AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 6. 1997, as amended and
restated through November 6, 1997, among KEY ENERGY GROUP, INC., a Maryland
corporation (the "Borrower"), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the "Lenders"), PNC
BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders hereunder
(in such capacity, the "Administrative Agent"), NORWEST BANK TEXAS, N.A., as
Collateral Agent for the Lenders hereunder (in such capacity, the "Collateral
Agent") and PNC CAPITAL MARKETS, INC., as arranger with respect to the credit
facilities contained herein (in such capacity, the "Arranger").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the Collateral
Agent are parties to the Credit Agreement, dated as of June 6, 1997 (as amended
prior to the date hereof, the "Existing Credit Agreement");
WHEREAS, pursuant to the Existing Credit Agreement, the Lenders have over time
made term loans ("Term Loans") and revolving credit loans ("Existing Revolving
Credit Loans") to, and have issued letters of credit ("Existing Letters of
Credit") for the account of, the Borrower which are secured pursuant to the
Security Documents (as hereinafter defined);
WHEREAS, the Term Loans have been paid and the Borrower desires to increase the
amount of the commitment for revolving credit loans and to modify certain other
provisions of the Existing Credit Agreement; and
WHEREAS, this Amended and Restated Credit Agreement is intended to confirm and
evidence (i) the amendment and restatement and continuation (but not payment) of
the existing obligations of the Loan Parties under the Loan Documents and (ii)
the continuation as security for the indebtedness and obligations under this
Amended and Restated Agreement and the other Loan Documents, without any release
or termination whatsoever, of all liens and security interests granted under and
in connection with the Existing Credit Agreement and the other Loan Documents;
ACCORDINGLY, the parties hereto hereby agree that on the Closing Date, the
Existing Credit Agreement is hereby amended and restated in its entirety to read
as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:
"Adjustment Date": each date on or after December 31, 1997 that is the second
Business Day following receipt by the Lenders of both (i) the financial
statements required to be delivered pursuant to Section 6.1(a) or 6.1(b), as
applicable, for the most recently completed fiscal period (which shall be
December 31, 1997, in the case of the Adjustment Date occurring on or
immediately after December 31, 1997) and (ii) the related compliance certificate
required to be delivered pursuant to Section 6.2(b) with respect to such fiscal
period.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": 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. For purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (b) direct
or cause the direction of the management and policies of such Person, whether by
contract or otherwise. Notwithstanding the foregoing (i) no Subsidiary of the
Borrower shall be deemed to be an Affiliate of the Borrower and (ii) no
Affiliate of any investment company that controls the Borrower shall be deemed
to be an Affiliate of the Borrower solely because such investment company
Affiliate is in control of, is controlled by, or is under common control with,
such investment company.
"Agents": the collective reference to the Arranger, the Collateral Agent and the
Administrative Agent.
"Aggregate Outstanding Extensions of Credit": as to any Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Loans made
by such Lender then outstanding and (b) such Lender's Percentage of the L/C
Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, supplemented or otherwise
modified from time to time.
"Applicable Margin": During the period from the Closing Date until the first
Adjustment Date, 0.00% for Loans which are Base Rate Loans and 1.25% for Loans
which are Eurodollar Loans. The Applicable Margin for Loans will be adjusted on
each Adjustment Date to the applicable rate per annum set forth under the
heading "Applicable Margin for Loans which are Eurodollar Loans" or "Applicable
Margin for Loans which are Base Rate Loans", as the case may be, on Annex I
which corresponds to the Consolidated Leverage Ratio as determined from the
financial statements and compliance certificate relating to the end of the
fiscal period immediately preceding such Adjustment Date; provided that in the
event that the financial statements required to be delivered pursuant to Section
6.1(a) or 6.1(b), as applicable, and the related compliance certificate required
to be delivered pursuant to Section 6.2(b), are not delivered when due, then
(i) if such financial statements and compliance certificate are delivered after
the date such financial statements and compliance certificate were required
to be delivered (without giving effect to any applicable cure period) and
the Applicable Margin increases from that previously in effect as a result
of the delivery of such financial statements, then the Applicable Margin in
respect of the Loans during the period from the date upon which such
financial statements were required to be delivered (without giving effect
to any applicable cure period) until the date upon which they actually are
delivered shall, except as otherwise provided in clause (iii) below, be the
Applicable Margin as so increased;
(ii) if such financial statements and compliance certificate are delivered after
the date such financial statements and compliance certificate were required
to be delivered and the Applicable Margin decreases from that previously in
effect as a result of the delivery of such financial statements, then such
decrease in the Applicable Margin shall not become applicable until the
date upon which the financial statements and certificate actually are
delivered; and
(iii)if such financial statements and compliance certificate are not delivered
prior to the expiration of the applicable cure period, then, effective upon
such expiration, for the period from the date upon which such financial
statements and compliance certificate were required to be delivered (after
the expiration of the applicable cure period) until two Business Days
following the date upon which they actually are delivered, the Applicable
Margin in respect of Loans shall be 0.00% per annum, in the case of Base
Rate Loans, and 1.50% per annum, in the case of Eurodollar Loans (it being
understood that the foregoing shall not limit the rights of the
Administrative Agent and the Lenders set forth in Section 8).
"Application": an application, in such form as the Issuing Lender may specify
from time to time, requesting the Issuing Lender to issue a Letter of Credit.
"Argentine Subsidiaries": Kenting and Servicios.
"Arranger": as defined in the preamble hereto.
"Assignee": as defined in Section 10.6(c).
"Available Commitment": as to any Lender at any time, an amount equal to the
excess, if any, of (a) such Lender's Commitment over (b) such Lender's Aggregate
Outstanding Extensions of Credit.
"Base Rate": for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum established from time to time by PNC Bank, National
Association as its prime rate in effect at its principal office in Pittsburgh
(the Prime Rate not being intended to be the lowest rate of interest charged by
PNC Bank, National Association in connection with extensions of credit to
debtors); and "Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by it. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is based upon
the Base Rate.
"Board": the Board of Governors of the Federal Reserve System of the United
States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice pursuant to Section 2.2
as a date on which the Borrower requests the Lenders to make Loans hereunder.
"Business Day": (a) for all purposes other than as covered by clause (b) below,
a day other than a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to close and (b) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day described in
clause (a) and which is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a Financing Lease) of fixed or capital
assets or additions to equipment (including replacements and improvements during
such period) which should be capitalized under GAAP on a consolidated balance
sheet of such Person and its Subsidiaries; provided that "Capital Expenditures"
shall not include (i) expenditures for Permitted Acquisitions or
(ii) expenditures by any Person prior to the time such Person was acquired by
the Borrower or any Subsidiary in a Permitted Acquisition.
"Capital Lease Obligations": as to any Person, the obligations of such Person to
pay rent or other amounts under any Financing Lease and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares of capital stock of a corporation, and any
and all equivalent ownership interests in a Person (other than a corporation).
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b) demand
deposits, certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of twelve months or less from the date
of acquisition issued by any Lender or by any commercial bank organized under
the laws of the United States or any state thereof having combined capital and
surplus of not less than $250,000,000; (c) commercial paper of (i) an issuer
rated at least A-1 by Standard & Poor's Ratings Services or P-1 by Xxxxx'x
Investors Service, Inc., or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally or (ii) the holding
company of any Lender, and, in either case, maturing within twelve months from
the date of acquisition; and (d) money market funds the assets of which consist
primarily of obligations of the types referred to in clauses (a) through (c)
above.
"Change of Control": a "Change of Control" shall be deemed to occur if a "Change
in Control" (as defined in the 0000 Xxxxxxxxx or, if the 1997 Indenture shall
have been terminated, as defined in the 1997 Indenture immediately prior to such
termination) shall occur.
"Closing Date": the date on which the conditions precedent set forth in Section
5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended.
"Collateral": all assets of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by any Security Document.
"Collateral Agent": as defined in the preamble hereto.
"Collateral Release Date": the date upon which the Liens on the Collateral
granted pursuant to the Security Documents are released pursuant to subsection
10.17.
"Collateral Release Event": shall occur at any time, so long as no Default or
Event of Default shall have occurred and be continuing at such time: (a) if the
senior unsecured credit rating for the Borrower's senior unsecured debt is at
least Ba1 by Moody's and BB+ by S&P; or (b) if the 1997 Convertible Subordinated
Notes of the Borrower is rated at least Ba2 by Moody's and BB by S&P.
"Commercial Letter of Credit": as defined in Section 3.1(a).
"Commitment": as to any Lender, the obligation of such Lender, if any, to make
Loans to and/or issue or participate in Letters of Credit issued on behalf of
the Borrower hereunder in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Commitment" opposite such
Lender's name on Schedule 1.1A, as the same may be changed from time to time
pursuant to the terms hereof and as the same shall be reduced pursuant to
Section 2.1(c).
"Commitment Period": the period from and including the Closing Date to but not
including the Termination Date, or such earlier date on which the Commitments
shall have been terminated.
"Commonly Controlled Entity": an entity, whether or not incorporated, which is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Borrower and which is treated as
a single employer under Section 414 of the Code.
"Confidential Information Memorandum": the Confidential Information Memorandum
dated as of November, 1997 with respect to the Borrower and the credit
facilities provided for herein.
"Consolidated" or "consolidated": when used in respect of any Subsidiary or any
financial statements or financial term relating to the Borrower and its
Subsidiaries, refers to the Borrower and the Subsidiaries of the Borrower
(including Excluded Subsidiaries) whose accounts are consolidated with the
Borrower's accounts in accordance with GAAP.
"Consolidated EBITDA": with respect to any Person for any period, Consolidated
Net Income of such Person for such period plus, without duplication and to the
extent reflected as a charge in the statement of such Consolidated Net Income
for such period, the sum of (a) total income tax expense, (b) interest expense,
(c) depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary expenses or losses (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of business),
(f) any other noncash charges and (g) if applicable, restructuring charges,
write-off of goodwill and licensing agreements, and minus, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (a) interest income, (b) any extraordinary income or gains (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (c) any other noncash income (other than
any income represented by a receivable that in the ordinary course would be
expected to be paid in cash), all as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA of the Borrower and its Subsidiaries for such period to
(b) Consolidated Interest Expense for such period.
"Consolidated Interest Expense": for any period, total interest expense
(including that attributable to Capital Lease Obligations), both expensed and
capitalized, of the Borrower and its Subsidiaries for such period with respect
to all outstanding Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Protection Agreements to the extent such net costs are
allocable to such period in accordance with GAAP), determined on a consolidated
basis in accordance with GAAP, net of interest income of the Borrowers and its
Subsidiaries for such period (determined on a consolidated basis in accordance
with GAAP).
"Consolidated Lease Expense": for any period, the aggregate amount of fixed and
contingent rentals payable by the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, for such period with respect to
leases of real and personal property; provided that amounts payable under
Financing Leases and oil and gas leases shall be excluded from Consolidated
Lease Expense.
"Consolidated Leverage Ratio": on the date of any determination thereof, the
ratio of (a) Consolidated Total Debt on such date, less the amount of cash and
Cash Equivalents in excess of $5,000,000 held by the Borrower and its
Subsidiaries on such date to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for the four full fiscal quarters ending on such date; provided
that for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period of four full fiscal quarters, the Consolidated
EBITDA of any Person acquired by the Borrower or its Subsidiaries during such
period shall be included on a pro forma basis for such period of four full
fiscal quarters (assuming the consummation of each such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred on
the first day of such period of four full fiscal quarters and assuming only such
cost reductions as are related to such acquisition and are realizable on or
before the date of calculation) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated statements
of income and stockholders' equity and of cash flows for such period (i) have
been previously provided to the Administrative Agent and the Lenders and
(ii) either (A) have been reported on without a qualification arising out of the
scope of the audit (other than a "going concern" or like qualification or
exception) by independent certified public accountants of nationally recognized
standing or (B) have been found acceptable by the Administrative Agent.
"Consolidated Net Income": with respect to any Person for any period, the
consolidated net income (or loss) of such Person for such period, determined on
a consolidated basis in accordance with GAAP.
"Consolidated Net Worth": at a particular date, as to any Person, the amount
which would be included under stockholders' equity on a consolidated balance
sheet of such Person and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Consolidated Senior Debt": with respect to the Borrower and its Subsidiaries,
consolidated Indebtedness of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP other than Subordinated Indebtedness.
"Consolidated Senior Leverage Ratio": on the date of any determination thereof,
the ratio of (a) Consolidated Senior Debt on such date, less the amount of cash
and Cash Equivalents in excess of $5,000,000 held by the Borrower and its
Subsidiaries on such date to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for the four full fiscal quarters ending on such date; provided
that for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period of four full fiscal quarters, the Consolidated
EBITDA of any Person acquired by the Borrower or its Subsidiaries during such
period shall be included on a pro forma basis for such period of four full
fiscal quarters (assuming the consummation of each such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred on
the first day of such period of four full fiscal quarters and assuming only such
cost reductions as are related to such acquisition and are realizable on or
before the date of calculation) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated statements
of income and stockholders' equity and of cash flows for such period (i) have
been previously provided to the Administrative Agent and the Lenders and
(ii) either (A) have been reported on without a qualification arising out of the
scope of the audit (other than a "going concern" or like qualification or
exception) by independent certified public accountants of nationally recognized
standing or (B) have been found acceptable by the Administrative Agent.
"Consolidated Total Debt": at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date, which on a
consolidated basis in accordance with GAAP would be required to be reflected on
a consolidated balance sheet of the Borrower and its Subsidiaries as a
liability.
"Contractual Obligation": as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.
"Convertible Subordinated Debentures": the 7% Convertible Subordinated
Debentures due 2003 issued by the Borrower pursuant to the Indenture.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under the laws
of any jurisdiction within the United States.
"Environmental Consultant": as defined in Section 6.8(c).
"Environmental Laws": any and all laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, or other legally enforceable requirements
(including, without limitation, common law) of any foreign government, the
United States, or any state, local, municipal or other governmental authority,
regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and safety,
as has been, is now, or at any time hereafter is, in effect.
"Environmental Permits": any and all permits, licenses, registrations,
approvals, notifications, exemptions and any other authorization required under
any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended from
time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum of interest determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate Service (or otherwise on such
service), the "Eurodollar Base Rate" for purposes of this definition shall be
determined by reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative Agent or,
in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is based upon
the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans, the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).
"Event of Default": any of the events specified in Section 8, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Excluded Subsidiary" or "Excluded Subsidiaries": (a) Production Systems, Inc.,
WellTech, Inc. (California), WellTech, Inc., WellTech Oilfield Services
(Canada), Ltd., WellTech Oilfield Services Limited, WellTech (Overseas) Limited,
and Xxxxxxx Transport, Inc., (b) Thunderbird Tool Company, (c) KEG Canal
Properties, Inc., KEG Xxxxx Xxxxxx, Inc., KEG Pearl Acres, Inc., KEG Xxxx
Heights, Inc., KEG Orleans Place, Inc., and Pyramid Land Corporation, and
(d) any other entity which becomes a Subsidiary of Borrower after the date of
this Agreement if such entity has assets with a book value of $1,000,000 or less
and annual revenues of $1,000,000 or less; provided that all entities deemed to
be Excluded Subsidiaries under this subsection (d) may not have, in the
aggregate, assets with a book value exceeding $5,000,000 or annual revenues
exceeding $5,000,000.
"Existing Credit Agreement": as defined in the recitals hereto.
"Existing Letters of Credit": as defined in Section 3.1.
"Existing Revolving Credit Loans": as defined in the recitals hereto.
"Financing Lease": any lease (or other similar arrangement conveying the right
to use) of property, real or personal, the obligations of the lessee in respect
of which are required in accordance with GAAP to be capitalized on a balance
sheet of the lessee.
