EXHIBIT 10-W
-------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of July 17, 2001
among
VERITAS DGC INC.
as Domestic Borrower
VERITAS DGC LIMITED,
VERITAS ENERGY SERVICES INC., and
VERITAS ENERGY SERVICES PARTNERSHIP
as Foreign Borrowers
▇▇▇▇▇ FARGO BANK TEXAS, N.A.
as Domestic Agent
HSBC BANK CANADA
as Foreign Agent
and
the Banks
-------------------------------------------------------------------------------
Table of Contents
Page
ARTICLE I Definitions............................................1
Section 1.1 Definitions............................................1
Section 1.2 Other Definitional Provisions.........................27
ARTICLE II Domestic Advances and Letters of Credit...............27
Section 2.1 Domestic Revolving Credit Commitments.................27
Section 2.2 The Domestic Revolving Credit Notes...................27
Section 2.3 Repayment of Domestic Advances........................28
Section 2.4 Interest..............................................28
Section 2.5 Use of Proceeds.......................................28
Section 2.6 Revolving Credit Commitment Fee.......................28
Section 2.7 Reduction or Termination of Domestic Revolving Credit
Commitment..........................................29
Section 2.8 Letters of Credit.....................................29
Section 2.9 Swing Line Advances...................................30
Section 2.10 Domestic Banks' Funding of Swing Line Advances as
Domestic Advances...................................31
Section 2.11 The Swing Line Note...................................32
ARTICLE III Foreign Advances; Foreign Letters of Credit and Bank
Guaranties..........................................32
Section 3.1 Foreign Revolving Credit Commitments..................32
Section 3.2 The Foreign Revolving Credit Notes....................32
Section 3.3 Repayment of Foreign Advances.........................33
Section 3.4 Interest..............................................33
Section 3.5 Use of Proceeds.......................................33
Section 3.6 Revolving Credit Commitment Fees......................33
Section 3.7 Reduction or Termination of Foreign Revolving Credit
Commitment..........................................34
Section 3.8 Foreign Letters of Credit; Bank Guaranties............35
Section 3.9 Nature of Canadian Obligations........................36
ARTICLE IV Borrowing Procedure: Payments; Facilities Fees;
Matters Related to Letters of Credit; Matters
Related to Advances; Designation of Additional
Guarantors, Etc.....................................36
Section 4.1 Borrowing Procedure...................................36
Section 4.2 Method of Payment.....................................37
Section 4.3 Voluntary Prepayment..................................38
Section 4.4 Mandatory Prepayment..................................38
Section 4.5 Pro Rata Treatment....................................39
Section 4.6 Non-Receipt of Funds by the Agents....................39
Section 4.7 Taxes.................................................39
Section 4.8 Computation of Interest...............................42
Section 4.9 Conversions and Continuation..........................43
Section 4.10 Limitation on Foreign Borrowers and Domestic
Guarantors, Liability for the Obligations...........43
Section 4.11 Application of Payments...............................43
Section 4.12 Letter of Credit Procedure............................43
i
Table of Contents
(continued)
Page
Section 4.13 Amendments to Letters of Credit.......................47
Section 4.14 Letter of Credit Fees.................................47
Section 4.15 Participation by Banks................................47
Section 4.16 Obligations Absolute..................................48
Section 4.17 Limitation of Liability...............................48
Section 4.18 Letter of Credit Agreements........................49
Section 4.19 Replacement of the Issuing Banks......................49
Section 4.20 No Advances...........................................49
Section 4.21 Designation of Additional Guarantors..................49
Section 4.22 Judgment Currency.....................................49
ARTICLE V Yield Protection and Illegality.......................50
Section 5.1 Capital Adequacy......................................50
Section 5.2 Additional Costs......................................51
Section 5.3 Limitation on Types of Advances.......................52
Section 5.4 Illegality............................................53
Section 5.5 Treatment of Certain Advances.........................53
Section 5.6 Compensation..........................................54
ARTICLE VI Security..............................................54
Section 6.1 Collateral............................................54
Section 6.2 Setoff................................................56
Section 6.3 Special Provision Regarding Security Interests and
Security Agreements.................................56
ARTICLE VII Conditions Precedent..................................56
Section 7.1 Conditions to Initial Domestic Advance................56
Section 7.2 Conditions to Initial Foreign Advance.................58
Section 7.3 All Advances..........................................60
ARTICLE VIII Representations and Warranties........................61
Section 8.1 Corporate Existence...................................61
Section 8.2 Financial Statements.................................61
Section 8.3 Corporate Action: No Breach...........................61
Section 8.4 Operation of Business.................................62
Section 8.5 Litigation and Judgments..............................62
Section 8.6 Rights in Properties: Liens...........................62
Section 8.7 Enforceability........................................62
Section 8.8 Approvals.............................................62
Section 8.9 Debt..................................................63
Section 8.10 Taxes.................................................63
Section 8.11 Use of Proceeds: Margin Securities....................63
Section 8.12 ERISA.................................................63
Section 8.13 Disclosure............................................63
Section 8.14 Subsidiaries..........................................64
ii
Table of Contents
(continued)
Page
Section 8.15 Agreements: Indenture Defaults........................64
Section 8.16 Compliance with Laws..................................64
Section 8.17 Investment Company Act................................64
Section 8.18 Public Utility Holding Company Act....................64
Section 8.19 Environmental Matters.................................65
Section 8.20 Environmental Law.....................................66
ARTICLE IX Affirmative Covenants.................................66
Section 9.1 Reporting Requirements................................66
Section 9.2 Maintenance of Existence: Conduct of Business.........69
Section 9.3 Maintenance of Properties.............................69
Section 9.4 Taxes and Claims......................................69
Section 9.5 Insurance.............................................69
Section 9.6 Inspection Rights.....................................69
Section 9.7 Keeping Books and Records.............................70
Section 9.8 Compliance with Laws..................................70
Section 9.9 Compliance with Agreements............................70
Section 9.10 Further Assurances....................................70
Section 9.11 ERISA.................................................70
Section 9.12 Contracts.............................................70
Section 9.13 Additional Material Subsidiaries as Guarantors:
Execution of Additional Security Agreements-
Guarantors..........................................70
Section 9.14 Continuity of Operations..............................71
ARTICLE X Negative Covenants....................................71
Section 10.1 Debt..................................................72
Section 10.2 Limitation on Liens...................................72
Section 10.3 Mergers, Dissolutions, Etc............................73
Section 10.4 Loans and Investments.................................74
Section 10.5 Transactions With Affiliates..........................76
Section 10.6 Disposition of Assets.................................76
Section 10.7 Sale and Leaseback....................................76
Section 10.8 Nature of Business....................................76
Section 10.9 Environmental Protection..............................76
Section 10.10 Accounting............................................77
Section 10.11 Contracts.............................................77
ARTICLE XI Financial Covenants...................................77
Section 11.1 Consolidated Tangible Net Worth.......................77
Section 11.2 Consolidated Net Tangible Assets......................77
Section 11.3 Fixed Charge Coverage Ratio...........................78
Section 11.4 Funded Debt to EBITDA Ratio...........................78
Section 11.5 Subsidiary Assets.....................................78
iii
Table of Contents
(continued)
Page
ARTICLE XII Default...............................................78
Section 12.1 Events of Default.....................................78
Section 12.2 Remedies Upon Default.................................80
Section 12.3 Letter of Credit......................................80
Section 12.4 Performance by the Agent..............................80
ARTICLE XIII The Agents............................................81
Section 13.1 Appointment, Powers and Immunities....................81
Section 13.2 Rights of Agents as Banks.............................84
Section 13.3 Sharing of Payments, Etc..............................84
Section 13.4 Indemnification.......................................85
Section 13.5 Independent Credit Decisions..........................86
Section 13.6 Several Commitments...................................86
Section 13.7 Successor Agents......................................86
ARTICLE XIV Miscellaneous.........................................87
Section 14.1 Expenses..............................................87
Section 14.2 Indemnification.......................................87
Section 14.3 Limitation of Liability...............................88
Section 14.4 No Duty...............................................88
Section 14.5 Bank Not Fiduciary....................................88
Section 14.6 No Waiver; Cumulative Remedies........................88
Section 14.7 Successors and Assigns................................89
Section 14.8 Survival..............................................92
Section 14.9 ENTIRE AGREEMENT; AMENDMENTS..........................92
Section 14.10 Maximum Interest Rate.................................93
Section 14.11 Notices...............................................93
Section 14.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS..............93
Section 14.13 Counterparts..........................................94
Section 14.14 Severability..........................................94
Section 14.15 Headings..............................................94
Section 14.16 Non-Application of Chapter 346 of Texas Finance
Code................................................94
Section 14.17 Construction..........................................94
Section 14.18 Independence of Covenants.............................94
Section 14.19 Waiver of Trial By Jury...............................95
ARTICLE XV Arbitration...........................................95
Section 15.1 Arbitration...........................................95
Section 15.2 Governing Rules.......................................95
Section 15.3 No Waiver; Provisional Remedies, Self-Help and
Foreclosure.........................................95
Section 15.4 Arbitrator Qualifications and Powers Awards...........96
Section 15.5 Judicial Review.......................................96
Section 15.6 Miscellaneous.........................................96
iv
SCHEDULES AND EXHIBITS
Schedules
1.1.A Existing Domestic Letters of Credit
1.1.B [Intentionally Deleted]
1.1.C Restricted Subsidiaries
8.5 Litigation
8.10 Tax Matters
8.14 Subsidiaries
8.19 Environmental Matters
10.1 Existing Debt
10.2 Existing Liens
10.4 Permitted Investments
Exhibits
A-1 Domestic Revolving Credit Note
A-2 Foreign Revolving Credit Note
A-3 Swing Line Note
B-1 Security Agreement - Domestic Borrower
B-2 Security Agreement - Canada
B-3 Security Agreement - Brazil
B-4 Charge Debenture (U.K.)
B-5 Security Agreement - Australia
C Security Agreement - Domestic Guarantor
D-1 Guaranty Agreement - Domestic Subsidiary
▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇ Guaranty Agreement - Foreign Subsidiary
▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇ Guaranty Agreement - U.K. Borrower
E-1 Domestic Advance Request Form
E-2 Foreign Advance Request Form
F Collateral Agency Agreement
G Assignment and Acceptance
H Legal Opinion of Counsel to Domestic Borrower and Domestic
Guarantors
I Compliance Certificate
CREDIT AGREEMENT
THIS
CREDIT AGREEMENT, dated as of July 17, 2001 (this "Agreement"), is
among
VERITAS DGC INC., a Delaware corporation (the "Domestic Borrower"),
VERITAS DGC LIMITED, a company organized under the laws of England and Wales,
VERITAS ENERGY SERVICES INC., an Alberta corporation, and VERITAS ENERGY
SERVICES PARTNERSHIP, an Alberta general partnership (each a "Foreign Borrower",
and collectively the "Foreign Borrowers", and together with the Domestic
Borrower, the "Borrowers"), their respective successors and assigns, each of the
banks or other lending institutions which is or which may from time to time
become a signatory hereto or any successor or assignee thereof (individually, a
"Bank" and, collectively, the "Banks") ▇▇▇▇▇ FARGO BANK
TEXAS, N.A., a national
banking association, as agent for itself, each Domestic Issuing Bank and the
other Domestic Banks (in such capacity, together with its successors in such
capacity, the "Domestic Agent"), and HSBC BANK CANADA, as agent for itself, each
Foreign Issuing Bank and the other Foreign Banks (in such capacity, together
with its successors in such capacity, the "Foreign Agent", and together with the
Domestic Agent, the "Agents").
