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EXHIBIT 10.15
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED LOAN AGREEMENT
(hereinafter called this "Amendment") is entered into as of January 28, 1998,
among ▇▇▇▇▇▇ INTERNATIONAL INC., a Delaware corporation ("Borrower"), and at
the time of its entry into the Agreement hereinafter referenced, formerly known
as ▇▇▇▇▇▇ Petroleum Services Corp., a Delaware corporation, and prior to such
name, formerly known as ▇▇▇▇▇▇ Corporation, a Delaware corporation, successor
by merger to ▇▇▇▇▇▇ Petroleum Services Corp., a Delaware corporation, the
SEVERAL FINANCIAL INSTITUTIONS THAT ARE PARTIES TO THE THIRD AMENDED AND
RESTATED LOAN AGREEMENT (collectively, the "Banks," individually, a "Bank") and
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as agent for the Banks (the
"Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Agent entered into a Third
Amended and Restated Loan Agreement dated as of June 20, 1997 (hereinafter
called the "Agreement"), whereby the Banks agreed to make available to the
Borrower a credit facility upon the terms and conditions set forth in the
Agreement; and
WHEREAS, the Borrower has requested that the Banks and the Agent agree
to certain amendments to the Agreement and acknowledge and agree to certain
matters with respect to the Agreement, as each is more particularly specified
herein;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, the parties to this Amendment hereby agree as
follows:
SECTION 1. Terms Defined in Agreement. As used in this Amendment,
except as may otherwise be provided herein, all capitalized terms which are
defined in the Agreement shall have the same meaning herein as therein, all of
such terms and their definitions being incorporated herein by reference.
SECTION 2. Amendments to Agreement. Subject to the conditions
precedent set forth in Section 5 hereof, the Agreement is hereby amended as
follows:
(a) Definitions. (i) The following terms are added in
alphabetical order to Section 1.2 of the Agreement:
"DWS/DAMCO" means Directional Wireline Services, Inc., a
Louisiana corporation, DAMCO Services, Inc., a Louisiana corporation,
and DAMCO Tong Services, Inc., a Louisiana corporation.
"DWS/DAMCO Acquisition Agreement" means that certain Asset
Purchase Agreement among the Borrower, DWS/DAMCO and the Shareholders
of DWS/DAMCO dated effective as of November 30, 1997.
"DWS/DAMCO Acquisition" means the acquisition by Borrower of
substantially all of the assets of DWS/DAMCO, along with consummation
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of the other transactions contemplated by the DWS/DAMCO Acquisition
Agreement, in each case, in accordance with the terms and conditions
of the DWS/DAMCO Acquisition Agreement.
"DWS/DAMCO Acquisition Documents" means the DWS/DAMCO
Acquisition Agreement and all other agreements or instruments
delivered in connection therewith in order to consummate the DWS/DAMCO
Acquisition.
"Senior Indenture" means that certain Indenture dated as of
August 19, 1997, among the Borrower, the Subsidiary Guarantors (as
therein defined) and U.S. Trust Company of Texas, N.A., as Trustee, as
amended or modified from time to time with the consent of the Agent
and the Majority Banks.
"Senior Securities" means the unsecured 9.75% senior notes due
August 15, 2007 in the aggregate principal amount of $115,000,000
issued by the Borrower pursuant to, and as provided for by, the Senior
Indenture, which notes include the Series A Securities (as therein
defined) and the Series B Securities (as therein defined) issued in
exchange for such Series A Securities."
(ii) The definitions of "Consolidated Interest Expense,"
"Guarantors," "Funded Debt Ratio" and "Material Foreign Subsidiaries" in
Section 1.2 of the Agreement are hereby amended and restated in their entirety
to read as follows:
"Consolidated Interest Expense means, for any period, the
interest expense of a Person and its Subsidiaries (including
amortization of debt discounts, net cost under interest rate contracts
and all of the interest but not the principal component of rentals in
respect of Capital Lease obligations) determined on a consolidated
basis for such period in accordance with GAAP."
"Guarantors mean collectively each of the U.S. Subsidiaries of
the Borrower as of the date of this Agreement, as identified on
Schedule 2.13 attached hereto, and each other Subsidiary that executes
and delivers a Guaranty."