"Foreign Subsidiary": any Subsidiary of the Borrower organized under the laws of
any jurisdiction outside the United States.
"GAAP": generally accepted accounting principles in the United States in effect
from time to time.
"Governmental Authority": any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Hedge Obligations": as defined in the Master Guarantee and Collateral
Agreement.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables and accrued expenses incurred in the ordinary course of such Person's
business not more than 150 days past due or being contested in good faith), (c)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, (e) all Capital Lease Obligations of such Person, (f)
all obligations, contingent or otherwise, of such Person as an account party
under acceptance, letter of credit or similar facilities (other than obligations
in respect of undrawn letters of credit securing trade payables or performance
obligations incurred in the ordinary course of business not more than 150 days
past due or being contested in good faith), (g) all obligations of such Person
to purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
Indebtedness of others and (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation (but if not so assumed, the amount of such obligation shall be deemed
not to exceed the fair market value of the property subject to the Lien).
"Indenture": the Indenture, dated as of July 3, 1996, between the Borrower and
American Stock Transfer & Trust Company, as trustee.
"Insolvency": with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Policies": (i) the insurance policies the Borrower is required to
maintain pursuant to Section 6.5 and (ii) the insurance policies the Borrower is
required to maintain pursuant to Section 5.3 of the Master Guarantee and
Collateral Agreement.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding, (b)
as to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the Termination Date
shall end on the Termination Date;
(iii)any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to require a payment
or prepayment of any Eurodollar Loan during an Interest Period for such
Loan.
"Interest Rate Protection Agreement": any interest rate protection agreement,
interest rate futures contract, interest rate option, interest rate cap or other
interest rate hedge arrangement, to or under which the Borrower or any
Subsidiary is a party or a beneficiary on the date hereof or becomes a party or
a beneficiary after the date hereof.
"Interest Rate Protection Agreement Obligation": in respect of any Loan Party,
the obligation of such Loan Party under an Interest Rate Protection Agreement to
make a payment to the counterparty thereto in the event of a termination event
or similar occurrence thereunder.
"Issuing Lender": (a) with respect to the Existing Letters of Credit, Norwest
Bank, and (b) with respect to any Letters of Credit issued after the Closing
Date, any Lender designated as "Issuing Lender" hereunder by the Borrower with
the consent of the Administrative Agent and such Lender, in its capacity as
issuer of any Letter of Credit.
"Kenting": Kenting Holdings (Argentina) S.A., an Argentine corporation, and
Kenting Drilling (Argentina) S.A., an Argentine corporation.
"L/C Commitment": $10,000,000.
"L/C Fee Payment Date": the last day of each March, June, September and December
and the last day of the Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a) the aggregate
then undrawn and unexpired amount of the then outstanding Letters of Credit and
(b) the aggregate amount of drawings under Letters of Credit which have not then
been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Lenders other than the
Issuing Lender.
"Lenders": as defined in the preamble hereto (which shall include the Issuing
Lender).
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing) and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction.
"Loan": as defined in Section 2.1(a).
"Loan Documents": this Agreement, the Notes, the Applications and the Security
Documents.
"Loan Parties": the Borrower and each Domestic Subsidiary of the Borrower which
is, or is required by the terms hereof to be, a party to a Loan Document.
"Master Guarantee and Collateral Agreement": the Master Guarantee and Collateral
Agreement executed and delivered by the Borrower and each of its Domestic
Subsidiaries, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Material Adverse Effect": a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent, the Collateral Agent or the
Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower and/or its
Subsidiaries under any Environmental Law in excess of $2,500,000 for remedial
costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactive
materials, and any other substances of any kind, whether or not any such
substance is defined as hazardous or toxic under any Environmental Law, that is
regulated pursuant to or could give rise to liability under any Environmental
Law.
"Moody's": Xxxxx'x Investors Service, Inc.
"Mortgage": the mortgage or deed of trust made by the appropriate Loan Party in
favor of, or for the benefit of, the Collateral Agent for the benefit of the
Lenders, as the same may be amended, supplemented or otherwise modified from
time to time.
"Mortgaged Property": the real property listed on Schedule 1.1B, as to which the
Collateral Agent for the benefit of the Lenders has been granted a Lien pursuant
to the Mortgages and the real property as to which the Collateral Agent for the
benefit of the Lenders shall be granted a Lien in accordance with Section 6.10.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with the Significant Disposition, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of the Significant Disposition, net of attorneys'
fees, accountants' fees, investment banking fees, brokers' and underwriters'
commissions paid to third parties, amounts required to be applied to the
repayment of Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of the Significant Disposition (other than any Lien
in favor of the Collateral Agent for the benefit of the Lenders), the aggregate
amount of reserves required in the reasonable judgment of the Borrower to pay
contingent liabilities with respect to the Significant Disposition (provided
that amounts deducted from aggregate proceeds pursuant to this clause and not
actually paid by the Borrower or any of its Subsidiaries in liquidation of such
contingent liabilities shall be deemed to be Net Cash Proceeds and shall be
applied in accordance with Section 2.7(c) at such time as the Borrower shall
reasonably determine that such amounts are not required to pay contingent
liabilities with respect to the Significant Disposition) and other customary
fees and expenses actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements with any Person other than the Borrower and its Subsidiaries) and
(b) in connection with any issuance or sale of Capital Stock or debt securities
or instruments or the incurrence of Indebtedness, the cash proceeds received
from such issuance or incurrence, net of attorneys' fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.
"New Loan Parties": Domestic Subsidiaries of the Borrower acquired after the
closing date of the Existing Credit Agreement and before the Closing Date.
"1997 Convertible Subordinated Notes": the 5% Convertible Subordinated Notes due
2004 issued by the Borrower pursuant to the 1997 Indenture.
"1997 Indenture": the Indenture, dated as of September 25, 1997, between the
Borrower and American Stock Transfer & Trust Company, as trustee.
"Non-Excluded Taxes": as defined in Section 2.16(a).
"Non-U.S. Lender": as defined in Section 2.16(b).
"Norwest Bank": Norwest Bank Texas, N.A.
"Note": as defined in Section 2.4(e).
"Obligations": the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Notes and all other
obligations and liabilities of the Borrower to the Arranger, the Administrative
Agent or to any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under
this Agreement, any other Loan Document, the Letters of Credit, any Interest
Rate Protection Agreement entered into with any Lender or any other document
made, delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent and the Collateral Agent) or otherwise.
"Odessa": Odessa Exploration Incorporated.
"Oil and Gas Mortgages": mortgages in favor of the Collateral Agent for the
ratable benefit of the Lenders, in form and substance reasonably satisfactory to
the Collateral Agent, covering the Oil and Gas Properties.
"Oil and Gas Properties": the oil and gas properties described in Schedule 1.1C
which are to be mortgaged pursuant hereto and the oil and gas property as to
which the Collateral Agent for the benefit of the Lenders shall be granted a
Lien in accordance with Section 6.10.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
"Percentage": as to any Lender at any time, the percentage which such Lender's
Commitment then constitutes of the aggregate Commitments (or, at any time after
the Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Aggregate Outstanding Extensions of
Credit then outstanding constitutes of the aggregate principal amount of the
Aggregate Outstanding Extensions of Credit of all Lenders then outstanding).
"Permitted Acquisitions": the acquisition by the Borrower and its Subsidiaries
of (a) rigs and other well service equipment, (b) well service companies and (c)
oil and gas properties and related equipment or interests therein, provided that
(i), after giving effect to such acquisitions and any borrowings hereunder in
connection therewith, (x) the Consolidated Leverage Ratio shall not be more than
3.75 to 1.00 and (y) the sum of (1) the Borrower's cash and Cash Equivalents on
hand and (2) the aggregate Available Commitments shall be at least $10,000,000
or (ii) after giving effect to such acquisition the Consolidated Leverage Ratio
is not increased and such acquisition is funded solely with the Borrower's
Capital Stock.
"Person": an individual, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledged Notes", "Pledged Securities" and "Pledged Stock": each as defined in
the Master Guarantee and Collateral Agreement.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": the collective reference to the real property owned, leased or
operated by the Borrower or any of its Subsidiaries (or with respect to Sections
6.8 and 10.5, any of the Excluded Subsidiaries).
"Proved Reserves": the estimated quantities of crude oil, condensate, natural
gas and natural gas liquids that adequate geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions (i.e., prices
and costs as of the date the estimate is made).
"Register": as defined in Section 10.6(e).
"Reimbursement Obligation": the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.
"Reorganization": with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg. ' 2615.
"Required Lenders": at any date shall mean the holders of more than 50% of the
Commitments, or, if the Commitments have been terminated, the Aggregate
Outstanding Extensions of Credit of the Lenders.
"Requirement of Law": as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, president or chief financial
officer of the Borrower, but in any event, with respect to financial matters,
the chief financial officer of the Borrower.
"Security Documents": the collective reference to each Mortgage, each Oil and
Gas Mortgage, the Master Guarantee and Collateral Agreement and all other
security documents hereafter delivered to the Collateral Agent granting a Lien
on any asset or assets of any Person to secure the obligations and liabilities
of the Borrower hereunder and/or under any of the other Loan Documents or to
secure any guarantee of any such obligations and liabilities.
"Seller Indebtedness": Indebtedness of the Borrower which is issued to the
seller in a Permitted Acquisition as all or a portion of the consideration for
such Permitted Acquisition.
"Servicios": Servicios WellTech, S.A., an Argentine corporation.
"Significant Disposition": as defined in Section 7.6(d).
"Single Employer Plan": any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"S&P": Standard & Poor's Ratings Group.
"Standby Letter of Credit": as defined in Section 3.1(a).
"Subordinated Indebtedness": the Convertible Subordinated Debentures, the 1997
Convertible Subordinated Notes and any other Indebtedness of the Borrower
subordinated to the prior payment in full of the Obligations to at least the
extent the 1997 Convertible Subordinated Notes are subordinated to the
Obligations or otherwise in a manner acceptable to the Required Lenders as
evidenced by their written approval.
"Subsidiary": as to any Person, a corporation, partnership or other entity of
which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower, but such references shall not include any Excluded Subsidiary.
"Subsidiary Guarantor": each Subsidiary of the Borrower which is a party to the
Master Guarantee and Collateral Agreement.
"Termination Date": November 6, 2002.
"Transferee": as defined in Section 10.6(g).
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be amended from time to time.
"United States": the United States of America.
"Vehicles": as defined in the Master Guarantee and Collateral Agreement.
"Wholly Owned Subsidiary": as to any Person, any other Person all of the Capital
Stock of which is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms relating
to the Borrower and its Subsidiaries not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions hereof, each Lender
severally agrees to make revolving credit loans ("Loans") to the Borrower from
time to time during the Commitment Period in an aggregate principal amount at
any one time outstanding which, when added to such Lender's Percentage of the
L/C Obligations then outstanding, does not exceed the amount of such Lender's
Commitment. During the Commitment Period, the Borrower may use the Commitments
by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. On the Closing Date, all
Existing Revolving Credit Loans outstanding on the Closing Date shall be
continued (without payment thereof) as Loans hereunder.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii) Base Rate
Loans or (iii) a combination thereof, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.3 and 2.8, provided
that no Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Termination Date.
(c) The Commitments shall be reduced (and each Lender's Commitment shall be
ratably reduced) on each anniversary of the Closing Date, commencing with the
third such anniversary, to the amount set forth opposite such anniversary below:
Anniversary Amount
Third $175,000,000
Fourth $125,000,000
Fifth $ 0
2.2 Procedure for Borrowing. The Borrower may borrow under the Commitments
during the Commitment Period on any Business Day, provided that the Borrower
shall give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City time,
(a) three Business Days prior to the requested Borrowing Date, if all or any
part of the requested Loans are to be Eurodollar Loans or (b) one Business Day
prior to the requested Borrowing Date, otherwise), specifying (i) the amount to
be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be of Eurodollar Loans, Base Rate Loans, or a combination thereof and (iv) if
the borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Commitments shall be in an
amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole
multiple thereof (or, if the then Available Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified in Section 10.2
prior to 11:00 A.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. The
aggregate of the amounts made available to the Administrative Agent by the
Lenders will then be made available to the Borrower by the Administrative Agent
in accordance with the instructions of the Borrower in like funds as received by
the Administrative Agent.
2.3 Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the Closing Date to the last day of the Commitment Period, computed at
the rate per annum set forth under the heading "Commitment Fee Rate" on Annex I
on the average daily amount of the Available Commitment of such Lender during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the last day of the
Commitment Period, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Administrative Agent and the Arranger the
fees in the amounts and on the dates agreed to in writing from time to time by
the Borrower, the Administrative Agent and the Arranger.
(c) The Borrower agrees to pay to the Collateral Agent the fees in the amount
and on the dates agreed to in writing from time to time by the Borrower and the
Collateral Agent.
2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Lender the then unpaid principal amount of each Loan of such
Lender on the last day of the Commitment Period (or such earlier date on which
the Loans become due and payable pursuant to Section 8). The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in Section 2.10.
(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing indebtedness of the Borrower to such Lender resulting
from each Loan of such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 10.6(e) and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each Lender maintained
pursuant to Section 2.4(b) shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any Lender or
the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Loans made to such Borrower by such Lender
in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative Agent by
any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing any Loans of such Lender, substantially in the
form of Exhibit C with appropriate insertions as to date and principal amount (a
"Note"). A Note and the obligation evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of an obligation evidenced by a Note shall be registered in the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such obligation, accompanied by an Assignment and Acceptance
substantially in the form of Exhibit G duly executed by the Assignor thereof,
and thereupon one or more new Notes shall be issued to the designated Assignee
and the old Note shall be returned by the Administrative Agent to the Borrower
marked "cancelled". No assignment of a Note and the obligation evidenced thereby
shall be effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section 2.4(e).
2.5 Optional Termination or Reduction of Commitments. The Borrower shall have
the right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments; provided that no such termination or reduction of
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the sum of the
Aggregate Outstanding Extensions of Credit of all Lenders would exceed the
Commitments then in effect. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Commitments then in effect.
2.6 Optional Prepayments. The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon at least
three Business Days' irrevocable notice to the Administrative Agent by the
Borrower, specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, Base Rate Loans or a combination thereof,
and, if of a combination thereof, the amount allocable to each, provided that if
a Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto the Borrower shall also pay any amounts owing pursuant
to Section 2.17. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with accrued interest to such date on the amount prepaid. Partial
prepayments of Loans shall be in an aggregate principal amount of $1,000,000 or
a whole multiple thereof.
2.7 Mandatory Prepayments and Commitment Reductions. (a) If any senior or
subordinated debt securities or instruments of the Borrower or any of its
Subsidiaries shall be issued or sold, or the Borrower or any of its Subsidiaries
shall incur any Indebtedness, after the Closing Date (except any debt securities
or instruments issued or sold or Indebtedness incurred pursuant to Section 7.2),
an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance, sale or incurrence toward the prepayment of the Loans and
the reduction of the Commitments as set forth in paragraph (d) of this Section
2.7. Nothing in this paragraph (a) shall be deemed to permit the incurrence of
Indebtedness not permitted by Section 7.2.
(b) If any Capital Stock of the Borrower or any of its Subsidiaries shall be
issued or sold after the Closing Date (except any Capital Stock issued as a part
of the consideration of and in connection with a Permitted Acquisition), an
amount equal to 75% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or sale toward the prepayment of the Loans as set forth in
paragraph (d) of this Section 2.7.
(c) If the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds
from the Significant Disposition permitted under Section 7.6(e), 75% of the Net
Cash Proceeds thereof shall be applied on the date such Net Cash Proceeds are
received toward the prepayment of the Loans and the reduction of the Commitments
as set forth in paragraph (d) of this Section 2.7.
