AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Amendment") is made
and entered into effective as of the 22nd day of October, 1998
(the "Effective Date"), by and among MATRIX SERVICE COMPANY, a
Delaware corporation (hereinafter referred to as "Matrix"),
MATRIX SERVICE, INC., an Oklahoma corporation (hereinafter to as
"MSI"), MIDWEST INDUSTRIAL CONTRACTORS, INC., a Delaware
corporation (hereinafter referred to as "MIC"), MATRIX SERVICE
MID-CONTINENT, INC., an Oklahoma corporation (hereinafter
referred to as "MSM"), PETROTANK EQUIPMENT, INC., an Oklahoma
corporation (hereinafter referred to as "PEI"), TANK SUPPLY INC.,
an Oklahoma corporation (hereinafter referred to as "TSI"), SAN
▇▇▇▇ TANK PIPING CONSTRUCTION CO., INC., a Delaware corporation
(hereinafter referred to as "SLT"), COLT CONSTRUCTION CO., INC.,
a Delaware corporation (hereinafter referred to as "CCC"),
MIDWEST INTERNATIONAL, INC., a Delaware corporation (hereinafter
referred to as "MII"), ▇▇▇▇▇ STEEL CONTRACTORS, INC., a Georgia
corporation (hereinafter referred to as "BSC"), ▇▇▇▇▇ TANKS,
INC., a Georgia corporation (hereinafter referred to as "BTI"),
AQUA TANKS, INC., a Georgia corporation (hereinafter referred to
as "ATI"), WEST COAST INDUSTRIAL COATINGS, INC., a California
corporation (hereinafter referred to as "WCI"), MIDWEST SERVICE
COMPANY, a Delaware corporation (hereinafter referred to as
"MSC"), MATRIX SERVICE, INC. (CANADA), an Ontario corporation
(hereinafter referred to as "MSIC"), MAYFLOWER VAPOR SEAL
CORPORATION, an Oklahoma corporation (hereinafter referred to as
("MVS"), GENERAL SERVICE CORPORATION, a Delaware corporation
(hereinafter referred to as "GSC"), MAINSERV-ALLENTECH, INC., a
Delaware corporation (hereinafter referred to as "MA"),
MAINTENANCE SERVICES, INC., a Delaware corporation (hereinafter
referred to as "MSERV"), and BANK ONE, OKLAHOMA, N.A., successor
in interest to LIBERTY BANK AND TRUST COMPANY OF TULSA, NATIONAL
ASSOCIATION (hereinafter referred to as the "Bank"). Matrix,
MSI, MIC, MSM, PEI, TSI, SLT, CCC, MII, BSC, BTI, ATI, WCI, MSC,
MSIC, MVS, GSC, MA and MSERV are hereinafter collectively
referred to as the "Borrowers" and individually as a "Borrower."
RECITALS
A. The Bank and certain of the Borrowers are parties to that
certain Credit Agreement dated August 30, 1994, as amended by
that certain First Amendment to Credit Agreement dated June 19,
1997 (the "First Amendment"), as amended by that certain Second
Amendment to Credit Agreement dated September 15, 1997, and as
further amended by that certain Third Amendment to Credit
Agreement dated as of March 1, 1998 (hereinafter collectively
referred to as the "Existing Credit Agreement"), pursuant to
which the Bank has established certain credit facilities in favor
of the Borrowers, as more particularly described therein.
B. Pursuant to the Existing Credit Agreement, the Bank has
established the following credit facilities in favor of the
Borrowers: (i) the Revolving Credit Facility in the original
principal amount of $20,000,000.00, and (ii) the Term Loan
Facility in the original principal amount of $10,000,000.00,
pursuant to which the Borrowers executed and delivered: (a) that
certain Revolving Note dated March 1, 1998, payable to the order
of the Bank in the original principal amount of $20,000,000.00
(the "Existing Revolving Note"), and (b) that certain Term Note
dated March 1, 1998, payable to the order of the Bank in the
original principal amount of $10,000,000.00 (the "Existing Term
Note").
C. The Borrowers have requested that the Bank: (i) renew, extend
and replace the Existing Revolving Note with a replacement
Revolving Note, (ii) modify the calculation of the Borrowing
Base, (iii) modify certain financial covenants regarding minimum
tangible net worth, minimum net working capital, debt service
coverage ratios and limitations on capital expenditures, and
(iv) remove Georgia Steel Acquisition Corporation, Georgia Steel
Fabricators, Inc., Heath Engineering, LTD., and Heath (Tank
Maintenance) Engineering, LTD., as Borrowers and add BTI, ATI and
MSIC as Borrowers.
D. The Bank has agreed to the foregoing, subject to the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and subject to the terms and
conditions set forth herein, the parties hereby amend and restate
the Existing Credit Agreement in its entirety to read as of the
Effective Date as follows:
1. TERMS DEFINED IN THE CREDIT AGREEMENT.
1.1 Terms Defined Above. The terms defined above shall have the
respective meanings set forth in the preamble and recitals above.
1.2 Certain Definitions. As used herein, the following terms
shall have the meanings indicated below (unless the context
otherwise requires):
Accounts. "Accounts" shall mean and include all accounts (as
such term is defined in Article 9 of the UCC) of the Borrowers,
of every nature, whether now existing or hereafter arising,
including, without limitation, all accounts receivable and other
rights to payment for goods sold or leased or for services
rendered.
Accounts Aging Report. "Accounts Aging Report" shall mean a
written report to be delivered by the Borrowers pursuant to
Subsection 6.2(b) hereof, substantially in the form of Exhibit
"G" attached to the Existing Credit Agreement.
Advance. "Advance" shall mean a cash loan from the Bank to the
Borrowers under the Revolving Credit Facility.
Affiliate. "Affiliate" shall mean any Person who has a
relationship with any of the Borrowers whereby either such Person
or such Borrower directly or indirectly controls or is controlled
by or is under common control with the other, or holds or
beneficially owns five percent (5%) or more of the equity
interest in the other or five percent (5%) or more of any class
of voting securities of the other and, in addition, shall include
all officers and directors of each of the Borrowers. "Affiliate"
shall not include any employees of any of the Borrowers who are
not officers or directors of any of the Borrowers.
Agreement. "Agreement," and such terms as "herein," "hereof,"
"hereto," "hereby," "hereunder" and the like shall mean and refer
to this Amended and Restated Credit Agreement, together with any
and all exhibits and schedules attached hereto or incorporated by
reference from the Existing Credit Agreement, and any and all
supplements, modifications or amendments hereto.
Board. "Board" shall mean the Board of Governors of the Federal
Reserve System.
Bonded Account. "Bonded Account" shall mean any Account that is
subject to, arises under or earned pursuant to a bonded
construction contract, and is thereby subject to a bonded lien.
Borrowing Base. "Borrowing Base" shall mean, as of any
determination date, eighty percent (80%) of Eligible Accounts.
Borrowing Base and Compliance Certificate. "Borrowing Base and
Compliance Certificate" shall mean a written certificate to be
delivered by Matrix on behalf of the Borrowers pursuant to
Subsection 6.2(a) hereof, substantially in the form of Exhibit
"F-1" attached hereto.
Business Day. "Business Day" shall mean that portion of any day,
other than a Saturday, Sunday or legal holiday for commercial
banks under the laws of the State of Oklahoma, during which the
Bank is open for substantially all of its normal banking
functions.
Closing. "Closing" shall mean the date and time, as provided in
Subsection 4.1 hereof, on which the Loan Documents are executed
and delivered by the appropriate parties thereto, all in form and
substance satisfactory to the Bank.
Collateral. "Collateral" shall mean and include (i) all
Accounts, (ii) all Inventory, (iii) all General Intangibles, (iv)
all books, records, ledger cards, electronic data processing
materials and other general intangibles relating to the foregoing
property, and (v) all Proceeds of the foregoing property.
Credit Facilities. "Credit Facilities" shall mean, collectively,
the Revolving Credit Facility and the Term Loan Facility, and
"Credit Facility" shall mean either one of the Credit Facilities.
Debt. "Debt" shall mean without duplication (i) all obligations
of the Borrowers which, in accordance with GAAP, would be shown
on their respective balance sheets as a liability (including,
without limitation, obligations for borrowed money and for the
deferred purchase price of property or services, and obligations
evidenced by bonds, debentures, notes or other similar
instruments); (ii) all rental obligations under leases required
to be capitalized under GAAP; (iii) all guaranties (direct or
indirect) and other contingent obligations of the Borrowers in
respect of, or obligations to purchase or otherwise acquire or to
assure payment of, Debt of other Persons; and (iv) Debt of other
Persons secured by a Lien upon property owned by the Borrowers,
whether or not assumed.
Default. "Default" shall mean the occurrence of any event or the
existence of any circumstances which, but for the giving of
notice or the passage of time, or both, would constitute an Event
of Default.
Disbursement Request. "Disbursement Request" shall mean a
written request for an Advance, substantially in the form of
Exhibit "E-1" attached hereto.
Eligible Accounts. "Eligible Accounts" shall mean, as of any
determination date, the aggregate unpaid balance (net of
interest, finance charges and contra accounts) of Accounts (a)
which arose from bona fide, outright sales of items of Inventory
or from the performance of services by the Borrowers, (b) if
arising from sales of items of Inventory, as to which the items
of Inventory have been shipped for delivery, (c) which are based
upon valid, enforceable and legally binding orders or contracts
and invoiced in accordance with the terms of such orders or
contracts, (d) for which the account debtors are unconditionally
obligated to make payment, and (e) in and to which the Bank has a
valid and perfected first priority security interest. The term
shall exclude the following:
(i) Any Account which is in dispute or as to which any of the
Borrowers has received notice that the account debtor claims
right of rejection, return, recoupment, setoff, counterclaim,
deduction or defense to payment;
(ii) Any Account which is subject to any assignment, adverse
claim or Lien (except in favor of the Bank);
(iii) Any Account which is evidenced by, or as to which any of
the Borrowers has received, a note, chattel paper, draft, check,
trade acceptance or other instrument in payment thereof or
obtained a judgment with respect thereto;
(iv) Any Account as to which the account debtor is an Affiliate;
(v) Any Account as to which the account debtor is a Governmental
Authority if the Bank is unable to obtain a valid and perfected
first priority security interest in such Account;
(vi) Any Account as to which the account debtor has died or is
the subject of dissolution, liquidation, termination of
existence, insolvency, business failure, receivership,
bankruptcy, readjustment of debt, assignment for the benefit of
creditors or similar proceedings;
(vii) Any Account which is due and payable more than thirty (30)
days from the original invoice date or which remains unpaid for a
period in excess of sixty (60) days beyond the original stated
due date;
(viii) All Accounts which are due from any account debtor who
owes Accounts ten percent (10%) or more of which remain unpaid
for a period in excess of sixty (60) days beyond the original
stated due date or ninety (90) days beyond the original invoice
date;
(ix) The amount by which the aggregate Accounts due from account
debtors who are Persons located in Canada exceed the total amount
of $500,000.00;
(x) Except as permitted in the immediately preceding sub-
paragraph (ix), any Account which is due from an account debtor
who is a Person not located in the United States or which is
payable in a currency other than U.S. Dollars (unless the Bank
determines, in its sole discretion, to include such Account and
the Bank shall have first received, at its option, a written
opinion in form and substance, and from counsel for the
Borrowers, satisfactory to the Bank reflecting that all necessary
steps have been taken to render the Bank's Lien on such Account
properly perfected and of first priority);
(xi) Any Account which is due to a Borrower whose principal place
of business (chief executive office) is located outside the
United States or which is incorporated or organized under the
laws of a jurisdiction other than a state of the United States
(unless the Bank determines, in its sole discretion, to include
such Account and the Bank shall have first received, at its
option, a written opinion in form and substance, and from counsel
for the Borrowers, satisfactory to the Bank reflecting that all
necessary steps have been taken to render the Bank's Lien on such
Account properly perfected and of first priority);
(xii) If the aggregate Accounts due from any account debtor
exceed twenty percent (20%) of the total Eligible Accounts
outstanding as of any determination date, the amount by which
such Accounts exceed twenty percent (20%) of the total Eligible
Accounts;
(xiii) Any other Account as to which the Bank has made a
determination, in the reasonable exercise of its discretion, that
the prospects for collection are doubtful; and
(xiv) The amount by which all Bonded Accounts exceed eighteen
percent (18%) of the net Eligible Accounts.
Environmental Laws. "Environmental Laws" shall mean all laws,
statutes, ordinances, and regulations of any Governmental
Authority pertaining to health, industrial hygiene or
environmental conditions on, under, about, or in any way relating
to any properties or assets of any Person including, without
limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601
et seq., as amended and in effect from time to time, and the
Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Sections 6901 et seq., as amended and in effect from time to
time.
ERISA. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended and as in effect from time to
time.
Event of Default. "Event of Default" shall mean the occurrence
of any of the events or the existence of any of the circumstances
specified in Section 8 hereof.