RECITALS:
The Borrowers have requested the Banks to extend credit in the form of
(a) a revolving credit facility not to exceed $80,000,000 outstanding at any
time (subject to reduction as herein set forth) under which the Domestic
Borrower may request (i) advances and (ii) letters of credit (subject to a
$30,000,000 sublimit) and (b) a revolving credit facility not to exceed
$20,000,000 outstanding at any time (subject to reduction as herein set forth)
under which the Foreign Borrowers may request (i) Alternate Currency Advances,
(ii) Dollar denominated Advances and (iii) letters of credit and/or bank
guaranties (subject to a $10,000,000 sublimit), all in accordance with this
Agreement. The Banks are willing to extend such credit to the Borrowers upon the
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
have the following meanings:
"AAA" has the meaning given to such term in Section 15.2 of this
Agreement.
"Additional Costs" has the meaning given to such term in Section 5.2.
"Adjusted Foreign Revolving Credit Commitments" means one-half of the
aggregate of the Foreign Revolving Credit Commitments.
"Adjusted LIBOR Rate" means, for any LIBOR Advance for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined by the applicable Agent to be equal to (a) LIBOR
for the applicable Interest Period divided by (b) the remainder of 1 minus the
Reserve Requirement for such LIBOR Advance for such Interest Period.)
"Advance" means (a) a Domestic Advance or a Foreign Advance, (b) a
Swing Line Advance, and (c) a payment under a Letter of Credit.
"Advance Request Form" means a Domestic Advance Request Form or a
Foreign Advance Request Form.
"Affiliate" means, as to any Person, any other Person (a) that directly
or indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds 25% or more of any class of voting stock of such
Person; or (c) 25% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Person in question. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract, or otherwise; provided,
however, in no event shall any of the Agents, any Issuing Bank or the Banks be
deemed an Affiliate of the Domestic Borrower or any of its Subsidiaries.
"Agents" has the meaning given to such term in the first paragraph of
this Agreement.
"Alternate Currency" means British pounds sterling and Canadian
dollars, so long as British pounds sterling and Canadian dollars, as the case
may be, is an Eligible Currency, and any other Eligible Currency acceptable to
the Agents and the Foreign Banks. For purposes of this definition of Alternate
Currency, "Eligible Currency" means any currency other than Dollars that is
readily available, freely traded, in which deposits are customarily offered to
banks in the London interbank market, convertible into Dollars in the
international interbank market and as to which an Equivalent Amount is available
in Dollars in the London interbank market (or other market where the applicable
Agent's currency exchange operations in respect of the applicable currency are
then being conducted). If a change of any currency of a country occurs
(including where there is more than one currency or currency unit recognized at
the same time as the lawful currency of a country), the Loan Documents will be
amended to the extent the Agents (acting reasonably and after consultation with
the Domestic Borrower) determine is necessary to reflect such change.
"Alternate Currency Advances" means Advances which are funded in
Alternate Currency and bear interest based upon the Alternate Currency Rate.
"Alternate Currency Rate" means, (a) for any Alternate Currency Advance
denominated in Canadian dollars, the rate of interest per annum most recently
announced by Foreign Agent at its Principal Office as its prime rate, with the
understanding that such prime rate is one of its base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
2
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Foreign Agent may
designate, such rate to be adjusted automatically as of the opening of business
on the effective date of each change in such rate, to account for such change,
and (b) for any Alternate Currency Advance not denominated in Canadian dollars,
for any Interest Period therefor, an interest rate per annum determined by the
Foreign Agent by dividing: (i) the rate per annum determined by the Foreign
Agent to be the rate per annum at which deposits in the relevant Alternate
Currency are offered by the Principal Office of the Foreign Agent to first class
banks in the interbank euro alternate currency market selected by the Foreign
Agent at or before 11:00 a.m. (London time) (or as soon thereafter as
practicable) on the Quotation Day for a period equal to such Interest Period and
in an amount substantially equal to the amount of such Alternate Currency
Advance during such Interest Period; by (ii) Reserve Requirements, if any,
applicable to the Foreign Banks.
"Applicable Lending Office" means for each Bank and each Type of
Advance, the Lending Office of such Bank (or of an Affiliate of such Bank)
designated for such Type of Advance below its name on the signature pages hereof
or such other office of the Bank (or of an Affiliate of such Bank) as such Bank
may from time to time specify to the Borrower as the office by which its
Advances of such Type are to be made and maintained.
"Applicable Margin" means, on any date of determination of the interest
rate for any Base Rate Advance, LIBOR Advance, or Alternate Currency Advance or
of the commitment fee described in Section 2.6 or Section 3.6 hereof, the
applicable percentage set forth in the table below for such Advance or fee, as
appropriate, which corresponds to the ratings established by both S&P and
▇▇▇▇▇'▇ applicable to the indebtedness under the Senior Notes or the Domestic
Revolving Credit Notes ("Index Debt") on such date of determination:
APPLICABLE
MARGIN FOR
LIBOR
APPLICABLE ADVANCES AND
MARGIN FOR ALTERNATE APPLICABLE
BASE RATE CURRENCY MARGIN FOR
RATINGS ADVANCES ADVANCES COMMITMENT FEE
------- ------------ ------------- --------------
Category 1
Equal to or 0.00% 0.75% 0.15%
higher than BBB+
by S&P;
Equal to or
higher than Baa1
by ▇▇▇▇▇'▇
Category 2
BBB by S&P; 0.00% 0.875% 0.175%
Baa2 by ▇▇▇▇▇'▇
Category 3
BBB- by S&P; 0.00% 1.00% 0.20%
Baa3 by ▇▇▇▇▇'▇
Category 4
Lower than BBB- See Chart Below See Chart Below See Chart Below
by S&P;
Lower than Baa3
by ▇▇▇▇▇'▇
3
provided that, if the rating of the Index Debt as determined in accordance with
this definition is within those ratings set forth in Category 4, the Applicable
Margin shall be, on any date of determination of the interest rate for any Base
Rate Advance, LIBOR Advance or Alternate Currency Advance or of the commitment
fee described in Section 2.6 or Section 3.6 hereof, the applicable percentage
set forth in the table below for such Advance or fee, as appropriate, which
corresponds to the Borrower's Funded Debt to EBITDA Ratio set forth in the table
below:
APPLICABLE
MARGIN FOR
LIBOR
APPLICABLE ADVANCES AND
MARGIN FOR ALTERNATE APPLICABLE
BASE RATE CURRENCY MARGIN FOR
RATIO ADVANCES ADVANCES COMMITMENT FEE
----- ------------ ------------- --------------
Less than 1.00 to
1.00 0.00% 1.00% 0.20%
Greater than or
equal to 1.00 to 0.00% 1.25% 0.25%
1.00 and less
than 1.50 to 1.00
Greater than or
equal to 1.50 to
1.00 and less 0.25% 1.50% 0.375%
than 2.00 to 1.00
Greater than 2.00
to 1.00 0.50% 1.75% 0.375%
4
For purposes of the foregoing, (i) if neither ▇▇▇▇▇'▇ nor S&P shall
have in effect a rating for Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then both
such rating agencies will be deemed to have established ratings for Index Debt
in Category 4; (ii) if only one of ▇▇▇▇▇'▇ or S&P shall have in effect a rating
for Index Debt, the Domestic Borrower and the Banks will negotiate in good faith
to agree upon another rating agency to be substituted by an amendment to this
Agreement for the rating agency which shall not have a rating in effect, and in
the absence of such amendment the Applicable Margin will be determined by
reference to the available rating; (iii) if the ratings established by ▇▇▇▇▇'▇
and S&P shall fall within different Categories, the Applicable Margin shall be
determined by reference to the Category containing the rating which is one grade
below the higher rating; (iv) if the ratings established by ▇▇▇▇▇'▇ or S&P for
the Senior Notes shall fall within a different Category than such rating
agency's ratings for the Domestic Revolving Credit Notes, such rating agency's
ratings for the Index Debt shall be deemed to fall within the Category
containing the higher rating; and (v) if any rating established by ▇▇▇▇▇'▇ or
S&P shall be changed (other than as a result of a change in the rating system of
either ▇▇▇▇▇'▇ or S&P), such change shall be effective as of the date on which
such change is first announced by the rating agency making such change. Each
change in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of either ▇▇▇▇▇'▇
or S&P shall change prior to the Maturity Date, the Domestic Borrower and the
Banks shall negotiate in good faith to amend the references to specific ratings
in this definition to reflect such changed rating system. If both ▇▇▇▇▇'▇ and
S&P shall cease to be in the business of rating corporate debt obligations, the
Domestic Borrower and the Banks shall negotiate in good faith to agree upon a
substitute rating agency and to amend the references to specific ratings in this
definition to reflect the ratings used by such substitute rating agency.
Any change in the Funded Debt to EBITDA Ratio shall be effective to
adjust the Applicable Margin as of the date of receipt by the Domestic Agent of
the most recently delivered Compliance Certificate. If the Applicable Margin is
determined by reference to the Domestic Borrower's Funded Debt to EBITDA Ratio
and if the Domestic Borrower fails to deliver the Compliance Certificate and
financial statements within the times specified in this Agreement, such ratio
shall be deemed to be greater than 2.00 to 1.00 solely for the purpose of
determining the Applicable Margin until the Domestic Borrower delivers such
Compliance Certificate and financial statements.
"Applicable Rate" means the sum of the Base Rate, Adjusted LIBOR Rate,
or Alternate Currency Rate, as the case may be, plus the Applicable Margin from
time to time in effect.
5
"Asia Pacific" means Veritas DGC Asia Pacific Ltd., a Delaware
corporation, and its successors and assigns.
"Assignee" has the meaning given to such term in Section 14.7 (b).
"Assignment and Acceptance" means an Assignment and Acceptance, in
substantially the form attached hereto as Exhibit "G" with appropriate
completions.
"Authorized Representative" means any officer or employee of the
applicable Borrower who has been designated in writing by the applicable
Borrower to the Agents to be an Authorized Representative.
"Bank" has the meaning given such term in the first paragraph of this
Agreement.
"Bank Guarantor" means any Issuing Bank or its Affiliate which issues
Bank Guaranties hereunder.
"Bank Guaranty" means any guaranty or similar instrument which may be
issued by Bank Guarantor for the benefit of any Borrower to support performance
bonds or for another purpose approved by Bank Guarantor.
"Base Rate" means, for any day, a per annum interest rate equal to the
higher of (a) the sum of 0.50% plus the Federal Funds Rate on such day or (b)
the Prime Rate on such day. The Base Rate shall be adjusted automatically as of
the opening of business on the effective date of each change in the Prime Rate
or Federal Funds Rate, as applicable, to account for such change.
"Base Rate Advances" means Advances that bear interest at rates based
upon the Base Rate.
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented and
otherwise modified and in effect from time to time, or any replacement thereof.
"Borrowers" has the meaning given to such term in the first paragraph
of this Agreement.