(d) Amounts to be applied in connection with prepayments of Loans and Commitment
reductions made pursuant to this Section 2.7 shall be applied to prepay the
Loans and reduce permanently the Commitments, pro rata according to the
outstanding amounts of Commitments. Any such reduction of the Commitments shall
be accompanied by prepayment of the Loans to the extent, if any, that the sum of
the Aggregate Outstanding Extensions of Credit of all Lenders exceeds the amount
of the aggregate Commitments as so reduced, provided that if the aggregate
principal amount of Loans then outstanding is less than the amount of such
excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent. Amounts on
deposit in the cash collateral account shall be invested as directed by the
Borrower subject to the approval of the Administrative Agent, which approval
shall not be unreasonably withheld. The application of any prepayment pursuant
to this Section 2.7 shall be made first to Base Rate Loans and second to
Eurodollar Loans, provided that at the request of the Borrower the application
of any prepayment to any Eurodollar Loan may be delayed until the end of an
Interest Period (or Interest Periods) so that such application does not result
in the incurrence by any Lender of any loss or expense under Section 2.17, and
during such delay, the Administrative Agent shall hold the amount of such
prepayment in a cash collateral account. Each prepayment of the Loans under this
Section 2.7 shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
2.8 Conversion and Continuation Options. (a) The Borrower may elect from time to
time to convert Eurodollar Loans to Base Rate Loans by giving the Administrative
Agent at least two Business Days' prior irrevocable notice of such election,
provided that any such conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto. The Borrower may elect from
time to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election. Any such notice of conversion to Eurodollar Loans shall specify
the length of the initial Interest Period therefor. Upon receipt of any such
notice, the Administrative Agent shall promptly notify each Lender thereof. All
or any part of outstanding Eurodollar Loans and Base Rate Loans may be converted
as provided herein, provided that (i) no Loan may be converted into a Eurodollar
Loan (A) when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined in its or their
sole discretion not to permit such a conversion or (B) having an Interest Period
in excess of one month prior to the date which is the earlier of (y) 120 days
after the Closing Date or (z) the date the initial syndication of Loans is
completed by the Arranger and (ii) no Loan may be converted into a Eurodollar
Loan after the date that is one month prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such a
continuation or (ii) after the date that is one month prior to the Termination
Date, and provided, further, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to Base Rate Loans on the last day of such then expiring
Interest Period.
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions,
continuations and optional prepayments of Loans hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Loans comprising each Eurodollar Tranche shall be equal to
$5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more
than eight Eurodollar Tranches in respect of all Loans shall be outstanding at
any one.
2.10 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal to the
Base Rate plus the Applicable Margin.
(c) If all or a portion of any principal of any Loan or Reimbursement
Obligations shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such amounts shall bear interest at 2% above the
rate otherwise applicable thereto from the date of such non-payment until such
overdue principal is paid in full (as well after as before judgment). If all or
a portion of any interest shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such amounts shall bear interest at 2%
above the rate otherwise applicable to the Loans or Reimbursement Obligations on
which such interest accrued from the date of such non-payment until such overdue
principal is paid in full (as well after as before judgment). If all or a
portion of any commitment fee or any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such amounts shall bear interest at a rate which is 2% above the rate applicable
to Base Rate Loans, in each case from the date of such non-payment until such
overdue commitment fee or other amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section 2.10 shall be
payable from time to time on demand.
2.11 Computation of Interest and Fees. (a) Interest on Loans and Reimbursement
Obligations, commitment fees, letter of credit commissions and interest on
overdue interest, commitment fees and other amounts payable hereunder shall be
calculated on the basis of a 360-day year for the actual days elapsed, except
that, with respect to Base Rate Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the Base
Rate or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error.
2.12 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
that were to be continued on the first day of such Interest Period as Eurodollar
Loans shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from
the Lenders hereunder, each payment by the Borrower on account of any commitment
fee and any reduction of the Commitments of the Lenders shall be made pro rata
according to the respective Percentages, as the case may be, of the relevant
Lenders. Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
Each payment made at any time when any amount hereunder is due and payable shall
be made pro rata according to the respective amounts then due and payable to the
Lenders. All payments (including prepayments) to be made by the Borrower
hereunder and under the Notes, whether on account of principal, interest, fees
or otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in Section 10.2, in Dollars and in immediately
available funds. Payments received by the Administrative Agent after such time
shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this Section 2.13(b) shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrower (together with any
amounts due under Section 2.17, calculated as if such Lender's failure to fund
such amount were a failure of the Borrower to borrow such amount after having
given notice of such borrowing). Nothing herein shall be deemed to limit the
rights of the Borrower against any defaulting Lender.
(c) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment being made hereunder that the Borrower
will not make such payment to the Administrative Agent, the Administrative Agent
may assume that the Borrower is making such payment, and the Administrative
Agent may, but shall not be required to, in reliance upon such assumption, make
available to the Lenders their respective pro rata shares of a corresponding
amount. If such payment is not made to the Administrative Agent by the Borrower
within three Business Days of such required date, the Administrative Agent shall
be entitled to recover, on demand, from each Lender to which any amount which
was made available pursuant to the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily average Federal Funds Effective
Rate. Nothing herein shall be deemed to limit the rights of the Administrative
Agent or any Lender against the Borrower.
2.14 Illegality. Notwithstanding any other provision herein, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.17.
2.15 Requirements of Law. (a) If after the date hereof the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with respect to
this Agreement, any Note, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for taxes covered by Section 2.16 and changes
in the rate of tax (whether characterized as income, franchise or other tax) on
the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender on
an after-tax basis for such increased cost or reduced amount receivable. If any
Lender becomes entitled to claim any additional amounts pursuant to this Section
2.15, it shall promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under or in respect of any Letter of Credit to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender on an after-tax basis for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts pursuant to
this subsection, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this Section
2.15, together with a calculation thereof in reasonable detail, shall be
submitted by the affected Lender to the Borrower (with a copy to the
Administrative Agent) and such certificate shall be conclusive in the absence of
manifest error. The obligations of the Borrower pursuant to this Section 2.15
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder.
2.16 Taxes. (a) All payments made by the Borrower under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under the Notes,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes, provided, however, that the Borrower shall make
payments net of and after deduction for Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Non-U.S. Lender (as defined
below) that fails to comply with Section 2.16(b). Whenever any Non-Excluded
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any Non-Excluded Taxes, incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure. The agreements in this Section
2.16 shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
(b) Each Lender (or Transferee) that is not a corporation or partnership created
or organized in or under the laws of the United States, any estate that is
subject to federal income taxation regardless of the source of its income or any
trust which is subject to the supervision of a court within the United States
and the control of a United States fiduciary as described in section 7701(a)(30)
of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) on or before the date on
which it becomes a party to this Agreement (or, in the case of a Participant, on
or before the date on which such Participant purchases the related
participation) either:
(A) (x) two duly completed and signed copies of either Internal Revenue Service
Form 1001 (relating to such Non-U.S. Lender and entitling it to a complete
exemption from withholding of U.S. Taxes on all amounts to be received by such
Non-U.S. Lender pursuant to this Agreement and the other Loan Documents) or Form
4224 (relating to all amounts to be received by such Non-U.S. Lender pursuant to
this Agreement and the other Loan Documents), or successor and related
applicable forms, as the case may be, and (y) two duly completed and signed
copies of Internal Revenue Service Form W-8 or W-9, or successor and related
applicable forms, as the case may be; or
(B) in the case of a Non-U.S. Lender that is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and that does not comply with the requirements
of clause (A) hereof, (x) a statement in the form of Exhibit F (or such other
form of statement as shall be reasonably requested by the Borrower or the
Administrative Agent from time to time) to the effect that such Non-U.S. Lender
is eligible for a complete exemption from withholding of U.S. Taxes under Code
Section 871(h) or 881(c), and (y) two duly completed and signed copies of
Internal Revenue Service Form W-8 or successor and related applicable form.
Further, each Non-U.S. Lender agrees to deliver to the Borrower and the
Administrative Agent, and if applicable, the assigning Lender (or, in the case
of a Participant, to the Lender from which the related participation shall have
been purchased) two further duly completed and signed copies of such Forms 1001,
4224, W-8 or W-9, as the case may be, or successor and related applicable forms,
on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to the Borrower or the Administrative
Agent (or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) in accordance with applicable United
States laws and regulations; unless, in any such case, any change in law or
regulation has occurred subsequent to the date such Lender became a party to
this Agreement (or in the case of a Participant, the date on which such
Participant purchased the related participation) which renders all such forms
inapplicable or which would prevent such Lender (or Participant) from properly
completing and executing any such form with respect to it and such Lender
promptly notifies the Borrower and the Administrative Agent (or, in the case of
a Participant, the Lender from which the related participation shall have been
purchased) if it is no longer able to deliver, or if it is required to withdraw
or cancel, any form or statement previously delivered by it pursuant to this
Section 2.16(b). A Non-U.S. Lender shall not be required to deliver any form or
statement pursuant to the immediately preceding sentences in this Section
2.16(b) that such Non-U.S. Lender is not legally able to deliver (it being
understood and agreed that the Borrower shall withhold or deduct such amounts
from any payments made to such Non-U.S. Lender that the Borrower reasonably
determines are required by law and that payments resulting from a failure to
comply with this paragraph (b) shall not be subject to payment or indemnity by
the Borrower pursuant to Section 2.16(a)).
2.17 Indemnity. The Borrower agrees to indemnify each Lender and to hold each
Lender harmless from any loss or expense which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification shall not exceed the sum of (i) an amount equal to the excess,
if any, of (A) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (B) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market plus (ii) any transaction costs of such Lender in connection
with the related funding or redeployment of funds. A certificate as to any
amounts payable pursuant to this Section 2.17, together with a calculation
thereof in reasonable detail, shall be submitted to the Borrower by any affected
Lender and such certificate shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
2.18 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.14, 2.15(a) or 2.16 with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no material economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.18 shall
affect or postpone any of the obligations of the Borrower or the rights of any
Lender pursuant to Section 2.14, 2.15(a) or 2.16.
2.19 Use of Proceeds. The Borrower shall use the proceeds of the Loans only in
the manner expressly contemplated by Section 4.16.
2.20 Replacement of Lenders. If no Event of Default then exists, the Borrower
may replace any Lender (the "Replaced Lender") if an event occurs giving rise to
the operation of Section 2.14 or Section 2.15, which results in the Replaced
Lender charging to Borrower increased costs in excess of those being generally
charged by the other Lenders and such Lender is not able to eliminate the
increased costs pursuant to Section 2.18. The Replaced Lender shall be replaced
with one or more banks, financial institutions, or other entities which are
reasonably acceptable to the Administrative Agent (each a "Replacement Lender")
under the terms set out in Section 10.6(c). Upon execution of the Assignment and
Acceptance referred to in Section 10.6(c), payment of amounts referred to in
Section 10.6(c), and delivery to the Replacement Lender of the appropriate Note
or Notes executed by Borrower, the Replacement Lender shall become a Lender
under this Agreement and the Replaced Lender shall no longer be a Lender under
this Agreement, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Prior to the date hereof, Norwest Bank has issued the
Letters of Credit listed on Schedule 3.1 (the "Existing Letters of Credit"), and
subject to the terms and conditions hereof, the Lender designated as Issuing
Lender hereunder, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue letters of credit (together with the Existing
Letters of Credit, "Letters of Credit") for the account of the Borrower, or for
the joint and several account of the Borrower and any Subsidiary, on any
Business Day during the Commitment Period in such form as may be requested by
the Borrower and approved from time to time by the Issuing Lender; provided,
that such approval may not be unreasonably withheld, delayed or conditioned; and
provided, further, that the Issuing Lender shall have no obligation to issue any
Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the Aggregate Outstanding
Extensions of Credit would exceed the aggregate Commitments. Each Letter of
Credit shall (i) be denominated in Dollars, (ii) be either (x) a standby letter
of credit issued to support (I) obligations of the Borrower or any of its
Subsidiaries, contingent or otherwise, which finance the working capital or
business needs of the Borrower or its Subsidiaries or (II) performance
obligations of the Borrower and its Subsidiaries, in each case, incurred in the
ordinary course of business (a "Standby Letter of Credit"), or (y) a commercial
letter of credit in respect of the purchase of goods or services by the Borrower
or any of its Subsidiaries in the ordinary course of business (a "Commercial
Letter of Credit"), (iii) expire no later than five Business Days prior to the
Termination Date and (iv) expire no later than 365 days after its date of
issuance, provided that any Letter of Credit with a 365-day duration may provide
for the renewal thereof at the election of the Borrower (in accordance with
procedures to be established by the Issuing Lender) for additional 365-day
periods (which shall not expire later than five Business Days prior to the
Termination Date).
(b) Each Letter of Credit issued after the Closing Date shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to
time request that the Issuing Lender issue a Letter of Credit by delivering to
the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Standby
Letter of Credit (including the amount thereof). On each L/C Fee Payment Date,
the Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the aggregate face
amount of the Commercial Letters of Credit outstanding on such date.
3.3 Fees, Commissions and Other Charges. (a) The Borrower agrees that it will
pay a commission on all outstanding Letters of Credit at a rate per annum equal
to 1/8 of 1% above the Applicable Margin then in effect with respect to Loans
that are Eurodollar Loans of the face amount of each such Letter of Credit, of
which 1/8 of 1% per annum will be a fronting fee for the account of the Issuing
Lender, and the remainder will be shared ratably among the Lenders in accordance
with their Percentages, payable quarterly in arrears on each L/C Fee Payment
Date after the issuance date.
(b) In addition to the foregoing fees and commissions, the Borrower agrees that
it shall pay or reimburse the Issuing Lender promptly upon demand for such
normal and customary costs and expenses as are incurred or charged by the
Issuing Lender in issuing, negotiating, effecting payment under, or amending any
Letter of Credit.
(c) The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this Section.
3.4 L/C Participation. (a) Effective on the Closing Date in respect of the
Existing Letters of Credit, and effective on the date of issuance thereof in
respect of each Letter of Credit issued hereunder after the Closing Date, the
Issuing Lender in respect of each Letter of Credit irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce such Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from such Issuing Lender,
on the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Percentage in such Issuing Lender's obligations and rights under such Letter of
Credit and the amount of each draft paid by such Issuing Lender thereunder. Each
L/C Participant unconditionally and irrevocably agrees with such Issuing Lender
in respect of each Letter of Credit that, if a draft is paid under any Letter of
Credit issued by such Issuing Lender for which such Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at
such Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to Loans that are Base Rate Loans hereunder. A certificate of the
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with Section 3.4(a), the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will
distribute to such L/C Participant its pro rata share thereof; provided that in
the event that any such payment received by the Issuing Lender shall be required
to be returned by the Issuing Lender, such L/C Participant shall return to the
Issuing Lender the portion thereof previously distributed by the Issuing Lender
to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse
the Issuing Lender on each date on which the Issuing Lender notifies the
Borrower of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Lender for the amount of (a) such draft so paid and (b)
any taxes, fees, charges or other costs or expenses incurred by the Issuing
Lender in connection with such payment. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States and in immediately available funds. Interest shall be payable
to the Issuing Lender on any and all amounts drawn under Letters of Credit from
the date of such drawing until the date three Business Days after receipt by the
Borrower from the Issuing Lender of notice of such drawing at the rate set forth
in Section 2.10(b) for Loans, and thereafter until payment in full at the rate
set forth in Section 2.10(c).