GAAP. "GAAP" shall mean generally accepted accounting principles
in effect from time to time, applied on a consistent basis
throughout the periods involved, as set forth in the opinions of
the Accounting Principles Board of the American Institute of
Certified Public Accountants and/or Statements of the Financial
Accounting Standards Board which may be applicable as of any
determination date.
General Intangibles. "General Intangibles" shall mean and
include (i) all general intangibles (as such term is defined in
Article 9 of the UCC) of the Borrowers, of every nature, whether
now owned or existing or hereafter arising or acquired,
including, without limitation, all books, correspondence, credit
files, records, computer programs, source codes, computer tapes,
computer cards, computer disks, Permits, know-how, technologies,
trade secrets, claims (including, without limitation, claims for
income tax and other refunds), causes of action, choses in
action, judgments, goodwill, patents, copyrights, brand names,
trademarks, tradenames, service names, service marks, logos,
licensing agreements, franchises, royalty payments, settlements,
partnership interests (whether general, limited or special),
interests in joint ventures, contracts, contract rights and
monies due under any contract or agreement, (ii) all chattel
paper of the Borrowers, whether now owned or existing or
hereafter arising or acquired, and (iii) all papers and documents
evidencing or constituting any of the foregoing.
Governmental Authority. "Governmental Authority" shall mean any
court or any administrative or governmental department,
commission, board, bureau, authority, agency or body of any
governmental entity, whether foreign or domestic, and whether
national, federal, state, county, city, municipal or otherwise.
Indebtedness. "Indebtedness" shall mean and include all
liabilities, obligations and indebtedness of the Borrowers to the
Bank or an affiliate of the Bank, of every kind and description,
now existing or hereafter incurred, direct or indirect, absolute
or contingent, due or to become due, matured or unmatured, and
whether or not of the same or a similar class or character as the
Credit Facilities and whether or not currently contemplated by
the Bank or the Borrowers, including, without limitation, (i) all
Advances, and Letters of Credit (including interest accruing
thereon and fees payable in respect thereof), (ii) all
Reimbursement Obligations, (iii) all liabilities, obligations and
indebtedness of the Borrowers to the Bank arising out of or
relating to this Agreement, the Credit Facilities, the Notes, the
L/C Agreements or any other of the Loan Documents, (iv) any
overdrafts by any of the Borrowers on any deposit account
maintained with the Bank, (v) any Interest Rate Swap with the
Bank or affiliate of the Bank, and (vi) any and all extensions
and renewals of any of the foregoing.
Interest Payment Date. "Interest Payment Date" shall mean, as to
any Tranche, the last day of the Interest Period applicable
thereto, provided that in the case of an Interest Period of six
(6) months, "Interest Payment Date" shall also include the three
(3) month anniversary of the commencement of that Interest
Period.
Interest Period. "Interest Period" shall mean any interest
period applicable to a Tranche as determined in accordance with
the provisions of Subsection 2.6.3 hereof.
Interest Rate Swap. "Interest Rate Swap" means that certain ISDA
Master Agreement dated as of February 1, 1998 between the
Borrowers and the Bank (as the same may be from time to time
amended, modified or supplemented) under which a fixed effective
rate of interest is applicable to the outstanding principal
balance under the Term Loan Facility.
Inventory. "Inventory" shall mean and include all inventory (as
such term is defined in Article 9 of the UCC) of the Borrowers,
now existing or hereafter acquired and wherever located,
including, without limitation, (i) raw goods and raw materials,
(ii) goods in process, (iii) finished goods, (iv) materials,
supplies, containers, boxes and packaging materials, (v)
materials used or consumed in the course of business, and (vi)
all other goods held or stored for sale or lease or furnished or
to be furnished under contracts of service.
L/C Agreement. "L/C Agreement" shall mean the Bank's standard
form of "Application for Standby Letter of Credit" or
"Application for Commercial Letter of Credit," as applicable, to
be executed and delivered by each of the Borrowers in connection
with each request for the issuance of a Letter of Credit pursuant
to Subsection 2.4.1 hereof.
Letters of Credit. "Letters of Credit" shall mean, collectively,
all standby and commercial letters of credit issued or to be
issued from time to time by the Bank under the Revolving Credit
Facility for the account of any of the Borrowers, as the same may
be amended, supplemented and extended from time to time.
LIBOR Rate. "LIBOR Rate" shall mean, as of any determination
date, the "London Interbank Offered Rates (LIBOR)" for one (1),
three (3) or six (6) months, as applicable, as established by the
Bank based upon the rates published on a daily basis in the
"Money Rates" section of The Wall Street Journal (Southwest
Edition).
LIBOR Tranche. "LIBOR Tranche" shall mean each portion of the
Advances under the Revolving Credit Facility which the Borrowers
designate as such pursuant to a Rate Election.
Lien. "Lien" shall mean any mortgage, pledge, lien, security
interest, assignment, charge, restriction, claim, or other
encumbrance, whether statutory, consensual or otherwise, which is
granted, created or suffered to exist by the Borrowers on any of
their Properties and which secures any Debt of the Borrowers.
Loan Documents. "Loan Documents" shall mean this Agreement, the
Notes, the Security Agreements, the Lockbox Agreement, the L/C
Agreements, the Interest Rate Swap and all other instruments and
documents executed or issued, or to be executed or issued, in
favor of the Bank pursuant hereto or in connection with the
Credit Facilities and/or the Collateral, and all amendments,
modifications, extensions and renewals of any of the foregoing.
Lockbox Agreement. "Lockbox Agreement" shall mean the Bank's
standard form of lockbox agreement to be executed by the
Borrowers pursuant to Subsection 3.3 hereof, as the same may be
amended, modified, supplemented, renewed or extended from time to
time.
Material Adverse Effect. "Material Adverse Effect" shall mean
any circumstance or set of events which (i) has or could
reasonably be expected to have any adverse effect whatsoever on
the validity, enforceability or performance of the Loan
Documents, (ii) does or could reasonably be expected to reduce
the Borrowers" consolidated tangible net worth (determined in
accordance with GAAP) or the Borrowers" consolidated net income
by more than $500,000.00, (iii) does or could reasonably be
expected to impair the ability of the Borrowers to fulfill their
collective obligations under the terms and conditions of the Loan
Documents, or (iv) causes or creates a Default.
Notes. "Notes" shall mean, collectively, the Revolving Note and
the Term Note, and "Note" shall mean either one of the Notes.
PBGC. "PBGC" shall mean the Pension Benefit Guaranty
Corporation, as established pursuant to Section 4002 of ERISA,
and any successor thereto or substitute therefor under ERISA.
Permit. "Permit" shall mean any permit, certificate, consent,
franchise, concession, license, authorization, approval, filing,
registration or notification from or with any Governmental
Authority or other Person.
Performance Bond. "Performance Bond" shall mean any bid bond or
performance bond posted by any of the Borrowers as security for
such Borrower"s obligations arising in connection with the
rendering of bids or the performance of services in the ordinary
course of business, including bonds posted in support of workers"
compensation obligations.
Permitted Liens. "Permitted Liens" shall mean the following
Liens against the Properties of the Borrowers: (i) deposits to
secure payment of worker's compensation, unemployment insurance
and other similar benefits; (ii) Liens for property taxes not yet
due; (iii) statutory Liens against which there are established
reserves in conformity with GAAP and which (A) are being
contested in good faith by appropriate legal proceedings or (B)
arise in the ordinary course of business and secure obligations
which are not yet due and not in default; (iv) Liens arising in
connection with capitalized leases of equipment, (v) Liens in
favor of the Bank; and (vi) Liens which are in existence on the
date hereof and which are described on Schedule I attached
hereto.
Person. "Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution,
entity, party or Governmental Authority.
Prime Rate. "Prime Rate" shall mean the "Prime Rate" as
established by the Bank based upon the rates published on a daily
basis in the "Money Rates" section of The Wall Street Journal
(Southwest Edition).
Prime Tranche. "Prime Tranche" shall mean that portion of the
outstanding Advances under the Revolving Credit Facility which is
not made up of LIBOR Tranches.
Proceeds. "Proceeds" shall mean all proceeds of all or any
portion of the Collateral within the meaning of Article 9 of the
UCC, including, without limitation, (i) all proceeds of any
insurance, judgment, indemnity, warranty or guaranty payable to
or for the account of any of the Borrowers with respect to all or
any portion of the Collateral, (ii) all proceeds in the form of
accounts, collections, contract rights, documents, instruments,
chattel paper or general intangibles relating in whole or in part
to the Collateral, and (iii) all payments, in any form
whatsoever, made or due and payable to or for the account of any
of the Borrowers in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any
portion of the Collateral by any Governmental Authority.
Property. "Property" shall mean any asset or property, whether
real, personal or mixed, tangible or intangible, which is now or
at any time hereafter owned, operated or leased by any or all of
the Borrowers.
Rate Election. "Rate Election" shall have the meaning set forth
in Subsection 2.6.3 hereof.
Reimbursement Obligation. "Reimbursement Obligation" shall mean
the joint and several obligation of the Borrowers arising under
the UCC, the Uniform Customs and Practice for Documentary Credits
(International Chamber of Commerce Publication No. 500, 1993
Revision), and the applicable L/C Agreement to reimburse the Bank
upon its payment of drafts presented against any Letter of
Credit.
Revolving Commitment. "Revolving Commitment" shall mean, as of
any determination date, the lesser of (i) Twenty Million and
No/100 Dollars ($20,000,000.00), and (ii) the Borrowing Base in
effect on such determination date.
Revolving Credit Facility. "Revolving Credit Facility" shall
mean the revolving loan facility to be established by the Bank in
favor of the Borrowers pursuant to Subsection 2.1.1 hereof.
Revolving Note. "Revolving Note" shall mean the replacement
promissory note to be executed by the Borrowers in order to
evidence all Advances made under the Revolving Credit Facility
pursuant to Subsection 2.5.1 hereof, substantially in the form of
Exhibit "A-1" attached hereto, as the same may be amended,
modified, supplemented, renewed or extended from time to time.
Security Agreement. "Security Agreement" shall mean each
security agreement executed by the Borrowers pursuant to
Subsection 3.1 hereof, each substantially in the form of Exhibit
"C" attached to the Existing Credit Agreement, as the same may be
amended, modified, supplemented, renewed or extended from time to
time.
Subsidiary. "Subsidiary" shall mean any Person in which any of
the Borrowers jointly or individually own or control more than
fifty percent (50%) of the outstanding equity interest.
Systems. "Systems" shall mean all devices, systems, machinery,
information technology, computer software and hardware, and other
date sensitive technology necessary for the Borrowers to carry on
their business as presently conducted and as contemplated to be
conducted in the future are Year 2000 Compliant or will be Year
2000 Compliant within a period of time calculated to result in no
Material Adverse Effect on any of Borrowers" business operations
taken as a whole.
Term Loan Facility. "Term Loan Facility" shall mean the term
loan facility to be established by the Bank in favor of the
Borrowers pursuant to Subsection 2.1.2 hereof.
Term Note. "Term Note" shall mean that promissory note executed
by the Borrowers in order to evidence all the outstanding
principal balance under the Term Loan Facility pursuant to
Subsection 2.5.2 hereof, substantially in the form of Exhibit "B-
1" attached hereto, as the same may be amended, modified,
supplemented, renewed or extended from time to time.
Tranches. "Tranches" shall mean, collectively, the Prime
Tranches and all LIBOR Tranches, and "Tranche" shall mean any of
the Tranches.
UCC. "UCC" shall mean the Uniform Commercial Code of the State
of Oklahoma, as amended and as in effect from time to time.
Year 2000 Compliant. "Year 2000 Compliant" shall mean that the
Systems are designed to be used prior to, during and after the
Gregorian calendar year 2000 A.D. and will operate during each
such time period without error relating to date data,
specifically including any error relating to, or the product of,
date data which represents or references different centuries or
more than one century.
1.3 Accounting Terms. Accounting and financial terms used herein
and not otherwise defined with respect to the Borrowers'
financial statements and consolidated financial position shall
have the meanings ascribed thereto pursuant to GAAP.
1.4 Terms Defined in UCC. Terms used herein that are defined in
Article 9 of the UCC shall have the respective meanings set forth
therein.
1.5 Interpretation. All terms defined herein in the singular
shall include the plural, as the context requires, and
vice-versa. Unless the context otherwise requires, all
references herein to "the Borrowers" shall mean "the Borrowers,
jointly and severally, and any one of the Borrowers,
individually."
2. LENDING AGREEMENT. Subject to the terms and conditions of
this Agreement and the Loan Documents, and in reliance upon the
representations and warranties contained herein and therein:
2.1 Credit Facilities.
2.1.1 Revolving Credit Facility. The Bank agrees to continue
and extend a revolving credit facility, to be designated as the
"Revolving Credit Facility," in an aggregate principal amount
equal to the Revolving Commitment. The Revolving Credit Facility
may be drawn upon by the Borrowers from time to time, in whole or
in part, on or before October 31, 2000, by requesting an Advance
in accordance with the provisions of Subsections 2.3.1 and 2.4.2
hereof, or the issuance of a Letter of Credit in accordance with
the provisions of Subsection 2.4.1 hereof; provided, however,
that the aggregate principal (or face) amount of all Advances and
Letters of Credit at any one time outstanding under the Revolving
Credit Facility shall not exceed the Revolving Commitment as of
such date. The Revolving Credit Facility shall be a revolving
facility, and the prepayment of Advances drawn and the expiration
of Letters of Credit issued thereunder shall restore the amount
available for reborrowing.