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Houston,
Texas, (b) with respect to the
Foreign Revolving Credit Commitment, Conversions, Continuations, Interest
Periods, and notices in connection with each Foreign Advance, any day on which
commercial banks are not authorized or required to close in Calgary, Alberta or
London, England, as applicable, and (c) with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods, and notices in
connection with each LIBOR Advance or Alternate Currency Advance (other than
Alternate Currency Advances made in Canadian dollars to a Canadian Borrower),
any day which is a Business Day described in clause (a) above (and with respect
to the Foreign Revolving Credit Commitment, clause (b)
6
above) and which is also a day on which dealings in Dollar or Alternate Currency
deposits are carried out in the relevant interbank market referred to by the
applicable Agent to determine LIBOR for such LIBOR Advance or the Alternate
Currency Rate for such Alternate Currency Advance and which is also a day on
which banks and foreign exchange markets are open for business in London and (if
applicable) for the purpose of payments in an Alternate Currency in the
principal financial center of the country of such currency.
"Canadian Borrowers" means Veritas Energy Services, Inc., an Alberta
corporation, Veritas Energy Services Partnership, an Alberta general
partnership, and their respective successors and assigns, and "Canadian
Borrower" means any one of the Canadian Borrowers.
"Canadian Obligations" means that portion of the Foreign Obligations
directly owed by the Canadian Borrowers.
"Canadian Banks" means the Foreign Banks other than the U.K. Bank.
"Calculation Period" means, as of the last day of any Fiscal Quarter,
the period of four Fiscal Quarters ended as of such date or, if a calculation is
performed on a date other than the last day of any Fiscal Quarter, the period of
twelve months ending on such date.
"Capital Expenditures" means, for any Person, all expenditures for
assets which, in accordance with GAAP, are properly classified as equipment,
real property, improvements, fixed assets or a similar type of capitalized asset
and which would be required to be capitalized and shown on the balance sheet of
such Person.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Cash Equivalent Investment" means, at any time, (a) any evidence of
Debt, maturing not more than one year after such time, issued or guaranteed by
the United States government or any agency thereof, (b) commercial paper,
maturing not more than one year from the date of issue, corporate demand notes
or other debt securities having a maturity or tender right less than one year
from the date of issuance thereof, in each case (unless issued by a Bank or its
holding company) rated in one of the two highest rating categories by Standard &
Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc., (c) any certificate of
deposit (or time deposits represented by such certificates of deposit), bankers
acceptance or eurodollar account, maturing not more than one year after such
time, or overnight Federal Funds transactions that are issued or sold by a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$300,000,000, (d) any repurchase agreement entered into with any Bank (or other
commercial banking institution of the stature referred to in clause (c) which
(i) is secured by a fully perfected security interest in any
7
obligation of the type described in any of clauses (a) through (c) and (ii) has
a market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of such Bank (or other commercial banking
institution) thereunder and (e) investments in short-term asset management
accounts offered by any Bank for the purpose of investing in loans to any
corporation (other than the Domestic Borrower or an Affiliate of the Domestic
Borrower), state or municipality, in each case organized under the laws of any
state of the United States or of the District of Columbia.
"Cash Reserves" means for any Person amounts held by such Person in
cash or Cash Equivalent Investments.
"Cash Taxes" means, for any Person, the sum of all cash income taxes
paid or required to be paid during the period in question, as determined in
accordance with GAAP applied consistently.
"Charge Debenture (U.K.)" means a charge debenture of U.K. Borrower in
favor of the Foreign Agent, in substantially the form of Exhibit "B-4" attached
hereto with appropriate completions, as the same may be amended, supplemented or
modified from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" has the meaning given to such term in Section 6.1.
"Collateral Agency Agreement" means a collateral agency agreement
executed by the Domestic Agent, the Foreign Agent and the Domestic Collateral
Agent, in substantially the form attached hereto as Exhibit "F" with appropriate
completions, as the same may be amended, supplemented or modified from time to
time.
"Compliance Certificate" means a certificate, in substantially the form
of Exhibit "I" attached hereto, properly completed and signed by the Domestic
Borrower in connection with Section 9.1(c).
"Consolidated Current Liabilities" means, at any particular time, all
amounts which, in conformity with GAAP, would be included as current liabilities
on a consolidated balance sheet of the Domestic Borrower and its consolidated
Subsidiaries.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) after income and franchise taxes determined in conformity with
GAAP of the Domestic Borrower and its consolidated Subsidiaries, plus the amount
of any write-downs of goodwill, to the extent such amounts are deducted in
calculating consolidated net income.
"Consolidated Net Tangible Assets" means, at any date, the aggregate
amount of assets included on the most recent consolidated balance sheet of the
Domestic Borrower and its Restricted Subsidiaries, less (a) without duplication,
applicable reserves and other properly deductible items and goodwill, trade
names, trademarks, patents, unamortized debt discount and
8
expense and other like intangibles (other than the Data Library) and (b)
Consolidated Current Liabilities (other than current liabilities constituting
Debt for borrowed money).
"Consolidated Tangible Net Worth" means, at any particular time, all
amounts which, in conformity with GAAP, would be included as Stockholders'
Equity on a consolidated balance sheet of the Domestic Borrower and its
consolidated Subsidiaries; provided, however, there shall be excluded therefrom
intangible assets (other than the Data Library), including: (a) any amount at
which shares of capital stock of the Domestic Borrower appear as an asset on the
Domestic Borrower's balance sheet, (b) goodwill, including any amounts, however
designated, that represent the excess of the purchase price paid for assets or
stock over the value assigned thereto, and (c) loans (to the extent that such
are not fully secured) to any stockholder, director, officer, or employee of the
Domestic Borrower or any Affiliate of the Domestic Borrower.
"Contingent Liabilities" means, as applied to any Person, those direct
or indirect liabilities of that Person which in conformity with GAAP, would be
included as liabilities of that Person on a consolidated balance sheet of the
Domestic Borrower and its consolidated Subsidiaries, with respect to any Debt,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor") including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof. The
amount of any Contingent Liabilities shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Liabilities are made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
Domestic Borrower in good faith.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 4.9 of (a) a LIBOR Advance as a LIBOR Advance
from one Interest Period to the next Interest Period and (b) an Alternate
Currency Advance as an Alternate Currency Advance from one Interest Period to
the next Interest Period.
"Convert," "Conversion," and "Converted" shall refer to a conversion
pursuant to Section 4.9 or Article V of one Type of Advance into another Type of
Advance.
"Credit Request" has the meaning in Section 4.12 hereof.
"Current Maturities" means as to any Person, at any date, the current
maturities of Funded Debt (other than (a) the Advances and (b) the Senior Notes
as in effect on the Initial Effective Date) determined in accordance with GAAP
applied consistently.
9
"Data Library" means all of each of the Domestic Borrower's and its
Subsidiaries' multi-client data library of proprietary seismic reports and other
data.
"Debt" means as to any Person at any time (without duplication as to
such Person and as to such Person's Subsidiaries): (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, notes, debentures, or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable of such Person arising in the ordinary course of business
that are not past due by more than one hundred twenty (120) days or which are
being contested in good faith and for which adequate reserves have been
established, (d) all Capital Lease Obligations of such Person, (e) all
obligations secured by a Lien existing on property owned by such Person, whether
or not the obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person, (f) all reimbursement obligations of
such Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds and similar instruments, (g) all
liabilities of such Person in respect of unfunded vested benefits under any
Plan, and (h) all Contingent Liabilities.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means the lesser of (a) the Applicable Rate plus 2.00%
and (b) the Maximum Rate.
"Dollars" and "$" mean lawful money of the United States of America.
"Domestic Advance" means an advance of Dollars by the Domestic Agent on
behalf of the Domestic Banks to the Domestic Borrower pursuant to Article II and
includes, as applicable, a Base Rate Advance or a LIBOR Advance.
"Domestic Advance Request Form" means a certificate, in substantially
the form attached hereto as Exhibit "E-l", properly completed and signed by an
Authorized Representative requesting a Domestic Advance.
"Domestic Agent" has the meaning given to such term in the first
paragraph of this Agreement.
"Domestic Bank" means a Bank holding a Domestic Revolving Credit
Commitment.
"Domestic Borrower" has the meaning given to such term in the first
paragraph of this Agreement.
"Domestic Collateral Agent" means ▇▇▇▇▇ Fargo Bank
Texas, N.A. and its
successors and assigns, as appointed under the Collateral Agency Agreement.
10
"Domestic Effective Date" means the date on which all the conditions
precedent set forth in Section 7.1 have been satisfied or waived in writing by
the Domestic Agent and the Domestic Banks.
"Domestic Guarantors" means (a) all the Material Subsidiaries which are
Domestic Subsidiaries, and (b) all other Domestic Subsidiaries which have been
designated by the Borrower to be Domestic Guarantors pursuant to Section
4.21(a), and "Domestic Guarantor" means any one of the Domestic Guarantors. The
Domestic Guarantors as of the date hereof are Geophysical Corp., Asia Pacific,
and Land.
"Domestic Issuing Bank" means (a) Bank One, NA (with its main office in
Chicago, Illinois), or any of its Affiliates, (b) ▇▇▇▇▇ Fargo Bank
Texas, N.A.
(or any of its Affiliates), and (c) any other Bank (or any of its Affiliates)
appointed by the Domestic Borrower and approved by the Domestic Agent that
agrees to issue Domestic Letters of Credit hereunder.
"Domestic Letter of Credit" means a standby or documentary Letter of
Credit, denominated in Dollars or an Alternate Currency issued pursuant to
Article II of this Agreement (including Existing Domestic Letters of Credit) and
"Domestic Letters of Credit" means more than one Domestic Letter of Credit.
"Domestic Letter of Credit Liabilities" means, at any time, the
aggregate undrawn face amounts of all outstanding Domestic Letters of Credit in
the Equivalent Amount of Dollars.
"Domestic Obligations" means all obligations, indebtedness and
liabilities of the Domestic Borrower to the Domestic Agent, the Domestic Issuing
Banks and the Domestic Banks, or any or some of them, arising from or in
connection with (a) the Domestic Advances, the Domestic Revolving Credit Notes
or Article II of this Agreement, (b) Borrower's contingent reimbursement
obligations in respect of Domestic Letters of Credit, (c) all interest accruing
on the items described in clauses (a) and (b) of this definition, and (d) all
reasonable attorneys' fees and other expenses incurred in the enforcement of
collection of the items described in clauses (a), (b) and (c) of this
definition.
"Domestic Revolving Credit Commitment" means as to each Domestic Bank,
the obligation of such Domestic Bank to make (a) Domestic Advances and (b)
subject to applicable sublimits, to purchase participations in Domestic Letters
of Credit pursuant to Section 4.15, in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount set forth opposite the name
of such Domestic Bank on Annex A attached hereto or on Annex A attached to the
most recent amendment hereto under the heading "Domestic Revolving Credit
Commitment," or on the signature pages of an Assignment and Acceptance, as the
case may be, as such amount may be reduced pursuant to Section 2.7 or terminated
pursuant to Section 2.7 or Section 12.2.
"Domestic Revolving Credit Notes" means the promissory notes of the
Domestic Borrower payable to the order of the Banks, in substantially the form
attached hereto as Exhibit "A-l" with appropriate completions, and all
extensions, renewals, replacements, modifications,
11
supplements or rearrangements thereof from time to time, and "Domestic Revolving
Credit Note" means any one of the Domestic Revolving Credit Notes.
"Domestic Subsidiary" means any Subsidiary of the Domestic Borrower
that is organized and existing under the laws of the United States of America or
any state thereof.