3.6 Obligations Absolute. The Borrower's obligations under this Section 3 shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment which the Borrower may have or
have had against the Issuing Lender, any beneficiary of a Letter of Credit or
any other Person. The Borrower also agrees with the Issuing Lender that, subject
to Section 3.7, the Issuing Lender shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 3.5 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for payment under
any Letter of Credit, the Issuing Lender shall promptly notify the Borrower of
the date and amount thereof. The responsibility of the Issuing Lender to the
Borrower in connection with any draft presented for payment under any Letter of
Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be to determine whether the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any Application related to
any Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arranger, the Administrative Agent, the Collateral Agent and the
Lenders to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Arranger, the Administrative Agent, the Collateral Agent and
each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated balance sheet
of the Borrower as at September 30, 1997 (including the notes thereto) (the "Pro
Forma Balance Sheet"), copies of which have heretofore been furnished to each
Lender, has been prepared giving effect (as if such events had occurred on such
date) to the borrowings under this Agreement contemplated to be made on the
Closing Date and the use of proceeds thereof and the payment of estimated fees
and expenses in connection therewith. The Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of the date
of delivery thereof and presents fairly in all material respects on a pro forma
basis the estimated consolidated financial position of the Borrower as of
September 30, 1997, assuming that the events specified in the preceding sentence
had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as at June 30, 1997
and June 30, 1996 and the related audited consolidated statements of income and
of cash flows for the fiscal years ended on such dates, reported on by KPMG Peat
Marwick LLP, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly in all material respects the
consolidated financial condition of the Borrower as at such dates, and the
consolidated results of operations and consolidated cash flows for the fiscal
years then ended.
All such financial statements described in this Section 4.1(b), including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). Except for contingent obligations
incurred in the ordinary course of business, the Borrower had at the date of the
most recent audited balance sheet referred to above no material undisclosed
liabilities, Guarantee Obligations, contingent liability or liability for taxes,
nor any material long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in such balance sheet or in the
notes thereto. During the period from June 30, 1997 to and including the date
hereof there has been no sale, transfer or other disposition by the Borrower or
any of its Consolidated Subsidiaries of any material part of their business or
property.
4.2 No Change. (a) Since June 30, 1997, there has been no development or event
which has had or could reasonably be expected to have a Material Adverse Effect,
and (b) during the period from June 30, 1997 to and including the date hereof no
dividends or other distributions have been declared, paid or made upon the
Capital Stock of the Borrower nor has any of the Capital Stock of the Borrower
been redeemed, retired, purchased or otherwise acquired for value by the
Borrower, except for the notice that the Borrower has received that it will be
required to repurchase approximately 16,000 shares of Capital Stock of the
Borrower from a former employee of the Borrower and which Capital Stock will be
purchased by the Borrower in due course.
4.3 Corporate Existence; Compliance with Law. Each Loan Party (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, except (in the case of any Subsidiary) where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, (b) has the power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, (c) is duly
qualified and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has
the power and authority, and the legal right, to make, deliver and perform each
Loan Document to which it is a party and, in the case of the Borrower, to borrow
hereunder. Each Loan Party has taken all necessary action to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
and, in the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement and the Notes. No material consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the transactions
contemplated hereby, the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except for those obtained on or before the date of this Agreement and
listed in Schedule 4.4, and except the filings referred to in Section 4.19. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
thereto. This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this Agreement and
the other Loan Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or Contractual Obligation of any Loan Party and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation (other than the Liens created by the Security Documents).
4.6 No Material Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby or (b) which could reasonably be expected to have
a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any of its Contractual Obligations in any respect which
could reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its Domestic
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 7.3. The Borrower and its Subsidiaries (other than
Argentine Subsidiaries) have no fee interests in any material real property
other than the Mortgaged Property, the Oil and Gas Properties and, as of the
date hereof, the real property described on Schedule 4.8.
4.9 Intellectual Property. The Borrower and each of its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, technology, know-how
and processes necessary for the conduct of its business as currently conducted,
except for those the failure to own or license which could not reasonably be
expected to have a Material Adverse Effect (collectively, the "Intellectual
Property"). No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim. To the Borrower's knowledge, the use of
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person where such infringement could reasonably be expected to
have a Material Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation
of the Borrower or any of its Subsidiaries could reasonably be expected to have
a Material Adverse Effect.
4.11 Taxes. Each of the Borrower and its Domestic Subsidiaries, and to the
knowledge of the Borrower, its Argentine Subsidiaries have filed or caused to be
filed all material Federal, state and other tax returns which are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
Borrower); no material tax Lien has been filed; and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any material tax, fee or
other charge.
4.12 Federal Regulations. Except as otherwise provided by Sections 4.16 and 7.7,
no part of the proceeds of any Loans will be used for "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation G or Regulation U of the Board as now and from time to time
hereafter in effect. No part of the proceeds of any Loans will be used for any
purpose which violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. To the knowledge of the
Borrower and the Commonly Controlled Entities, no such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of $1,000,000.
4.14 Investment Company Act; Other Regulations. No Loan Party is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board) which limits its ability to
incur Indebtedness.
4.15 Subsidiaries. As of the date hereof, the Subsidiaries listed on Schedule
4.15 constitute all the direct or indirect Subsidiaries of the Borrower, and
Schedule 4.15 shows, as to each such Subsidiary, its jurisdiction of its
incorporation, its authorized capitalization and the ownership of Capital Stock
of such Subsidiary.
4.16 Purpose of Loans; Limitations on Use. The proceeds of the Loans shall be
used to finance Permitted Acquisitions and capital expenditures, to finance the
repurchase from time to time the outstanding Capital Stock of the Borrower to
the extent permitted by subsection 7.7 and for general corporate purposes of the
Borrower and its Subsidiaries (including Excluded Subsidiaries) in the ordinary
course of business; provided, that the amount of proceeds of the Loans which may
be used for Permitted Acquisitions of oil and gas properties shall be limited to
an amount equal to the lesser of (a) $25,000,000 and (b) 65% of the value of the
oil and gas properties of Odessa Exploration Incorporated (after giving effect
to any such Permitted Acquisition), which value shall be calculated as the
present value discounted at 10% of future net revenue relating to all proved
developed producing reserves and proved undeveloped reserves from such
properties. In addition, if at least 90% of the original outstanding principal
amount of the Convertible Subordinated Debentures or the 1997 Convertible
Subordinated Notes shall have been converted into common stock of the Borrower,
the Borrower may use proceeds of the Loans to repurchase or redeem the remaining
outstanding Convertible Subordinated Debentures or 1997 Convertible Subordinated
Notes, as applicable, as permitted by Section 7.10.
4.17 Environmental Matters. Other than exceptions to any of the following that
could not, individually or in the aggregate, reasonably be expected to give rise
to a Material Adverse Effect:
(a) the Borrower and each of its Subsidiaries: (i) are, and to the knowledge of
the executive management of the Borrower within the period of all applicable
statutes of limitation have been, in compliance with all applicable
Environmental Laws; (ii) hold all Environmental Permits (each of which is in
full force and effect) required for any of their current operations or for any
property owned, leased, or otherwise operated by any of them; (iii) are, and to
the knowledge of the executive management of the Borrower within the period of
all applicable statutes of limitation have been, in compliance with all of their
Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits required for their continued operations will be timely
renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is reasonably expected by the Borrower's executive
management to become applicable to any of them will be timely attained and
maintained, without material expense.
(b) To the knowledge of the executive management of the Borrower, Materials of
Environmental Concern are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by the Borrower or any of its
Subsidiaries or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in costs
to the Borrower or any of its Subsidiaries, or (ii) interfere with the continued
operations of the Borrower or any of its Subsidiaries, or (iii) impair the fair
saleable value of any real property owned or leased by the Borrower or any of
its Subsidiaries.
(c) There is no judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under or relating to any Environmental
Law to which the Borrower or any of its Subsidiaries is, or to the knowledge of
the executive management of the Borrower will be, named as a party that is
pending or, to the knowledge of the executive management of the Borrower,
threatened.
(d) Neither the Borrower nor any of its Subsidiaries has received any written
request for information, or been notified that it is a potentially responsible
party under or relating to the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law.
(e) Neither the Borrower nor any of its Subsidiaries has entered into or agreed
to any consent decree, order, or settlement or other agreement, nor is subject
to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law.
(f) To the knowledge of the executive management of the Borrower, neither the
Borrower nor any of its Subsidiaries has assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known or
unknown, under or relating to any Environmental Law.
For purposes of Section 8, each of the foregoing representations and warranties
contained in this Section 4.17 that is qualified by the knowledge of the
executive management of the Borrower shall be deemed not to be so qualified.
4.18 Accuracy of Information. No statement or information contained in this
Agreement, any other Loan Document, the Confidential Information Memorandum or
any other document, certificate or statement furnished to the Arranger, the
Administrative Agent or the Lenders, by or on behalf of any Loan Party for use
in connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished any untrue statement of a material fact or, with
all such statements and information being taken as a whole, omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. It is understood that no representation or warranty is
made concerning the forecasts, estimates, pro forma information, projections and
statements as to anticipated future performance or conditions, and the
assumptions on which they were based contained in any such information, reports,
financial statements, exhibits or schedules, except that as of the date such
forecasts, estimates, pro forma information, projections and statements were
generated, such forecasts, estimates, pro forma information, projections and
statements were based upon good faith estimates and assumptions believed by
management of the Borrower and its Subsidiaries to be reasonable at such time.
There is no fact known to the executive management of the Borrower that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, or in such other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
4.19 Security Documents. (a) The Master Guarantee and Collateral Agreement is
effective to create in favor of the Collateral Agent, for the benefit of the
Lenders, a security interest which has attached (as that term is used in Section
9-203 of the New York UCC) in the Pledged Securities and other instruments,
negotiable documents, chattel paper and money described therein, to the extent
that the Loan Parties to the Master Guaranty and Collateral Agreement have
rights in such Collateral, and proceeds thereof and, when the Pledged Notes and
the stock certificates representing the Pledged Stock described therein and
other instruments, negotiable documents, chattel paper and money described
therein are delivered to the Collateral Agent, the Master Guarantee and
Collateral Agreement shall constitute a perfected first priority Lien on, and
security interest in, all right, title and interest of the relevant pledgor in
such Pledged Securities and other instruments, negotiable documents, chattel
paper and money and the proceeds thereof, as security for the Obligations (as
defined in the Master Guarantee and Collateral Agreement), in each case prior
and superior in right to any other Person, except for inchoate tax liens for
obligations to be paid in the ordinary course of business.
(b) The Master Guarantee and Collateral Agreement is effective to create in
favor of the Collateral Agent, for the benefit of the Lenders, a security
interest which has attached (as that term is used in Section 9-203 of the New
York UCC) in the Collateral described therein (other than the Collateral
described in Section 4.19(a)), to the extent that the Loan Parties to the Master
Guarantee and Collateral Agreement have rights in such Collateral, and proceeds
thereof, and when financing statements in appropriate form are properly filed
(with all required filing fees being paid) in the offices specified on
Schedule 4.19(b) and, with respect to vehicles included in the Collateral and
covered by certificates of title issued by any State, when the security interest
of the Collateral Agent has been noted on such certificate of title in
accordance with the certificate of title laws of such State, the Master
Guarantee and Collateral Agreement shall constitute a perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in
substantially all of such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Master Guarantee and Collateral Agreement),
in each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 7.3.
(c) Each Mortgage, which has been executed and delivered by the relevant Loan
Party, and properly filed and recorded (with all required filing and recording
fees being paid) in the office(s) specified on Schedule 4.19(c), constitutes a
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Mortgaged Property properly described therein, as security for
the Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person, other than with respect to Liens
expressly permitted by Section 7.3.
(d) Each Oil and Gas Mortgage, which has been executed and delivered by the
relevant Loan Party, and properly filed and recorded (with all required filing
and recording fees being paid) in the office(s) specified on Schedule 4.19(d),
constitutes a perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Oil and Gas Property properly described
therein, as security for the Obligations (as defined in the relevant Oil and Gas
Mortgage), in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by Section 7.3.
4.20 Solvency. The Borrower and its Subsidiaries, taken as a whole, are, and
after giving effect to the incurrence of all Indebtedness and obligations being
incurred in connection herewith will be, Solvent.
4.21 Labor Matters. There are no strikes pending or, to the knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The hours worked and payments made to employees of the
Borrower and each of its Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable Requirement of Law, except to the
extent such violations could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. All material payments due
from the Borrower or any of its Subsidiaries on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary.
4.22 Indentures. All Indebtedness of the Borrower hereunder constitutes "Senior
Indebtedness" within the meaning of the Indenture and the 1997 Indenture.
4.23 Excluded Subsidiaries. As of the Closing Date the Borrower is in the
process of dissolving all Excluded Subsidiaries listed in clause (a) of the
definition of Excluded Subsidiaries in Section 1.1, and the Borrower expects to
dissolve the Excluded Subsidiaries listed in clause (c) of the definition of
Excluded Subsidiaries in Section 1.1 in the ordinary of business when the assets
of such corporations are disposed of.
4.24 Oil and Gas Properties. The Oil and Gas Properties described in Schedule
1.1C constitute 80% of the value of the proved developed producing and proved
undeveloped reserves of Odessa Exploration Incorporated on the Closing Date. For
purposes of this Section, the value of such reserves shall be calculated as the
present value discounted at 10% of future revenue relating to such reserves.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness. The effectiveness of the changes to the
Existing Credit Agreement made pursuant to this Agreement is subject to the
satisfaction, prior to or concurrently with the Closing Date (which Closing Date
shall occur on or before November 20, 1997), of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have received this Agreement,
executed and delivered by a duly authorized officer of the Borrower, with a
counterpart or a conformed copy for each Lender.
(b) Related Agreements. The Administrative Agent shall have received, with a
copy for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of the Insurance Policies (or certificates evidencing the
effectiveness of such Insurance Policies and the material terms thereof) and the
1997 Indenture.
(c) Fees. The Lenders, Arranger and the Administrative Agent shall have received
all fees required to be paid, and all expenses for which invoices have been
presented, on or before the Closing Date.
(d) Approvals. All governmental and third party approvals necessary or, in the
reasonable discretion of the Administrative Agent, advisable in connection with
this Agreement and the financings contemplated hereby and the continuing
operations of the Borrower and its Domestic Subsidiaries shall have been
obtained and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the continuing operations of the Borrower.
(e) [Intentionally omitted].
(f) Solvency Analysis. The Lenders shall have received a reasonably satisfactory
solvency analysis certified by the chief financial officer of the Borrower which
shall document the solvency of the Borrower and its Subsidiaries considered as a
whole after giving effect to the transactions contemplated hereby.
(g) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, (i) the executed legal opinion of Xxxx X. Xxxxxx,
Xx., Esq., general counsel to the Loan Parties, substantially in the form of
Exhibit E-1 and (ii) the executed legal opinion of Xxxxxx & Xxxxxx, L.L.P.,
counsel to the Loan Parties, substantially in the form of Exhibit E-2. Each such
legal opinion shall be in form and substance reasonably satisfactory to the
Lenders and shall cover such matters incident to the transactions contemplated
by this Agreement as the Administrative Agent may reasonably require.
(h) Closing Certificate. The Administrative Agent shall have received, with a
counterpart for each Lender, a certificate of each Loan Party, dated the Closing
Date, substantially in the form of Exhibit D, with appropriate insertions and
attachments, executed by the President or any Vice President and the Secretary
or any Assistant Secretary of such Loan Party.
(i) Corporate Proceedings of Loan Parties. The Administrative Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions of the
Board of Directors of each Loan Party authorizing (i) the execution, delivery
and performance of the Loan Documents to which it is a party (including, but not
limited to, the granting of any Liens provided for therein), and (ii) in the
case of the Borrower, the borrowings contemplated hereunder.
(j) Pledged Securities; Stock Powers. The Collateral Agent shall have received
the Pledged Stock pledged pursuant to the Master Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof.