2.1.2 Term Loan Facility. The Borrowers acknowledge and agree
that (i) the current outstanding principal balance of the
Existing Term Note is $8,833,333.31, (ii) none of the Borrowers
has any defenses to payment, offsets, recoupments, deductions, or
counterclaims with respect to the Existing Term Note or the
Indebtedness evidenced thereby, and (iii) the Interest Rate Swap
continues in effect and the Borrowers" obligations thereunder are
reaffirmed. Bank agrees to continue the Term Loan and the
Borrowers agree to execute and deliver a term note in the
principal amount of $8,833,333.31 in accordance with Subsection
2.5.2 hereof in replacement and continuation of, and in
substitution for, the Existing Term Note. The making of
principal payments, including prepayments, on the Term Loan
Facility shall not restore the amount available for borrowing.
2.2 Use of Proceeds.
2.2.1 Revolving Credit Facility. Advances under the Revolving
Credit Facility shall be used by the Borrowers for the purposes
of (i) providing working capital, and/or (ii) financing the
Borrowers" corporate acquisition and capital expenditure
activity.
2.2.2 Term Loan Facility. Proceeds of the Term Loan Facility
shall be used by the Borrowers to fund general corporate
purposes.
2.3 Borrowing Procedures. All Advances shall be made in
accordance with the disbursement conditions and procedures set
forth below.
2.3.1 Requests for Advances. The Borrowers shall make each
request for an Advance either orally or in writing (by delivering
to the Bank a properly completed and executed Disbursement
Request) no later than 11:00 a.m., Tulsa time, on the requested
date of disbursement; provided, however, that the Borrowers shall
confirm all oral requests for Advances by delivering to the Bank
a properly completed and executed Disbursement Request within
three (3) Business Days after the date of the oral request. Each
request for an Advance shall specify (i) the requested date of
disbursement (which shall be a Business Day), (ii) the amount of
the requested Advance, (iii) whether the requested Advance will
be included within the Prime Tranche or a LIBOR Tranche, and (iv)
in the case of an Advance to be included within a LIBOR Tranche,
the requested Interest Period. Each request for an Advance under
the Prime Tranche shall be in a minimum amount of $100,000.00
(unless the remaining availability under the Revolving Credit
Facility is less than $100,000.00) and in integral multiples of
$100,000.00 in excess of that amount, and each request for an
Advance under a LIBOR Tranche shall be in a minimum amount of
$500,000.00 and in integral multiples of $100,000.00 in excess of
that amount.
2.3.2 Disbursements. Not later than 12:30 p.m., Tulsa time, on
the date on which any Advance is requested to be made, the Bank
shall credit the amount of the requested Advance to the account
maintained by Matrix with the Bank. Notwithstanding any
provision of this Agreement, the Bank shall not be required to
make any Advance hereunder if any of the conditions precedent in
Section 4 hereof has not been satisfied.
2.4 Letters of Credit. The Letters of Credit to be issued by the
Bank under the Revolving Credit Facility shall be subject to the
following terms and conditions:
2.4.1 Terms. Each Letter of Credit shall be either a standby or
a commercial letter of credit for a proper business purpose, with
a final expiration date not later than the termination of the
Revolving Credit Facility. Each Letter of Credit shall be issued
pursuant to and subject to the terms and conditions of a L/C
Agreement, which shall be completed and executed by the Borrowers
at least three (3) Business Days prior to the issuance of the
applicable Letter of Credit.
2.4.2 Draws. In the event a draft drawn under (or purporting to
be drawn under) any Letter of Credit is presented to the Bank for
payment, the Bank shall promptly notify the Borrowers. At least
one (1) Business Day prior to the date such draft is payable, the
Borrowers shall advise the Bank either (i) that they intend to
provide the Bank with funds sufficient to pay such draft on or
before the date it is payable, or (ii) that the Bank is requested
to make an Advance under the Revolving Credit Facility to pay the
Bank for the amount of such draft. The latter option shall not
be available to the Borrowers if there is not sufficient
availability under the Revolving Commitment to make the requested
Advance. Upon the Bank's payment of such draft through an
Advance under the Revolving Credit Facility, the Borrowers shall
be deemed to have borrowed from the Bank under the Revolving
Credit Facility and the Bank shall record such amount as a
Advance under the Revolving Note.
2.4.3 Release and Indemnification. The Bank shall be authorized
to pay any draft drawn under any Letter of Credit upon its due
presentation by the beneficiary thereof in accordance with its
terms and conditions. The Borrowers jointly and severally agree
to release the Bank and to indemnify and hold the Bank harmless
from and against all liability, cost and expense resulting from
or relating to its honor of any such draft. The Borrowers
further agree that, in the event the Bank incurs any loss, cost
or expense (including, without limitation, any loss of profit) as
a result of any failure by the Borrowers to provide funds to the
Bank sufficient to pay any draft drawn on any Letter of Credit
prior to its due date (unless the Borrowers have properly
requested an Advance under the Revolving Credit Facility prior to
such date), the Borrowers will upon demand pay to the Bank such
amount as will reimburse it for such loss, cost or expense.
2.4.4 Reimbursement. The Borrowers" Reimbursement Obligations
shall be absolute and unconditional under any and all
circumstances (except as provided below with respect to the gross
negligence or willful misconduct of the Bank) and irrespective of
any setoff, counterclaim or defense to payment which the
Borrowers may have or have had against the Bank, including (i)
any defense based upon the failure of any drawing under a Letter
of Credit to conform to the terms of the Letter of Credit (other
than a defense based upon the gross negligence or willful
misconduct of the Bank in determining whether such drawing
conforms to the terms of the Letter of Credit), or any
non-application or misapplication by the beneficiary of the
proceeds of such drawing; (ii) any claim, setoff, defense or
other right which the Borrowers may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit, the Bank or any other person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrowers and
the beneficiary named in any such Letter of Credit); (iii) any
claim, setoff, defense or other right which the Borrowers may
have based upon any draft, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrowers (other
than the gross negligence or willful misconduct of the Bank).
The Borrowers further agree that, in the absence of gross
negligence or willful misconduct of the Bank, the Bank shall not
be responsible for, and Borrowers" Reimbursement Obligations
shall not be affected by, among other things, the validity or
genuineness of documents or any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or
forged or any dispute between or among the Borrowers and the
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 Borrowers against any beneficiary of such Letter of Credit
or any such transferee.
2.4.5 Advice of Credit. The Bank 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 caused by the Bank's gross negligence or willful
misconduct.
2.4.6 Obligation to Issue Letters of Credit. Notwithstanding any
provision of this Agreement, the Bank shall not be required to
issue any Letter of Credit hereunder if the conditions precedent
set forth in Section 4 hereof have not been satisfied.
2.4.7 Maximum Amount of Outstanding Letters of Credit.
Notwithstanding any provision of this Agreement, the maximum
aggregate amount outstanding at any time under all Letters of
Credit issued by the Bank hereunder shall not exceed Seven
Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00).
2.5 Notes.
2.5.1 Revolving Note. The Advances from time to time
outstanding under the Revolving Credit Facility shall be
evidenced by the Revolving Note, which shall be jointly and
severally made, executed and delivered by the Borrowers at the
Closing. Notwithstanding the principal amount stated on the face
of the Revolving Note, the actual principal due from the
Borrowers on account of the Revolving Note shall be the sum of
all Advances made by the Bank pursuant to the Revolving Credit
Facility, less all principal payments actually received by the
Bank in collected funds. All Advances and payments under the
Revolving Credit Facility shall be recorded by the Bank in its
books and records, and the unpaid principal balance so recorded
shall be presumptive evidence of the principal amount owing under
the Revolving Credit Facility.
2.5.2 Term Note. The outstanding unpaid balance under the Term
Loan Facility shall be evidenced by the Term Note, which shall be
jointly and severally made, executed and delivered by the
Borrowers at the Closing in modification of and substitution for
the Existing Term Note. All payments under the Term Loan
Facility shall be recorded by the Bank in its books and records,
and the unpaid principal balance so recorded shall be presumptive
evidence of the principal amount owing under the Term Loan
Facility.
2.6 Interest. The unpaid principal amounts from time to time
outstanding under each of the Notes shall bear interest as
follows:
2.6.1 Revolving Note. The unpaid principal amount of all
Advances from time to time outstanding under the Revolving Note
shall bear interest at a rate determined by reference to the
Prime Rate or the LIBOR Rate, as selected by the Borrowers
pursuant to a Rate Election made in accordance with the
provisions of Subsection 2.6.3 hereof, as follows:
(a) Advances included within the Prime Tranche shall bear
interest at a fluctuating rate per annum equal to the Prime Rate
minus one and one-quarter percent (1-1/4%).
(b) Advances included within each LIBOR Tranche shall bear
interest at a rate per annum equal to the sum of the LIBOR Rate
applicable to such LIBOR Tranche plus one and one-eighth percent
(1-1/8%).
(c) In the event of any Event of Default and until cured to the
satisfaction of the Bank, the unpaid principal amount of all
Advances outstanding under the Revolving Note shall bear interest
at a fluctuating rate per annum equal to the Prime Rate plus one
and one-half percent (1-1/2%), adjusted as of the date of each
change therein.
2.6.2 Term Note. The unpaid principal amount from time to time
outstanding under the Term Note shall bear interest at the
floating rate equal to the 30-day LIBOR Rate plus one and one-
half percent (1-1/2%); provided, however, that in the event of
any Event of Default and until cured to the satisfaction of the
Bank, the unpaid principal amount outstanding under the Term Note
shall bear interest at a fluctuating rate per annum equal to the
Prime Rate plus two percent (2%), adjusted as of the date of each
change therein.
2.6.3 Rate Elections; Interest Periods. In connection with each
request for an Advance under the Revolving Credit Facility
submitted pursuant to Subsection 2.3.1 hereof, or each request to
continue or convert an existing Tranche (or portion thereof)
under the Revolving Credit Facility pursuant to Subsection 2.6.4
hereof, the Borrowers shall notify the Bank whether such Advance
or Tranche will be included within the Prime Tranche or within a
LIBOR Tranche (a "Rate Election") and shall elect an interest
period (each an "Interest Period") to be applicable to such
Tranche, which Interest Period shall (i) in the case of Advances
included within the Prime Tranche, be a one (1) month period, and
(ii) in the case of Advances included within a LIBOR Tranche, be
either a one (1), three (3) or six (6) month period; provided
that:
(a) the Interest Period for any Advance shall commence on the
date such Advance is disbursed pursuant to Subsection 2.3.2
hereof, and the Interest Period for any Tranche shall commence on
the date such Tranche is converted or continued pursuant to
Subsection 2.6.4 hereof;
(b) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day;
(c) no Interest Period shall extend beyond October 31, 2000;
(d) the Borrowers shall make no Rate Election requesting
inclusion of an Advance or Tranche within a LIBOR Tranche without
specifying the applicable Interest Period;
(e) each Rate Election shall be irrevocable, and, if no Rate
Election is made, the Advance or the Tranche, as the case may be,
shall be included within the Prime Tranche;
(f) there shall be no limit to the maximum number of Tranches
outstanding under the Revolving Credit Facility at any time; and
(g) notwithstanding any provisions herein to the contrary, the
Borrowers may select an Interest Period of less than 30 days for
Advances included within the Prime Tranche if such shorter period
ends on October 31, 2000.
2.6.4 Continuation and Conversion Options. Subject to the
limitations set forth in Subsection 2.6.3 hereof, the Borrowers
may under the Revolving Credit Facility from time to time: (i)
elect to continue, on the last day of the Interest Period
therefor, any LIBOR Tranche (or any portion thereof) to a
subsequent Interest Period, (ii) elect to convert, on the last
day of the Interest Period therefor, any LIBOR Tranche in the
Prime Tranche; or (iii) elect to convert, on any Business Day,
the Prime Tranche (or any portion thereof) into a LIBOR Tranche.
The Borrowers shall give the Bank irrevocable notice of each
conversion or continuation either orally or in writing (by
delivering to the Bank a properly completed and executed
Disbursement Request) no later than 5:00 p.m., Tulsa time, at
least one (1) Business Day prior to the conversion or
continuation date; provided, however, that the Borrowers shall
confirm all oral conversion or continuation notices under the
Revolving Credit Facility by delivering to the Bank a properly
completed and executed Disbursement Request within three (3)
Business Days after the date of the oral request. Each
conversion or continuation notice shall specify (i) the proposed
conversion or continuation date (which shall be a Business Day),
(ii) the aggregate amount to be converted or continued, (iii) the
nature of the proposed conversion or continuation, and (iv) in
the case of conversion to or continuation as a LIBOR Tranche, the
requested Interest Period. No LIBOR Tranche may be converted or
continued (i) at any time other than on the last day of the
Interest Period applicable thereto, or (ii) at any time that a
Default or Event of Default has occurred and is continuing.
