SECOND AMENDMENT TO
CREDIT AGREEMENT
between
DRIL-QUIP, INC.
and
BANK ONE, TEXAS, NATIONAL ASSOCIATION
Effective as of
January 24, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS......................................... 1
1.01 Terms Defined Above........................... 1
1.02 Terms Defined in Agreement.................... 1
1.03 References.................................... 1
1.04 Articles and Sections......................... 1
1.05 Number and Gender............................. 2
ARTICLE II. AMENDMENTS.......................................... 2
2.01 Amendment of Section 1.2...................... 2
2.02 Amendment of Section 2.9...................... 2
2.03 Amendment of Section 6.4...................... 2
2.04 Amendment of Exhibit I........................ 3
2.05 Amendment of Exhibit IV....................... 3
ARTICLE III CONDITIONS.......................................... 3
3.01 Receipt of Documents.......................... 3
3.02 Accuracy of Representations and Warranties.... 3
ARTICLE IV. REPRESENTATIONS AND WARRANTIES...................... 3
ARTICLE V. RATIFICATION........................................ 4
ARTICLE VI. MISCELLANEOUS....................................... 4
6.01 Scope of Amendment............................ 4
6.02 Agreement as Amended.......................... 4
6.03 Parties in Interest........................... 4
6.04 Rights of Third Parties....................... 4
6.05 ENTIRE AGREEMENT.............................. 4
6.06 GOVERNING LAW................................. 5
6.07 JURISDICTION AND VENUE........................ 5
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment") is made
and entered into effective as of January 24, 2001, between DRIL-QUIP, INC., a
Delaware corporation (the "Borrower"), and BANK ONE, TEXAS, NATIONAL
ASSOCIATION, a national banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, the above named parties did execute and exchange counterparts of
that certain Credit Agreement dated August 27, 1999, as amended by First
Amendment to Credit Agreement dated effective as of May 26, 2000 (the
"Agreement"), to which reference is here made for all purposes;
WHEREAS, the parties subject to and bound by the Agreement are desirous of
amending the Agreement in the particulars hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties to the Agreement, as set forth therein, and the mutual covenants and
agreements of the parties hereto, as set forth in this Second Amendment, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Terms Defined Above. As used herein, each of the terms "Agreement,"
"Borrower," "Lender," and "Second Amendment" shall have the meaning assigned to
such term hereinabove.
1.02 Terms Defined in Agreement. As used herein, each term defined in the
Agreement shall have the meaning assigned thereto in the Agreement, unless
expressly provided herein to the contrary.
1.03 References. References in this Second Amendment to Article or Section
numbers shall be to Articles and Sections of this Second Amendment, unless
expressly stated herein to the contrary. References in this Second Amendment to
"hereby," "herein," "hereinafter," "hereinabove," "hereinbelow," "hereof," and
"hereunder" shall be to this Second Amendment in its entirety and not only to
the particular Article or Section in which such reference appears.
1.04. Articles and Sections. This Second Amendment, for convenience only,
has been divided into Articles and Sections and it is understood that the
rights, powers, privileges, duties, and other legal relations of the parties
hereto shall be determined from this Second Amendment as an
entirety and without regard to such division into Articles and Sections and
without regard to headings prefixed to such Articles and Sections.
1.05 Number and Gender. Whenever the context requires, reference herein made
to the single number shall be understood to include the plural and likewise the
plural shall be understood to include the singular. Words denoting sex shall be
construed to include the masculine, feminine, and neuter, when such construction
is appropriate, and specific enumeration shall not exclude the general, but
shall be construed as cumulative. Definitions of terms defined in the singular
and plural shall be equally applicable to the plural or singular, as the case
may be.
ARTICLE II.
AMENDMENTS
The Borrower and the Lender hereby amend the Agreement in the following
particulars:
2.01 Amendment of Section 1.2. Section 1.2 of the Agreement is hereby
amended as follows:
The following definition is amended to read as follows:
"Available Commitment" shall mean, at any time, an amount equal to the
remainder, if any, of (a) $40,000,000 minus (b) the Loan Balance at such
time."
2.02 Amendment of Section 2.9. Section 2.9 of the Agreement is hereby
amended to read as follows:
"2.9 Facility Fee. In addition to interest on the Note as provided
herein and all other fees payable hereunder and to compensate the Lender for
the costs of the extension of credit hereunder, the Borrower shall pay to
the Lender on the date of execution of this Second Amendment, in immediately
available funds, a facility fee in the amount of $25,000."
2.03 Amendment of Section 6.4. Section 6.4 of the Agreement is hereby
amended to read as follows:
"6.4 Tangible Net Worth. Permit Tangible Net Worth as of the close of
any fiscal quarter to be less than $140,000,000 for all periods beginning
with the December 31, 2000, Financial Statements."
2
2.04 Amendment of Exhibit I. Exhibit I, i.e. the Form of Promissory Note, is
as set forth on Exhibit I to this Second Amendment.
2.05 Amendment of Exhibit IV. Exhibit IV, i.e. "Disclosures", is as set
forth on Exhibit IV to this Second Amendment.
ARTICLE III.
CONDITIONS
The obligation of the Lender to amend the Agreement as provided herein is
subject to the fulfillment of the following conditions precedent:
3.01 Receipt of Documents. The Lender shall have received, reviewed, and
approved the following documents and other items, appropriately executed when
necessary and in form and substance satisfactory to the Lender:
(a) multiple counterparts of this Second Amendment as requested by the
Lender;
(b) the Note; and
(c) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may
reasonably request.