(k) Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code financing statement) required by the
Security Documents or the Existing Credit Agreement or under law or reasonably
requested by the Administrative Agent to be delivered to the Collateral Agent or
to be filed, registered or recorded in order to (i) continue the liens on the
Collateral under the Security Documents with the same priority as under the
Existing Credit Agreement immediately prior to the Closing Date and (ii) create
in favor of the Collateral Agent, for the benefit of the Lenders, a perfected
Lien on all Collateral that was to have been perfected pursuant to Section 6.10
and 6.11 of the Existing Credit Agreement immediately prior to the Closing Date
(including, without limitation, all Collateral of New Loan Parties), prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation in each jurisdiction in which the filing,
registration or recordation thereof is so required or requested, other than
those documents required to be filed, registered or recorded after the Closing
Date pursuant to Section 6.11.
(l) Existing Credit Agreement. To the extent requested by any Lender, the
Borrower shall execute and deliver a new Note in the amount of such Lender's
Commitment in replacement and substitution of (but not in payment of) such
Lender's note under the Existing Credit Agreement and the Administrative Agent
shall request all the Lenders who hold notes under the Existing Credit Agreement
to return such notes to the Administrative Agent for cancellation and
replacement (but not payment), if applicable. The Borrower shall have paid all
interest, fees and other amounts (other than principal) accrued under the
Existing Credit Agreement through the Closing Date.
5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make
any extension of credit requested to be made by it on any date (including,
without limitation, its initial extension of credit) and the occurrence of the
Closing Date is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Except to the extent that they are made as
of a specific date, each of the representations and warranties made by any Loan
Party in or pursuant to the Loan Documents (excluding on and after the
Collateral Release Date, the representations and warranties contained in
subsections 4.19 and 4.24) shall be true and correct in all material respects on
and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions or credit
requested to be made on such date.
(c) Additional Matters. All proceedings, and all documents, instruments and
other legal matters in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall be reasonably satisfactory in form
and substance to the Administrative Agent, and the Administrative Agent shall
have received such other documents and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
(d) Borrowing Notice. The Borrower shall have delivered to the Administrative
Agent the applicable borrowing notice in accordance with the relevant subsection
of Section 2.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Note or Letter of Credit remains outstanding and unpaid or any other amount
is owing to any Lender, the Arranger or the Administrative Agent hereunder, the
Borrower shall and, if applicable, shall cause each of its Subsidiaries (and
with respect to Section 6.8, each of the Excluded Subsidiaries) to:
6.1 Financial Statements. Furnish to the Administrative Agent for distribution
to each Lender:
(a) as soon as available, but in any event within 95 days after the end of each
fiscal year of the Borrower, a copy of the audited consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at the end of such year and
the related audited consolidated statements of income and retained earnings and
of cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by KPMG Peat Marwick LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 50 days after the end
of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Borrower and its Consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements referred to in this Section 6.1(b) shall be
complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods, subject to normal year-end
adjustments.
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred to in
Section 6.1(a), (i) a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate and (ii) copies of all
reports or written communications providing advice, recommendations or analysis
to the management of the Borrower from such independent certified public
accountants with regard to their audit of the financial statements referred to
in Section 6.1(a) or the internal financial controls and systems of the
Borrower;
(b) concurrently with the delivery of any financial statement pursuant to
Section 6.1, (x) a certificate of a Responsible Officer of the Borrower stating
that, to the best of each such Responsible Officer's knowledge, during such
period (i) no Subsidiary has been formed or acquired (or, if any such Subsidiary
has been formed or acquired, the Loan Parties have complied with the
requirements of Section 6.10 with respect thereto), (ii) neither the Borrower
nor any of its Subsidiaries has changed its name, its principal place of
business, its chief executive office, its principal place of business, the
location where records concerning the Collateral are kept or the location of any
material item of tangible Collateral without complying with the requirements of
this Agreement and the Security Documents with respect thereto and (iii) each
Loan Party has observed or performed all of its covenants and other agreements,
and satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (y) in the case of
quarterly or annual financial statements, a certificate containing all
information reasonably necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement (including but not
limited to Sections 2.7 and 7.1) as of the last day of such fiscal quarter or
fiscal year of the Borrower;
(c) as soon as available, and in any event no later than the end of each fiscal
year of the Borrower, a projected consolidated balance sheet of the Borrower as
of the end of the following fiscal year, and the related consolidated statements
of projected cash flow, projected retained earnings and projected income for the
following fiscal year, together with an operating budget with respect to the
following fiscal year, and, as soon as available, significant revisions, if any,
of such projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer of the Borrower stating that such
Projections are based on estimates, information and assumptions believed by such
Responsible Officer to be reasonable and that such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading in any
material respect;
(d) within 50 days after the end of each fiscal quarter of each fiscal year of
the Borrower, a narrative discussion and analysis of the consolidated financial
condition and results of operations of the Borrower and its Subsidiaries for
such fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion of the
Projections, as applicable, covering such periods and to the comparable periods
of the previous year;
(e) within five days after the same are filed, copies of all financial
statements and reports which the Borrower or any of its Subsidiaries may make
to, or file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority of the United States; and
(f) promptly, such additional financial and other information as any Lender may
from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent or (in the case of trade payables and
obligations other than for borrowed money) within 150 days after the due date,
as the case may be, all its material obligations of whatever nature, except
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries, as
the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc. (_) (a) Continue to
engage in business of the same general type as now conducted by it, (b)
preserve, renew and keep in full force and effect its existence and (c) take all
commercially reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case in clauses (a), (b) and (c) above, as otherwise permitted pursuant to
Section 7.5 and except, in the case of clause (c) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (d) comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all material property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted; (b) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks (but including in any event general liability) as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and (c) furnish to each Lender, upon written request, full
information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. Keep proper books of
records and account in which full, true and correct entries in conformity with
GAAP or, in the case of Foreign Subsidiaries, in conformity with generally
accepted accounting principles in effect in the jurisdiction where such Foreign
Subsidiary is located at such time and, in the case of the Borrower and its
Domestic Subsidiaries, all Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and upon reasonable
notice permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with senior officers of the Borrower and its
Subsidiaries and with its independent certified public accountants.
6.7 Notices. Promptly give notice to the Administrative Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation of the
Borrower or any of its Subsidiaries or (ii) litigation, investigation or
proceeding which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, which in either case, if not cured
or if adversely determined, as the case may be, could reasonably be expected to
have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event within 30 days
after the Borrower or any of its Subsidiaries knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution in a material
amount to a Plan, the creation of any Lien in a material amount in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan;
(d) (i) any release or discharge by the Borrower or any Subsidiary of any
Materials of Environmental Concern required to be reported under Environmental
Laws to any Governmental Authority which could reasonably be expected to result
in the assessment or payment of a Material Environmental Amount; (ii) any
condition, circumstance, occurrence or event that could reasonably be expected
to result in the assessment or payment of a Material Environmental Amount, or
could result in the imposition of any Lien or other restriction on the title,
ownership or transferability of any Mortgaged Property; and (iii) any action to
be taken by the Borrower or any Subsidiary that could reasonably be expected to
subject the Borrower or any Subsidiary to the assessment or payment of a
Material Environmental Amount; and
(e) any development or event which could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower or the applicable
Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws.
(a)(i) Comply with all Environmental Laws applicable to it, and obtain, comply
with and maintain any and all Environmental Permits necessary for its operations
as conducted and as planned; and (ii) take all reasonable efforts to ensure that
all of its tenants, subtenants, contractors, subcontractors, and invitees comply
with all applicable Environmental Laws, and obtain, comply with and maintain any
and all Environmental Permits, applicable to any of them insofar as any failure
to so comply, obtain or maintain reasonably could be expected to adversely
affect the Borrower or any of its Subsidiaries. For purposes of this 6.8(a),
noncompliance by the Borrower with any applicable Environmental Law or
Environmental Permit shall be deemed not to constitute a breach of this covenant
provided that, upon learning of any actual or suspected noncompliance, the
Borrower shall undertake reasonable efforts to achieve compliance, and provided
further that, in any case, such non-compliance, and any other noncompliance with
applicable Environmental Law, individually or in the aggregate, could not
reasonably be expected to give rise to a Material Adverse Effect.
(b) Promptly comply in all material respects with all orders and directives of
all Governmental Authorities directed to the Borrower or any of its Domestic
Subsidiaries regarding Environmental Laws, other than such orders and directives
or parts thereof as are being contested in good faith and by appropriate
proceedings.
(c) Within six months after the Closing Date, complete the development of a
program to promote compliance with and to minimize prudently any liabilities or
potential liabilities under any Environmental Law that may affect Borrower or
any of its Domestic Subsidiaries (the "Environmental Program") and implement the
Environmental Program upon a reasonable schedule thereafter. The Environmental
Program shall be developed with the assistance of a reputable independent
environmental consulting firm reasonably acceptable to the Administrative Agent
(an "Environmental Consultant") or a qualified employee of the Borrower. Upon
the Administrative Agent's request, a reasonably detailed written description of
the Environmental Program shall be provided to the Administrative Agent, after
which, upon the Administrative Agent's request, Borrower shall confer with the
Administrative Agent concerning any questions the Administrative Agent may have
about the Environmental Program.
(d) Prior to acquiring any ownership or leasehold interest in real property, or
other interest in any real property which in the Borrower's reasonable judgment
could give rise to significant liability under any Environmental Law, obtain a
written environmental assessment report regarding the environmental condition of
such real property by a reputable independent environmental consulting firm.
Upon the request of the Administrative Agent, a copy of each such environmental
assessment report shall be delivered to the Administrative Agent by the end of
the calendar quarter in which the acquisition closed, together with a list of
all acquisitions of interests in real property by the Borrower and the
Subsidiaries in such quarter. Pursuant to this Section 6.8(d), the
Administrative Agent shall have the right, but shall not have any duty, to
obtain, review or discuss any such report.
(e) Promptly upon the Administrative Agent's request if there has been an Event
of Default which has not been fully and timely cured, permit an Environmental
Consultant whom the Administrative Agent in its discretion designates to perform
an environmental assessment (including, without limitation: reviewing documents;
interviewing knowledgeable persons; and sampling and analyzing soil, air,
surface water, groundwater, and/or other media in or about property owned or
leased by the Borrower, or on which operations of the Borrower otherwise take
place). Such environmental assessment shall be in form, scope, and substance
reasonably satisfactory to the Administrative Agent. The Borrower shall
cooperate fully in the conduct of such environmental assessment, and shall pay
the costs of such environmental assessment immediately upon written demand by
the Administrative Agent. Pursuant to this section 6.8(e), the Administrative
Agent shall have the right, but shall not have any duty, to request and/or
obtain such environmental assessment.
6.9 Further Assurances. Upon the request of the Administrative Agent at any time
prior to the Collateral Release Date, promptly perform or cause to be performed
any and all acts and execute or cause to be executed any and all documents
(including, without limitation, financing statements and continuation
statements) for filing under the provisions of the Uniform Commercial Code or
any other Requirement of Law which are necessary or advisable in the reasonable
judgment of the Collateral Agent to maintain in favor of the Collateral Agent,
for the benefit of the Lenders, Liens on the Collateral that are duly perfected
in accordance with all applicable Requirements of Law.
6.10 Additional Collateral. Unless the Collateral Release Date shall have
occurred:
(a) With respect to any assets acquired after the Closing Date by the Borrower
or any of its Domestic Subsidiaries that are intended to be subject to the Lien
created by any of the Security Documents but which are not so subject (other
than any assets described in paragraph (b), (c), (d) or (e) of this Section
6.10), promptly (and in any event within 30 days after the acquisition or
creation thereof): (i) execute and deliver to the Collateral Agent such
amendments to the Master Guarantee and Collateral Agreement or such other
documents as the Collateral Agent shall reasonably deem necessary or advisable
to grant to the Collateral Agent, for the benefit of the Lenders, a Lien on such
assets, (ii) take all actions reasonably necessary or advisable to cause such
Lien to be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be reasonably requested by the
Collateral Agent (provided that for any Vehicles that are covered by a
certificate of title, the Borrower shall cause such Lien to be duly perfected in
accordance with all applicable Requirements of Law within 90 days after the
acquisition thereof), and (iii) if requested by the Collateral Agent, deliver to
the Collateral Agent within 30 days of such request legal opinions relating to
the matters described in clauses (i) and (ii) immediately preceding, which
opinions shall be in form and substance and from counsel reasonably satisfactory
to the Collateral Agent.
(b) With respect to any Person that, subsequent to the Closing Date, becomes a
Domestic Subsidiary of the Borrower (including, without limitation, any Person
which had previously been an Excluded Subsidiary), promptly (and in any event
within 30 days after the acquisition or creation thereof): (i) execute and
deliver to the Collateral Agent, for the benefit of the Lenders, such amendments
to the Master Guarantee and Collateral Agreement as the Collateral Agent shall
deem reasonably necessary or advisable to grant to the Collateral Agent, for the
benefit of the Lenders, a Lien on the Capital Stock of such Subsidiary which is
owned by the Borrower or any of its Subsidiaries, (ii) deliver to the Collateral
Agent the certificates representing such Capital Stock, together with undated
stock powers duly executed and delivered in blank, (iii) cause such new Domestic
Subsidiary (A) to become a party to the Master Guarantee and Collateral
Agreement, pursuant to documentation which is in form and substance reasonably
satisfactory to the Collateral Agent, and (B) to take all actions necessary or
advisable to cause the Lien created by such security agreement to be duly
perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be reasonably requested by the Collateral Agent
(provided that for any Vehicles that are covered by a certificate of title, the
Borrower shall cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law within 90 days after the acquisition thereof),
and (iv) if requested by the Collateral Agent, deliver to the Collateral Agent
within 30 days of such request legal opinions relating to the matters described
in clauses (i), (ii) and (iii) immediately preceding, which opinions shall be in
form and substance and from counsel reasonably satisfactory to the Collateral
Agent.
(c) With respect to any fee interest in any real property acquired after the
Closing Date by the Borrower or any of its Domestic Subsidiaries having a
purchase price (or, if acquired through a merger or stock acquisition, a fair
market value) in excess of $1,000,000, promptly (and in any event within 90 days
after the acquisition thereof) (i) execute and deliver a first priority mortgage
or deed of trust, as the case may be (subordinate only to such mortgages or
deeds of trust as are necessary to permit the Borrower or such Domestic
Subsidiary to purchase such real property but subject to such easements, rights
of way, restrictions and other similar encumbrances as such property may be
subject at the time of acquisition), in favor of the Collateral Agent, for the
benefit of the Lenders, covering such real property, in form and substance
reasonably satisfactory to the Collateral Agent, (ii) provide to the Collateral
Agent all necessary documents reasonably requested by the Collateral Agent to
confirm the Borrower's or its Subsidiaries' ownership of such real property,
(iii) if requested by the Collateral Agent, provide the Lenders with any
consents or estoppels deemed necessary or advisable by the Collateral Agent in
connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Collateral Agent and (iv) if
requested by the Collateral Agent, deliver to the Collateral Agent legal
opinions relating to the matters described in the preceding clauses (i) and
(iii), which opinions shall be in form and substance and from counsel reasonably
satisfactory to the Collateral Agent. Notwithstanding the foregoing, compliance
shall not be required with the foregoing provision of this paragraph (c) in
respect of any interest in real property which, at the time of acquisition
thereof by the Borrower or its Subsidiary, is subject to a legal or contractual
restriction that would prohibit the granting of a mortgage thereon to the
Collateral Agent; provided, that the aggregate book value of real property owned
by the Borrower and its Subsidiaries so subject may not exceed $5,000,000 at any
time.