2.6.5 Computation of Interest. Interest on the outstanding
amounts under each Note shall be computed on the basis of a year
consisting of 360 days and for the actual number of days elapsed.
2.7 Fees.
2.7.1 Revolving Credit Facility Fee. On an annual basis until
the date of termination of the Revolving Credit Facility, the
Borrowers shall pay to the Bank a nonrefundable "Revolving Credit
Facility Fee" in the amount of $18,750.00. The "Revolving Credit
Facility Fee" shall be payable on October 31, 1998 and on each
October 31 thereafter.
2.7.2 Letter of Credit Fees. Upon the issuance of each Letter
of Credit, the Borrowers shall pay to the Bank (i) a "Letter of
Credit Fee" equal to the product of (A) in the case of a Letter
of Credit in a face amount less than $250,000.00, one and one-
quarter percent (1-1/4%) of the face amount of the Letter of
Credit, or (B) in the case of a Letter of Credit in a face amount
equal to or greater than $250,000.00, three-quarters of one
percent (3/4 of 1%) of the face amount of the Letter of Credit,
times a fraction, the numerator of which is the number of days
which will elapse prior to the final maturity of the Letter of
Credit and the denominator of which is the number 360, and (ii)
all other usual and customary charges of the Bank for documentary
credits, as provided in the applicable L/C Agreement.
2.8 Required Payments and Maturity.
2.8.1 Revolving Note.
(a) Required Payments. The Borrowers shall pay all unpaid
accrued interest under the Revolving Note on each Interest
Payment Date and on October 31, 2000. The entire outstanding
principal balance under the Revolving Note, together with all
unpaid interest accrued thereon, shall be due and payable in full
on October 31, 2000.
(b) Maturity. The final maturity of the Revolving Note shall be
October 31, 2000.
2.8.2 Term Note.
(a) Required Payments. Prior to maturity and on the first
Business Day of each month beginning November 1, 1998, the
principal amount of the Term Note shall be due and payable in
fifty-three (53) consecutive monthly installments of One Hundred
Sixty-Six Thousand Six Hundred Sixty-Six and 67/100 Dollars
($166,666.67), together with all unpaid interest thereon
calculated at the variable rate of interest applicable from time
to time under the Term Note in accordance with the Interest Rate
Swap.
(b) Maturity. The final maturity of the Term Note shall be
February 28, 2003.
2.9 Optional Prepayments. The Borrowers may, at any time and
from time to time, prepay the outstanding principal amount under
any of the Notes, in whole or in part, without premium or
penalty, provided, however, that any partial prepayment on any
Note shall be accompanied by payment of all unpaid accrued
interest. Notwithstanding the foregoing, amounts prepaid on the
Term Note will be subject to the terms, conditions and
restrictions set forth in the Interest Rate Swap.
2.10 Mandatory Prepayments. If at any time the outstanding
principal balance of the Revolving Note plus the total face
amount of all outstanding Letters of Credit exceeds the Revolving
Commitment, the Borrowers shall make an immediate mandatory
prepayment of principal on the Revolving Note sufficient to
reduce the principal balance of the Revolving Note to not more
than the Revolving Commitment.
2.11 Making of Payments. All payments, including prepayments, of
principal of, or interest on, the Notes shall be made to the Bank
at its principal office in Tulsa, Oklahoma, on or before 2:00
p.m. (Tulsa time), on the date due, in immediately available
funds. Whenever a payment is due on a day other than a Business
Day, the due date shall be extended to the next succeeding
Business Day and interest (if any) shall accrue during such
extension.
2.12 Renewal and Extension. Between May 31 and September 30,
1999, and between May 31 and September 30 of each year
thereafter, the Borrowers may submit a written request to the
Bank to extend the termination date of the Revolving Credit
Facility for an additional one (1) year period beyond the then
stated maturity. The Bank shall give the Borrowers notice of its
decision with respect to the Borrowers" request on or before
October 31, 1999, and October 31 of each year thereafter, which
decision shall be made by the Bank in the exercise of its sole,
absolute and unconditional discretion. In the event that the
Bank elects to renew and extend the Revolving Credit Facility
pursuant to the Borrowers" request, the terms and provisions of
this Agreement shall continue in full force and effect with
respect to Revolving Credit Facility except as may otherwise be
agreed in writing by the Borrowers and the Bank. Notwithstanding
the foregoing, the Bank shall not be obligated, and nothing
contained in this Agreement shall be construed as obligating the
Bank, to agree or consent to any such renewal and extension.
2.13 Maximum Lawful Interest Rate. It is not the intention of
the Bank or the Borrowers to violate the laws of any applicable
jurisdiction relating to usury or other restrictions on the
maximum lawful interest rate. The Loan Documents and all other
agreements between the Borrowers and the Bank, whether now
existing or hereafter arising and whether written or oral, are
hereby limited so that in no event shall the interest paid or
agreed to be paid to the Bank for the use, forbearance or
detention of money loaned, or for the payment or performance of
any covenant or obligation contained herein or in any other Loan
Document, exceed the maximum amount permissible under applicable
law. If from any circumstances whatsoever fulfillment of any
provision hereof or of any other Loan Document, at the time the
performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the
limit of such validity. If from any such circumstances the Bank
shall ever receive anything of value deemed interest under
applicable law which would exceed interest at the highest lawful
rate, such excessive interest shall be applied to the reduction
of the principal amount owing hereunder, and not to the payment
of interest, or if such excessive interest exceeds any unpaid
balance of principal, such excess shall be refunded to the
Borrowers. All sums paid or agreed to be paid to the Bank for
the use, forbearance or detention of monies shall, to the extent
permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full term of such indebtedness until
payment in full so that the rate of interest on account of such
indebtedness is uniform throughout the term thereof. This
Subsection 2.13 shall control every other provision of the Loan
Documents and all other agreements between the Bank and the
Borrowers contemplated thereby.
2.14 Appointment of Agent. Each of the Borrowers (other than
Matrix) hereby designates and appoints Matrix as its sole and
exclusive agent for the purposes of requesting and receiving
Advances under the Credit Facilities hereunder, giving notices of
Rate Elections or continuation or conversion notices hereunder,
submitting reports and certificates hereunder and making payments
or prepayments in accordance herewith.
3. COLLATERAL. To secure the Indebtedness, including, without
limitation, all Advances outstanding under the Revolving Credit
Facility, all unpaid amounts outstanding under the Term Loan
Facility, all Reimbursement Obligations under outstanding Letters
of Credit and any obligation by any of the Borrowers owed to an
affiliate of the Bank:
3.1 Collateral. The Borrowers have and shall continue to grant
and maintain, or cause to be granted and maintained, in favor of
the Bank at all times during the term of this Agreement and until
the Indebtedness is paid and satisfied in full, a valid and
perfected first priority security interest in and to the
Collateral, free and clear of all other Liens. Toward that end,
each of the Borrowers has executed and delivered, or upon the
request of the Bank will execute and deliver, a Security
Agreement, together with such UCC financing statements as the
Bank has deemed or will deem necessary or advisable.
3.2 Reaffirmation and Execution of Security Agreements. By
signing below, the Borrowers hereby ratify and reaffirm the
Security Agreements and agree that the Security Agreements shall
continue in full force and effect in accordance with their terms
as security for payment and performance of all Indebtedness. Any
of the Borrowers who were not party to the Existing Credit
Agreement shall execute and deliver to the Bank a Security
Agreement as security for payment and performance of the
Indebtedness. Any of the Borrowers who were party to the
Existing Credit Agreement that have changed their corporate name
since their execution and delivery of a Security Agreement shall
fully cooperate with the Bank in executing any amended financing
statements to reflect the name change. All references to the
term "Indebtedness" contained in the Security Agreements and
other Loan Documents shall hereafter be deemed to include all
liabilities, obligations and indebtedness of the Borrowers to the
Bank arising out of or relating to the Credit Agreement as
amended by this Agreement, the Notes and any other Loan Documents
(including without limitation the Interest Rate Swap) and shall
also secure any amounts now or hereafter due and payable by any
of the Borrowers to the Bank or any Affiliate of the Bank.
3.3 Lockbox. Except as to the lockboxes or similar collection
accounts currently in existence and utilized by BSC, ATI and
BTI, the Borrowers have caused and shall continue to cause all
payments from account debtors to be remitted directly to a
"lockbox" maintained with the Bank or an affiliate of the Bank.
Until further notice from the Bank, all payments remitted to such
lockbox will be deposited by the Bank into an operating account
maintained with the Bank by Matrix (subject to the Bank"s
established policies on availability of uncollected funds). The
Borrowers have executed and delivered to the Bank the Lockbox
Agreement.
3.4 Further Assurances. In order to provide the Bank with and to
perfect the security interests required hereunder and to
establish and maintain the priority of such security interests,
free and clear of all other Liens whatsoever, each of the
Borrowers has at its sole expense: (i) without any request from
the Bank, delivered or cause to be delivered to the Bank, in due
form for transfer, all Proceeds of Collateral consisting of
promissory notes, Debt instruments, chattel paper, securities or
the like, and all documents of title, if any, at any time
representing all or any portion of the Collateral; and (ii) upon
the request of the Bank, forthwith execute and deliver or cause
to be executed and delivered to the Bank, in due form for filing
or recording, such additional security agreements, instruments,
agreements, assignments, financing statements and other
documents, and do such other acts and things with respect to the
Collateral, as the Bank may reasonably deem necessary or
advisable.
4. CONDITIONS OF LENDING
4.1 Closing. The Closing shall take place at the offices of the
Bank in Tulsa on October 22, 1998, at 10:30 a.m., or at such
other place, date and/or time as the parties shall agree.
4.2 Conditions to Initial Funding. The obligation of the Bank to
enter into and perform under this Agreement and to make Advances
is subject to the Borrowers" satisfaction of the following
conditions precedent at or as of the date of the initial Advance
under the Revolving Credit Facility:
(a) Loan Documents. This Agreement, the Notes, the Security
Agreements, the Lockbox Agreement and appropriate UCC-1 financing
statements shall have been duly and validly authorized, executed,
acknowledged (where appropriate) and delivered to the Bank, all
in form and substance satisfactory to the Bank.
(b) Corporate Documents. With respect to each of the Borrowers,
the Bank shall have received: (i) a true and correct copy of its
Articles or Certificate of Incorporation, as amended; (ii) a true
and correct copy of its Bylaws, as amended; (iii) a good standing
certificate issued by the Secretary of State or equivalent public
official of the state or jurisdiction of its incorporation, as to
its due incorporation and good standing under the laws of such
state or jurisdiction; and (iv) with respect to each Borrower not
incorporated under the laws of the State of Oklahoma, a good
standing certificate issued by the Oklahoma Secretary of State as
to its due qualification and good standing as a foreign
corporation under the laws of the State of Oklahoma.
(c) Resolutions. With respect to each of the Borrowers, the Bank
shall have received a true and correct copy of the resolutions
adopted by its Board of Directors duly authorizing the borrowings
contemplated hereunder and the execution, delivery and
performance of the Loan Documents to which it is a party.
(d) Incumbency Certificates. With respect to each of the
Borrowers, the Bank shall have received a certificate executed by
its duly elected and acting corporate secretary stating the names
and titles and containing specimen signatures of the officers
authorized to execute and deliver the Loan Documents to which it
is a party.
(e) Lien Searches. The Bank shall have received certified
responses to UCC lien search requests reflecting that there are
no effective UCC financing statements on file in any filing
office in the State of Oklahoma or any other states or
jurisdictions in which any of the Borrowers maintains its
principal place of business naming any of the Borrowers as debtor
and covering the Collateral, other than (i) financing statements
in favor of the Bank, and (ii) financing statements relating to
Permitted Liens.
(f) Insurance Policies. The Bank shall have received copies of
such insurance policies, or binders or certificates of insurance,
in form and substance satisfactory to the Bank, evidencing that
the Borrowers have obtained and are maintaining the minimum
insurance coverages required by this Agreement.
(g) Other Matters. The Borrowers shall have provided the Bank
with such reports, information, financial statements, and other
documents as the Bank has reasonably requested to evidence the
Borrowers' compliance with the terms and conditions of this
Agreement and the Loan Documents.
(h) Legal Matters. All legal matters incident to the Loan
Documents and the Credit Facilities shall be satisfactory to the
Bank and its counsel.
4.3 Conditions to Advances Under Revolving Credit Facility. The
obligation of the Bank to make any Advance under the Revolving
Credit Facility is subject to the Borrowers' satisfaction of the
following additional conditions precedent:
(a) Disbursement Request. The Bank shall have received a
properly completed and executed Disbursement Request in
accordance with the provisions of Subsection 2.3.1 hereof.