3.02 Accuracy of Representations and Warranties. The representations and
warranties contained in Article IV of the Agreement and this Second Amendment
shall be true and correct.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby expressly re-makes, in favor of the Lender, all of the
representations and warranties set forth in Article IV of the Agreement, and
represents and warrants that all such representations and warranties remain true
and unbreached.
3
ARTICLE V.
RATIFICATION
Each of the parties hereto does hereby adopt, ratify, and confirm the
Agreement and the other Loan Documents, in all things in accordance with the
terms and provisions thereof, as amended by this Second Amendment.
ARTICLE VI.
MISCELLANEOUS
6.01 Scope of Amendment. The scope of this Second Amendment is expressly
limited to the matters addressed herein and this Second Amendment shall not
operate as a waiver of any past, present, or future breach, Default, or Event of
Default under the Agreement, except to the extent, if any, that any such breach,
Default, or Event of Default is remedied by the effect of this Second Amendment.
6.02 Agreement as Amended. All references to the Agreement in any document
heretofore or hereafter executed in connection with the transactions
contemplated in the Agreement shall be deemed to refer to the Agreement as
amended by this Second Amendment.
6.03 Parties in Interest. All provisions of this Second Amendment shall be
binding upon and shall inure to the benefit of the Borrower, the Lender and
their respective successors and assigns.
6.04 Rights of Third Parties. All provisions herein are imposed solely and
exclusively for the benefit of the Lender and the Borrower, and no other Person
shall have standing to require satisfaction of such provisions in accordance
with their terms and any or all of such provisions may be freely waived in whole
or in part by the Lender at any time if in its sole discretion it deems it
advisable to do so.
6.05 ENTIRE AGREEMENT. THIS SECOND AMENDMENT CONSTITUTES THE ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND
SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, BETWEEN SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS SECOND AMENDMENT,
THE AGREEMENT, THE NOTE, THE SECURITY INSTRUMENTS, AND THE OTHER WRITTEN
DOCUMENTS REFERRED TO IN THE AGREEMENT OR EXECUTED IN CONNECTION WITH OR AS
SECURITY FOR THE NOTE REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE
PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
4
6.06 GOVERNING LAW. THIS SECOND AMENDMENT, THE AGREEMENT AND THE NOTE SHALL
BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS. THE PARTIES ACKNOWLEDGE AND
AGREE THAT THIS AGREEMENT AND THE NOTE AND THE TRANSACTIONS CONTEMPLATED HEREBY
BEAR A NORMAL, REASONABLE, AND SUBSTANTIAL RELATIONSHIP TO THE STATE OF TEXAS.
6.07 JURISDICTION AND VENUE. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO,
ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM
THIS SECOND AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE LITIGATED
IN COURTS HAVING SITUS IN ▇▇▇▇▇▇ COUNTY, TEXAS. EACH OF THE BORROWER AND THE
LENDER HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED IN ▇▇▇▇▇▇ COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO
TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT AGAINST
IT BY THE BORROWER OR THE LENDER IN ACCORDANCE WITH THIS SECTION.
IN WITNESS WHEREOF, this Second Amendment to Credit Agreement is executed
effective the date first hereinabove written.
BORROWER:
DRIL-QUIP, INC.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
J. ▇▇▇▇ ▇▇▇▇▇▇
Co-Chief Executive Officer
LENDER:
BANK ONE, TEXAS, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
5
EXHIBIT I
FORM OF NOTE
PROMISSORY NOTE
$40,000,000 Houston, Texas January 24, 2001
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned ("Maker") promises to
pay to the order of BANK ONE, TEXAS, NATIONAL ASSOCIATION ("Payee"), at its
banking quarters in Houston, ▇▇▇▇▇▇ County, Texas, the sum of FORTY MILLION
DOLLARS ($40,000,000), or so much thereof as may be advanced against this Note
pursuant to the Credit Agreement dated of even date herewith by and between
Maker and Payee (as amended, restated, or supplemented from time to time, the
"Credit Agreement"), together with interest at the rates and calculated as
provided in the Credit Agreement.
Reference is hereby made to the Credit Agreement for matters governed
thereby, including, without limitation, certain events which will entitle the
holder hereof to accelerate the maturity of all amounts due hereunder.
Capitalized terms used but not defined in this Note shall have the meanings
assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is payable as
provided in the Credit Agreement. Subject to compliance with applicable
provisions of the Credit Agreement, Maker may at any time pay the full amount or
any part of this Note without the payment of any premium or fee, but such
payment shall not, until this Note is fully paid and satisfied, excuse the
payment as it becomes due of any payment on this Note provided for in the Credit
Agreement.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW;
PROVIDED, HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES
CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL
NOT APPLY TO THIS NOTE.
DRIL-QUIP, INC.
By:
--------------------------------
J. ▇▇▇▇ ▇▇▇▇▇▇
Co-Chief Executive Officer
I-i
EXHIBIT IV
DISCLOSURES
Section 4.7 Liabilities
None
Litigation
None
Section 4.11 Environmental Matters
None
Section 4.16 Casualties
None
Section 4.18 Subsidiaries
Dril-Quip (Europe), Limited
Dril-Quip Asia Pacific P.T.E., Ltd.
DQ Holding PTY, Ltd.
Dril-Quip Do Brasil Ltda.
IV-i