"Funded Debt Ratio means at any date the ratio of (a)
Consolidated Funded Debt of the Borrower on such date to (b) the
Consolidated EBITDA of the Borrower for the twelve consecutive
calendar months ending on such date; provided, however, that for the
periods set forth below, Consolidated EBITDA shall be calculated as
follows:
(i) for the twelve calendar months ending January
31, 1998, the sum of (A) Consolidated EBITDA of the Borrower for such
period plus (B) the Consolidated EBITDA of DWS/DAMCO for such period
plus (C) the Consolidated EBITDA of ADI for the period of February 1,
1997 through June 19, 1997;
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(ii) for the twelve calendar months ending April
30, 1998, the sum of (A) the Consolidated EBITDA for the Borrower for
such period, plus (B) the sum of Consolidated EBITDA of DWS/DAMCO for
the nine calendar months ending January 31, 1998 plus (C) the
Consolidated EBITDA of ADI for the period of May 1, 1997 through June
19, 1997;
(iii) for the twelve calendar months ending July
31, 1998, the sum of (A) the Consolidated EBITDA of the Borrower for
such period, plus (B) the Consolidated EBITDA of DWS/DAMCO for the six
calendar months ending January 31, 1998;
(iv) for the twelve calendar months ending October
31, 1998, the sum of (A) the Consolidated EBITDA of the Borrower for
such period, plus (B) the Consolidated EBITDA of DWS/DAMCO for the
three calendar months ending January 31, 1998; and
(v) for the twelve calendar months ending January
31, 1999, and thereafter, the Consolidated EBITDA of the Borrower for
the twelve calendar months ending on such date."
"Material Foreign Subsidiaries means, at any time, (a)
Canadian Air Drilling Services Ltd., an Alberta, Canada corporation,
Specialty Testing & Consulting Ltd., an Alberta, Canada corporation,
▇▇▇▇▇▇ Regional Headquarters, S.A., a Venezuela corporation, ▇▇▇▇▇▇ de
Venezuela, S.A., a Venezuela corporation, GL/95 Servicios, C.A., a
Venezuela corporation, and Air Drilling Services de Venezuela, C.A., a
Venezuela corporation, and (b) any other Foreign Subsidiary that,
together with its Subsidiaries, (i) accounted for more than 5% of the
revenue of the Borrower and its Subsidiaries determined on a
consolidated basis for the then most recently completed fiscal year of
the Borrower, or (ii) was the owner of more than 5% of the assets of
the Borrower and its Subsidiaries determined on a consolidated basis
at the end of such fiscal year of the Borrower, all as shown in the
case of (i) and (ii) on the consolidated financial statements of the
Borrower and its Subsidiaries for such fiscal year of the Borrower."
(iii) The reference to "$2,000,000" in clause (vii) of the
definition of Permitted Liens in Section 1.2 of the Agreement is hereby amended
to read "$2,500,000".
(b) Representations and Warranties. The following
Section 2.21 is hereby added to the Agreement immediately following the end of
Section 2.20:
"Section 2.21 DWS/DAMCO Acquisition. The Borrower has
delivered to the Agent and the Banks a true, complete and correct copy
of the DWS/DAMCO Acquisition Documents. No Default or Event of
Default will occur as a result of giving effect to the DWS/DAMCO
Acquisition and all representations and warranties contained in the
Loan Documents shall be true and correct after giving effect to the
DWS/DAMCO Acquisition.
(c) Security. Section 3.11 of the Agreement is amended
and restated in its entirety as follows:
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"Section 3.11 Security.
(a) Payment of the Notes and the Obligations and
the performance of the covenants set forth in this Agreement and the
other Loan Documents will be secured, directly or indirectly, by a
first priority perfected security interest, mortgage, assignment or
lien, as the case may be, in and upon the following described property
and assets:
(i) all of the Borrower's and its U.S.