(d) With respect to any Foreign Subsidiary created or acquired after the Closing
Date by the Borrower or any of its Domestic Subsidiaries, promptly (and in any
event within 150 days after the acquisition or creation thereof) (i) execute and
deliver to the Collateral Agent such amendments to the Master Guarantee and
Collateral Agreement (or comparable documentation) as the Collateral Agent deems
reasonably necessary or advisable in order to grant to the Collateral Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock (except for Liens permitted under Section 7.3) of such new Foreign
Subsidiary which is owned by the Borrower or any of its Domestic Subsidiaries
(provided that in no event shall more than 65% of the Capital Stock of any such
new Subsidiary be required to be so pledged), (ii) deliver to the Collateral
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
the Borrower or such Subsidiary, as the case may be, and (iii) if requested by
the Collateral Agent, deliver to the Collateral Agent legal opinions relating to
the matters described in the preceding clauses (i) and (ii), which opinions
shall be in form and substance and from counsel reasonably satisfactory to the
Collateral Agent.
(e) With respect to any oil and gas property acquired after the Closing Date by
the Borrower or any of its Domestic Subsidiaries having a purchase price (or, if
acquired through a merger or stock acquisition, a fair market value) in excess
of $1,000,000 and which, after giving effect to such acquisition and assuming
that a perfected first priority Lien thereon were not granted to the Collateral
Agent would result in the Collateral Agent having a perfected first priority
Lien on less than 80% in value (calculated as provided in Section 4.24) of the
reserves contained in all of the oil and gas properties of the Borrower and its
Domestic Subsidiaries, promptly (and in any event within 30 days after the
acquisition thereof) (i) execute and deliver a first priority oil and gas
mortgage (subordinate only to such oil and gas mortgages as are necessary to
permit the Borrower or such Domestic Subsidiary to purchase such property but
subject to such restrictions and other similar encumbrances as such property may
be subject at the time of acquisition), in favor of the Collateral Agent, for
the benefit of the Lenders, covering such property, in form and substance
reasonably satisfactory to the Collateral Agent, and (ii) if requested by the
Collateral Agent, deliver to the Collateral Agent within 180 days of such
request title opinions relating to the matters described in the preceding clause
reasonably satisfactory to the Collateral Agent.
6.11 Post-Closing Matters.
(a) Legal Opinions. Deliver to the Collateral Agent as promptly as practicable,
but in any event within 90 days after the Closing Date, such title opinions in
respect of the Oil and Gas Properties as may be reasonably requested by the
Collateral Agent. Such legal opinions shall be in form and substance reasonably
satisfactory to the Collateral Agent and shall cover such matters incident to
the transactions contemplated by this Agreement as the Collateral Agent may
reasonably require.
(b) Vehicles. Within 90 days after the Closing Date, deliver to the Collateral
Agent each document (including, without limitation, any certificates of
title) required by the Security Documents or under law or reasonably requested
by the Collateral Agent to be delivered to the Collateral Agent or to be filed,
registered or recorded in order to create in favor of the Collateral Agent, for
the benefit of the Lenders, a perfected Lien on all of the Vehicles covered by a
certificate of title, prior and superior in right to any other Person (other
than with respect to Liens expressly permitted by Section 7.3), which documents
shall be in proper form for filing, registration or recordation in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested.
(c) Lien Searches. The Collateral Agent shall have received the results of a
recent lien search by a Person satisfactory to the Administrative Agent, of the
Uniform Commercial Code, judgment and tax lien filings in each of the relevant
jurisdictions where assets of the all Loan Parties are located, and such search
shall reveal no material Liens on any of such assets except for Liens permitted
by Section 7.3. If any Liens not permitted by Section 7.3 appear as a result of
such lien search, promptly (and in any event within 60 days of completion of the
lien search), the Borrower shall cause to be filed any termination statements
that are reasonably requested by the Collateral Agent to be filed with respect
to such unpermitted Liens.
(d) Pledged Securities; Stock Powers. The Collateral Agent shall have received
within 60 days of the Closing Date 65% of the Capital Stock of Kenting Holdings
(Argentina) S.A., an Argentine corporation, pledged pursuant to the Master
Guarantee and Collateral Agreement, together with an undated stock power for
such certificate executed in blank by a duly authorized officer of the pledgor
thereof.
(e) Legal Opinions. In connection with the Pledged Stock of the New Loan
Parties, the Administrative Agent shall have received within 60 days of the
Closing Date, with a counterpart for each Lender, the executed legal opinion of
Xxxx X. Xxxxxx, Xx., Esq., general counsel to the New Loan Parties or the
executed legal opinion of a local counsel satisfactory to the Administrative
Agent. Each such legal opinion shall be substantially in the form of Exhibit E-1
hereto and shall cover such matters incident to the transactions contemplated by
this Agreement as the Administrative Agent may reasonably require.
(f) Mortgages. The Collateral Agent shall have received within 60 days of the
Closing Date legal opinions from local counsel in respect of the Mortgages and
recording thereof relating to the necessity of amending the terms thereof as may
be reasonably requested by the Collateral Agent, with a counterpart for each
Lender, and the Collateral Agent shall have received amendments to each Mortgage
the Collateral Agent reasonably deems necessary to amend, executed and delivered
by a duly authorized officer of each party thereto, with a copy for each Lender.
6.12 Authorization of Additional Shares of Stock. As soon as practicable, use
its best efforts to increase the number of shares of common stock which the
Borrower is authorized to issue under its certificate of incorporation to an
amount which would be sufficient to allow the Borrower to issue shares of its
common stock to all of the holders of the 1997 Convertible Subordinated Notes
upon conversion of all of the 1997 Convertible Subordinated Notes.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Note or Letter of Credit remains outstanding and unpaid or any other amount
is owing to any Lender, the Arranger, the Collateral Agent or the Administrative
Agent hereunder, the Borrower shall not, and, if applicable, shall not permit
any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
any date set forth below to exceed the ratio set forth below opposite such date:
Consolidated
Date Leverage Ratio
December 31, 1997 4.50 to 1.00
March 31, 1998 4.50 to 1.00
June 30, 1998 4.00 to 1.00
September 30, 1998 4.00 to 1.00
December 31, 1998 3.50 to 1.00
March 31, 1999 3.50 to 1.00
June 30, 1999 3.50 to 1.00
September 30, 1999 3.50 to 1.00
December 31, 1999 3.00 to 1.00
March 31, 2000 3.00 to 1.00
June 30, 2000 3.00 to 1.00
September 30, 2000 3.00 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 2.50 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.50 to 1.00
March 31, 2002 2.50 to 1.00
June 30, 2002 2.50 to 1.00
September 30, 2002 2.50 to 1.00
====================
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending as of any date set forth below to be less than the ratio set
forth below opposite such date:
Consolidated
Interest
Date Coverage Ratio
December 31, 1997 2.50 to 1.00
March 31, 1998 2.50 to 1.00
June 30, 1998 3.00 to 1.00
September 30, 1998 3.00 to 1.00
December 31, 1998 3.50 to 1.00
March 31, 1999 3.50 to 1.00
June 30, 1999 4.00 to 1.00
September 30, 1999 4.00 to 1.00
December 31, 1999 4.00 to 1.00
March 31, 2000 4.00 to 1.00
June 30, 2000 4.00 to 1.00
September 30, 2000 4.00 to 1.00
December 31, 2000 4.00 to 1.00
March 31, 2001 4.00 to 1.00
June 30, 2001 4.00 to 1.00
September 30, 2001 4.00 to 1.00
December 31, 2001 4.00 to 1.00
March 31, 2002 4.00 to 1.00
June 30, 2002 4.00 to 1.00
September 30, 2002 4.00 to 1.00
(c) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior Leverage
Ratio as of any date set forth below to exceed the ratio set forth below
opposite such date:
Consolidated
Date Senior
Leverage Ratio
December 31, 1997 2.50 to 1.00
March 31, 1998 2.50 to 1.00
June 30, 1998 2.50 to 1.00
September 30, 1998 2.50 to 1.00
December 31, 1998 2.50 to 1.00
March 31, 1999 2.50 to 1.00
June 30, 1999 2.50 to 1.00
September 30, 1999 2.50 to 1.00
December 31, 1999 2.50 to 1.00
March 31, 2000 2.50 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 2.00 to 1.00
March 31, 2001 2.00 to 1.00
June 30, 2001 2.00 to 1.00
September 30, 2001 2.00 to 1.00
December 31, 2001 2.00 to 1.00
March 31, 2002 2.00 to 1.00
June 30, 2002 2.00 to 1.00
September 30, 2002 2.00 to 1.00
(d) Consolidated Net Worth. Permit the Consolidated Net Worth of the Borrower
and its Subsidiaries to be less than the sum of (i) 85% of the Consolidated Net
Worth of the Borrower and its Subsidiaries on September 30, 1997, plus (ii) 75%
of Consolidated Net Income of the Borrower and its Subsidiaries (to the extent a
positive number) for each fiscal quarter completed after the Closing Date
commencing with the fiscal quarter ending December 31, 1997, plus (iii) 75% of
the Net Cash Proceeds of any offerings or issuances of Capital Stock of the
Borrower or any of its Subsidiaries after the Closing Date, plus (iv) 75% of the
increase in the Consolidated Net Worth of the Borrower and its Subsidiaries
resulting from any conversion of the 1997 Convertible Subordinated Notes.
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Borrower under the Loan Documents;
(b) Indebtedness (i) of the Borrower to a Wholly Owned Subsidiary, (ii) of a
Domestic Wholly Owned Subsidiary to the Borrower or any other Subsidiary, (iii)
of Servicios to the Borrower or any Subsidiary in an aggregate principal amount
at any time outstanding not to exceed $5,000,000 in excess of the amount of such
Indebtedness outstanding on the date of this Agreement and (iv) of any Foreign
Subsidiary (other than Servicios) to the Borrower or any Subsidiary in an
aggregate principal amount at any time outstanding (with respect to all such
Foreign Subsidiaries of the Borrower) not to exceed $1,000,000, provided that
such Indebtedness referred to in clauses (iii) and (iv) hereof, if to the
Borrower or any Domestic Subsidiary, is evidenced by a promissory note or
promissory notes which has or have been pledged to the Collateral Agent on terms
and conditions reasonably satisfactory to the Administrative Agent;
(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition or construction of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrower and its Subsidiaries (i) $15,000,000 at any time
outstanding minus (ii) the amount of Indebtedness outstanding under clauses (f)
and (i) of this Section 7.2 and the amount of indebtedness attributable to sale
and leaseback transactions permitted pursuant to Section 7.12;
(d) Indebtedness of the Borrower and its Subsidiaries under the Convertible
Subordinated Debentures and the 1997 Convertible Subordinated Notes;
(e) Indebtedness outstanding on the date hereof, or incurred hereafter pursuant
to existing commitments or agreements, and, in each case, listed on Schedule 7.2
and any refinancings, refundings, renewals or extensions thereof not increasing
the principal amount thereof;
(f) Indebtedness of a Person which becomes a Subsidiary after the date hereof in
an aggregate principal amount at any time outstanding not exceeding
(i) $15,000,000, minus (ii) the sum of (A) the amount of Indebtedness
outstanding under clauses (c) and (i) of this Section 7.2 and (B) the amount of
indebtedness attributable to sale and leaseback transactions permitted pursuant
to Section 7.12, provided that (x) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof and
(y) immediately after giving effect to the acquisition of such corporation by
the Borrower no Default or Event of Default shall have occurred and be
continuing, and any refinancings, refundings, renewals or extensions thereof not
increasing the principal amount thereof.
(g) Indebtedness constituting deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds and performance bonds and other obligations of a like nature
that are incurred in the ordinary course of business, not to exceed $5,000,000
in the aggregate at any time outstanding;
(h) Indebtedness under Interest Rate Protection Agreements and Hedge Agreements
entered into the ordinary course of business for hedging purposes and not for
speculative purposes;
(i) Seller Indebtedness in an aggregate principal amount at any time outstanding
not exceeding (i) $15,000,000 minus (ii) the sum of (A) the amount of
Indebtedness outstanding under clauses (c) and (f) of this Section 7.2, and any
refinancings, refundings, renewals or extensions thereof not increasing the
principal amount thereof and (B) the amount of indebtedness attributable to sale
and leaseback transactions permitted pursuant to Section 7.12;
(j) Indebtedness in the form of Guarantee Obligations permitted by Section 7.4;
and
(k) Indebtedness not otherwise permitted by the foregoing clauses (a) through
(j) in an aggregate principal amount at any time outstanding of not to exceed
$5,000,000;
7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 180 days or which are being contested
in good faith by appropriate proceedings and which, in any case, do not encumber
a material amount of the assets of the Borrower and its Subsidiaries;
(c) pledges or deposits in connection with workers' compensation, unemployment
insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any Subsidiary;
(f) Liens securing Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition or construction of fixed or capital assets, provided
that (i) such Liens shall be created within 180 days after the acquisition or
construction of such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness and
the proceeds and products thereof, (iii) the principal amount of Indebtedness
secured thereby is not increased and (iv) the proceeds of the Indebtedness
secured by any such Lien shall at no time exceed 100% of the original purchase
price of such property;
(g) Liens created pursuant to the Security Documents;
(h) Liens in existence on the date hereof listed on Schedule 7.3 (i) securing
Indebtedness permitted by Section 7.2(e) provided that no such Lien is spread to
cover any additional property after the Closing Date and that the principal
amount of Indebtedness secured thereby is not increased or (ii) securing
Indebtedness which is being repaid on the Closing Date, provided that such Liens
shall be released promptly following the Closing Date;
(i) Liens on the property or assets of a corporation which becomes a Subsidiary
after the date hereof securing Indebtedness permitted by Section 7.2(f),
provided that (i) such Liens existed at the time such corporation became a
Subsidiary and were not created in anticipation thereof, (ii) any such Lien is
not spread to cover any property or assets of such corporation after the time
such corporation becomes a Subsidiary, and (iii) the principal amount of
Indebtedness secured thereby is not increased;
(j) Liens on assets acquired in a Permitted Acquisition securing Seller
Indebtedness incurred in connection with such Permitted Acquisition; and
(k) the Permitted Exceptions (as defined in the Mortgages).
7.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to
exist any Guarantee Obligation except:
(a) Guarantee Obligations made in the ordinary course of its business by the
Borrower or any Subsidiary in respect of Indebtedness and other obligations of
any of the Borrower or any of its Subsidiaries which Indebtedness or other
obligations are otherwise not prohibited under this Agreement;
(b) the Guarantee Obligations of the Loan Parties pursuant to the Master
Guarantee and Collateral Agreement;
(c) the Guarantee Obligations of the Subsidiaries of the Borrower under the
Indenture and the 1997 Indenture; and
(d) Guarantee Obligations (in respect of obligations not constituting
Indebtedness) arising under agreements entered into by the Borrower or any
Subsidiary in the ordinary course of business.
7.5 Limitation on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or combined with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any one or more Subsidiaries of the Borrower
provided that in the case of any such transaction involving a Wholly Owned
Subsidiary, such Wholly Owned Subsidiary shall be the continuing or surviving
corporation;
(b) any Subsidiary may be dissolved, liquidated or wound up or may sell, lease,
assign, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to Borrower or any Domestic Wholly Owned
Subsidiary of the Borrower, and the Borrower may sell, lease, assign, transfer
or otherwise dispose of any or all of its assets to any wholly owned Subsidiary
of the Borrower which is a party to the Master Guarantee and Collateral
Agreement; and
(c) any Subsidiary may sell, lease, transfer or otherwise dispose of any or all
of its assets so long as (i) such transaction does not violate Section 7.6 and
(ii) the Borrower complies with the provisions of Section 2.9(c) with respect to
such transaction.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary of the Borrower, issue or sell any
shares of such Subsidiary's Capital Stock to any Person other than the Borrower
or any Domestic Wholly Owned Subsidiary of the Borrower, except:
(a) the sale or other disposition of any property in the ordinary course of
business, including obsolete or worn out property, provided that (other than
inventory and light vehicles) the aggregate proceeds received from all assets so
sold or disposed of in any fiscal year shall not exceed 10% of the Borrower's
Consolidated Net Worth as of the end of the immediately preceding fiscal year;
(b) the sale of inventory and light vehicles in the ordinary course of business;
(c) as permitted by Section 7.5(b); and
(d) the sale of Odessa, provided that (i) the Consolidated Leverage Ratio, after
giving pro forma effect to such disposition and repayment of Indebtedness paid
or to be paid in connection with such disposition (including Loans paid or to be
paid pursuant to Section 2.7), does not exceed 3.75 to 1.00 and (ii) Odessa's
Proved Reserves are no greater than 65 billion cubic feet of natural gas
equivalent (the "Significant Disposition").
