Section 8.12(q)(x), (r) or [**], as applicable, and such Commercial Tort Claim has an individual value of at least $5,000,000 or (y) such Commercial Tort Claim expressly constitutes Current Asset Collateral and such Commercial Tort Claim has an individual value of at least $5,000,000, and (g) other than with respect to Stock, no actions in any jurisdiction other than the United States and Canada or required by the Laws of any jurisdiction other than the United States and Canada shall be required to be taken to create any security interests in assets located or titled outside of the United States and Canada or to perfect or make enforceable any security interests in any such assets (it being understood that there shall be no Security Document (or other security agreements or pledge agreements) governed under the laws of any jurisdiction other than the United States and Canada) provided that no such actions under or in accordance with the Laws of Canada (and no Security Document (or other security agreements) shall be required to be governed by the laws of the Canada, other than pledge agreements in respect of Stock of any Restricted Subsidiary of Holdings organized under the laws of Canada (other than Excluded Stock)) shall be required to be taken, in each case, unless (i) the Fair Market Value of the property and assets of the Obligors located in Canada exceeds $50,000,000 at such time, (ii) the contribution to Consolidated EBITDA of Holdings and its Subsidiaries by such property and assets exceeds $17,500,000 for any Test Period (calculated on a Pro Forma Basis), or (iii) material books and records of the Obligors are exclusively located at such locations (for the avoidance of doubt, nothing herein, including this clause (g), shall obligate any Foreign Subsidiary to grant or perfect any Liens on its assets, wherever such assets may be located).
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“Collateral Reporting Period” means (a) any period commencing from the date that Availability shall have been less than the greater of (i) 20.0% of the Maximum Credit and (ii)
$80,000,000, for five (5) consecutive Business Days and ending on the date on which Availability shall have been equal to or greater than (y) 20.0% of the Maximum Credit and (z) $80,000,000 for fifteen (15) consecutive calendar days or (b) upon the occurrence of a Specified Event of Default, the period that such Specified Event of Default shall be continuing.
“Commercial Tort Claims” has the meaning specified in the Security Agreement. “Commitment” means, (a) with respect to each Lender (to the extent applicable), such
Xxxxxx’s Revolving Credit Commitment, Extended Revolving Credit Commitment or a Revolving Credit Commitment Increase or any combination thereof (as the context requires), (b) with respect to the applicable Swingline Lender, or swingline lender under any Extended Revolving Credit Commitments, its Swingline Commitment or swingline commitment, as applicable and (c) with respect to each Letter of Credit Issuer, such Letter of Credit Issuer’s L/C Commitment.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D or in such other form as may be reasonably satisfactory to the Agent and Borrower.
“Concentration Account” has the meaning specified in Section 8.23(c).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Depreciation and Amortization Expense” means, with respect to Holdings and its Restricted Subsidiaries for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees or costs, debt issuance costs, commissions, fees and expenses, capitalized expenditures, customer acquisition costs and incentive payments, conversion costs and contract acquisition costs, of Holdings and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
“Consolidated EBITDA” means, with respect to Holdings and its Restricted Subsidiaries for any period, the Consolidated Net Income of Holdings and its Restricted Subsidiaries for such period; plus
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Subsidiaries paid or accrued during such period, including any penalties and interest relating to such taxes or arising from any tax examinations and any payments to any Parent Entity in respect of such taxes; plus
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of Consolidated EBITDA for such Test Period, prior to giving effect to any increase in Consolidated EBITDA pursuant to this clause (10), clause (14) below or clause (d) below), and
(C) such actions have been taken, such actions with respect to which substantial steps have been taken or such actions are expected to be taken within twelve (12) months after the date of determination to take such action; provided, further, that the adjustments pursuant to this clause (10) and clause (14) below may be incremental to (but not duplicative of) Pro Forma Adjustments made pursuant to clause (d) below; or (y) to the extent that no Debt, or commitments with respect thereto, are outstanding under Section 8.12(r) hereof, that would be permitted to be included in pro forma financial statements prepared in accordance with Regulation S-X under the Security Act of 1933; plus
minus
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provided that, to the extent non-cash gains are deducted pursuant to this clause (b) for any previous period and not otherwise added back to Consolidated EBITDA, Consolidated EBITDA shall be increased by the amount of any cash receipts (or any netting arrangements resulting in reduced cash expenses) in respect of such non-cash gains received in subsequent periods to the extent not already included therein;