"EBIT" means as to any Person, for any period, the sum of Consolidated
Net Income for such period plus Interest Expense, Tax Expense and amortization
of goodwill to the extent deducted from Consolidated Net Income in such period.
"EBITDA" means as to any Person, for any period, the sum of
Consolidated Net Income for such period plus Interest Expense, Tax Expense and
Non-Cash Charges to the extent deducted from Consolidated Net Income in such
period.
"▇▇▇▇▇" means the Electronic Data Gathering, Analysis and Retrieval
program operated by the SEC pursuant to Regulation ST of the General Rules and
Regulations of the SEC under the Securities Act of 1933, and shall include any
successor program.
"Eligible Assignee" means any commercial bank, savings and loan
association; savings bank, finance company, insurance company, pension fund,
mutual fund, or other financial institution (whether a corporation, partnership,
or other entity) acceptable to the Agents, and having combined capital and
surplus of at least $300,000,000 or the Equivalent Amount thereof, provided that
such institution complies with Section 4.7 hereof to the extent applicable to
such institution.
"Energy Services" means Veritas Energy Services Inc., an Alberta
corporation, and its successors and assigns.
"Environmental Law" means any and all foreign, federal, state,
provincial, municipal and local laws, regulations, and requirements pertaining
to health, safety, or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 et. seq., the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 et seq., the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Clean Water Act, 33 U.S.C. Section 1251 et seq., and the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., as such laws, regulations, and
requirements may be amended or supplemented from time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, including any
Environmental Law, permit, order or agreement with any Governmental Authority or
other Person, arising from environmental, health or safety
12
conditions or the Release or threatened Release of a Hazardous Material into the
environment, resulting from the past, present, or future operations of such
Person or its Affiliates.
"Equivalent Amount" means (a) the equivalent in Dollars of any
Alternate Currency and (b) the equivalent in any Alternate Currency of Dollars.
For purposes of this Agreement, each Equivalent Amount shall be determined by
using the quoted spot rate at which the applicable Agent or U.K. Bank, as
applicable, or any Affiliate of the applicable Agent or U.K. Bank, as
applicable, offers to exchange Dollars for such Alternate Currency at (a) 11:00
a.m. London time with respect to British pounds sterling, (b) 10:00 a.m.
Calgary, Alberta time with respect to Canadian dollars, and (c) 11:00 a.m.
Dallas,
Texas time with respect to Dollars and Alternate Currencies other than
British pounds sterling and Canadian dollars, two Business Days prior to the
date on which such equivalent is to be determined pursuant to the provisions of
this Agreement. The applicable Agent shall notify each affected Bank of such
determination on such date. The Equivalent Amount of each Advance made in
Alternate Currency shall be recalculated hereunder on each date it is necessary
to determine the unused portion of each Bank's Revolving Credit Commitment or
any Advances outstanding on such date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is
or has been a member of the same controlled group of corporations (within the
meaning of Section 414 (b) of the Code) as the Domestic Borrower or is or has
been under common control (within the meaning of Section 414 (c) of the Code)
with the Domestic Borrower.
"Event of Default" has the meaning specified in Section 12.1.
"Excluded Taxes" means, in the case of each Bank and each Agent, all
taxes imposed on it, other than taxes imposed on it by a Governmental Authority
of the jurisdiction of formation, incorporation or place of business of a
Borrower by deduction or withholding, or as a result of any failure to deduct or
withhold, from payments made by such Borrower under any Loan Document.
"Existing Domestic Letters of Credit" means the one or more letters of
credit issued by Bank One, NA (with its main office in Chicago, Illinois) or any
of its Affiliates for the account of Domestic Borrower or any Domestic Guarantor
before the date of this Agreement that are described on Schedule 1.1.A.
"Existing Domestic Letter of Credit Liabilities" means, at any time,
the aggregate undrawn face amounts of all outstanding Existing Domestic Letters
of Credit in the Equivalent Amount of Dollars.
"Federal Funds Rate" means, for any day, the rate per annum, (rounded
upwards, if necessary, to the nearest 1/16 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the
13
Business Day next succeeding such day, provided that (a) if the day for which
such rate is to be determined is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if such rate is
not so published on such next succeeding Business Day, the Federal Funds Rate
for any day shall be the average rate charged to the Domestic Agent on such day
on such transactions as determined by the Domestic Agent.
"Fee Letter" means that certain letter agreement dated as of April 18,
2001, executed by and between the Domestic Borrower and the Domestic Agent,
setting forth certain fees to be paid by the Borrowers to the Agents in
connection with this Agreement.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of the Domestic Borrower and its
Subsidiaries, as effective from time to time, which period currently is the 12
month period ending on July 31 of each year.
"Fixed Charge Coverage Ratio" means as to any Person, at any date (a)
EBIT for the Calculation Period minus Cash Taxes for the Calculation Period,
divided by (b) the sum of (i) Current Maturities as of such date, and (ii)
Interest Expense for the Calculation Period.
"Foreign Advance" means an advance of funds, in Dollars or any
Alternate Currency, as selected by a Foreign Borrower in accordance with Section
4.1, by (a) the Foreign Agent on behalf of the Canadian Banks to the Canadian
Borrowers or (b) the U.K. Bank to the U.K. Borrower, as the case may be,
pursuant to Article III and includes, as applicable, a Base Rate Advance, a
LIBOR Advance, or an Alternate Currency Advance.
"Foreign Agent" has the meaning given to such term in the first
paragraph of this Agreement.
"Foreign Advance Request Form" means a certificate, in substantially
the form attached hereto as Exhibit "E-2", properly completed and signed by an
Authorized Representative requesting a Foreign Advance.
"Foreign Bank" means a Bank holding a Foreign Revolving Credit
Commitment.
"Foreign Borrowers" means the Persons designated as such in the first
paragraph of this Agreement and "Foreign Borrower" means any one of the Foreign
Borrowers.
"Foreign Effective Date" means the date on which all the conditions
precedent set forth in Section 7.2 have been satisfied or waived in writing by
the Foreign Agent and the Foreign Banks.
"Foreign Guarantors" means (a) all of the Material Subsidiaries (other
than U.K. Borrower and Canadian Borrowers) that are Foreign Subsidiaries and (b)
all other Foreign Subsidiaries that have been designated by the Borrower to be
Foreign Guarantors pursuant to
14
Section 4.21(b), and "Foreign Guarantor" means any one of the Foreign
Guarantors. The Foreign Guarantors as of the date hereof are Veritas Australia
and Veritas Brazil.
"Foreign Issuing Bank" means (a) HSBC Bank Canada (or any of its
Affiliates) (b) U.K. Bank, and (c) any other Bank (or any of its Affiliates)
appointed by the Foreign Borrowers and approved by the Foreign Agent that agrees
to issue Foreign Letters of Credit or Bank Guaranties hereunder.
"Foreign Letter of Credit" means a standby or documentary Letter of
Credit, denominated in Dollars or an Alternate Currency, issued pursuant to
Article III of this Agreement and "Foreign Letters of Credit" means more than
one Foreign Letter of Credit.
"Foreign Letter of Credit Liabilities" means, at any time, the sum of
(a) the aggregate undrawn face amounts of all outstanding Foreign Letters of
Credit plus (b) the outstanding amount of all Bank Guaranties issued by a
Foreign Issuing Bank, all in the Equivalent Amount of Dollars.
"Foreign Obligations" means all obligations, indebtedness and
liabilities of the Foreign Borrowers or any of them to the Foreign Agent, the
Foreign Issuing Banks and the Foreign Banks, or any or some of them, arising
from or in connection with (a) the Foreign Advances, the Foreign Revolving
Credit Notes or Article III of this Agreement, (b) the Foreign Borrowers'
contingent reimbursement obligations in respect of Foreign Letters of Credit and
Bank Guaranties, (c) all interest accruing on the items described in clauses (a)
and (b) of this definition, and (d) all attorneys' fees and other expenses
incurred in the enforcement of collection of the items described in clauses (a),
(b) and (c) of this definition.
"Foreign Revolving Credit Commitment" means as to each Foreign Bank,
the obligation of such Foreign Bank to make (a) Foreign Advances and (b) subject
to applicable sublimits, to purchase participations in Foreign Letters of Credit
pursuant to Section 4.15, in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount set forth opposite the name of
such Foreign Bank on Annex A attached hereto or on Annex A attached to the most
recent amendment hereto under the heading "Foreign Revolving Credit Commitment,"
or on the signature pages of an Assignment and Acceptance, as the case may be,
as such amount may be reduced pursuant to Section 3.7 or terminated pursuant to
Section 3.7 or Section 12.2.
"Foreign Revolving Credit Notes" means the promissory notes of the
Foreign Borrowers payable to the order of the Canadian Banks or the U.K. Bank,
as the case may be, in substantially the form attached hereto as Exhibit "A-2"
with appropriate completions, and all extensions, renewals, replacements,
modifications, supplements or rearrangements thereof from time to time, and
"Foreign Revolving Credit Note" means any one of the Foreign Revolving Credit
Notes.
"Foreign Subsidiary" means any Subsidiary of the Domestic Borrower
which is organized and existing under the laws of a jurisdiction other than the
United States of America or any state thereof.
15
"Funded Debt" means, at any time, the aggregate obligations of the
Domestic Borrower and its Subsidiaries (determined on a consolidated basis) for
Debt for borrowed money, including, without limitation, Capital Lease
Obligations.
"Funded Debt to EBITDA Ratio" means, at any time, (a) Funded Debt
divided by (b) EBITDA for the Calculation Period.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Geophysical Corp." means Veritas Geophysical Corporation, a Delaware
corporation, and its successors and assigns.
"Governmental Authority" means any nation or government, any state,
province or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or pertaining
to government.
"Guarantors" means the Domestic Guarantors and the Foreign Guarantors.
"Guaranty Agreement-Canadian Borrower" means a guaranty agreement
executed by a Canadian Borrower in favor of the Foreign Agent, in substantially
the form attached hereto as Exhibit "D-4" with appropriate completions, as the
same may be amended, supplemented, or modified from time to time, and "Guaranty
Agreements-Canadian Borrowers" means more than one Guaranty Agreement- Canadian
Borrower.
"Guaranty Agreement-Domestic Subsidiary" means a General Continuing
Guaranty executed by a Domestic Guarantor in favor of the Domestic Collateral
Agent, in substantially the form attached hereto as Exhibit "D-l" with
appropriate completions, as the same may be amended, supplemented, or modified
from time to time, and "Guaranty Agreements-Domestic Subsidiaries" means more
than one Guaranty Agreement-Domestic Subsidiary.
"Guaranty Agreement-Domestic Borrower" means a General Continuing
Guaranty executed by Domestic Borrower in favor of the Foreign Agent, in
substantially the form attached hereto as Exhibit "D-2" with appropriate
completions, as the same may be amended, supplemented, or modified from time to
time.
"Guaranty Agreement-Foreign Subsidiary" means a guaranty agreement
executed by a Foreign Guarantor in favor of the Foreign Agent, in substantially
the form attached hereto as Exhibit "D-3" with appropriate completions, as the
same may be amended, supplemented, or modified from time to time, and "Guaranty
Agreements-Foreign Subsidiaries" means more than one Guaranty Agreement-Foreign
Subsidiary.
▇▇
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇.▇. ▇▇▇▇▇▇▇▇" means a guaranty agreement executed
by U.K. Borrower in favor of the Foreign Agent, in substantially the form
attached hereto as Exhibit "D-5" with appropriate completions, as the same may
be amended, supplemented, or modified from time to time.