To the extent the Required Lenders waive the provisions of this Section 7.6 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 7.6, such Collateral in each case shall be sold free and clear of
the Liens in favor of the Collateral Agent created by the Security Documents,
and the Collateral Agent shall take such actions as it deems appropriate in
connection therewith or may be reasonably requested by the Borrower to evidence
such Lien release, in each case at the Borrower's expense.
7.7 Limitation on Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock (including but not
limited to in respect of any preferred Capital Stock outstanding or dividends
accumulated thereon on the Closing Date) of the Borrower or any of its
Subsidiaries or any warrants or options to purchase any such Capital Stock or
any of the Convertible Subordinated Debentures or 1997 Convertible Subordinated
Notes, whether now or hereafter outstanding, or make any other distribution in
respect thereof or purchase any thereof, either directly or indirectly, whether
in cash or property or in obligations of the Borrower or any Subsidiary, except
that the Borrower (a) may make open market purchases of its outstanding common
stock in an aggregate amount during the term of this Agreement not to exceed (i)
$10,000,000, while the Consolidated Leverage Ratio is less than 3.75 to 1.0 but
greater than or equal to 2.50 to 1.0 and (ii) $25,000,000 (including any amounts
expended pursuant to clause (i)), while the Consolidated Leverage Ratio is less
than 2.50 to 1.0, (b) may (i) make scheduled payments of interest in respect of
the Convertible Subordinated Debentures and the 1997 Convertible Subordinated
Notes, and (ii) if permitted by Section 7.10, redeem the Convertible
Subordinated Debentures after at least 90% of the Convertible Subordinated
Debentures have been converted or redeem the 1997 Convertible Subordinated Notes
after at least 90% of the 1997 Convertible Subordinated Notes have been
converted, (c) may make cash payments required pursuant to Sections 11.1 and
11.3 of the Indenture in connection with conversions of the Convertible
Subordinated Debentures or Section 10.3 of the 1997 Indenture in connection with
conversions of the 1997 Convertible Subordinated Notes and, (d) if the Borrower
is not yet authorized to issue a sufficient number of shares of its common stock
to allow conversion into common stock of all 1997 Convertible Subordinated
Notes, the Borrower may make cash payments to holders of the 1997 Convertible
Subordinated Notes in connection with the conversion thereof, provided that (i)
no more than 40% of the aggregate consideration to any holder of the 1997
Convertible Subordinated Notes upon conversion thereof may be in cash, (ii)
after giving effect to such payment and conversion, no Default or Event of
Default shall be continuing and (iii) after giving pro forma effect to such
payment and conversion as if it had occurred on the last day of the most
recently ended fiscal quarter, the Consolidated Leverage Ratio would not exceed
2.50 to 1.00. Notwithstanding the foregoing, any Subsidiary of the Borrower may
pay dividends and other distributions to the Borrower and Servicios may pay
dividends to its shareholders.
7.8 Limitation on Capital Expenditures. Make or commit to make any Capital
Expenditure except for expenditures in the ordinary course of business not
exceeding, in the aggregate for the Borrower and its Subsidiaries during any of
the fiscal years of the Borrower set forth below, an amount equal to the sum of
(i) the amount set forth below opposite such fiscal year plus (ii) an additional
amount for any Person or business unit acquired by the Borrower in a Permitted
Acquisition since the Closing Date, such amount being calculated as 10% of the
net revenues, calculated in accordance with GAAP, of such Person or business
unit during such fiscal year (or, if such Person or business unit was acquired
after the beginning of such fiscal year, such revenues for the portion of such
fiscal year during which such Person or business unit was owned by the
Borrower):
Fiscal Year Ending Amount
1998 $50,000,000
1999 $55,000,000
2000 $55,000,000
2001 $60,000,000
2002 $65,000,000
Any amount permitted by the foregoing provision to be expended as Capital
Expenditures in any fiscal year and not so expended may be carried over for
expenditure in the immediately succeeding fiscal year.
7.9 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Permitted Acquisitions;
(d) loans by the Borrower or any Subsidiary to Servicios in an aggregate
principal amount at any time outstanding not to exceed the amount thereof
outstanding on the date of this Agreement plus $5,000,000;
(e) as permitted by subsection 7.2(b)(iv);
(f) investments by the Borrower in a Domestic Wholly Owned Subsidiary and
investments by any Subsidiary in the Borrower and in one or more Domestic Wholly
Owned Subsidiaries;
(g) expense accounts for, and other expense advances to, its directors, officers
and employees in the ordinary course of business;
(h) loans and advances to its officers and employees in an aggregate amount not
to exceed $5,000,000 at any time outstanding;
(i) the Borrower's purchase or redemption of its own Capital Stock to the extent
permitted by Section 7.7;
(j) current trade and customer accounts receivable that are for goods furnished
or services rendered in the ordinary course of business and that are payable in
accordance with Borrower's or any Subsidiary's customary trade terms;
(k) Interest Rate Protection Agreements to the extent permitted under this
Agreement, and Hedge Agreements entered into in the ordinary course of business
for hedging purposes and not for speculative purposes;
(l) the Borrower may repurchase its capital stock and/or options to purchase
such stock held by directors, officers and employees of the Borrower or any
Subsidiary upon the death, disability, retirement or termination of such
directors, officers or employees or the exercise of such options, or from the
shareholders of Borrower so long as the purpose is to acquire stock for
reissuance to new employees of Borrower and its Subsidiaries; provided, that the
amount expended for such purposes shall not exceed $1,000,000 in any fiscal year
or $2,500,000 while this Agreement is in effect;
(m) the Borrower and its Subsidiaries may acquire and own investments (including
Indebtedness and other obligations) received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(n) investments acquired by the Borrower and its Subsidiaries in connection with
Permitted Acquisitions; and
(o) the Borrower's current investment in the Argent Classic Convertible
Arbitrage Fund L.P.
7.10 Limitation on Optional Payments and Modifications of Debt Instruments and
Organizational Documentation, etc. (a) Make any optional payment or prepayment
on or redemption or purchase of any material Indebtedness (other than the Loans)
or preferred Capital Stock including, without limitation, the Convertible
Subordinated Debentures and the 1997 Convertible Subordinated Notes, (b) amend,
modify or change, or consent or agree to any amendment, modification or change
to any of the terms of any such Indebtedness or preferred Capital Stock which
would be materially adverse to Lenders or (c) amend, modify or change in any
material respect, or consent or agree to any amendment, modification, or change
in any material respect to the terms of any of its capitalization or
organizational documents (including but not limited to in respect of any
preferred Capital Stock of any Loan Party) or a material contract, to the extent
such amendment, modification or change could reasonably be expected to have a
Material Adverse Effect, except that, after 90% of the original outstanding
principal amount of Convertible Subordinated Debentures have been converted into
common stock of the Borrower, the Borrower may, at any time when no Default or
Event of Default has occurred and is continuing, repurchase or redeem the
remaining outstanding Convertible Subordinated Debentures or repurchase or
redeem the remaining outstanding 1997 Convertible Subordinated Notes; provided
that the Borrower may not repurchase or redeem such Convertible Subordinated
Debentures at any time when the Consolidated Leverage Ratio is or, after giving
effect to such repurchase or redemption, would be, greater than 3.75.
7.11 Limitation on Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate (other than the Borrower)
unless such transaction (a) is otherwise permitted under this Agreement, and
(b) is upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate; provided, that any
such transaction involving more than $5,000,000 must be approved by a majority
of the disinterested members of the Borrower's Board of Directors.
7.12 Limitation on Sales and Leasebacks. Enter into any arrangement with any
Person providing for the leasing by the Borrower or any of its Subsidiaries of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary, if, after giving
effect thereto, the amount of all indebtedness attributable to transactions
consummated pursuant to this Section 7.12, plus the amount of Indebtedness
outstanding pursuant to clause (c), (f) and (i) of Section 7.2, would exceed
$15,000,000.
7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of the
Borrower to end on a day other than June 30.
7.14 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement, other than (a) this Agreement and the other Loan Documents and (b)
any industrial revenue bonds, purchase money Liens or Financing Leases permitted
by this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby) which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired.
7.15 Limitation on Lines of Business. Enter into any business, either directly
or through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or which are directly
related thereto including any business in the oil and gas well service industry.
7.16 Limitation on Consolidated Lease Expense. Permit Consolidated Lease Expense
for any fiscal year of the Borrower and its Subsidiaries to exceed $20,000,000.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or Reimbursement Obligation, or any other
amount payable hereunder or under any other Loan Document, within three days
after any such interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by the Borrower or any
other Loan Party herein or in any other Loan Document or which is contained in
any certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the observance or
performance of any agreement contained in Section 7; or
(d) The Borrower or any other Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section
8), and such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in making any
payment of any principal of any Indebtedness (including, without limitation, any
Guarantee Obligation) or Interest Rate Protection Agreement Obligation on the
scheduled or original due date with respect thereto; or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness or
Interest Rate Protection Agreement Obligation was created; or (iii) default in
the observance or performance of any other agreement or condition relating to
any such Indebtedness or Interest Rate Protection Agreement Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder
or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of any
such Indebtedness constituting a Guarantee Obligation or Interest Rate
Protection Agreement Obligation) to become payable; provided that a default,
event or condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default under this Agreement
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness and/or Guarantee
Obligations and/or Interest Rate Protection Agreement Obligations of the
Borrower and its Subsidiaries the outstanding principal amount of which exceeds
in the aggregate $1,000,000; or
(f) (i) The Borrower or any of its Subsidiaries (other than Servicios) shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries (other than Servicios) shall
make a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Borrower or any of its Subsidiaries (other than
Servicios) any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against the
Borrower or any of its Subsidiaries (other than Servicios) any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries (other than
Servicios) shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries (other than
Servicios) shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of any Loan Party or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any Loan
Party or any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the Borrower or
any of its Subsidiaries (other than Servicios) involving in the aggregate a
liability (not paid or fully covered by insurance) of $2,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) Prior to the Collateral Release Date, any of the Security Documents shall
cease, for any reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any material Lien created by any
of the Security Documents shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or
(j) Any Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes each Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. No Agent shall be responsible for the negligence or misconduct of
any agents or attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Agents nor any of their officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by any Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of any Loan
Party a party thereto to perform its obligations hereunder or thereunder. No
Agent shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by such
Agent. The Agents may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. Each Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action,
provided that in no event shall the Lenders be obligated to indemnify the Agents
for any amounts described in the proviso to Section 9.7. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless such Agent
has received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent and the Collateral Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent or the
Collateral Agent shall have received such directions, the Administrative Agent
or the Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges
that neither any Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Agents hereafter taken, including any review of the
affairs of a Loan Party or any Affiliate of a Loan Party, shall be deemed to
constitute any representation or warranty by any Agent to any Lender. Each
Lender represents to each Agent that it has, independently and without reliance
upon any Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their Affiliates and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon any Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their Affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, no Agent shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of
a Loan Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against any Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
which are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section 9.7 shall survive the payment of the
Notes and all other amounts payable hereunder.
9.8 Agents in Their Individual Capacities. Each Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent were not an Agent hereunder and under
the other Loan Documents. With respect to its Loans made or renewed by it and
any Note issued to it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, respectively, and the terms "Lender" and
"Lenders" shall include each Agent in their individual capacities.
9.9 Successor Agents. The Administrative Agent or the Collateral Agent may
resign as Administrative Agent or Collateral Agent, as the case may be, upon 10
days' notice to the Lenders. If the Administrative Agent or the Collateral Agent
shall resign as Administrative Agent or Collateral Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent in such capacity, which successor agent, so long
as no Default or Event of Default shall have occurred and be continuing, shall
have been approved by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent or the Collateral Agent,
as the case may be, hereunder. Effective upon such appointment and approval, the
terms "Administrative Agent" and "Collateral Agent" shall mean such successor
agent, and the former Administrative Agent's or Collateral Agent's rights,
powers and duties as such shall be terminated, without any other or further act
or deed on the part of such former Administrative Agent or Collateral Agent or
any of the parties to this Agreement or any holders of the Notes. After any
retiring Agent's resignation as Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 10.1. The Required Lenders and
each Loan Party which is party to the relevant Loan Documents may, or, with the
written consent of the Required Lenders, the Administrative Agent and each Loan
Party which is a party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount of any Loan or any L/C
Obligation, or extend the final scheduled date of maturity of any Loan, or
reduce the stated rate of any interest, fee or letter of credit commission
payable hereunder or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any Lender's Commitment, or
waive any mandatory prepayment or make any change in the application of any
prepayment of the Loans specified in the first sentence of Section 2.7(f) or in
Section 2.13(a), or the right to refuse prepayments set forth in the penultimate
sentence of Section 2.6, in each case without the consent of each Lender
directly affected thereby, (ii) extend the scheduled date or reduce the amount
of any reduction of the Commitments referred to in Section 2.1(c) without the
consent of each Lender directly affected thereby, (iii) amend, modify or waive
any provision of this Section 10.1 or reduce any percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by any
Loan Party of any of its rights and obligations under this Agreement and the
other Loan Documents or release all or a substantial portion of the Collateral
(other than in connection with any sale or other disposition of assets permitted
by Section 7.6 or pursuant to Section 10.17) or any guarantee of the
Obligations, in each case, without the written consent of all the Lenders, (iv)
amend, modify or waive any provision of Section 9 without the written consent of
the Agents, or (v) amend, modify or waive any provision of Section 3 without the
written consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Agents and all future holders
of the Notes. In the case of any waiver, the Loan Parties, the Lenders and the
Agents shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three Business Days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower, the Administrative Agent, the
Collateral Agent and the Arranger, and as set forth in Schedule 1.1A in the case
of the Lenders, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
The Borrower: Key Energy Group, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxxx X. XxXxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative
Agent: PNC Bank, National Association
One PNC Plaza, Third Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: PNC Bank, National Association
One PNC Plaza, Fourth Floor Annex
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Collateral
Agent: Norwest Bank Texas, N.A.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxxx XxXxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.2, 2.5, 2.6 or 2.8 shall not be effective
until received. Any notice or delivery to or from or consent required of the
Borrower hereunder or pursuant to any other Loan Document may be made to or by
the Borrower.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.4 Survival. All representations and warranties made hereunder, in the other
Loan Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the Notes and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse
the Agents for all their reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel (including any local counsel) to the Agents, (b) to pay
or reimburse each Lender and each of the Agents for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and counsel
to the Agents, (c) to pay, indemnify, and hold each Lender and each Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and each Agent and their respective officers, directors, trustees,
employees, affiliates, agents and controlling persons (each, an "indemnitee")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
Borrower, any of its Subsidiaries, any of its Excluded Subsidiaries or any of
the Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided that the Borrower shall have no obligation
hereunder to any indemnitee with respect to indemnified liabilities to the
extent such indemnified liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert, and hereby waives, and to cause each of its Subsidiaries not to
assert and to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. The agreements in this Section 10.5 shall
survive repayment of the Notes and all other amounts payable hereunder and the
termination of the Commitments and, in the case of any Lender that may assign
any interest in its Commitments, Loans or Letter of Credit interest hereunder,
shall survive the making of such assignment, notwithstanding that such assigning
Lender may cease to be a "Lender" hereunder.