plus or minus, as applicable, without duplication
plus
in each case, as determined on a consolidated basis for Holdings and its Restricted Subsidiaries in accordance with GAAP; provided that,
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otherwise Disposed of, closed or classified as discontinued operations by Holdings, the Borrower or any Restricted Subsidiary to the extent not subsequently reacquired, reclassified or continued, in each case, during such period (each such Person (other than an Unrestricted Subsidiary), property, business or asset so sold, transferred or otherwise Disposed of, closed or classified, a “Sold Entity or Business”), and the Disposed EBITDA of any Restricted Subsidiary that is converted into an Unrestricted Subsidiary during such period (each, a “Converted Unrestricted Subsidiary”), in each case based on the Disposed EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for such period (including the portion thereof occurring prior to such sale, transfer, disposition, closure, classification or conversion) determined on a historical Pro Forma Basis.
Notwithstanding anything to the contrary contained herein and subject to adjustments as provided in clauses (i) and (ii) of the immediately preceding proviso with respect to acquisitions and dispositions occurring prior to, on and following the Closing Date and other adjustments as contemplated in the definitions of “Pro Forma Basis” and “Pro Forma Effect”, including as provided under clause (a)(10) above or clause (d) above or in the definition of “Pro Forma Adjustment”, Consolidated EBITDA shall be deemed to be, $19,768,888, $37,675,374,
$38,449,657 and $52,600,000, respectively, for the Fiscal Quarters ended March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021. Notwithstanding any other provisions set forth herein, (x) for purposes of the measurement of the Total Net Leverage Ratio and the Senior Secured Net Leverage Ratio, unrealized gains shall be excluded from Consolidated EBITDA and (y) for purposes of calculating Consolidated EBITDA, the Non-Wholly Owned Subs shall not be included in such calculation; provided that without duplication, any cash Distributions by any Non-Wholly Owned Sub to a Restricted Subsidiary during a Test Period shall constitute Consolidated Net Income of such Restricted Subsidiary (receiving such cash Distribution) during such Test Period for purposes of measuring Consolidated EBITDA.
“Consolidated Interest Expense” means cash interest expense (including that attributable to Capital Leases), net of cash interest income of Holdings and its Restricted Subsidiaries with respect to all outstanding Debt of Holdings and its Restricted Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net cash costs (less net cash payments) under Hedge Agreements, but excluding, for the avoidance of doubt:
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all calculated on a consolidated basis in accordance with GAAP.
“Consolidated Net Income” means, with respect to any Person for any period, without duplication, the aggregate of (a) the Net Income, attributable to such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP (adjusted to exclude the equity interests in any Unrestricted Subsidiary owned by such Person or any of its Restricted Subsidiaries); plus (b) the amount of distributions received in cash by such Person or any of its Restricted Subsidiaries from any Subsidiary (including any Unrestricted Subsidiary) for such period, to the extent not already included in clause (a) above minus (c) (i) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period, (ii) the income (or loss) of any Person (other than a Restricted Subsidiary of such Person) in which any other Person (other than such Person or any of its Restricted Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Restricted Subsidiaries by such Person during such period, (iii) the income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of such Person or is merged into or consolidated with such Person or any of its Restricted Subsidiaries or that Person’s assets are acquired by such Person or any of its Restricted Subsidiaries (except as may be required in connection with the calculation of a covenant or test on a pro forma basis), (iv) the income of any Restricted Subsidiary of such Person to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary, (v) any after-Tax gains or losses attributable to Dispositions of Property permitted under this Agreement, in each case other than in the ordinary course of business (as determined in good faith by the Borrower) or returned surplus assets of any Pension Plan, (vi) any net after-Tax gains or losses from disposed, abandoned, transferred, closed or discontinued operations and any net after-Tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations, (vii) any losses and expenses with respect to liability or casualty events to the extent covered by insurance or indemnification and
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actually reimbursed or so long as the Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer or indemnifying party and only to the extent that such amount is (a) not denied by the applicable carrier or indemnifying party in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days) and (viii) (to the extent not included in sub-clauses (i) through (vii) above) any net extraordinary gains or net extraordinary losses.