"Hazardous Material" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law, including,
without limitation, asbestos, petroleum, and polychlorinatedbiphenyls.
"Hedging Agreements" shall mean any commodity, interest rate or
currency swap, cap, floor, collar, forward agreement or other exchange or
protection agreements or any option with respect to any such transaction.
"Indebtedness" shall have the meaning given to such term in the
Indenture.
"Indenture" means, as applicable, (a) the Indenture dated October 23,
1996 between the Domestic Borrower and Fleet National Bank, a national banking
association, as such Indenture existed on October 23, 1996, without taking into
account any amendments, modifications thereof or supplements thereto unless such
amendment, modification or supplement has the effect of increasing the Maximum
Bank Credit Amount, increasing the Permitted Subsidiary Indebtedness, or
eliminating or reducing the restrictions contained in the Indenture with respect
to incurring Indebtedness to the Banks or securing such Indebtedness to the
Banks, (b) the Indenture dated October 28, 1998, between the Domestic Borrower
and State Street Bank and Trust Company, a Massachusetts trust company, as such
Indenture existed on October 28, 1998, without taking into account any
amendments, thereof or supplements thereto, unless such amendment, modification
or supplement has the effect of increasing the Maximum Bank Credit Amount,
increasing the Permitted Subsidiary Indebtedness, or eliminating or reducing the
restrictions contained in the Indenture with respect to incurring Indebtedness
to the Banks or securing such Indebtedness to the Banks, and (c) any indenture
providing for notes given in replacement of the notes under the indentures
described in clauses (a) and (b) above, so long as (i) the structure, covenants,
terms and conditions of any such indenture and replacement notes are no more
restrictive than the indentures described in clauses (a) and (b) above and the
notes issued thereunder, (ii) the maturity date of such replacement notes is no
earlier than six months after the Revolving Credit Termination Date, (iii) the
Domestic Borrower and its Subsidiaries are in pro forma compliance with all the
financial covenants set forth in Article XI taking into account such replacement
notes (but excluding current maturities of such replacement notes from the
calculation of Current Maturities for purposes of determining pro forma
compliance with Section 11.3 hereof), (iv) the aggregate principal amount of all
such replacement notes is no greater than $200,000,000, and (v) with respect to
any such indenture under which the aggregate principal amount of all such
replacement notes is greater than $150,000,000, such indenture does not contain
any provision that has the effect of limiting the amount of the Obligations that
may be secured by the Collateral.
17
"Initial Effective Date" means the Domestic Effective Date or the
Foreign Effective Date, whichever first occurs.
"Interest Expense" means the sum of all cash interest expense paid or
required by its terms to be paid during the period in question, as determined in
accordance with GAAP applied consistently, with respect to the Funded Debt of a
Person or any portion thereof.
"Interest Period" means, with respect to LIBOR Advances or Alternate
Currency Advances, each period commencing on the date such Advances are made or
Converted from Advances of another Type or, in the case of each subsequent,
successive Interest Period applicable to a LIBOR Advance or an Alternate
Currency Advance, the last day of the next preceding Interest Period with
respect to such Advance, and ending on that day which is one, two, three, or six
months thereafter, as the applicable Borrower may select as provided in Section
4.1 or 4.9 hereof. Notwithstanding the foregoing: (a) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day; (b) any Interest Period which would otherwise extend
beyond the Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date; (c) no more than three Interest Periods for each LIBOR Advance
shall be in effect at the same time; (d) no more than three Interest Periods for
Alternate Currency Advances shall be in effect at the same time; and (e) no
Interest Period for any LIBOR Advances or Alternate Currency Advances shall have
a duration of less than one month and, if the Interest Period for any LIBOR
Advance or Alternate Currency Advance would otherwise be a shorter period, such
Advance shall be a Base Rate Advance.
"Issuing Bank" means a Domestic Issuing Bank or Foreign Issuing Bank,
as the case may be.
"Land" means Veritas DGC Land Inc., a Delaware corporation, and its
successors and assigns.
"Letter of Credit" means a Domestic Letter of Credit or a Foreign
Letter of Credit, and "Letters of Credit" means the Domestic Letters of Credit
and the Foreign Letters of Credit.
"Letter of
Credit Agreements" means the application and letter of
credit agreements and other documents, if any, required by the applicable
Issuing Bank now or hereafter executed by the applicable Borrower, such
agreements to be in form and substance satisfactory to the applicable Borrower
and the applicable Issuing Bank.
"Letter of Credit Liabilities" means the Domestic Letter of Credit
Liabilities and the Foreign Letter of Credit Liabilities.
"LIBOR Advances" means Advances the interest rates on which are
determined on the basis of the rates referred to in the definition of "Adjusted
LIBOR Rate".
"LIBOR" means, with respect to each Interest Period:
18
(a) the rate per annum equal to the rate determined by the
applicable Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) on the Quotation Day, or
(b) if the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall
cease to be available, the rate per annum equal to the rate determined
by the applicable Agent to be the offered rate on such other page or
other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the
first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London
time) on the Quotation Day, or
(c) if the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) at which Dollar deposits are
offered to the applicable Agent at approximately 11:00 a.m. London time
(or as soon thereafter as practicable) on the Quotation Day for the
requested LIBOR Advance by leading banks in the London interbank market
for Dollar deposits having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the LIBOR
Advance to be made by the applicable Banks for such Interest Period.
"License Agreement" means any General Non-Exclusive Data License
Agreement and any supplements thereto, or any similar agreement as supplemented,
between the Domestic Borrower or any of its Subsidiaries and any other Person,
which provides for the sale and licensing of a portion of Domestic Borrower's or
any such Subsidiary's Data Library.
"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation, assignment, preference, priority, or
other encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or title retention agreement), whether arising
by contract, operation of law, or otherwise.
"Loan Documents" means (a) this Agreement and all promissory notes,
security agreements, collateral agency agreements, deeds of trust, assignments,
guaranties, and other instruments, documents, and agreements executed and
delivered pursuant to or in connection with this Agreement, as such instruments,
documents, and agreements may be amended, modified, renewed, extended, or
supplemented from time to time, (b) any Hedging Agreements between Domestic
Borrower or any of its Subsidiaries and any Bank or its Affiliate, and (c) the
Fee Letter.
"Marketable Securities" means (a) direct obligations issued or
unconditionally guaranteed by the United States of America or issued by an
agency thereof and fully backed by the full faith and credit of the United
States of America owned by the Domestic Borrower or any
19
Subsidiary which are not subject to any Lien, except for Liens created by
operation of law, and (b) securities (as defined in Section 8.102 of the
Texas
Business and Commerce Code) that are listed and traded on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ - National Market System
owned by the Domestic Borrower or any Subsidiary which are not subject to any
Lien, except for Liens created by operation of law.
"Material Adverse Effect" means (a) a material adverse effect on (i)
the financial condition of the Domestic Borrower and its Subsidiaries, taken as
a whole, (ii) the ability of the Domestic Borrower and its Subsidiaries, taken
as a whole, to perform their respective obligations under this Agreement or any
of the other Loan Documents, or (iii) the validity or enforceability of this
Agreement or any of the other Loan Documents, or the rights or remedies of the
Agents, the Banks or the Issuing Bank hereunder or thereunder or (b) civil or
criminal liability for any of the Agents or the Banks under Environmental Laws.
"Material Subsidiary" means any Subsidiary whose total assets have a
value (determined in accordance with GAAP) which exceeds $25,000,000 for a
period of 90 consecutive days or more.
"Maximum Bank Credit Amount" has the meaning given to such term in the
Indentures described in clauses (a) and (b) of the definition of "Indenture",
and shall include any identically defined term, if any, which may be set forth
or expressed in an Indenture described in clause (c) of the definition of
Indenture.
"Maximum Rate" means, with respect to any Bank and the holder of the
Swing Line Note or any Revolving Credit Note, the maximum nonusurious interest
rate, if any, that at any time, or from time to time, may be contracted for,
taken, reserved, charged or received on the indebtedness created under this
Agreement, the Revolving Credit Notes, the Swing Line Note or any other Loan
Document under the laws which are presently in effect in the United States and
the State of
Texas applicable to the Banks, such holders and such indebtedness
or, to the extent permitted by law, under such applicable laws of the United
States and the State of
Texas which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now allow. To the
extent that Chapter 303 of the Texas Finance Code (the "Finance Code"), is
relevant to any Bank or any holder of the Swing Line Note or any Revolving
Credit Note for the purposes of determining the Maximum Rate, each such Person
shall determine such applicable legal rate under the Finance Code pursuant to
the "weekly ceiling," from time to time in effect, as referred to and defined in
Chapter 303 of the Finance Code; subject, however, to the limitations on such
applicable ceiling referred to and defined in Chapter 303 of the Finance Code,
and further subject to any right such Person may have subsequently, under
applicable law, to change the method of determining the Maximum Rate. If no
Maximum Rate is established by applicable law, then the Maximum Rate shall be
equal to 18% per annum.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, a division of McGraw Hill,
Inc., or any successor thereto.
20
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower or
any predecessor thereto or any ERISA Affiliate and which is covered by Title IV
of ERISA.
"Non-Cash Charges" means as to any Person, for any period,
depreciation, amortization and other non-cash charges (including amortization of
the capitalized balance of the Data Library), determined in accordance with GAAP
applied consistently.
"Non-U.S. Domestic Bank" has the meaning in Section 4.7(a) hereof.
"Obligated Party" means each Guarantor or any other Person who is or
becomes party to any agreement pursuant to which such Person guarantees or
secures payment and performance of the Obligations or any part thereof.
"Obligations" means all obligations, indebtedness and liabilities of
the Borrowers or any of them to the Agents, the Issuing Banks and the Banks, or
any or some of them, arising pursuant to this Agreement or any of the Loan
Documents, now existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, including, without limitation, the Domestic Obligations and the
Foreign Obligations.
"Other Taxes" has the meaning given such term in Section 4.7(d).
"Partnership" means Veritas Energy Services Partnership, an Alberta
general partnership, and its successors and assigns.
"Payment Date" means, (a) in the case of Base Rate Advances, the last
day of each March, June, September and December, commencing September 30, 2001,
(b) in the case of LIBOR Advances and Alternate Currency Advances the last day
of each Interest Period therefor (and, in the case of six-month Interest
Periods, the last day of the third month following the date of each Advance,
Conversion or Continuation), and (c) in the case of all Advances, the Revolving
Credit Termination Date.
"Payor" has the meaning given to such term in Section 4.6.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Percentage" means, at any time, (a) with respect to any Domestic Bank,
such Domestic Bank's portion, expressed as a percentage, of the aggregate
Domestic Revolving Credit Commitments, and (b) with respect to any Canadian
Bank, such Canadian Bank's portion, expressed as a percentage, of the Adjusted
Foreign Revolving Credit Commitments.
"Permitted Liens" has the meaning assigned to it in Section 10.2.
21
"Permitted Subsidiary Indebtedness" means, with respect to Restricted
Subsidiaries, Indebtedness in an aggregate principal amount outstanding up to
the amount, if any, by which (a) 10% of Consolidated Net Tangible Assets exceeds
(b) the greater of (i) $20,000,000 or (ii) the aggregate principal amount of
outstanding Indebtedness of the Domestic Borrower incurred pursuant to Section
10.11(a) of the Indenture which is secured as permitted by the Indenture.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture constituting a legal entity
under the laws of the jurisdiction of formation of such joint venture,
Governmental Authority, or other entity.