Subsidiaries' present and future accounts, inventory,
equipment, fixtures, documents, instruments, general
intangibles, chattel paper (as such terms are defined in the
UCC), notes receivable, drafts, acceptances, patents,
copyrights, trademarks, trade secrets and other intellectual
property, rental agreements and lease agreements relating to
any of the foregoing, and contract rights now owned or
existing and hereafter acquired or arising, wherever located,
and all the proceeds thereof, which property and assets are
more particularly described in, and which security interests
will be evidenced by, one or more Security Agreements or
Subsidiary Security Agreement-Pledges, as applicable;
provided, however, that so long as the Borrower is in
compliance with Section 5.15 hereof, neither the Borrower nor
any of its U.S. Subsidiaries shall be required to perfect any
such security interests under the laws, regulations or rules
of any Governmental Authority situated outside of the United
States; and
(ii) 100% of the outstanding capital
stock or other ownership interest of all U.S. Subsidiaries and
66-1/2% of the outstanding capital stock or other ownership
interest of all Material Foreign Subsidiaries now owned or
hereafter acquired by the Borrower or any of its Subsidiaries,
which security interest will be evidenced by one or more
Security Agreement- Pledges and Subsidiary Security
Agreement-Pledges;
(b) Payment of the Notes and the Obligations will
be guaranteed by the Guarantors, each of such guarantees to be
evidenced by a Guaranty. If at any time after the date of this
Agreement any Person becomes a U.S. Subsidiary or a Material Foreign
Subsidiary of the Borrower, the Borrower shall, and shall cause each
such Person to, do the following, as applicable, within thirty (30)
days after such Person becomes a U.S. Subsidiary or a Material Foreign
Subsidiary of the Borrower: (i) each such U.S. Subsidiary shall
execute and deliver to the Agent a Guaranty, (ii) the Borrower and/or
each such Subsidiary, as applicable, shall grant to the Agent, for the
benefit of the Banks, a first priority perfected security interest in
100% of the stock or other ownership interest in any such U.S.
Subsidiary and 66-1/2% of the stock or other ownership interest in any
such Material Foreign Subsidiary, in form and substance acceptable to
the Agent and the Majority Banks, in each instance, (iii) each such
U.S. Subsidiary shall enter into a valid, binding and enforceable
Subsidiary Security Agreement (granting the Agent, for the benefit of
the Banks, a first priority perfected security interest (in scope and
substance acceptable to the Agent and the Majority Banks) in the
property of the type described in Section 3(a)(i)
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above owned by such Subsidiary, (iv) execute such other documents and
instruments as may be necessary to comply with Subsection 3.11(c)
below, and (v) furnish the Agent, for the benefit of the Agent and the
Banks, a written opinion of counsel to such Person reasonably
acceptable to the Agent and the Majority Banks covering such matters
as the Agent and the Majority Banks may reasonably require.
(c) The Borrower will, and will cause each of its
U.S. Subsidiaries and, to the extent required by clause (a) or (b)
above, Material Foreign Subsidiaries to, execute, acknowledge and
deliver to the Agent and the Banks such instruments, mortgages,
chattel mortgages, deeds of trust, security agreements, security
agreement-pledges, statements, assignments, registrations and
financing statements, in form and substance acceptable to the Agent
and the Majority Banks, as in the good faith and discretion of counsel
for the Agent may be necessary to enforce, grant to the Agent and the
Banks and perfect, in the United States and such other jurisdictions
in which the Collateral owned by the Borrower and such Subsidiaries is
located in accordance with the terms and conditions of clauses (a) and
(b) above, the security interests, liens, assignments and mortgages on
the Collateral. Each of the Borrower, the Agent and the Banks agrees
that all Collateral now or hereafter securing any of the Obligations
hereunder also shall secure any and all other indebtedness and
liabilities now or hereafter owing by the Borrower to the Agent and
the Banks under the Loan Documents.
(d) Notwithstanding any provision of this
Agreement or any other Loan Document to the contrary, if, subsequent
to the Issue Date (as defined in the Senior Indenture), any Subsidiary
that has not guaranteed, or is not otherwise required to guaranty, the
Obligations, whether or not required, guarantees the payment of any
Senior Indebtedness (as defined in the Indenture), or any part
thereof, including without limitation, the obligations evidenced by
the Senior Securities or otherwise arising under the Senior Indenture,
then such Subsidiary shall (i) execute and deliver to the Agent a
Guaranty no later than contemporaneously with the execution and
delivery (or notation on any document or instrument evidencing such
Senior Indebtedness) to the holders of such Senior Indebtedness (or a
trustee or agent on behalf of such holders) of such Subsidiary's
guarantee with respect to such Senior Indebtedness, and (ii) execute
and deliver to the Agent, within such period following the delivery of
the Guaranty as the Agent shall reasonably request, such other related
documents as the Agent deems necessary or desirable and if requested
by the Agent, furnish to Agent, for the benefit of the Agent and the
Banks, a written opinion of counsel of such Person reasonably
acceptable to the Agent and the Majority Banks covering such related
matters as the Agent and the Majority Banks may reasonably require."