(b) Borrowing Base. The making of such Advance shall not cause
the total outstanding principal balance of the Revolving Note,
plus the total face amount of all outstanding Letters of Credit,
to exceed the Revolving Commitment.
(c) Acquisition Information. With respect to any Advance to be
used to finance a corporate acquisition by the Borrowers (or any
one or more of them), (i) the Bank shall have been notified in
writing of the proposed acquisition and provided with such
information as the Bank deems necessary to enable the Bank to
evaluate the terms of the acquisition, (ii) the Bank shall have
consented to the terms of the acquisition, (iii) except as waived
in writing by the Bank in connection with the acquisition of a
corporation which is incorporated or organized under the laws of
a jurisdiction other than the United States, the corporation to
be acquired shall have agreed to become a party to this Agreement
and to become liable for the Indebtedness, and (iv) the
corporation to be acquired shall have executed and delivered a
Security Agreement and such other Loan Documents as the Bank
deems necessary to grant in favor of the Bank a valid and
perfected first priority security interest in and to its
properties and assets to be included in the Collateral.
(d) Representations and Warranties. The representations and
warranties set forth herein and in the other Loan Documents shall
be true and accurate (except to the extent any representations or
warranties as to the financial condition of the Borrowers relate
solely to an earlier specified date).
(e) No Defaults. There shall not have occurred and be continuing
any Default or Event of Default.
(f) No Violation. The making of such Advance shall not cause the
Bank to be in violation of any statute or regulation or any order
or decree of any Governmental Authority.
5. REPRESENTATIONS AND WARRANTIES. In addition to the other
representations and warranties made herein, the Borrowers
represent and warrant to the Bank that the following statements
are and will be true and correct at all times until the
Indebtedness is paid and satisfied in full:
5.1 Existence. Each of the Borrowers is a corporation, duly
organized, validly existing and in good standing under the laws
of the state or jurisdiction of its incorporation and is duly
qualified to conduct business and in good standing under the laws
of the State of Oklahoma and all other states or jurisdictions in
which it does business. Each of the Borrowers is duly
authorized, qualified and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to carry
on its business as currently conducted and as contemplated to be
conducted, or, if not, such noncompliance does not create or give
rise to a Material Adverse Effect.
5.2 Validity and Binding Nature. The Loan Documents to which
each of the Borrowers is a party constitute (or upon execution
and delivery will constitute) its valid and legally binding
obligations, enforceable in accordance with their respective
terms (subject to any applicable bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights
generally and subject to general principles of equity).
5.3 Conflicting Agreements and Restrictions. None of the
Borrowers is a party to any contract or agreement or subject to
any other restriction which has or is likely to have a Material
Adverse Effect. Neither the execution and delivery by any of the
Borrowers of the Loan Documents to which it is a party, nor
fulfillment or compliance with the terms and provisions thereof,
will (i) conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or
result in any violation of any agreement, instrument,
undertaking, judgment, decree, order, writ, injunction, statute,
law, rule or regulation to which it is subject or by which its
Properties are bound, (ii) result in the creation or imposition
of any Lien on any Property now or hereafter owned by it pursuant
to the provisions of any mortgage, indenture, security agreement,
contract, undertaking or other agreement, except for security
interests created in favor of the Bank, or (iii) require any
authorization, consent, license, approval or authorization of or
other action by, or notice or declaration to, or registration
with, any Governmental Authority, or, to the extent that any such
consent or other action may be required, it has been validly
procured or duly taken.
5.4 Actions and Proceedings. There is no action or proceeding
against or investigation of any of the Borrowers, pending or
threatened, which questions the validity of any of the Loan
Documents or which is likely to have a Material Adverse Effect.
5.5 Financial Condition. The audited consolidated financial
statements of the Borrowers for the fiscal year ended May 31,
1998, and the unaudited consolidated financial statements of the
Borrowers dated as of August 31, 1998, copies of which have been
furnished to the Bank, are correct and complete and fairly
present the consolidated financial position of the Borrowers as
of the dates thereof. Such financial statements were prepared in
conformity with GAAP, and there has occurred no material adverse
change in the financial condition of any of the Borrowers from
the effective dates of such financial statements to the date
hereof. None of the Borrowers has any contingent obligations,
unusual or long-term commitments, unrealized or anticipated
losses from any unfavorable commitment, or liabilities for taxes
not reflected in such financial statements or in the notes
thereto which are individually or in the aggregate substantial in
relation to its financial position.
5.6 Ownership of Properties; Liens. Each of the Borrowers has
good and marketable title to, or valid leasehold interests in,
all of its Properties owned or used in connection with the
operation of its business, including, without limitation, the
Collateral, and none of such Properties is subject to any Lien of
any kind other than Permitted Liens on Properties not included in
the Collateral.
5.7 No Subsidiaries. Each of MSI, PEI, TSI, SLT, WCI, MSIC, BSC,
MVS and MSC is a wholly-owned Subsidiary of Matrix, MSM is a
Subsidiary of MSI, each of MIC, CCC, MII and National Piping
Service, Inc., a Delaware corporation not presently active, is a
Subsidiary of MSC, each of BTI and ATI is a Subsidiary of BSC,
each of MA and MSERV is a Subsidiary of GSC, and ▇▇ ▇▇▇▇▇▇-
Midwest Constructors, Inc., a Saudi Arabian corporation, is a
Subsidiary of MII. Except for the foregoing ownership interests
of each of the Borrowers in the other Borrowers and other listed
entities, none of the Borrowers shall take or cause to be taken
any of the following actions which in the aggregate would cause
or create a capital requirement, investment cost or other expense
in excess of $500,000.00: (i) create or acquire without the prior
written consent of the Bank, any Subsidiaries, (ii) own any stock
in any other corporation, or (iii) become without the prior
written consent of the Bank, a partner or joint venturer in or
equity owner of any partnership, joint venture or other business
association.
5.8 Permits. Each of the Borrowers has all Permits and has made
all governmental and regulatory filings, registrations and
notifications (i) which are presently necessary for it to carry
on its business as now being conducted or as contemplated to be
conducted, (ii) which are presently necessary for it to own and
operate its Properties as now owned and operated, or (iii) which
if not obtained would have a Material Adverse Effect. All such
Permits are or will be valid and subsisting, and none of the
Borrowers is or will be in material violation of any such Permit.
5.9 No Defaults. None of the Borrowers is in default of or in
breach under any material contract, agreement or instrument to
which it is a party or by which it or any of its Properties may
be bound.
5.10 ERISA. None of the Borrowers has incurred any "accumulated
funding deficiency," as such term is defined in Section 302(a)(2)
of ERISA, with respect to any employee pension or other benefit
plan or trust maintained by or related to it, and none of the
Borrowers has incurred any material liability to PBGC or
otherwise under ERISA in connection with any such plan. No
reportable event described in Sections 4042(a) or 4043(b) of
ERISA has occurred.
5.11 No Violation of Applicable Law. Each of the Borrowers is in
compliance in all material respects with all statutes, rules and
regulations relating to its business and operations in all states
and jurisdictions where it is currently doing business,
including, without limitation, those relating to occupational
health and safety standards, equal employment practices, labor
relations and civil rights.
5.12 Environmental Laws. The Borrowers are in compliance in all
material respects with all applicable Environmental Laws in all
jurisdictions in which they are presently doing business, and
none of the Borrowers is aware of any violation or claimed
violation of any Environmental Law which has or is likely to have
a Material Adverse Effect.
5.13 Taxes. Each of the Borrowers has filed all federal, state
and provincial tax returns and all local, county and foreign tax
returns required by law to be filed, and has paid all taxes,
assessments and similar charges shown to be due and payable on
said returns, to the extent that such taxes and assessments have
become due, except those being diligently contested by
appropriate legal proceedings, in good faith, and against which
adequate reserves have been established in conformity with GAAP.
At the date of this Agreement, no extensions of time are in
effect for assessments of deficiencies for federal income taxes
of any of the Borrowers.
5.14 Compliance with Board Regulations. No part of the proceeds
of any Advance will be used, and no part of any loan repaid or to
be repaid with the proceeds of any Advance was or will be used,
directly or indirectly, for the purpose of purchasing or carrying
any margin security or margin stock within the meaning of
Regulations G or U of the Board. The Properties of the Borrowers
do not include any margin securities or margin stock, and none of
the Borrowers has any present intention of acquiring any margin
securities or margin stock.
5.15 Investment Company Act; Public Utility Holding Company Act.
None of the Borrowers is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or (ii) a "holding
company", a "subsidiary company" thereof or an "affiliate" of a
"holding company" or of such a "subsidiary company", each within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
5.16 Common Enterprise. The Borrowers are engaged in the
business of providing specialized on-site maintenance and
construction services for petrochemical processing and petroleum
refining and storage facilities. Such operations require
financing on an integrated basis. Each of the Borrowers will
derive benefits from the Advances, both in its individual
capacity and as a member of the integrated group, since the
successful operation and condition of each is dependent on the
continued successful performance of the integrated group as a
whole. Each of the Borrowers is solvent and after giving effect
to each Advance will be solvent.
5.17 Survival of Representations. All representations and
warranties made herein or in any other Loan Documents shall
survive the delivery of the Notes and the making of any Advances,
and any investigation at any time made by or on behalf of the
Bank shall not diminish its right to rely thereon. All
statements contained in any certificate or other instrument
delivered by or on behalf of the Borrowers under or pursuant to
this Agreement or any other Loan Documents or in connection with
the transactions contemplated hereby or thereby shall constitute
representations and warranties made hereunder.
5.18 Year 2000. The Borrowers represent and warrant as follows
to the Bank that: (i) as of the date of any request for an
Advance under the Revolving Credit Facility, (ii) as of the date
of any renewal, extension or modification of the Revolving Credit
Facility or the Term Loan Facility, and (iii) at all times the
Bank's commitment to make Advances under the Revolving Credit
Facility is outstanding:
(a) All Systems are Year 2000 Compliant or will be Year 2000
Compliant within a period of time calculated to result in no
Material Adverse Effect on the Borrowers" collective business
operations.
(b) The Borrowers have: (i) undertaken a detailed inventory,
review and assessment of all areas within its business and
operations that could be adversely affected by the failure of the
Borrowers to be Year 2000 Compliant on a timely basis; (ii)
developed a detailed plan and time line for becoming Year 2000
Compliant on a timely basis, and (iii) to date, implemented that
plan in accordance with that timetable in all material respects.
(c) The Borrowers have made or will make on or before February
28, 1999, reasonable inquiry of each of its key suppliers,
vendors, and customers, and has obtained reasonable confirmations
from all such persons, as to whether such persons have initiated
programs to become Year 2000 Compliant and on the basis of such
confirmations, the Borrowers reasonably believe that all such
persons will be or become so compliant. For purposes hereof,
"key suppliers, vendors, and customers" refer to those suppliers,
vendors and customers of the Borrowers whose business failure
would, with reasonable probability, result in a material adverse
change in the business, properties, condition (financial or
otherwise), or prospects of the Borrowers. For purposes of this
paragraph, the Bank, as a lender of funds under the terms of the
this Agreement, confirms to the Borrowers that the Bank has
initiated its own corporate-wide Year 2000 program with respect
to its lending activities.
(d) Based upon the Borrowers" review and to the best of their
knowledge, the fair market value of all real and personal
property, if any, pledged to the Bank as Collateral to secure the
Indebtedness is not and shall not be less than currently
anticipated or subject to substantial deterioration in value
because of the failure of such Collateral to be Year 2000
Compliant.
6. AFFIRMATIVE COVENANTS. Until the Indebtedness has been paid
in full and all of the Bank's obligations hereunder have been
terminated, the Borrowers agree to perform or cause to be
performed the following, unless the Bank shall otherwise consent
in writing:
6.1 Financial Statements and Other Reports.
(a) Annual Financial Statements and Reports. Within one hundred
twenty (120) days after the end of each fiscal year, the
Borrowers will furnish to the Bank a copy of the Borrowers'
audited balance sheet as of the end of such year and audited
statements of income, retained earnings, stockholders' equity and
cash flows for such fiscal year, each prepared in conformity with
GAAP on a consolidated basis and setting forth in each case, in
comparative form, corresponding figures from the preceding fiscal
year, all in reasonable detail and satisfactory in scope to the
Bank. Such financial statements shall be duly certified by
independent certified public accountants of recognized standing
selected by the Borrowers and acceptable to the Bank.
(b) Quarterly Financial Reports and Reports. Within forty-five
(45) days after the end of each fiscal quarter (including the
last fiscal quarter), the Borrowers will furnish to the Bank a
copy of the Borrowers' unaudited interim consolidated and
consolidating financial statements, prepared in conformity with
GAAP (except for normal accounting adjustments) and presented in
a manner consistent with the audited financial statements
required under Subsection 6.1(a) hereof and certified (subject to
normal year-end adjustments) as to fairness of presentation,
compliance with GAAP and consistency by the chief executive
officer or chief financial officer of Matrix.