"Plan" means any employee benefit or other plan established or
maintained by the Domestic Borrower or any ERISA Affiliate.
"Prime Rate" means, at any time, the rate of interest per annum most
recently announced by Domestic Agent at its principal office in San Francisco as
its prime rate, with the understanding that such prime rate is one of its base
rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Domestic Agent may designate.
"Principal Office" means the respective principal office of the Agents,
the Issuing Banks and the Banks, presently located for such Persons at the
addresses shown under the signature line of such Persons in this Agreement.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Quarterly Fee Payment Date" means the last day of each March, June,
September, and December of each year, the first of which shall be September 30,
2001.
"Quotation Day" means, in relation to any Interest Period for which an
interest rate is to be determined, two Business Days before the first day of
that Interest Period, unless market practice differs in the relevant interbank
market for a currency, in which case the Quotation Day for that currency will be
determined by the applicable Agent in accordance with market practice in the
relevant interbank market (and if quotations would normally be given by leading
banks in the relevant interbank market on more than one day, the Quotation Day
shall be the last of those days).
"Register" has the meaning assigned to it in Section 14.7(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to a Bank:
22
(a) any change after the date of this Agreement in United States
federal, state, or foreign laws or regulations (including Regulation D), or
(b) the adoption or making after such date of any interpretations,
directives, or requests applying to a class of banks including such Bank of or
under any United States federal or state, or any foreign, laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water,
ground water, or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat, or otherwise address Hazardous Materials in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Hazardous Materials so that they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment, or (c) perform pre-remedial studies and investigations in
post-remedial monitoring and care.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Required Banks" means Banks having at least fifty-one percent (51%) of
the aggregate Revolving Credit Commitments. Solely for purposes of this
definition, U.K. Bank shall be deemed to hold 50% of the Foreign Revolving
Credit Commitment and the Canadian Banks shall be deemed to hold, in the
aggregate, 50% of the Foreign Revolving Credit Commitment, and each such Bank's
percentage of the aggregate the Revolving Credit Commitments shall be calculated
on that basis.
"Reserve Requirement" means, (a) for any LIBOR Advance or Alternate
Currency Advance not denominated in British pounds sterling, for any Interest
Period therefor, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against "Eurocurrency Liabilities" as such term is used in Regulation D. Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which the Adjusted LIBOR Rate or Alternate Currency
Rate is to be determined, or (ii) any category of extensions of credit or other
assets which include LIBOR Advances or Alternate Currency Advances, and (b) for
any LIBOR Advance or Alternate Currency Advance denominated in British pounds
sterling, for any Interest Period therefor, the mandatory costs applicable to
the U.K. Bank and payable by it on such LIBOR Advance or Alternate Currency
Advance as notified to the U.K. Borrower by the U.K. Bank.
23
"Restricted Advances" means Advances of a Type or in an Alternate
Currency described in one or more of clauses (a), (b) and (c) of Section 5.3 of
this Agreement.
"Restricted Subsidiary" has the meaning given to such term in the
Indentures described in clauses (a) and (b) of the definition of "Indenture",
and shall include any identically defined term, if any, which may be set forth
or expressed in an Indenture described in clause (c) of the definition of
Indenture. The Restricted Subsidiaries as of the Initial Effective Date are
listed on Schedule l.1.C.
"Revolving Credit Commitments" means the Domestic Revolving Credit
Commitment and the Foreign Revolving Credit Commitment.
"Revolving Credit Notes" means the Domestic Revolving Credit Notes and
the Foreign Revolving Credit Notes.
"Revolving Credit Termination Date" means August 29, 2003, or such
earlier date on which the Domestic Revolving Credit Commitment or the Foreign
Revolving Credit Commitment, as the case may be, terminates as provided in this
Agreement.
"RICO" means the Racketeer Influenced and Corrupt Organization Act of
1970, as amended from time to time.
"S&P" means Standard & Poor's Corporation or any successor thereto.
"SEC" means the Securities and Exchange Commission of the United States
of America, and includes any successor agency.
"Secured Obligations" means (a) while the Indenture is in effect, the
Obligations other than that portion of principal amount of the Obligations which
exceeds, at the time of the determination thereof, the greater of (i) the
greater of (A) 10% of Consolidated Net Tangible Assets, or (B) the Maximum Bank
Credit Amount and (ii) any less restrictive prohibition as may be found in the
Indenture as a result of an amendment to the Indenture that would constitute an
amendment to the Indenture under the definition of Indenture found in this
Agreement and (b) after the termination of the Indenture, or after the
elimination of the applicable restrictions therein contained regarding the
granting of Liens by Restricted Subsidiaries to secure Indebtedness to the Banks
and the incurrence of Indebtedness to the Banks, the Obligations.
"Security Agreement-Borrower" means, (a) with respect to the Domestic
Borrower, a security agreement executed by the Domestic Borrower in favor of the
Domestic Collateral Agent in substantially the form attached hereto as Exhibit
"B-1", (b) with respect to the Partnership and Energy Services, security
agreements executed by the Partnership and Energy Services in favor of Foreign
Agent in substantially the form of Exhibit "B-2", and (c) with respect to U.K.
Borrower, the Charge Debenture (U.K.), all with appropriate completions, as the
same may be amended, supplemented, or modified from time to time, and "Security
Agreements-Borrowers" means more than one Security Agreement-Borrower.
24
"Security Agreement-Domestic Guarantor" means, with respect to each
Domestic Guarantor, a security agreement executed by such Domestic Guarantor in
favor of the Domestic Collateral Agent in substantially the form attached hereto
as Exhibit "C", all with appropriate completions, as the same may be amended,
supplemented or modified from time to time, and "Security Agreements-Domestic
Guarantors" means more than one Security Agreement-Domestic Guarantor.
"Security Agreement-Foreign Guarantor" means (a) with respect to
Veritas Brazil, a security agreement executed by Veritas Brazil in favor of
Foreign Agent in substantially the form of Exhibit "B-3", and (b) with respect
to Veritas Australia, a security agreement executed by Veritas Australia in
favor of Foreign Agent in substantially the form of Exhibit "B-5", all with
appropriate completions, as the same may be amended, supplemented, or modified
from time to time, and "Security Agreements-Foreign Guarantors" means more than
one Security Agreement-Foreign Guarantor.
"Senior Debt" means the Debt evidenced by the Senior Notes.
"Senior Notes" means (a) the Senior Notes due 2003 in the original
aggregate principal amount of $75,000,000, issued by the Domestic Borrower
pursuant to the Indenture dated October 23, 1996, (b) the Senior Notes due 2003
in the original principal amount of $60,000,000 issued by the Domestic Borrower
pursuant to the Indenture dated October 28, 1998, and (c) replacement notes
issued pursuant to the Indenture described in clause (c) of the definition of
"Indenture".
"Stockholders Equity" has the meaning given to such term under GAAP.
"Subordinated Debt" means (a) Debt of a Person which has been
subordinated to the Obligations in form and substance and upon terms
satisfactory to the Agents, (b) publicly issued subordinated fixed rate debt
securities which are issued on then existing market terms, or (c) privately
issued subordinated fixed rate debt securities which are issued on then existing
market terms, including, without limitation, any such debt securities issued
under Rule 144A or Regulation S; provided, however, with respect to subordinated
debt securities issued pursuant to clauses (b) or (c) above, such securities
shall provide (i) for a maturity date thereof which is not less than six months
after the Revolving Credit Termination Date, (ii) that no principal shall be
payable thereon until that date which is six months after the Revolving Credit
Termination Date, (iii) that no principal may be optionally prepaid, and, except
for redemption upon a Change of Control (as defined in the trust indenture
pursuant to which such securities are issued) as provided in the trust indenture
pursuant to which such securities are issued, such securities shall not be
subject to redemption until that date which is six months after the Revolving
Credit Termination Date, and (iv) no principal or interest shall be payable
thereon if an Event of Default shall have occurred and be continuing under
Section l2.l(a), (e) or (f).
"Subsidiary" means any Person of which or in which the Domestic
Borrower and its Subsidiaries own or control, directly or indirectly, 50% or
more of (a) the combined voting power of all classes having general voting power
under ordinary circumstances to elect a
25
majority of the directors or equivalent body of such Person, if it is a
corporation, (b) the partnership interest, capital interest or profits interest
of such Person, if it is a partnership, limited liability company, joint venture
or similar entity, or (c) the beneficial interest of such Person, if it is a
trust, association or other unincorporated association or organization.
"Swing Line Advance" means any Advance made by the Domestic Agent under
Section 2.9 of this Agreement.
"Swing Line Note" means the promissory note of the Domestic Borrower
payable to the order of the Domestic Agent, in substantially the form attached
hereto as Exhibit "A-3" with appropriate completions, and all extensions,
renewals, replacements, modifications, supplements or rearrangements thereof
from time to time.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings imposed by any Governmental
Authority, and any and all liabilities with respect to the foregoing, but
excluding Excluded Taxes and Other Taxes.
"Tax Expense" means, for any period, all expenses incurred during such
period by the Domestic Borrower and its subsidiaries, on a consolidated basis,
in connection with income tax obligations, all as determined in accordance with
GAAP applied consistently.
"Type" means any type of Advance (i.e. Base Rate Advance, LIBOR Advance
or Alternate Currency Advance).
"U.K. Bank" means HSBC Bank Plc.
"U.K. Borrower" means Veritas DGC Limited, a company organized under
the laws of England and Wales, and its successors and assigns.
"U.K. Obligations" means that portion of the Foreign Obligations owed
by the U.K. Borrower.
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas from time to time.
"Unaffected Advance" means any Type of Advance specified by the
applicable Borrower that is not a Type of Advance then subject to Conversion
pursuant to Section 5.2, 5.3 or 5.4.
"Unbilled Receivables" means accounts receivable arising from sales of
the Domestic Borrower's or any of its Subsidiaries' Data Library, with respect
to which work has been performed by such Borrower or such Subsidiary, goods have
been shipped by such Borrower or such Subsidiary and such goods have been
delivered to and received by the account debtor, but which, as provided by the
payment schedule contained in the related License Agreement, cannot be billed to
the account debtor until a future date, and which (a) as of any date, are
billable within 365 days from such date, (b) are accounted for by such Borrower
or such Subsidiary
26
under GAAP as Unbilled Receivables, and (c) are included in the accounts
receivable of such Borrower or such Subsidiary.
"Veritas Australia" means Veritas DGC Australia Pty. Ltd., a company
organized under the laws of Australia, and its successors and assigns.
"Veritas Brazil" means Veritas do Brasil Ltda., a company organized
under the laws of Brazil, and its successors and assigns.
Section 1.2 Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Terms used herein that are defined in the UCC, unless
otherwise defined herein, shall have the meanings specified in the UCC. Unless
indicated otherwise, all references to amounts expressed in Dollars shall be
deemed to refer also to the Equivalent Amounts thereof. All references in this
Agreement and the Loan Documents to "fees, disbursements and expenses of
counsel," "fees and expenses of legal counsel", "attorneys' fees" and similar
expressions shall mean, with respect to counsel and attorneys of Foreign Agent,
such fees, disbursements and expenses incurred and charged on a solicitor and
his own client basis.