(d) Maximum Funded Debt Ratio. Section 5.12 of the
Agreement is amended and restated in its entirety as follows:
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"Section 5.12 Maximum Funded Debt Ratio. The Borrower and
its Subsidiaries will maintain a Funded Debt Ratio of not greater than
4.0 to 1.0 at all times throughout the term.
(e) Revenue Producing Assets. Section 5.15 of the
Agreement is amended and restated in its entirety as follows:
"Section 5.15 Revenue Producing Assets. The Borrower and its
Subsidiaries will maintain, at all times, Revenue Producing Assets
(exclusive of Consignment Assets) in the United States, determined on
an original cost basis, in an amount not less than one hundred-fifty
percent (150%) of the aggregate Commitment Amount set forth on
Schedule I with respect to the Line of Credit. Simultaneously with
the delivery of each set of financial statements referred to in
Section 5.1(c) of this Agreement, the Borrower shall furnish to the
Agent with copies for each Bank a schedule of the Revenue Producing
Assets of the Borrower and its Subsidiaries, which schedule shall set
forth the original cost of Borrowers and its Subsidiaries' Revenue
Producing Assets by location and entity of ownership along with any
other information as the Agent may reasonably request in order to
determine compliance with this Section."
(f) Financial Projections. The following Section 5.22 is
hereby added to the Agreement immediately following the end of Section 5.21:
"Section 5.22 DWS/DAMCO Proforma Projections. As soon as
available, but in any event no later than January 31, 1998, the
Borrower shall deliver to the Agent projections of the Borrower's and
its Subsidiaries' financial statements for the fiscal years ending
1998, 1999 and 2000 taking into account the DWS/DAMCO Acquisition on a
proforma basis and certified by a Responsible Officer of the
Borrower."
(g) Indebtedness. Section 6.1 of the Agreement is
amended by redesignating clause "(vii)" as clause "(viii)," and immediately
following clause "(vi)" of Section 6.1 and immediately prior to redesignated
clause "(viii)," adding a new clause "(vii)" to read as follows:
", (vii) Indebtedness incurred by the Borrower and each Subsidiary, as
applicable, pursuant to the Senior Indenture and Senior Securities not
to exceed the principal amount of $115,000,000 in the aggregate
(together with premium (if any) and accrued interest thereon),
including the Subsidiary Guarantees (as defined in the Senior
Indenture), the form and substance of each of which is acceptable to
the Agent and the Banks,"
(h) Contingent Liabilities. Section 6.3 of the Agreement
is amended by redesignating clause "(v)" as clause "(vi)," and immediately
following clause "(iv)" of Section 6.3 and immediately prior to redesignated
clause "(vi)," adding a new clause "(v)" to read as follows:
", (v) contribution obligations of Subsidiaries pursuant to Section
10.05 of the Senior Indenture,"
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(i) Schedules. The Agreement is hereby amended further
by deleting Schedule 2.13 therefrom and substituting Schedule 2.13 attached
hereto in lieu thereof.
SECTION 3. Release. By its signature hereto, the Agent acknowledges
and agrees that effective August 19, 1997 (a) the Term Notes have been repaid
in cash and (b) the release of the obligations and security interests expressly
provided for in Section 3.11(d) of the Agreement as in effect prior to this
Amendment, and evidenced by the Loan Documents described on Annex I hereto has
occurred and (c) the Loan Documents described on Annex I hereto are deemed
terminated. At Borrower's request and expense, the Agent will execute and
deliver to Borrower such evidence as Borrower shall reasonably request to
memorialize the foregoing.
SECTION 4. Consent. Subject to the conditions precedent set forth in
Section 5 hereof, the Agent and the Banks hereby consent to the DWS/DAMCO
Acquisition.
SECTION 5. Conditions of Effectiveness.