(c) Other Reports. The Borrowers will furnish to the Bank (i) as
soon as practicable and in any event within one hundred twenty
(120) days after the end of each fiscal year, copies of the
Annual Report of each of the Borrowers filed with the Securities
and Exchange Commission, or any Governmental Authority succeeding
to any or all of its functions, on Form 10-K (including any
financial statements incorporated by reference therein) for such
fiscal year, (ii) as soon as practicable and in any event within
forty-five (45) days after the end of each fiscal quarter (other
than the last fiscal quarter), copies of the Quarterly Report of
each of the Borrowers filed with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or
all of its functions, on Form 10-Q for such fiscal quarter, and
(iii) promptly upon their becoming available, copies of all other
regular and periodic reports including, without limitation, all
periodic reports filed on Form 8-K, proxy statements and other
materials filed by the Borrowers with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or
all of its functions.
6.2 Certificates and Reports. Within thirty (30) days after the
end of each calendar month, the Borrowers will furnish to the
Bank:
(a) Borrowing Base/Compliance Certificate. A completed Borrowing
Base and Compliance Certificate, prepared as of the end of such
month and certified by the chief executive officer or chief
financial officer of Matrix.
(b) Accounts Aging Report. A completed Accounts Aging Report,
prepared as of the end of such month and certified by the chief
executive officer or chief financial officer of Matrix, setting
forth (i) all Accounts of the Borrowers as of the end of such
month, showing as to each account debtor (A) the total amount
owing, (B) the current amount owing, and (C) the amounts past due
(including the aging, from the initial invoice date, thereof),
and (ii) upon request from time to time by the Bank, all accounts
payable of the Borrowers as of the end of such month, showing as
to each account payable the name of the vendor or supplier,
number of days outstanding, and current balance.
6.3 Other Reports and Notifications.
(a) Other Financial Information. Within ten (10) days after each
request, the Borrowers will furnish the Bank with such other
information concerning their respective businesses, operations
and financial condition as may be reasonably requested from time
to time by the Bank.
(b) Litigation. The Borrowers will promptly notify the Bank, but
in any event within seven (7) days, after they know of any
pending or threatened suit, action, investigation or
administrative proceeding against or affecting any of the
Borrowers or any of their Properties, including, without
limitation, the Collateral, where the amount sued for or the
value of the Property involved (notwithstanding any insurance
coverage therefor) is $500,000.00 or more.
(c) Notification of Liens. The Borrowers will promptly notify
the Bank, but in any event within seven (7) days, after they know
of the existence or asserted existence of any Lien on the
Collateral or on any of its other assets and properties,
excluding only Permitted Liens.
(d) Environmental Notices. The Borrowers will promptly notify
the Bank, but in any event within seven (7) days, after they know
of any violation or claimed violation of any Environmental Law
which has or is likely to have a Material Adverse Effect.
(e) Events With Respect to ERISA. The Borrowers will promptly
notify the Bank, but in any event within seven (7) days, after
they know that any reportable event described in Sections 4042(a)
or 4043(b) of ERISA has occurred with respect to any employee
pension or other benefit plan or trust maintained by or related
to the Borrowers or that PBGC has instituted or intends to
institute proceedings under ERISA to terminate any such plan.
Such notice shall contain (i) a certificate of the chief
executive officer or chief financial officer of Matrix setting
forth details as to such event and the action which the Borrowers
propose to take with respect thereto, and (ii) a copy of any
notice delivered by PBGC evidencing its intent to institute such
proceedings. The Borrowers will also furnish to the Bank (or
cause each plan administrator to furnish to the Bank) the annual
report for each plan covered by ERISA maintained by or related to
the Borrowers as filed with the U.S. Secretary of Labor not later
than ten (10) days after the receipt of a request from the Bank
in writing for such report.
(f) Other Notifications. The Borrowers will promptly notify the
Bank, but in any event within seven (7) days, after they know
that any of the following has occurred: (i) a Default or an
Event of Default; (ii) any change in the assets, liabilities,
financial condition, business, operations, affairs or
circumstances of the Borrowers which might have a Material
Adverse Effect; (iii) any material change in the accounting
practices and procedures of the Borrowers, including a change in
fiscal year; (iv) any change in the principal place of business
of any of the Borrowers; or (v) any merger, consolidation or
corporate reorganization permitted under Subsection 7.3 hereof.
6.4 Books and Records. Each of the Borrowers will maintain
adequate and accurate books and records of account in conformity
with GAAP. The Bank will have the right to examine and copy such
books and records at its expense, and to discuss the affairs,
operations, finances and accounts with the Borrowers' authorized
officers, during business hours and upon reasonable notice.
6.5 Field Audits. The Borrowers will (i) permit and assist the
Bank, through its authorized representatives, to conduct periodic
field audits of the Borrowers and to review their operations,
books and records, accounts receivable methods and controls, and
other matters relating to the value and maintenance of the
Collateral and the Borrowers' financial reporting, and (ii)
afford any authorized representative of the Bank with access to
any Property owned by them, during business hours and upon
reasonable notice.
6.6 Taxes; Other Liens. Each of the Borrowers will pay when due
all taxes, assessments, governmental charges or levies owing or
payable by it, and will pay when due all claims for labor,
materials, supplies, rent and other obligations which, if unpaid,
might become a Lien against the Collateral or any of its other
Properties, except to the extent any of the foregoing are being
diligently contested in good faith by appropriate legal
proceedings and against which there are established adequate
reserves in conformity with GAAP.
6.7 Existence. Each of the Borrowers will maintain its corporate
existence and will be duly qualified or licensed to conduct
business and in good standing under the laws of each state or
jurisdiction in which it does business.
6.8 Licenses and Permits. Each of the Borrowers will maintain
all Permits (i) which are necessary for it to carry on its
business as now being conducted or as contemplated to be
conducted, (ii) which are necessary for it to own and operate its
Properties, or (iii) which, if not obtained, would have a
Material Adverse Effect.
6.9 Maintenance of Properties. Each of the Borrowers will
maintain its Properties in good and workable condition, repair,
and appearance, normal wear and tear excepted.
6.10 Compliance with Laws. Each of the Borrowers will comply, to
the fullest extent required to prevent a Material Adverse Effect,
with all statutes, laws, rules or regulations to which it is
subject or by which its Properties are bound or affected,
including, without limitation, (i) Environmental Laws (ii) those
pertaining to occupational health and safety standards, (iii)
those pertaining to equal employment practices, labor relations
and civil rights, and (iv) those pertaining to its business or
operations, except to the extent that any of the foregoing are
being diligently contested in good faith by appropriate legal
proceedings and against which there are established adequate
reserves in conformity with GAAP.
6.11 Further Assurances. Each of the Borrowers will upon request
cure or cause to be cured any defects or omissions in the
execution and delivery of, or the compliance with, the Loan
Documents or the conditions described in Section 4 hereof.
6.12 Reimbursement of Expenses. The Borrowers will pay or
reimburse the Bank, either at the Closing or within ten (10) days
after the Bank presents a statement therefor, for (i) all
reasonable and customary out-of-pocket expenses incurred by the
Bank in connection with the negotiation and preparation of this
Agreement and the Loan Documents and the consummation of the
transactions herein contemplated, including, without limitation,
travel expenses, filing fees, recording costs, examinations of
and certifications as to public records, and attorneys" fees (not
to exceed $7,500.00) and expenses, (ii) all reasonable
out-of-pocket expenses of the Bank incurred in the performance of
each periodic field audit conducted pursuant to Subsection 6.5
hereof, (iii) all reasonable and customary out-of-pocket expenses
incurred by the Bank in connection with the administration of
this Agreement and the Loan Documents, including, without
limitation, attorneys' fees and expenses incurred in connection
with (A) any amendment, modification, interpretation,
termination, waiver or consent with respect to this Agreement or
the other Loan Documents, or (B) any action taken by the Bank to
protect or defend the Collateral, and (iv) upon the occurrence of
any Event of Default, all amounts reasonably expended, advanced
or incurred by the Bank (A) after notice to the Borrowers, to
satisfy any obligation of the Borrowers under the Loan Documents,
or (B) to collect upon the Notes or any other obligations
included in the Indebtedness, or (C) to enforce the rights of the
Bank under the Loan Documents or to collect, foreclose, or
otherwise realize upon the Collateral, which amounts will include
all court costs, attorneys' fees, fees of auditors and
accountants, and investigation expenses reasonably incurred by
the Bank in connection with any such matters. All of the
foregoing charges and expenses shall be considered Indebtedness
for purposes of this Agreement and if not paid when due shall
thereafter bear interest at the Prime Rate, plus two percent
(2%), until paid.
6.13 Access. Upon reasonable request and at any reasonable time,
each of the Borrowers will permit any officer, employee or
authorized representative of the Bank to enter upon its premises
and inspect the Collateral or any of its other Properties, and to
project test the Borrowers" Systems to determine if they are Year
2000 Compliant in an integrated environment.
6.14 Insurance. The Borrowers will at all times maintain in full
force and effect, with insurance companies satisfactory to the
Bank, insurance policies in amounts and against risks consistent
with insurance coverage customarily or typically maintained by
similar businesses which are similarly situated. Without
limiting the foregoing, such insurance coverage: (i) will
provide the Borrowers with comprehensive general liability
insurance against loss or damage from hazards and risks to the
person, rights and property of others in amounts not less than
$10,000,000.00 per occurrence, (ii) will name the Bank as an
additional named insured or loss-payee, as may be appropriate,
and (iii) will provide that no adverse alteration or cancellation
thereof shall be effective as against the Bank until thirty (30)
days after written notice of such alteration or cancellation is
given to the Bank. If requested, the Borrowers will furnish the
Bank with copies of all insurance policies in effect and evidence
of premium payment thereon. The Borrowers will not commit or
suffer to be committed any act whereby any insurance required
hereunder will or may be suspended, impaired or defeated, nor
suffer or permit its Properties to be used in a manner not
permitted under any applicable insurance policy then in effect.
The Borrowers shall notify the Bank at least fifteen (15) days
prior to making any change in the insurance company or companies
providing the insurance coverage required hereunder.
6.15 Environmental Compliance. Each of the Borrowers will
operate and maintain its Properties and conduct its business and
operations in compliance with all applicable Environmental Laws
to the fullest extent required to avoid a Material Adverse
Effect. Each of the Borrowers agrees to protect, indemnify and
hold harmless the Bank and its directors, officers, employees,
and agents from and against all loss, damage, cost, expense or
liability (including attorney's fees and costs) directly or
indirectly arising out of or attributable to any breach by any of
the Borrowers of any Environmental Laws. The obligation of the
Borrowers to indemnify the Bank under this Subsection 6.15 shall
survive the repayment of the Indebtedness, the release of the
Loan Documents or the release of any Lien.
6.16 Year 2000 Compliance. The Borrowers agree to:
(a) Furnish such additional information, statements and other
reports with respect to the Borrowers activities, course of
action and progress towards becoming Year 2000 Compliant as the
Bank may request from time to time.
(b) In the event of any change in circumstances that causes or
will likely cause any of the Borrowers" representations and
warranties with respect to its being or becoming Year 2000
Compliant to no longer be true (hereinafter, referred to as a
"Change in Circumstances") then the Borrowers shall promptly, and
in any event within ten (10) days of receipt of information
regarding a Change in Circumstances, provide the Bank with
written notice (the "Notice") that describes in reasonable detail
the Change in Circumstances and how such Change in Circumstances
caused or will likely cause Borrowers" representations and
warranties with respect to being or becoming Year 2000 Compliant
to no longer be true. The Borrowers shall, within ten (10) days
of a request, also provide the Bank with any additional
information the Bank requests of the Borrowers in connection with
the Notice and/or a Change in Circumstances.
7. NEGATIVE COVENANTS. Until the Indebtedness has been paid in
full and all of the Bank's obligations hereunder have been
terminated, the Borrowers will not perform or permit to be
performed any of the following acts, unless the Bank shall
otherwise consent in writing:
7.1 Creation or Existence of Liens. None of the Borrowers will
create, assume or suffer to exist any Lien on any of the
Collateral or, except for Permitted Liens, any of its other
Properties.
7.2 Sale of Assets. None of the Borrowers will sell, transfer,
convey or otherwise dispose of, whether pursuant to a single
transaction or a series of transactions: (i) the Collateral, or
any portion thereof; or (ii) more than five percent (5%) in value
of its other Properties. Notwithstanding the foregoing: (i) the
Borrowers may sell their Inventory and collect their Accounts in
the ordinary course of business; and (ii) the Borrowers may sell
Properties not included in the Collateral if (A) such Properties
are no longer used or useful in their respective businesses, (B)
any such sale, transfer or other disposition is for a price not
less than the fair market value of any such Properties and is
made pursuant to commercially reasonable terms and conditions,
and (C) such sales, transfers and dispositions do not create a
Default or Event of Default under any other provision of this
Agreement.