ARTICLE II
Domestic Advances and Letters of Credit
Section 2.1 Domestic Revolving Credit Commitments. Subject to the terms
and conditions of this Agreement, each Domestic Bank severally agrees to make
one or more Domestic Advances to the Domestic Borrower from time to time from
the date hereof to and including the Revolving Credit Termination Date in an
aggregate principal amount at any time outstanding up to but not exceeding the
amount of such Bank's Domestic Revolving Credit Commitment, provided that the
aggregate amount of all Domestic Advances at any time outstanding shall not
exceed the aggregate of the Domestic Revolving Credit Commitments minus the
outstanding Domestic Letter of Credit Liabilities. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the Domestic
Borrower may borrow, repay, and reborrow hereunder the aggregate amount of the
Domestic Revolving Credit Commitments by means of Domestic Advances. Each
Domestic Advance made by each Domestic Bank shall be made and maintained at such
Bank's Principal Office.
Section 2.2 The Domestic Revolving Credit Notes. The obligation of the
Domestic Borrower to repay the Domestic Advances and interest thereon shall be
evidenced by a Domestic Revolving Credit Note executed by the Domestic Borrower,
payable to the order of each Domestic Bank, in the principal amount of such
Bank's Domestic Revolving Credit
27
Commitment as originally in effect and dated the date hereof or such later date
as may be required with respect to transactions contemplated by Section 14.7.
Section 2.3 Repayment of Domestic Advances. The Domestic Borrower shall
repay the unpaid principal amount of all Domestic Advances on the Revolving
Credit Termination Date.
Section 2.4 Interest. The unpaid principal amount of the Domestic
Advances shall bear interest prior to maturity at a varying rate per annum equal
from day to day to the lesser of (a) the Maximum Rate, and (b) the Applicable
Rate. If at any time the Applicable Rate for any Domestic Advance shall exceed
the Maximum Rate, thereby causing the interest accruing on such Domestic Advance
to be limited to the Maximum Rate, then any subsequent reduction in the
Applicable Rate for such Domestic Advance shall not reduce the rate of interest
on such Advance below the Maximum Rate until the aggregate amount of interest
accrued on such Domestic Advance equals the aggregate amount of interest which
would have accrued on such Domestic Advance if the Applicable Rate had at all
times been in effect. Accrued and unpaid interest on the Domestic Advances shall
be due and payable as follows:
(a) on each Payment Date; and
(b) on the Revolving Credit Termination Date.
Notwithstanding the foregoing, any outstanding principal of any Domestic Advance
and (to the fullest extent permitted by law) any other amount payable by the
Domestic Borrower under this Agreement or any other Loan Document that is not
paid in full when due (whether at stated maturity, by acceleration, or
otherwise) shall bear interest at the Default Rate for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Interest payable at the Default Rate shall be payable from time to time on
demand.
Section 2.5 Use of Proceeds. The proceeds of Domestic Advances shall be
used by the Domestic Borrower (a) to refinance existing debt, (b) for general
corporate purposes (including the purchase of fixed assets) in the ordinary
course of business, and (c) in conjunction with using existing cash reserves or
proceeds from any new debt or equity offering, to effect a partial or full
pay-out of the Senior Notes so long as the pro-forma availability under the
aggregate Revolving Credit Commitments is greater than $35,000,000 after giving
effect to the pay-out.
Section 2.6 Revolving Credit Commitment Fee. The Domestic Borrower
agrees to pay to the Domestic Agent for the account of each Domestic Bank a
commitment fee on the daily average unused amount of such Domestic Bank's
Domestic Revolving Credit Commitment for the period from and including the date
of this Agreement to and including the Revolving Credit Termination Date at the
rate per annum equal to the Applicable Margin in effect on the date such payment
is due, based on a 360 day year and the actual number of days elapsed. The
accrued commitment fee shall be payable in arrears on each Quarterly Fee Payment
Date and on the Revolving Credit Termination Date.
28
Section 2.7 Reduction or Termination of Domestic Revolving Credit
Commitment.
(a) The Domestic Borrower shall have the right to terminate in
whole or reduce in part the unused portion of the Domestic Revolving
Credit Commitment upon at least three Business Days prior notice (which
notice shall be irrevocable) to the Domestic Agent specifying the
effective date thereof, whether a termination or reduction is being
made, and the amount of any partial reduction, provided, however, that
the Domestic Revolving Credit Commitment shall never be reduced below
an amount equal to the aggregate outstanding Domestic Letter of Credit
Liabilities. Each partial reduction shall be in the amount of
$1,000,000 or a greater integral multiple of $500,000, and the Domestic
Borrower shall simultaneously prepay the Domestic Advances by the
amount by which the unpaid principal amount of the Domestic Advances
plus the Domestic Letter of Credit Liabilities exceeds the Domestic
Revolving Credit Commitment (after giving effect to such notice) plus
accrued and unpaid interest on the principal amount so prepaid. The
Domestic Revolving Credit Commitment may not be reinstated after they
have been terminated or reduced.
(b) If the Foreign Borrowers shall terminate the Foreign
Revolving Credit Commitment in accordance with Section 3.7(a) hereof,
the Domestic Borrower shall, concurrent with such termination,
terminate the Domestic Revolving Credit Commitment in accordance with
Section 2.7(a) hereof. If the Foreign Borrowers shall permanently
reduce the Foreign Revolving Credit Commitment in accordance with
Section 3.7(a) hereof, the Domestic Borrower shall, concurrent with
such reduction, permanently reduce the Domestic Revolving Credit
Commitment in accordance with Section 2.7(a) hereof by an amount equal
to a percentage of the then effective Domestic Revolving Credit
Commitment, which percentage shall be equal to the percentage that (i)
the amount of the reduction to the Foreign Revolving Credit Commitment
bears to (ii) the Foreign Revolving Credit Commitment in effect
immediately prior to giving effect to such reduction.
Section 2.8 Letters of Credit.
(a) Subject to, and upon the terms, conditions, covenants and
agreements contained herein and in the Letter of
Credit Agreements,
prior to the Revolving Credit Termination Date, the Domestic Issuing
Banks agree to issue irrevocable standby or documentary letters of
credit, for the account of the Domestic Borrower or any Domestic
Guarantor; provided, however, that (i) the outstanding Domestic Letter
of Credit Liabilities pursuant to Domestic Letters of Credit issued by
▇▇▇▇▇ Fargo Bank Texas, N.A. shall not at any time exceed the
Equivalent Amount of $15,000,000, (ii) the outstanding Domestic Letter
of Credit Liabilities pursuant to Domestic Letters of Credit issued by
Bank One, NA shall not at any time exceed the Equivalent Amount of
$15,000,000, and (iii) the aggregate outstanding Domestic Letter of
Credit Liabilities shall not at any time exceed the lesser of (A) the
Equivalent Amount of $30,000,000, and (B) an amount equal to the
Equivalent Amount of the aggregate amount of the Domestic Revolving
Credit Commitment minus the outstanding Domestic Advances. The Existing
29
Domestic Letter of Credit Liabilities are renewed under this Agreement
and shall be included in any calculation of Domestic Letter of Credit
Liabilities. In the event of an actual conflict between the terms and
conditions of this Agreement and the terms and conditions of any Letter
of
Credit Agreement, then the terms and conditions of this Agreement
shall prevail. Domestic Letters of Credit shall expire no later than
the earlier of (y) 26 months after the date of issuance, or (z) one
year after the Revolving Credit Termination Date, must be satisfactory
in form to the Issuing Bank, and must be issued pursuant to a Letter of
Credit Agreement.
(b) If the Revolving Credit Termination Date occurs prior to
the expiration of any Domestic Letter of Credit, (i) each such Domestic
Letter of Credit shall be replaced and returned to the Domestic Agent
undrawn and marked "canceled" on or prior to the Revolving Credit
Termination Date, (ii) the Domestic Borrower shall, on or before the
Revolving Credit Termination Date, secure its obligations under such
Domestic Letter of Credit with a back-to-back letter of credit that is
in an amount equal to the face amount of such Domestic Letter of
Credit, in form and substance, and issued by a financial institution,
reasonably satisfactory to the Domestic Agent, or (iii) the Domestic
Borrower shall, on or before the Revolving Credit Termination Date,
deposit with and pledge to the Domestic Agent cash or Cash Equivalent
Investments in an amount equal to the face amount of such Domestic
Letter of Credit.
Section 2.9 Swing Line Advances. For the convenience of the parties,
the Domestic Agent, solely for its own account, may make any requested Domestic
Advance under the Domestic Revolving Credit Commitment (which request must be
made before 2:00 p.m. (Houston time) on the Business Day the Domestic Advance is
to be made and may be telephonic if confirmed in writing within two Business
Days) in the minimum amount of $500,000 (or a greater integral multiple of
$100,000) directly to the Domestic Borrower as a Swing Line Advance without
requiring each other Domestic Bank to fund its Percentage thereof on such
Business Day. Swing Line Advances are subject to the following conditions:
(a) Each Swing Line Advance must occur on a Business Day
before the Revolving Credit Termination Date;
(b) The aggregate principal outstanding of all Swing Line
Advances may not exceed $5,000,000; the aggregate principal outstanding
of all Swing Line Advances, all other Domestic Advances under the
Domestic Revolving Credit Commitment, and all Domestic Letter of Credit
Liabilities may not exceed the aggregate Domestic Revolving Credit
Commitments; and no Swing Line Advance shall be made which would cause
the aggregate principal outstanding of all Domestic Advances (including
Swing Line Advances) made by the Domestic Agent under the Domestic
Revolving Credit Commitment to exceed the Domestic Agent's Domestic
Revolving Credit Commitment;
(c) Each Swing Line Advance shall be paid in full by the
Domestic Borrower no later than 10 days after such Swing Line
30
Advance is made, and if such Swing Line Advance is not paid within such
time, then such Swing Line Advance shall be paid by the funding of a
Domestic Advance in accordance with Section 2.10; and
(d) Each Swing Line Advance is a Base Rate Advance.
Section 2.10 Domestic Banks' Funding of Swing Line Advances as Domestic
Advances. If the Borrower fails to repay any Swing Line Advance within 10 days
after the making thereof, the Domestic Agent shall promptly notify the Domestic
Banks of such failure and the unpaid amount, which notice shall, on behalf of
the Domestic Borrower (and for such purpose the Domestic Borrower hereby
irrevocably directs the Domestic Agent to act on its behalf), request each
Domestic Bank to make, and each Domestic Bank hereby agrees to make, a Domestic
Advance in an amount equal to such Bank's Percentage of the aggregate amount of
such unpaid Swing Line Advance (each a "Refunded Swing Line Advance"), to repay
the Domestic Agent. Each Domestic Bank shall make the amount of such Domestic
Advance available to the Domestic Agent in immediately available funds, not
later than 10:00 a.m. Houston time one Business Day after the date of such
notice. The proceeds of such Domestic Advance shall be immediately made
available to the Domestic Agent for application by the Domestic Agent to the
repayment of the Refunded Swing Line Advance. The Domestic Borrower irrevocably
authorizes the Domestic Agent to charge the Domestic Borrower's accounts with
the Domestic Agent in order to immediately pay the amount of such Refunded Swing
Line Advance to the extent amounts received from the Domestic Banks are not
sufficient to repay in full such Refunded Swing Line Advance (with notice of
such charge being provided to the Domestic Borrower, provided that the failure
to give such notice shall not affect the validity of such charge). All such
Refunded Swing Line Advances shall be subject to all provisions of this
Agreement concerning Domestic Advances, except that such Domestic Advances shall
be made without regard to satisfaction of the conditions precedent to Domestic
Advances (including the existence of a Default or Event of Default). If prior to
the time a Domestic Advance would otherwise have been made pursuant to this
paragraph, Domestic Advances may not be made as contemplated by this paragraph,
each Domestic Bank shall irrevocably and unconditionally purchase and receive
from Domestic Agent a ratable participation in such Swing Line Advance and shall
make available to Domestic Agent in immediately available funds its Percentage
of such unpaid amount, together with interest from the date when its payment was
due to, but not including, the date of payment. If a Domestic Bank does not
promptly pay its amount upon Domestic Agent's demand, and until such Domestic
Bank makes the required payment, Domestic Agent is deemed to continue to have
outstanding a Swing Line Advance in the amount of such Domestic Bank's unpaid
obligation. The Domestic Borrower shall make each payment of all or any part of
any Swing Line Advance to Domestic Agent for the ratable benefit of Domestic
Agent and those Domestic Banks who have funded their participations in Swing
Line Advances under this section (but all interest accruing on Swing Line
Advances before the funding date of any Domestic Advance to repay such Swing
Line Advance or any participation is payable solely to Domestic Agent for its
own account).