(a) The Agent and the Banks have relied upon the
representations and warranties contained in this Amendment in agreeing to the
amendments to the Agreement set forth herein and the amendments to the
Agreement set forth herein are conditioned upon and subject to the accuracy of
each and every representation and warranty of the Borrower made or referred to
herein, and performance by the Borrower of its obligations to be performed
under the Agreement on or before the date of this Amendment (except to the
extent amended herein).
(b) The amendments to the Agreement set forth herein are
further conditioned upon the Borrower having paid all accrued and unpaid legal
fees and expenses referred to in Section 5.2 of the Agreement and Section 9
hereof to the extent invoices for such fees and expenses have been delivered to
the Borrower.
(c) The amendments to the Agreement set forth herein are
further conditioned upon the Borrower having satisfied all of the conditions
described in that certain Amended and Restated Post Closing Condition Letter
dated as of July 31, 1997 from the Borrower to the Agent.
(d) The amendments to the Agreement set forth herein are
further conditioned upon the Borrower having furnished any and all other
information requested by the Agent or any Bank.
SECTION 6. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Agent and each Bank, with full
knowledge that the Agent and each Bank is relying on the following
representations and warranties in executing this Amendment, as follows:
(a) The Borrower has corporate power and authority to
execute, deliver and perform this Amendment, and all corporate action on the
part of the Borrower requisite for the due execution, delivery and performance
of this Amendment has been duly and effectively taken.
(b) The Agreement as amended by this Amendment and the
Loan Documents and each and every other document executed and delivered in
connection with
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this Amendment to which the Borrower or any of its Subsidiaries is a party
constitute the legal, valid and binding obligations of the Borrower and any of
its Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms.
(c) This Amendment does not and will not violate any
provisions of the articles or certificate of incorporation or bylaws of the
Borrower, or any contract, agreement, instrument or requirement of any
Governmental Authority to which the Borrower is subject. The Borrower's
execution of this Amendment will not result in the creation or imposition of
any lien upon any properties of the Borrower, other than those permitted by the
Agreement and this Amendment.
(d) The Borrower's execution, delivery and performance of
this Amendment do not require the consent or approval of any other Person,
including, without limitation, any regulatory authority or governmental body of
the United States of America or any state thereof or any political subdivision
of the United States of America or any state thereof.
(e) The audited annual financial statements of the
Borrower and its Subsidiaries at April 30, 1997 and the interim financial
statements of the Borrower and its Subsidiaries for the six (6) months ended
October 31, 1997 and the related consolidated statements of income and retained
earnings and cash flows of the Borrower for the periods then ended which have
been furnished to the Agent and the Banks, fairly present the financial
condition of the Borrower and its Subsidiaries as of April 30, 1997 and October
31, 1997 and the results of the operations of the Borrower and its Subsidiaries
for the periods ended on such dates, all in accordance with GAAP applied on a
consistent basis.
(f) The Borrower has performed and complied with all
agreements and conditions contained in the Agreement required to be performed
or complied with by the Borrower prior to or at the time of delivery of this
Amendment.
(g) No Default or Event of Default exists and after
giving effect to this Amendment no Default or Event of Default will exist and
all of the representations and warranties contained in the Agreement, as
amended by this Amendment, and the other Loan Documents are true and correct in
all material respects on and as of this date.
(h) Nothing in this Section 6 of this Amendment is
intended to amend any of the representations or warranties contained in the
Agreement or of the Loan Documents to which the Borrower or any of the
Subsidiaries is a party.
SECTION 7. Reference to and Effect on the Agreement. Upon the
effectiveness of this Amendment, on and after the date hereof, each reference
in the Agreement to "this Agreement", "hereunder", "hereof", "herein", or words
of like import, shall mean and be a reference to the Agreement as amended
hereby.
SECTION 8. No Waiver. Except as specifically amended hereby, the
Borrower agrees that no Event of Default and no Default has been waived or
remedied by the execution of this Amendment by the Agent and the Banks and any
such Default or Event or Default heretofore arising and currently continuing
shall continue after the execution and delivery hereof.