In addition, to the extent not already accounted for in the Consolidated Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include (without duplication) (i) the amount of proceeds received during such period from business interruption insurance in respect of insured claims for such period, (ii) the amount of proceeds as to which the Borrower has determined there is reasonable evidence it will be reimbursed by the insurer in respect of such period from business interruption insurance (with a deduction for any amounts so added back to the extent denied by the applicable carrier in writing within 180 days or not so reimbursed within 365 days) and (iii) reimbursements received of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any Permitted Investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder.
“Consolidated Parties” means Holdings and each of its Subsidiaries whose financial statements are consolidated with Holdings’ financial statements in accordance with GAAP.
“Consolidated Total Assets” means, as of any date of determination, the total book value of all assets of Holdings, the Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as of such date.
“Consolidated Total Debt” means, as of any date of determination, (a) the aggregate principal amount of indebtedness of Holdings and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of indebtedness resulting from the application of purchase accounting in connection with the Transactions, any Permitted Acquisition or other acquisition constituting a Permitted Investment), consisting of Debt for Borrowed Money, Unpaid Drawings, Capital Lease Obligations and third party debt obligations evidenced by promissory notes or similar instruments, minus (b) the least of (i) the amount of Unrestricted Cash on the balance sheet of Holdings, the Borrower, and its Restricted Subsidiaries as of such date minus the amount of Revolving Loans then outstanding as of such date and (ii) $30,000,000. It is understood that to the extent Holdings or any Restricted Subsidiary incurs any Debt and receives the proceeds of such Debt, for purposes of determining any incurrence test under this Agreement and whether the Borrower is in compliance on a Pro Forma Basis with any such test, the proceeds of such incurrence shall not be considered cash or Cash Equivalents for purposes of any “netting” pursuant to clause (b) of this definition.
“Contaminant” means any (i) chemical, material, compound, waste, pollutant, substance, toxic or hazardous substance, hazardous waste, special waste, or any other substance, waste or material regulated or subject to rules of liability under Environmental Law including any material, substance, compound, chemical or waste that is listed, classified, defined or regulated in relevant
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form, quantity or concentration as hazardous or toxic (or words of similar import) pursuant to any Environmental Law, and (ii) any petroleum or petroleum products or their refined or derived products, polychlorinated biphenyls, radioactive materials, per-and polyfluoroalkyl substances, aqueous film forming foam, or other emerging contaminants, urea formaldehyde or asbestos or asbestos containing materials.
“Continuation/Conversion Date” means the date on which a Loan is converted into or continued as a Term Benchmark Loan.
“Continuing Director” means, at any date, (x) the individual directors of ProFrac Holding Corp., a Delaware corporation as of the Closing Date or (y) an individual (a) who is a member of the Board of Directors of Holdings (or any Parent Entity) on the Closing Date, (b) who, as at such date, has been a member of such Board of Directors for at least the 12 preceding months, (c) who has been nominated or designated to be a member of such Board of Directors, directly or indirectly, by the Permitted Holders or Persons nominated or designated by the Permitted Holders or (d) who has been nominated or designated to be, or designated as, a member of such Board of Directors by a majority of the other Continuing Directors then in office.
“Control” shall mean 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 ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.
“Control Agreement” has the meaning specified in Section 8.23(a).
“Converted Restricted Subsidiary” has the meaning specified in the definition of “Consolidated EBITDA.”