7.3 Mergers, Consolidations and Reorganization. None of the
Borrowers will (i) merge or consolidate with any Person (or enter
into any merger or consolidation agreement or plan), or permit
any such merger or consolidation with it, or (ii) adopt or effect
any plan of reorganization, recapitalization, liquidation or
dissolution; provided, however, that this Subsection 7.3 shall
not prohibit one or more of the Borrowers from merging or
consolidating with each other or otherwise effecting an internal
corporate reorganization so long as the surviving or resulting
corporation(s) continues the respective businesses and operations
of the Borrowers and remains liable for the Indebtedness and
compliance with the provisions of this Agreement.
7.4 Loans to and Transactions with Affiliates.
(a) Loans. Except in the ordinary course of and pursuant to the
reasonable requirements of its business and upon fair and
reasonable terms no less favorable to it than would exist in a
comparable transaction with a Person other than an Affiliate,
none of the Borrowers will make or suffer to exist any loan,
advance or other extension of credit, directly or indirectly, to
or for the benefit of any Affiliate.
(b) Other Transactions. None of the Borrowers will enter into
any other transaction with any Affiliate including, without
limitation, any purchase, sale or exchange of property or the
rendering of any services, except in the ordinary course of and
pursuant to the reasonable requirements of its business and upon
fair and reasonable terms no less favorable to it than would
exist in a comparable transaction with a Person other than an
Affiliate.
7.5 Limitation on Debt. None of the Borrowers will create, incur
or suffer to exist any Debt, except for (i) Advances and Letters
of Credit under the Credit Facilities, (ii) current accounts
payable arising in the ordinary course of business which are not
in default and which are not evidenced by any promissory note or
other instrument, and (iii) other Debt not in excess of
$1,000,000.00 in the aggregate at any time outstanding and not
secured by a Lien, except for Permitted Liens. Notwithstanding
the foregoing, a Borrower may post Performance Bonds pursuant to
the reasonable requirement of its business.
7.6 Limitation on Contingent Debt. Except for the Borrowers'
existing commitment with respect to ▇▇ ▇▇▇▇▇▇-Midwest
Constructors, Inc., a Saudi Arabian corporation, none of the
Borrowers will, directly or indirectly, guarantee, co-sign, agree
to purchase or repurchase or provide funds in respect, or
otherwise become or remain liable with respect to indebtedness of
any character of any Person, including any Affiliate, provided,
however, that Matrix may directly guarantee the indebtedness of a
Subsidiary, unless the total amount of outstanding indebtedness
guaranteed by Matrix shall exceed $1,000,000.00 in the aggregate,
at which time any additional guaranty by Matrix shall require the
prior written consent of the Bank.
7.7 Acquisitions/Investments. Except as otherwise permitted
under Subsection 5.7 hereof, none of the Borrowers will (i) form
or acquire any additional Subsidiaries, (ii) acquire any stock in
any other corporation, (iii) become a partner or joint venturer
in or equity owner of any partnership, joint venture or other
business entity, (iv) acquire all or substantially all of the
assets or properties of any other Person; or (v) make or suffer
to exist any investment in any other Person, other than
short-term direct obligations of the United States of America,
readily marketable commercial paper rated A2 or better by
Standard & Poor's Corporation (or an equivalent rating by another
rating agency which rates commercial paper), and federally
insured certificates of deposit issued by one or more financial
institutions.
7.8 Changes in Nature of Business. Except as permitted under
Subsection 7.3 hereof, none of the Borrowers will discontinue its
business or enter into any business or line of business which is
not related to any business or line of business currently
conducted by the Borrowers.
7.9 Dividends and Distributions. None of the Borrowers will: (i)
declare, make or pay any dividends on shares of any class of its
capital stock, or set apart any sum of money or any assets for
the payment of dividends, or make any other distribution, by
reduction of capital or otherwise, in respect of any class of its
capital stock; (ii) purchase, redeem, retire, or otherwise
acquire, either directly or indirectly, any shares of any class
of its capital stock, or set apart any sum of money or any of its
assets therefor, or (iii) make any other type of payment or
distribution of cash, property or assets to or among any of its
shareholders (in their capacities as shareholders).
Notwithstanding the foregoing, any of the Borrowers may purchase
or redeem shares of its capital stock in each fiscal year,
provided that (A) no Default or Event of Default has occurred and
is continuing as of the date any such purchase or redemption is
to be made, and (B) the making of such purchase or redemption
would not create or give rise to a Default or Event of Default
under any other provision of this Agreement (including, without
limitation, the financial covenants set forth in Subsection 7.11
hereof).
7.10 Sale-Leaseback Transactions. None of the Borrowers will
make or permit the occurrence of any sale, transfer or
disposition of any of its Properties followed by such Borrower's
leasing or rental of such Property, or any portion thereof, as
lessee.
7.11 Financial Covenants.
7.11.1 Tangible Net Worth. The Borrowers will not permit their
consolidated tangible net worth (determined in accordance with
GAAP) to be less than an amount equal to the sum of
$47,500,000.00 plus fifty percent (50%) of the Borrowers"
cumulative net income after tax (beginning with the fiscal year
ending May 31, 1999), exclusive of the Borrowers" losses and/or
one hundred percent (100%) of the proceeds of any public offering
of the stock of any of the Borrowers.
7.11.2 Working Capital. The Borrowers will not permit their
consolidated net working capital (total current assets minus
total current liabilities), as of any determination date, to be
less than $24,000,000.00. For purposes of this Subsection
7.11.2, principal and interest payable under the Revolving Credit
Facility shall be included in the computation of the Borrowers'
current liabilities.
7.11.3 Debt Service Coverage Ratio. The Borrowers will not
permit their "Debt Service Coverage Ratio," as of any
determination date, to be less than 1.35 to 1.00. For purposes
of this Subsection 7.11.3, the Borrowers" "Debt Service Coverage
Ratio" as of any determination date shall mean the fraction whose
numerator (the "Debt Service Numerator") is equal to the
following:
(i) the consolidated after tax net income of the Borrowers for
the four preceding fiscal quarters; PLUS
(ii) the Borrowers" consolidated depreciation and amortization
expense, extraordinary noncash losses and other noncash expenses
for the four preceding fiscal quarters; PLUS
(iii) the Borrowers" interest expense for the four preceding
fiscal quarters; MINUS
(iv) the Borrowers" extraordinary gains (or losses) for the four
preceding fiscal quarters; PLUS
(v) such amount of the Borrowers" nonrecurring expenses incurred
during the four preceding fiscal quarters as the Bank in its sole
discretion shall allow to be included in this calculation;
and whose denominator is equal to the following:
(i) the current maturities of the Borrowers" long-term Debt
during the four fiscal quarters immediately following such
determination date; PLUS
(ii) the Borrowers" interest expense for the four preceding
fiscal quarters; PLUS
(iii) the total amount of all stock redemptions and stock
repurchases made by the Borrowers in accordance with the
provisions of Subsection 7.9 hereof during the four preceding
fiscal quarters.
7.11.4 Limitation on Capital Expenditures. Without the prior
written consent of the Bank, the Borrowers shall not incur
capital expenditures in any twelve month period which exceed in
the aggregate the lesser of: (i) $9,000,000.00, or (ii) that
amount which if subtracted from the Debt Service Numerator would
cause the Debt Service Ratio (calculated in Subsection 7.11.3
above) to fall below 1.00:1.
8. EVENTS OF DEFAULT. The occurrence of any of the following
events or existence of any of the following circumstances, unless
waived in writing by the Bank, shall constitute an "Event of
Default":
8.1 Nonpayment of Notes. If the Borrowers shall fail to pay any
principal of or interest on either of the Notes as and when such
payment shall become due and payable (whether at the stated
maturity, upon a mandatory prepayment, or otherwise); or
8.2 Nonpayment of Letter of Credit. If the Borrowers shall fail
to provide funds to the Bank sufficient to pay any draft
presented on a Letter of Credit within three (3) days after such
draft has been paid, unless an Advance shall have been made under
the Revolving Credit Facility upon the request of the Borrowers
in accordance with the terms of this Agreement; or
8.3 Other Nonpayment. If the Borrowers shall fail to pay any
other amount due and payable to the Bank or any Affiliate of the
Bank, under the terms of the Loan Documents or otherwise, within
five (5) days after the date such payment shall become due and
payable; or
8.4 Representations and Warranties. If any representation,
statement, certificate, schedule or report made or furnished to
the Bank by or on behalf of any of the Borrowers shall prove to
have been false or erroneous in any material respect as of the
date on which such warranty or representation was made, or if any
warranty shall cease to be complied with in any material respect;
or
8.5 Breach of Covenants. If any of the Borrowers shall fail to
perform or observe any of the covenants or agreements contained
in Section 6 of this Agreement (other than Subsections 6.3, 6.4,
6.5, 6.7, 6.11, 6.12, 6.13 and 6.15) and continuance thereof for
thirty (30) days after written notice thereof from the Bank, or
(ii) if the Borrowers shall fail to perform or observe any of the
covenants or agreements contained in Subsections 6.3, 6.4, 6.5,
6.7, 6.11, 6.12, 6.13 or 6.15 or in Section 7 of this Agreement;
or
8.6 Other Breach of Covenants. If any of the Borrowers shall
fail to perform or observe any covenants or agreements contained
in any other Loan Documents and continuance thereof beyond the
expiration of any applicable grace period expressly stated
therein; or
8.7 Insolvency. If any of the Borrowers shall (i) apply for or
consent to the appointment of a custodian, receiver, trustee or
liquidator for itself or any of its Properties, (ii) admit in
writing the inability to pay, or generally fail to pay, its debts
as they become due, (iii) make a general assignment for the
benefit of creditors, (iv) commence any proceeding relating to
the bankruptcy, reorganization, liquidation, receivership,
conservatorship, insolvency, readjustment of debt, dissolution or
liquidation, or if corporate action is taken for the purpose of
effecting any of the foregoing, (v) suffer any such appointment
or commencement of a proceeding as described in clause (i) or
(iv) of this Subsection 8.7, which appointment or proceeding is
not terminated or discharged within sixty (60) days, or (vi)
become insolvent; or
8.8 Judgments. If any of the Borrowers shall enter into any
binding settlement or settlements or have entered against them by
any court a final judgment or judgments for amounts not covered
by insurance for an aggregate amount in excess of $500,000.00; or
8.9 Default on Other Debt. If any of the Borrowers shall fail to
pay any principal or interest on any Debt owing to any Person
other than the Bank or an Affiliate of the Bank as and when the
same shall become due and payable and such default shall continue
beyond the expiration of any applicable grace period expressly
provided, or if any default or event of default shall occur under
the terms of any agreement or other document which would entitle
the holder or holders thereof to accelerate the maturity thereof;
or
8.10 Breach of Other Agreements. If any of the Borrowers shall
be in breach of or default under any material agreement with any
Person and such breach or default shall remain unremedied for a
period of ten (10) days; or
8.11 ERISA Non-Compliance. If any employee pension or other
benefit plan or trust maintained by or related to the Borrowers
shall incur any "accumulated funding deficiency," as such term is
defined in Section 302(a)(2) of ERISA (whether or not waived by
the Internal Revenue Service), or a reportable event, as such
term is defined in Section 4043(b) of ERISA, shall occur with
respect to any such plan or trust as a result of which the
Borrowers could be obligated to make payments to PBGC aggregating
in excess of five percent (5%) of their Tangible Net Worth, or in
connection with the termination of any such plan or trust the
Borrowers shall incur a liability to PBGC under Section 4062,
4063 or 4064 of ERISA; or
8.12 Change in Nature of Business. If any of the Borrowers shall
discontinue its business or make any material change in the
nature of or manner in which it conducts its business, except as
permitted under Subsection 7.3 hereof; or
8.13 Permits. If any of the Borrowers shall fail to maintain, or
if any action, suit, proceeding or investigation shall be
commenced seeking to cancel, terminate or alter, any Permit (i)
which is necessary for it to carry on its business as now being
conducted or as contemplated to be conducted, (ii) which is
necessary for it to own and operate its Properties, or (iii)
which if not obtained would have a Material Adverse Effect; or
8.14 Unenforceability of Loan Documents. If any Loan Document or
any provision thereof shall for any reason cease to be a valid,
binding and enforceable obligation of any of the Borrowers, or if
any of the Borrowers shall so state in writing, or if the
Security Agreements shall cease to create a perfected, first
priority security interest in the Collateral, or if any of the
Borrowers shall so state in writing; or
8.15 Material Adverse Change. If in the opinion of the Bank
there shall occur any change in the condition (financial or
otherwise) of the Borrowers which is likely to have a Material
Adverse Effect and such change shall not be remedied or corrected
within thirty (30) days after the Bank gives written notice
thereof to the Borrowers.
9. REMEDIES
9.1 Acceleration of Indebtedness. If any Event of Default
specified in Subsection 8.7 hereof shall occur, the obligations
of the Bank hereunder (including the Revolving Commitment) shall
automatically be terminated and the Notes and all other
Indebtedness (including contingent Reimbursement Obligations
under outstanding Letters of Credit) shall become immediately due
and payable, all without notice or demand. If any other Event of
Default shall occur, the Bank may, at its option, without notice
or demand, terminate its obligations hereunder (including the
Revolving Commitment) and declare the Notes and all other
Indebtedness (including contingent Reimbursement Obligations
under outstanding Letters of Credit) to be immediately due and
payable, whereupon the same shall become forthwith due and
payable.