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SECTION 9. Cost, Expenses and Taxes. The Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent and the Banks in
connection with the preparation, reproduction, execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder,
including reasonable attorneys' fees and out-of- pocket expenses of the Agent
and the Banks. In addition, the Borrower shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution and delivery, filing or recording of this Amendment and the other
instruments and documents to be delivered hereunder, and agrees to save the
Agent and the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
SECTION 10. Extent of Amendments. Except as otherwise expressly
provided herein, the Agreement and the other Loan Documents are not amended,
modified or affected by this Amendment. The Borrower ratifies and confirms
that (i) except as expressly amended hereby, all of the terms, conditions,
covenants, representations, warranties and all other provisions of the
Agreement remain in full force and effect, (ii) each of the other Loan
Documents are and remain in full force and effect in accordance with their
respective terms, and (iii) except for the releases described in Section 3
hereof, the Collateral is unimpaired by this Amendment.
SECTION 11. Grant and Affirmation of Security Interest. Except as
expressly provided in Section 3 hereof, each of the Borrower and its
Subsidiaries that are a party to a Security Instrument, hereby grants a
security interest in the Collateral to secure payment and performance of the
Revolving Credit Note and the Obligations and each of the Borrower and its
Subsidiaries that are a party to a Security Instrument hereby confirms and
agrees that any and all liens, security interests and other security or
Collateral now or hereafter held by the Agent for the benefit of, and as
representative of, the Banks as security for payment and performance of the
obligations hereby are renewed and carried forth to secure payment and
performance of all of the Obligations. Except as expressly provided in Section
3 hereof, the Security Instruments are and remain legal, valid and binding
obligations of the parties thereto, enforceable in accordance with their
respective terms.
SECTION 12. Guaranties. Each of the Guarantors hereby consents to
and accepts the terms and conditions of this Amendment, agrees to be bound by
the terms and conditions hereof and ratifies and confirms that its Guaranty,
executed and delivered to the Agent for the benefit of and as representative of
the Banks as of June 20, 1997, guaranteeing payment of the Obligations, is and
remains in full force and effect, except to the extent such Guarantee has been
released pursuant to Section 3 of this Amendment.
SECTION 13. Further Assurances. In particular recognition of Section
5.8 of the Agreement, but in no regard prejudicial to any other provision of
any Loan Document, the Borrower recognizes and affirms its obligations under
Section 5.8 as being applicable to this Amendment, as well as to each other
Loan Document.
SECTION 14. Execution and Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of the
signature page of this Amendment by facsimile shall be equally as effective as
delivery of a manually executed counterpart of this Amendment.
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SECTION 15. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
SECTION 16. Headings. Section headings in this Amendment are
included herein for convenience and reference only and shall not constitute a
part of this Amendment for any other purpose.
SECTION 17. Arbitration.
(a) Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any
action, dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including without limitation, any of
the foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Loan Documents. Any party
may by summary proceedings bring an action in court to compel arbitration of a
Dispute. Any party who fails or refuses to submit to arbitration following a
lawful demand by any other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or such other
administrator as the parties shall mutually agree upon in accordance with the
AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall
be resolved in accordance with the Federal Arbitration Act (Title 9 of the
United States Code), notwithstanding any conflicting choice of law provision in
any of the Loan Documents. The arbitration shall be conducted at a location in
Texas selected by the AAA or other administrator. If there is any
inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation
applicable to any Dispute shall apply to any arbitration proceeding. All
discovery activities shall be expressly limited to matters directly relevant to
the Dispute being arbitrated. Judgment upon any award rendered in an
arbitration may be entered in any court having jurisdiction; provided however,
that nothing contained herein shall be deemed to be a waiver by any party that
is a bank of the protections afforded to it under 12 U.S.C. Section 91 or any
similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and
Foreclosure. No provision hereof shall limit the right of any party to
exercise self-help remedies such as setoff, foreclosure against or sale of any
real or personal property collateral or security, or to obtain provisional or
ancillary remedies, including without limitation injunctive relief,
sequestration, attachment, garnishment or the appointment of a receiver, from a
court of competent jurisdiction before, after or during the pendency of any
arbitration or other proceeding. The exercise of any such remedy shall not
waive the right of any party to compel arbitration hereunder.
(d) Arbitrator Qualifications and Powers; Awards.