“Converted Unrestricted Subsidiary” has the meaning specified in the definition of “Consolidated EBITDA.”
“Corrective Extension Agreement” has the meaning specified in Section 2.7(e). “Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a
tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Covenant Trigger Period” means any period (a) commencing on the date upon which Availability is less than the greater of (i) 12.5% of the Maximum Credit and (ii) $30,000,000 and
(b) ending on the date upon which Availability shall have been at least equal to the greater of (i) 12.5% of the Maximum Credit and (ii) $30,000,000 for a period of twenty (20) consecutive calendar days.
“Credit Card Accounts Receivables” means each “payment intangible” (as defined in the UCC) together with all income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to an Obligor resulting from charges by a customer of an Obligor on credit or debit cards issued by such Credit Card Issuer in connection with the sale of Inventory by an
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Obligor, or services performed by an Obligor, in each case in the ordinary course of its business.
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“Credit Card Issuer” shall mean any person who issues or whose members issue credit or debit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, Xxxxx Xxxxxxx and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued by or through American Express Travel Related Services Company, Inc., and Novus Services, Inc. and other issuers approved by the Collateral Agent.
“Credit Card Processor” shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to any Obligor’s sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.
“Cure Amount” has the meaning specified in Section 10.4(a). “Cure Deadline” has the meaning specified in Section 10.4(a). “Cure Right” has the meaning specified in Section 10.4(a).
“Current Asset Collateral” means the “ABL Priority Collateral” (as defined in the Initial Intercreditor Agreement on the Closing Date).
“Daily Simple SOFR” means, for any day (a “SOFR Day”), a rate per annum equal to SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (a) if such SOFR Day is a U.S. Government Securities Business Day, such SOFR Day or (b) if such SOFR Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
“Debt” means, without duplication, all
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would be shown on a balance sheet of the Consolidated Parties prepared in accordance with GAAP or, if higher, the Fair Market Value of such property;
provided that Debt shall not include (i) prepaid or deferred revenue arising in the ordinary course of business or in the ordinary course of business for similarly situated businesses in the Borrower’s industry, (ii) purchase price holdbacks in respect of Permitted Acquisitions (or any other acquisitions constituting Permitted Investments) arising in the ordinary course of business or in the ordinary course of business for similarly situated businesses in the Borrower’s industry in respect of a portion of the purchase prices of an asset to satisfy unperformed obligations of the seller of such asset, (iii) earn out obligations in connection with a Permitted Acquisition (or any other acquisition constituting a Permitted Investment) unless such obligations become a liability on the balance sheet of such Person in accordance with GAAP and are not paid after becoming due and payable and (iv) Guaranties incurred (other than with respect to Debt) in the ordinary course of business or in the ordinary course of business for similarly situated businesses in the Borrower’s industry.
For all purposes hereof, the Debt of any Person shall include (A) the Debt of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, except to the extent such Person’s liability for such Debt is otherwise limited and only to the extent such Debt would be included in the calculation of Consolidated Total Debt and (B) in the case of Holdings and its Restricted Subsidiaries, exclude all intercompany Debt having a term not exceeding 364 days (inclusive of any roll over or extensions of terms) and made in the ordinary course of business
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consistent with past practice. The amount of any net obligation under any Hedge Agreement on
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any date shall be deemed to be the Swap Termination Value thereof as of such date. For the avoidance of doubt, Debt of Flotek and BPC shall not constitute Debt of Holdings and/or its Subsidiaries hereunder unless and until (x) Flotek or BPC become Restricted Subsidiaries of Holdings (and are not otherwise designated as Unrestricted Subsidiaries in accordance with Section 8.26), in which case, the Debt of such Restricted Subsidiaries shall be consolidated with Holdings and its Subsidiaries at such time or (y) such Debt for Borrowed Money is guaranteed by Holdings or any of its Restricted Subsidiaries or Holdings or any of its Subsidiaries otherwise have recourse to such Debt for Borrowed Money (including, without limitation, by means of pledging any collateral with respect thereof).