10.6 Successors and Assigns; Participation and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Lenders, the
Agents, all future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, without the consent of the Borrower, in the ordinary course
of its business and in accordance with applicable law, at any time sell to one
or more banks or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder and under the
other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Notes or any fees payable hereunder, postpone the date of
the final maturity of the Notes, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or a substantial portion of the Collateral (other
than in connection with any sale or other disposition of assets permitted by
Section 7.6) or any guarantee of the Obligations, in each case to the extent
subject to such participation. The Borrower agrees that if amounts outstanding
under this Agreement and the Notes are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any Note, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as
if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.16, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in accordance
with applicable law, at any time and from time to time assign to any Lender or
any affiliate thereof or any Person under common management with any such Lender
or, with the consent of the Borrower, the Administrative Agent and, in the case
of an assignment of Commitments, the Issuing Lender (which, in each case, shall
not be unreasonably withheld, delayed or conditioned), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement, the Letters of Credit and the Notes
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
G, executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof or a Person under
common management with such Lender, by the Borrower, the Administrative Agent
and, in the case of an assignment of Commitments, the Issuing Lender) and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided that (except with the consent of the Borrower and the
Administrative Agent) (i) no such assignment to an Assignee (other than any
Lender or any affiliate thereof or any Person under common management with such
Lender) shall be in an aggregate principal amount of less than $5,000,000 (other
than in the case of an assignment of all of a Lender's interests under this
Agreement and the Notes) and (ii) subsequent to any such assignment the
assigning Lender shall not retain an aggregate principal amount of less than
$5,000,000 in Commitments and Loans. Such assignment need not be ratable as
among any Commitments and/or Loans of the assigning Lender. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment as set
forth therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
Section 10.6, the consent of the Borrower shall not be required for any
assignment which occurs at any time when any Event of Default shall have
occurred and be continuing.
(d) A Note and the Obligation(s) evidenced thereby may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer of such Note and the Obligation(s) evidenced thereby on the Register
(and each Note shall expressly so provide). Any assignment or transfer of all or
part of such Obligation(s) and the Note(s) evidencing the same shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note(s) evidencing such Obligation(s), accompanied by an
Assignment and Acceptance duly executed by the holder of such Note(s), and
thereupon one or more new Note(s) in the same aggregate principal amount shall
be issued to the designated Assignee(s) and the old Notes(s) shall be returned
by the Administrative Agent to the Borrower marked "cancelled." No assignment of
a Note and the Obligation(s) evidenced thereby shall be effective unless it has
been recorded in the Register as provided in this Section 10.6(d).
(e) The Administrative Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time and the registered owners of the Obligation(s)
evidenced by the Note(s). The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Loan or the Obligation evidenced by a Note recorded therein for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate thereof or a Person under common management with such
Lender, by the Borrower, the Administrative Agent and the Issuing Lender)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the Borrower.
On or prior to such effective date, the Borrower, at its own expense, upon
request, shall execute and deliver to the Administrative Agent (in exchange for
the Note of the assigning Lender) a new Note to the order of such Assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment Note to the
order of the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Notes shall be dated the Closing Date and shall otherwise
be in the form of the Note replaced thereby.
(g) The Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and any prospective Transferee any and all
financial information in such Lender's possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(h) Nothing herein shall prohibit or restrict any Lender from (i) pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable law
or (ii) with the prior consent of the Administrative Agent and the Borrower
(which, in each case, shall not be unreasonably withheld or delayed or
conditioned), pledging its rights in connection with any Loan or Note to any
other Person.
10.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender") shall at
any time receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral in
respect thereof then due and owing to such Lender (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans or the Reimbursement Obligations then due and owing
to such other Lender, or interest thereon, such Benefitted Lender shall purchase
for cash from the other Lenders a participating (or, at the option of such
Lender, a direct) interest in such portion of each such other Lender's Loan
and/or of the Reimbursement Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided that if all or any portion of such excess payment
or benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder or under the Notes (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents represent the
agreement of the Borrower, the Administrative Agent, the Arranger and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent, the
Arranger or any Lender relative to subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 10.12 any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;
(b) neither any Agent nor any Lender has any fiduciary relationship with or duty
to the Borrower arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Agents and Lenders,
on one hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Agents and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the Agents or any
Lender from disclosing any such information (a) to the Agents any other Lender
or any affiliate or investment advisor of any Lender, (b) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
Section 10.15, (c) to the employees, directors, agents, attorneys, accountants
and other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over such
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) which has been publicly disclosed other
than in breach of this Section 10.15 or (h) in connection with the exercise of
any remedy hereunder or under any other Loan Document.
10.16 Enforceability; Usury. In no event shall any provision of this Agreement,
the Notes, or any other instrument evidencing or securing the indebtedness of
the Borrower hereunder ever obligate the Borrower to pay or allow any Lender to
collect interest on the Notes or any other indebtedness of the Borrower
hereunder at a rate greater than the maximum non-usurious rate permitted by
applicable law (herein referred to as the "Highest Lawful Rate"), or obligate
the Borrower to pay any taxes, assessments, charges, insurance premiums or other
amounts to the extent that such payments, when added to the interest payable on
the Notes, would be held to constitute the payment by the Borrower of interest
at a rate greater than the Highest Lawful Rate; and this provision shall control
over any provision to the contrary.
Without limiting the generality of the foregoing, in the event the maturity of
all or any part of the principal amount of the indebtedness of the Borrower
hereunder shall be accelerated for any reason, then such principal amount so
accelerated shall be credited with any interest theretofore paid thereon in
advance and remaining unearned at the time of such acceleration. If, pursuant to
the terms of this Agreement or the Notes, any funds are applied to the payment
of any part of the principal amount of the indebtedness of the Borrower
hereunder prior to the maturity thereof, then (a) any interest which would
otherwise thereafter accrue on the principal amount so paid by such application
shall be canceled, and (b) the indebtedness of the Borrower hereunder remaining
unpaid after such application shall be credited with the amount of all interest,
if any, theretofore collected on the principal amount so paid by such
application and remaining unearned at the date of said application; and if the
funds so applied shall be sufficient to pay in full all the indebtedness of the
Borrower hereunder, then the Lenders shall refund to the Borrower all interest
theretofore paid thereon in advance and remaining unearned at the time of such
acceleration. Regardless of any other provision in this Agreement, or in any of
the written evidences of the indebtedness of the Borrower hereunder, the
Borrower shall never be required to pay any unearned interest on such
indebtedness or any portion thereof, and shall never be required to pay interest
thereon at a rate in excess of the Highest Lawful Rate construed by courts
having competent jurisdiction thereof.
10.17 Collateral Release. Upon the occurrence of a Collateral Release Event, the
Liens on the Collateral granted pursuant to the Security Documents or otherwise
securing Obligations shall be released automatically. Within one Business Day
following the satisfaction of the foregoing conditions and the receipt by the
Administrative Agent of a certificate of a Responsible Officer certifying that
such conditions have been satisfied, the Administrative Agent shall deliver to
the Collateral Agent the notice required pursuant to Section 8.16 the Master
Guarantee and Collateral Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
KEY ENERGY GROUP, INC..
By: /s/ Xxxxxxx X. XxXxxxxx
Title: Executive Vice President
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President
NORWEST BANK TEXAS, N.A.
as Collateral Agent and Issuing Lender
By: /s/ Xxxx X. XxXxxxxx
Title: Senior Vice President
Pricing Grid
Applicable Margin for Applicable Margin for
Consolidated Loans which are Loans which are Commitment
Leverage Ratio Eurodollar Loans Base Rate Loans Fee Rate
greater than
3.5 to 1.0 1.50% 0.00% .35%
greater than
3.0 to 1.0 but 1.25% 0.00% .30%
less than or equal
to 3.5 to 1.0
greater than
2.50 to 1.0 but
less than or equal
to 3.0 to 1.0 1.00% 0.00% .25%
#2.50 to 1.0 0.75% 0.00% .20%
Commitments; Lending Offices and Addresses
Mortgaged Property
Oil and Gas Properties to be Mortgaged
Existing Letters of Credit
Account Party Issuer Amount Number Beneficiary
Consents
Schedule 4.8
Other Real Property Interests
Subsidiaries
Schedule 4.19(b)
UCC Filing Jurisdictions
Mortgage Filing Jurisdictions
Oil and Gas Mortgage Filing Jurisdictions
Mortgaged Properties to be Covered by Environmental Reports
Existing Indebtedness
Schedule 7.3
Existing Liens
$200,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
KEY ENERGY GROUP, INC.
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
NORWEST BANK TEXAS, N.A.,
as Collateral Agent
and
PNC CAPITAL MARKETS, INC.
as Arranger
Dated as of June 6, 1997,
as amended and restated through
November 6, 1997
TABLE OF CONTENTS
SECTION 1. DEFINITIONS...................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 19
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................... 20
2.1 Commitments..................................................... 20
2.2 Procedure for Borrowing......................................... 20
2.3 Commitment Fees, etc. .......................................... 21
2.4 Repayment of Loans; Evidence of Debt............................ 21
2.5 Optional Termination or Reduction of Commitments................ 22
2.6 Optional Prepayments............................................ 22
2.7 Mandatory Prepayments and Commitment Reductions................. 23
2.8 Conversion and Continuation Options............................. 24
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches....... 24
2.10 Interest Rates and Payment Dates............................... 24
2.11 Computation of Interest and Fees............................... 25
2.12 Inability to Determine Interest Rate........................... 25
2.13 Pro Rata Treatment and Payments................................ 26
2.14 Illegality..................................................... 27
2.15 Requirements of Law............................................ 27
2.16 Taxes 29
2.17 Indemnity...................................................... 30
2.18 Change of Lending Office....................................... 31
2.19 Use of Proceeds................................................ 31
2.20 Replacement of Lenders......................................... 31
SECTION 3. LETTERS OF CREDIT................................................. 32
3.1 L/C Commitment.................................................. 32
3.2 Procedure for Issuance of Letter of Credit...................... 32
3.3 Fees, Commissions and Other Charges............................. 33
3.4 L/C Participation............................................... 33
3.5 Reimbursement Obligation of the Borrower........................ 34
3.6 Obligations Absolute............................................ 34
3.7 Letter of Credit Payments....................................... 35
3.8 Applications.................................................... 35
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................... 35
4.1 Financial Condition............................................. 35
4.2 No Change....................................................... 36
4.3 Corporate Existence; Compliance with Law........................ 36
4.4 Corporate Power; Authorization; Enforceable Obligations......... 36
4.5 No Legal Bar.................................................... 37
4.6 No Material Litigation.......................................... 37
4.7 No Default...................................................... 37
4.8 Ownership of Property; Liens.................................... 37
4.9 Intellectual Property........................................... 37
4.10 No Burdensome Restrictions..................................... 38
4.11 Taxes 38
4.12 Federal Regulations............................................ 38
4.13 ERISA 38
4.14 Investment Company Act; Other Regulations...................... 39
4.15 Subsidiaries................................................... 39
4.16 Purpose of Loans; Limitations on Use........................... 39
4.17 Environmental Matters.......................................... 39
4.18 Accuracy of Information........................................ 40
4.19 Security Documents............................................. 41
4.20 Solvency....................................................... 42
4.21 Labor Matters.................................................. 42
4.22 Indentures..................................................... 42
4.23 Excluded Subsidiaries.......................................... 42
4.24 Oil and Gas Properties......................................... 42
SECTION 5. CONDITIONS PRECEDENT.............................................. 43
5.1 Conditions to Effectiveness..................................... 43
5.2 Conditions to Each Extension of Credit.......................... 45
SECTION 6. AFFIRMATIVE COVENANTS............................................. 45
6.1 Financial Statements............................................ 45
6.2 Certificates; Other Information................................. 46
6.3 Payment of Obligations.......................................... 47
6.4 Conduct of Business and Maintenance of Existence, etc. ......... 47
6.5 Maintenance of Property; Insurance.............................. 48
6.6 Inspection of Property; Books and Records; Discussions.......... 48
6.7 Notices 48
6.8 Environmental Laws.............................................. 49
6.9 Further Assurances.............................................. 50
6.10 Additional Collateral.......................................... 51
6.11 Post-Closing Matters........................................... 53
6.12 Authorization of Additional Shares of Stock.................... 54
SECTION 7. NEGATIVE COVENANTS................................................ 54
7.1 Financial Condition Covenants................................... 54
7.2 Limitation on Indebtedness...................................... 56
7.3 Limitation on Liens............................................. 58
7.4 Limitation on Guarantee Obligations............................. 59
7.5 Limitation on Fundamental Changes............................... 59
7.6 Limitation on Sale of Assets.................................... 60
7.7 Limitation on Restricted Payments............................... 61
7.8 Limitation on Capital Expenditures.............................. 61
7.9 Limitation on Investments, Loans and Advances................... 62
7.10 Limitation on Optional Payments and Modifications
of Debt Instruments and Organizational Documentation, etc. .................. 63
7.11 Limitation on Transactions with Affiliates..................... 64
7.12 Limitation on Sales and Leasebacks............................. 64
7.13 Limitation on Changes in Fiscal Year........................... 64
7.14 Limitation on Negative Pledge Clauses.......................... 64
7.15 Limitation on Lines of Business................................ 64
7.16 Limitation on Consolidated Lease Expense....................... 64
SECTION 8. EVENTS OF DEFAULT................................................. 64
SECTION 9. THE AGENTS........................................................ 67
9.1 Appointment..................................................... 67
9.2 Delegation of Duties............................................ 68
9.3 Exculpatory Provisions.......................................... 68
9.4 Reliance by Agents.............................................. 68
9.5 Notice of Default............................................... 69
9.6 Non-Reliance on Agents and Other Lenders........................ 69
9.7 Indemnification................................................. 69
9.8 Agents in Their Individual Capacities........................... 70
9.9 Successor Agents................................................ 70
SECTION 10. MISCELLANEOUS.................................................... 70
10.1 Amendments and Waivers......................................... 70
10.2 Notices........................................................ 71
10.3 No Waiver; Cumulative Remedies................................. 72
10.4 Survival....................................................... 72
10.5 Payment of Expenses and Taxes.................................. 73
10.6 Successors and Assigns; Participation and Assignments.......... 74
10.7 Adjustments; Set-off........................................... 76
10.8 Counterparts................................................... 77
10.9 Severability................................................... 77
10.10 Integration................................................... 77
10.11 GOVERNING LAW................................................. 77
10.12 Submission To Jurisdiction; Waivers........................... 78
10.14 WAIVERS OF JURY TRIAL......................................... 78
10.15 Confidentiality............................................... 79
10.16 Enforceability; Usury......................................... 79
10.17 Collateral Release........................................... 80
ANNEXES:
I Pricing Grid
SCHEDULES:
1.1A Commitments; Lending Offices and Addresses
1.1B Mortgaged Property
1.1C Oil and Gas Properties to be Mortgaged
3.1 Existing Letters of Credit
4.4 Consents
4.8 Other Real Property Interests
4.15 Subsidiaries
4.19(b) UCC Filing Jurisdictions
4.19(c) Mortgage Filing Jurisdictions
4.19(d) Oil and Gas Mortgage Filing Jurisdictions
6.11(e) Mortgaged Properties to be Covered by Environmental Reports
7.2 Existing Indebtedness
7.3 Existing Liens
EXHIBITS:
A Form of Master Guarantee and Collateral Agreement
B Form of Mortgage
C Form of Note
D Form of Closing Certificate
E-1 Legal Opinion of Xxxx X. Xxxxxx, Xx., Esq.
E-2 Form of Opinion of Xxxxxx & Xxxxxx
F Form of Exemption Certificate
G Form of Assignment and Acceptance