Arbitrators must be active members of the Texas State Bar with expertise in the
substantive laws applicable to
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the subject matter of the Dispute. Arbitrators are empowered to resolve
Disputes by summary rulings in response to motions filed prior to the final
arbitration hearing. Arbitrators (i) shall resolve all Disputes in accordance
with the substantive law of the state of Texas, (ii) may grant any remedy or
relief that a court of the state of Texas could order or grant within the scope
hereof and such ancillary relief as is necessary to make effective any award,
and (iii) shall have the power to award recovery of all costs and fees, to
impose sanctions and to take such other actions as they deem necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Texas Rules of Civil Procedure or other applicable law. Any Dispute in which
the amount in controversy is $5,000,000 or less shall be decided by a single
arbitrator who shall not render an award of greater than $5,000,000 (including
damages, costs, fees and expenses). By submission to a single arbitrator, each
party expressly waives any right or claim to recover more than $5,000,000. Any
Dispute in which the amount in controversy exceeds $5,000,000 shall be decided
by majority vote of a panel of three arbitrators; provided however, that all
three arbitrators must actively participate in all hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to
the contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported
by substantial evidence or which is based on legal error, (ii) an award shall
not be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the state of Texas, and (iii) the parties shall have in
addition to the grounds referred to in the Federal Arbitration Act for
vacating, modifying or correcting an award the right to judicial review of (A)
whether the findings of fact rendered by the arbitrators are supported by
substantial evidence, and (B) whether the conclusions of law are erroneous
under the substantive law of the state of Texas. Judgment confirming an award
in such a proceeding may be entered only if a court determines the award is
supported by substantial evidence and not based on legal error under the
substantive law of the state of Texas.
(f) Miscellaneous. To the maximum extent practicable,
the AAA, the arbitrators and the parties shall take all action required to
conclude any arbitration proceeding within 180 days of the filing of the
Dispute with the AAA. No arbitrator or other party to an arbitration
proceeding may disclose the existence, content or results thereof, except for
disclosures of information by a party required in the ordinary course of its
business, by applicable law or regulation, or to the extent necessary to
exercise any judicial review rights set forth herein. If more than one
agreement for arbitration by or between the parties potentially applies to a
Dispute, the arbitration provision most directly related to the Loan Documents
or the subject matter of the Dispute shall control. This arbitration provision
shall survive termination, amendment or expiration of any of the Loan Documents
or any relationship between the parties.
SECTION 18. NO ORAL AGREEMENTS. THE AGREEMENT (AS AMENDED BY THIS
AMENDMENT) AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
- 11 -
12
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized.
BORROWER:
--------
▇▇▇▇▇▇ INTERNATIONAL INC. (formerly
known as ▇▇▇▇▇▇ Petroleum
Services Corp.)
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
AGENT:
-----
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL
ASSOCIATION, AS AGENT FOR THE
BANKS
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
BANKS:
-----
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
- 12 -
13
CONSENTED AND AGREED TO AS OF THE 28th day of January, 1998:
▇▇▇▇▇▇ ENERGY SERVICES, INC. (formerly
known as ▇▇▇▇▇▇ International, Inc.)
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
▇▇▇▇▇▇ INTERNATIONAL SALES CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
COLUMBIA PETROLEUM SERVICES CORP.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
INTERNATIONAL PETROLEUM SERVICES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
▇▇▇▇▇▇ ENVIRONMENTAL REMEDIATION
TECHNOLOGIES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
AIR DRILLING INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
- 13 -
14
AIR DRILLING SERVICES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
▇▇▇▇▇▇ WORLDWIDE SERVICES, INC.
(formerly known as Energy Caribbean
Services, Inc.)