9.2 Remedies. Upon the occurrence and during the continuation of
any Event of Default, the Bank shall be entitled to exercise all
remedies available to it under the Loan Documents or otherwise
under applicable law.
9.3 Cumulative Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, any right or remedy under
the Loan Documents shall operate as a waiver thereof, nor shall
any single or partial exercise by the Bank of any right
thereunder preclude any other or further right or exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not alternative.
9.4 Waiver of Default. The Bank may, by an instrument in
writing, waive any Default or Event of Default and any of the
consequences of such Default or Event of Default, but no such
waiver shall extend to any subsequent or other Default or Event
of Default or impair any consequence of such subsequent or other
Default or Event of Default.
9.5 Deposits; Setoff. Regardless of the adequacy of any
collateral security held by the Bank, any deposits or other sums
credited by or due from the Bank to any of the Borrowers shall at
all times constitute collateral security for the Indebtedness,
and may be set off against the Indebtedness and any and all
liabilities, direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, of the
Borrowers to the Bank. The rights granted by this Subsection 9.5
shall be in addition to the rights of the Bank under any
statutory banker's lien or the common law right of set off. This
Subsection 9.5 shall not apply to any monies of which the
Borrowers are not the beneficial owners, regardless of the name
in which the money is deposited, nor shall this Subsection 9.5
apply to any monies which the Borrowers are contractually
obligated to spend in whole or in part for the account of others,
provided that the Borrowers shall have established special
accounts or given the Bank written notice that particular funds
are beneficially owned by others, are dedicated for particular
expenditures, or are subject to the Borrowers' contractual
obligation to spend for others. If the Borrowers fail to
establish such special accounts and fail to give such notice, the
Bank may assume that funds on deposit to the account of any of
the Borrowers belong solely to the named depositor and are
subject to this Subsection 9.5.
9.6 Application of Payments. During the continuation of any
Event of Default, all payments received by the Bank in respect of
the Indebtedness, whether from the Borrowers, recoveries upon any
portion of the Collateral or otherwise, may be applied by the
Bank to any liabilities, obligations or indebtedness included in
the Indebtedness selected by the Bank in its sole and exclusive
discretion.
9.7 Springing Lien. If any Event of Default shall occur and
remain unremedied within the applicable cure period, the Bank in
its sole discretion may require the Borrowers or any of them to
pledge, mortgage or otherwise grant the Bank a valid and
enforceable first position Lien against all Property or so much
thereof as the Bank in its sole discretion shall determine
necessary, and by execution of this Credit Agreement, the
Borrowers agree to cooperate fully and promptly with the Bank and
its counsel in the execution and delivery of all documents
necessary to convey and perfect such Liens. Upon a waiver of a
Default or Event of Default by the Bank in accordance with
Subsection 9.4 hereof, the Bank shall correspondingly waive its
election to cause a springing lien to arise hereunder as a result
of such waiver of Default, but in no event shall such waiver
extend to any subsequent or other Default or Event of Default or
impair any consequence of such subsequent or other Default or
Event of Default.
10. GENERAL PROVISIONS. It is further agreed as follows:
10.1 Participating Lender. The Borrowers understand that
although the Notes and the other Loan Documents name the Bank as
the holder thereof, the Bank may from time to time sell one or
more participation interests in the Loans to one or more other
financial institutions. The Borrowers agree that, subject to the
terms of the agreements of participation, each participating
lender will be entitled to rely on the terms of this Agreement
and the other Loan Documents as fully as if such participating
lender had been named as the holder of the applicable Note and
the other Loan Documents.
10.2 Participant Consent to Amendment. Notwithstanding the sale
of any participation interest in the Loans as disclosed in
Subsection 10.1 hereof, the Bank anticipates the retention of not
less than sixty-six and two-thirds percent (66-2/3%) ownership
interest in the Loans. Any subsequent amendment to any provision
of Sections 1, 4, 5, 6, 7, 8, 9 or 10 of this Credit Agreement
shall be accomplished by such participating financial institution
or institutions as hold not less than sixty-six and two-thirds
percent (66-2/3%).
10.3 Hold Harmless. Except for a successful claim against the
Bank by the Borrowers, the Borrowers will indemnify and hold the
Bank and each participant in the Notes harmless from all
liability, loss, damages or expense, including reasonable
attorney's fees, that the Bank or any such participant may incur
in good faith as a result of entering into the Loan Documents or
establishing the Credit Facilities, or in compliance with or in
the enforcement of the terms of the Loan Documents.
10.4 Notices. All notices, requests and demands required or
authorized hereunder (other than Disbursement Requests) shall be
served in person, delivered by certified mail, return receipt
requested, or transmitted by telefacsimile, addressed as follows:
Any Borrower: - c/o Matrix Service Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: C. ▇▇▇▇▇▇▇ ▇▇▇, Chief Financial Officer
and Vice President/Finance
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank: - Bank One, Oklahoma, N.A.
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as any party hereto shall designate for
such purpose in a written notice to the other party hereto. Each
of the Borrowers (other than Matrix) expressly agrees that any
notice given hereunder to Matrix shall also constitute effective
notice to each of them. Notices served in person shall be
effective and deemed given when delivered, notices sent by
certified mail shall be effective and deemed given three (3)
Business Days after being deposited in the U.S. mail, postage
prepaid, and notices transmitted by telefacsimile will be deemed
given when sent, as indicated by the sender's written
confirmation of transmission.
10.5 Construction; Applicable Law. This Agreement and all other
Loan Documents have been delivered to and accepted by the Bank in
the State of Oklahoma, are to be performed in the State of
Oklahoma and shall be deemed contracts made under the laws of the
State of Oklahoma, and all rights and Indebtedness hereunder,
including matters of construction, validity and performance,
shall be governed by the laws of the State of Oklahoma. Nothing
in this Agreement shall be construed to constitute the Bank as a
joint venturer with the Borrowers or to constitute a partnership.
The descriptive headings of the Sections and Subsections of this
Agreement are for convenience only and shall not be used in the
construction of the content of this Agreement.
10.6 Binding Effect. This Agreement and the other Loan Documents
shall be binding on, and shall inure to the benefit of, the
parties hereto and their respective successors and assigns,
provided that without the prior, written consent of the Bank, the
Borrowers will not assign or transfer any of their interest,
rights or obligations arising out of or relating to the Loan
Documents.
10.7 Exhibits and Schedules. Exhibits and Schedules attached to
this Agreement and the Existing Credit Agreement, as applicable,
are incorporated herein for all purposes and shall be considered
a part of this Agreement.
10.8 Entire Agreement; Conflicting Provisions. This Agreement
constitutes the entire agreement of the parties hereto with
respect to the Credit Facilities, and all matters arising out of
or related thereto. In the event of any direct conflict between
or among the provisions of this Agreement and the provisions of
any other Loan Documents, the provisions of this Agreement shall
control.
10.9 Waivers. No act, delay, omission or course of dealing
between or among the parties hereto will constitute a waiver of
their respective rights or remedies under this Agreement or the
other Loan Documents. No waiver, change, modification or
discharge of any of the rights and duties of the parties hereto
will be effective unless contained in a written instrument signed
by the party sought to be bound.
10.10 Arbitration. The Bank and the Borrowers agree that upon
the written demand of either party, whether made before or after
the institution of any legal proceedings, but prior to the
rendering of any judgment in that proceeding, all disputes,
claims and controversies between them, whether individual, joint,
or class in nature, arising from the Credit Agreement, as amended
hereby, the Notes, or any of the other Loan Documents or
otherwise, including without limitation contract disputes and
tort claims, shall be resolved by binding arbitration pursuant to
the Commercial Rules of the American Arbitration Association
("AAA"). Any arbitration proceeding held pursuant to this
arbitration provision shall be conducted in the city nearest the
Borrower's address having an AAA regional office, or at any other
place selected by mutual agreement of the parties. No act to
take or dispose of any Collateral shall constitute a waiver of
this arbitration agreement or be prohibited by this arbitration
agreement. This arbitration provision shall not limit the right
of either party during any dispute, claim or controversy to seek,
use, and employ ancillary, or preliminary rights and/or remedies,
judicial or otherwise, for the purposes of realizing upon,
preserving, protecting, foreclosing upon or proceeding under
forcible entry and detainer for possession of, any real or
personal property, and any such action shall not be deemed an
election of remedies. Such remedies include, without limitation,
obtaining injunctive relief or a temporary restraining order,
invoking a power of sale under any deed of trust or mortgage,
obtaining a writ of attachment or imposition of a receivership,
or exercising any rights relating to personal property, including
exercising the right of set-off, or taking or disposing of such
property with or without judicial process pursuant to the Uniform
Commercial Code. Any disputes, claims or controversies
concerning the lawfulness or reasonableness of an act, or
exercise of any right or remedy concerning any Collateral,
including any claim to rescind, reform, or otherwise modify any
agreement relating to the Collateral, shall also be arbitrated;
provided, however that no arbitrator shall have the right or the
power to enjoin or restrain any act of either party. Judgment
upon any award rendered by any arbitrator may be entered in any
court having jurisdiction. The statute of limitations, estoppel,
waiver, laches and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of any
action for these purposes. The Federal Arbitration Act (Title 9
of the United States Code) shall apply to the construction,
interpretation and enforcement of this arbitration provision.
10.11 WAIVER OF JURY. THE BORROWERS AND THE BANK (BY ITS
ACCEPTANCE HEREOF) FULLY, VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY OR TO HAVE A
JURY PARTICIPATE IN ANY DISPUTE, ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED (OR WHICH MAY IN THE
FUTURE BE DELIVERED) IN CONNECTION HEREWITH OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT,
THE NOTES AND/OR THE SECURITY INSTRUMENTS. THE BORROWERS AGREE
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY. THIS PROVISION IS A MATERIAL INDUCEMENT
TO THE BANK TO PROVIDE THE FINANCING AND COMMITMENT DESCRIBED
HEREIN OR IN THE OTHER LOAN DOCUMENTS.
10.12 Jurisdiction and Venue. All actions or proceedings with
respect to this Agreement or any of the other Loan Documents, to
which neither party demands Arbitration in accordance with
Subsection 10.10 hereof, may be instituted in any state or
federal court sitting in Tulsa, Oklahoma, as the Bank may elect,
and by execution and delivery of this Agreement, the Borrowers
irrevocably and unconditionally (i) submit to the non-exclusive
jurisdiction (both subject matter and person) of each such court,
and (ii) waive (A) any objection that the Borrowers may now or
hereafter have to the laying of venue in any of such courts, and
(B) any claim that any action or proceeding brought in any such
court has been brought in an inconvenient forum.
10.13 Counterpart Execution. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument. This Agreement shall be
binding only when a counterpart hereof has been executed by an
authorized officer or representative of the Bank at its principal
office in Tulsa, Oklahoma.
IN WITNESS WHEREOF, the Borrowers and the Bank have caused this
Agreement to be duly executed in multiple counterparts, each of
which shall be considered an original, effective the date and
year first above written.
MATRIX SERVICE COMPANY,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MATRIX SERVICE, INC.,
an Oklahoma corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MIDWEST INDUSTRIAL CONTRACTORS, INC.,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MATRIX SERVICE MID-CONTINENT, INC.,
an Oklahoma corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
PETROTANK EQUIPMENT, INC.,
an Oklahoma corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
TANK SUPPLY, INC.,
an Oklahoma corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
SAN ▇▇▇▇ TANK PIPING CONSTRUCTION CO., INC.,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
COLT CONSTRUCTION CO., INC.,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MIDWEST INTERNATIONAL, INC.,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
▇▇▇▇▇ STEEL CONTRACTORS, INC.,
a Georgia corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
▇▇▇▇▇ TANKS, INC.,
a Georgia corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
AQUA TANKS, INC.,
a Georgia corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
WEST COAST INDUSTRIAL COATINGS, INC.,
a California corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MIDWEST SERVICE COMPANY,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MATRIX SERVICE, INC. (CANADA),
an Ontario corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MAYFLOWER VAPOR SEAL CORPORATION,
an Oklahoma corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
GENERAL SERVICE CORPORATION,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MAINSERV-ALLENTECH, INC.,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
MAINTENANCE SERVICES, INC.,
a Delaware corporation
By:________________________________________________
Name: C. ▇▇▇▇▇▇▇ ▇▇▇
Title: Secretary
BANK ONE, OKLAHOMA, N.A.
By:________________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
EXHIBITS
Exhibit "A-1" - Form of Revolving Note
Exhibit "B-1" - Form of Term Note
Exhibit "E-1" - Form of Disbursement Request
Exhibit "F-1" - Form of Borrowing Base and Compliance Certificate
SCHEDULE
Schedule I - Schedule of Permitted Liens