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
- 14 -
15
ANNEX I
RELEASED LOAN DOCUMENTS
1. Subsidiary Commercial Security Agreement dated effective as of June
20, 1997 by and between ▇▇▇▇▇ Fargo Bank (Texas), National
Association, as Agent for the Banks from time to time a party to the
Agreement, and Canadian Air Drilling Services Ltd.;
2. Subsidiary Commercial Security Agreement dated effective as of June
20, 1997 by and between ▇▇▇▇▇ Fargo Bank (Texas), National
Association, as Agent for the Banks from time to time a party to the
Agreement, and Specialty Testing & Consulting Ltd.;
3. Subsidiary Commercial Security Agreement dated effective as of June
20, 1997 by and between ▇▇▇▇▇ Fargo Bank (Texas), National
Association, as Agent from time to time a party to the Agreement, and
3-D Drilling Tools & Services International Ltd.;
4. Continuing Guaranty Agreement dated as of June 20, 1997 by Canadian
Air Drilling Services Ltd. in favor of the Banks from time to time a
party to the Agreement, the Issuing Bank and ▇▇▇▇▇ Fargo Bank (Texas),
National Association, as agent for the Banks;
5. Continuing Guaranty Agreement dated as of June 20, 1997 by Specialty
Testing & Consulting Ltd. in favor of the Banks from time to time a
party to the Agreement, the Issuing Bank and ▇▇▇▇▇ Fargo Bank (Texas),
National Association, as agent for the Banks;
6. Continuing Guaranty Agreement dated as of June 20, 1997 by and 3-D
Drilling Tools & Services International Ltd. in favor of the Banks
from time to time a party to the Agreement, the Issuing Bank and ▇▇▇▇▇
Fargo Bank (Texas), National Association, as agent for the Banks; and
7. Security Agreement-Pledge (Stock of Domestic and Foreign Subsidiaries
of Canada Air Drilling Services Ltd.) dated as of June 20, 1997, by
Canada Air Drilling Services Ltd. in favor of the Banks from time to
time a party to the Agreement and ▇▇▇▇▇ Fargo Bank (Texas), National
Association, as agent for the Banks.
- 15 -
16
Amended
SCHEDULE 2.13
OWNER SUBSIDIARY NUMBER CERTI- PERCEN- JURISDIC-
----- ---------- OF FICATE TAGE OF TION
SHARES NUMBER(S) SHARES OF
OWNED --------- OWNED FORMATION
----- ----- ---------
▇▇▇▇▇▇ Air Drilling 100,000 19 100% Delaware
Petroleum International
Services Inc.
Corp.
DPSC ▇▇▇▇▇▇ 5,000 1 100% Delaware
International
Inc.
DPSC ▇▇▇▇▇▇ 500 2 100% Delaware
International
Sales Corp.
DPSC Columbia 1,000 1 100% Delaware
Petroleum
Services Corp.
DPSC International 1,000 2 100% Delaware
Petroleum
Services Corp.
DPSC ▇▇▇▇▇▇ 100 1 100% Texas
Environmental
Remediations
DPSC Energy 10 1 100% Texas
Caribbean
Empress
Technica Dissolved Brazil
Comerciale Limited Liability Company
Equipmentos,
Ltdo.
▇▇▇▇▇▇ Regional Dissolved * Venezuela
Headquarters, S.A. 3/27/96
Genesis Worldwide Oil 1,000 2 100% Cayman
as nominee of Tool Rentals Islands
DPSC
DPSC International 1,000 100% Cayman
Oil Tool Rentals Islands
Ltd.
DPSC ▇▇▇▇▇▇ de 1,498 100% Venezuela
Venezuela, S.A.
DPSC GL/98 Services, 99 99% Venezuela
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ C.A. 1 1%
17
DPSC ▇.▇. 10,000 100% Netherland
Investments Antilles
Bonaire N.V.
J.D. J.D.I. Tool 40 1-40 100% Netherland
Investments Works B.V. Antilles
Bonaire N.V. (f/k/a/
[ILLEGIBLE]
atis B.V.
Air Drilling Air Drilling 100 17 100% Wyoming
International, Services, Inc.
Inc.
Air Drilling Canadian Air 100 2 100% Alberta
Services, Inc. Drilling
Services Ltd.
Specialty 100 2 100% Alberta
Testing &
Consulting Ltd.
Air Drilling 500 1-500 100% France
Services -
France (SARL)
Air Drilling 1000 [1] 100% Venezuela
Services De
Venezuela, C.A.
Canadian 3-D Drilling 1000 [1] 100% Alberta
Air Drilling Tools &
Services Ltd. Services
International
Ltd.
▇▇▇▇▇▇ Directional 1,040,000 4 52% Nigeria
International Wireline
Inc. Engineering
(f/n/a DPSC) Services
(Nigeria)
Ltd.
Iyke Ejisu 800,000 2 40%
▇▇▇ ▇▇▇ 160,000 3 8%