31
Section 2.11 The Swing Line Note. The obligation of the Domestic
Borrower to repay the Swing Line Advances and interest thereon shall be
evidenced by the Swing Line Note in the principal amount of $5,000,000.
ARTICLE III
Foreign Advances; Foreign Letters of Credit and Bank Guaranties
Section 3.1 Foreign Revolving Credit Commitments.
(a) Subject to the terms and conditions of this Agreement,
each Foreign Bank severally agrees to make one or more Foreign Advances
to the Foreign Borrowers from time to time from the date hereof to and
including the Revolving Credit Termination Date in an aggregate
principal amount at any time outstanding up to but not exceeding the
Equivalent Amount of such Bank's Foreign Revolving Credit Commitment,
provided that the aggregate amount of all Foreign Advances at any time
outstanding shall not exceed the Equivalent Amount of the Adjusted
Foreign Revolving Credit Commitments minus the outstanding Foreign
Letter of Credit Liabilities, notwithstanding the Foreign Revolving
Credit Commitment of each Foreign Bank. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the
Foreign Borrowers may borrow, repay, and reborrow hereunder the
Equivalent Amount of the Adjusted Foreign Revolving Credit Commitments
by means of Foreign Advances. Each Foreign Advance made by each Foreign
Bank shall be made and maintained at such Bank's Principal Office.
(b) The obligations of the Foreign Banks to the Foreign
Borrowers shall be limited as follows:
(i) the Canadian Banks shall have no obligation to
make Advances to the U.K. Borrower; and
(ii) the U.K. Bank shall have no obligation to make
Advances to any Canadian Borrower.
Section 3.2 The Foreign Revolving Credit Notes. The joint and several
obligation of the Canadian Borrowers to repay their Foreign Advances and
interest thereon shall be evidenced by a Foreign Revolving Credit Note executed
by the Canadian Borrowers, payable to the order of each Canadian Bank, in the
principal amount of such Bank's Foreign Revolving Credit Commitment as
originally in effect and dated the date hereof or such later date as may be
required with respect to transactions contemplated by Section 14.7. The
obligation of the U.K. Borrower to repay its Foreign Advances and interest
thereon shall be evidenced by a Foreign Revolving Credit Note executed by the
U.K. Borrower, payable to the order of U.K. Bank, in the principal amount of
U.K. Bank's Foreign Revolving Credit Commitment as originally in effect and
dated the date hereof or such later date as may be required with respect to
transactions contemplated by Section 14.7.
32
Section 3.3 Repayment of Foreign Advances. The Foreign Borrowers shall
repay the unpaid principal amount of all Foreign Advances on the Revolving
Credit Termination Date.
Section 3.4 Interest. The unpaid principal amount of the Foreign
Advances shall bear interest prior to maturity at a varying rate per annum equal
from day to day to the lesser of (a) the Maximum Rate, and (b) the Applicable
Rate. If at any time the Applicable Rate for any Foreign Advance shall exceed
the Maximum Rate, thereby causing the interest accruing on such Foreign Advance
to be limited to the Maximum Rate, then any subsequent reduction in the
Applicable Rate for such Foreign Advance shall not reduce the rate of interest
on such Advance below the Maximum Rate until the aggregate amount of interest
accrued on such Foreign Advance equals the aggregate amount of interest which
would have accrued on such Foreign Advance if the Applicable Rate had at all
times been in effect. Accrued and unpaid interest on the Foreign Advances shall
be due and payable as follows:
(a) on each Payment Date; and
(b) on the Revolving Credit Termination Date.
Notwithstanding the foregoing, any outstanding principal of any Foreign Advance
and (to the fullest extent permitted by law) any other amount payable by the
Foreign Borrowers under this Agreement or any other Loan Document that is not
paid in full when due (whether at stated maturity, by acceleration, or
otherwise) shall bear interest at the Default Rate for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Interest payable at the Default Rate shall be payable from time to time on
demand.
Section 3.5 Use of Proceeds. The proceeds of Foreign Advances shall be
used by the Foreign Borrowers (a) to refinance existing debt, and (b) for
general corporate purposes (including the purchase of fixed assets) in the
ordinary course of business.
Section 3.6 Revolving Credit Commitment Fees.
(a) The Foreign Borrowers jointly and severally agree to pay
to the Foreign Agent or U.K. Bank, as the case may be, for the account
of each applicable Foreign Bank in accordance with clauses (b) and (c)
of this Section 3.6, a commitment fee on the daily average unused
amount of the Adjusted Foreign Revolving Credit Commitment for the
period from and including the date of this Agreement to and including
the Revolving Credit Termination Date at the rate per annum equal to
the Applicable Margin in effect on the date such payment is due, based
on a 360 day year and the actual number of days elapsed. The accrued
commitment fee shall be payable in arrears on each Quarterly Fee
Payment Date and on the Revolving Credit Termination Date.
(b) (i) If the daily average of the U.K. Obligations for the
applicable period is greater than or equal to 50% of the Adjusted
Foreign Revolving Credit Commitment as of the date of such payment,
then the entire fee described in clause (a) of this Section 3.6 shall
be paid for the account of the Canadian Banks; and
33
(ii) if the daily average of the U.K. Obligations for
the applicable period is less than 50% of the Adjusted Foreign
Revolving Credit Commitment as of the date of such payment, then the
portion, if any, of the fee described in clause (a) of this Section 3.6
to be paid for the account of the Canadian Banks shall be based on the
amount by which (A) 50% of the Adjusted Foreign Revolving Credit
Commitment as of the date of such payment exceeds (B) the daily average
of the Canadian Obligations for the applicable period.
(c) (i) If the daily average of the Canadian Obligations for
the applicable period is greater than or equal to 50% of the Adjusted
Foreign Revolving Credit Commitment as of the date of such payment,
then the entire fee described in clause (a) of this Section 3.6 shall
be paid for the account of the U.K. Bank; and
(ii) if the daily average of the Canadian Obligations
for the applicable period is less than 50% of the Adjusted Foreign
Revolving Credit Commitment as of the date of such payment, then the
portion, if any, of the fee described in clause (a) of this Section 3.6
to be paid for the account of the U.K. Bank shall be based on the
amount by which (i) 50% of the Adjusted Foreign Revolving Credit
Commitment as of the date of such payment exceeds (ii) the daily
average of the U.K. Obligations for the applicable period.
(d) The parties hereto acknowledge and agree that if the daily
average of the U.K. Obligations for the applicable period is less than
or equal to 50% of the Adjusted Foreign Revolving Credit Commitment as
of the date of such payment, and the daily average of the Canadian
Obligations for the applicable period is less than or equal to 50% of
the Adjusted Foreign Revolving Credit Commitment as of the date of such
payment, then the fee described in clause (a) of this Section 3.6 shall
be paid for the account of each of the Canadian Banks and the U.K. Bank
in accordance with clauses (b)(ii) and (c)(ii) of this Section 3.6.
Section 3.7 Reduction or Termination of Foreign Revolving Credit
Commitment.
(a) The Foreign Borrowers shall have the right to terminate in
whole or reduce in part the unused portion of the Foreign Revolving
Credit Commitment upon at least three Business Days prior notice (which
notice shall be irrevocable) to the Foreign Agent specifying the
effective date thereof, whether a termination or reduction is being
made, and the amount of any partial reduction, provided, however, that
the Foreign Revolving Credit Commitment shall never be reduced below an
amount equal to the aggregate outstanding Foreign Letter of Credit
Liabilities. Each partial reduction shall be in the Equivalent Amount
of $1,000,000 or a greater integral multiple of the Equivalent Amount
of $500,000, and the Borrower shall simultaneously prepay the Foreign
Advances by the amount by which the unpaid principal amount of the
Foreign Advances plus the Foreign Letter of Credit Liabilities exceeds
the Foreign Revolving Credit Commitment (after giving effect to such
notice) plus accrued and unpaid interest on the
34
principal amount so prepaid. The Foreign Revolving Credit Commitment
may not be reinstated after they have been terminated or reduced.
(b) If the Domestic Borrower shall terminate the Domestic
Revolving Credit Commitment in accordance with Section 2.7(a) hereof,
the Foreign Borrowers shall, concurrent with such termination,
terminate the Foreign Revolving Credit Commitment in accordance with
Section 3.7(a) hereof. If the Domestic Borrower shall permanently
reduce the Domestic Revolving Credit Commitment in accordance with
Section 2.7(a) hereof, the Foreign Borrowers shall, concurrent with
such reduction, permanently reduce the Foreign Revolving Credit
Commitment in accordance with Section 3.7(a) hereof by an amount equal
to a percentage of the then effective Foreign Revolving Credit
Commitment, which percentage shall be equal to the percentage that (i)
the amount of the reduction to the Domestic Revolving Credit Commitment
bears to (ii) the Domestic Revolving Credit Commitment in effect
immediately prior to giving effect to such reduction.
Section 3.8 Foreign Letters of Credit; Bank Guaranties.
(a) Subject to, and upon the terms, conditions, covenants and
agreements contained herein and in the Letter of
Credit Agreements,
prior to the Revolving Credit Termination Date, the Foreign Issuing
Bank agrees to issue irrevocable standby or documentary letters of
credit, for the account of any Foreign Borrower; provided, however,
that the outstanding Foreign Letter of Credit Liabilities shall not at
any time exceed the lesser of (i) the Equivalent Amount of $10,000,000,
and (ii) an amount equal to the Equivalent Amount of the Adjusted
Foreign Revolving Credit Commitment minus the outstanding Foreign
Advances. In the event of an actual conflict between the terms and
conditions of this Agreement and the terms and conditions of any Letter
of Credit Agreement, then the terms and conditions of this Agreement
shall prevail. Foreign Letters of Credit shall expire no later than the
earlier of (y) 26 months after the date of issuance, or (z) one year
after the Revolving Credit Termination Date, must be satisfactory in
form to the Issuing Bank, and must be issued pursuant to a Letter of
Credit Agreement.
(b) At the sole discretion of Bank Guarantor, and subject to,
and upon the terms, conditions, covenants and agreements contained
herein, prior to the Revolving Credit Termination Date, each Bank
Guarantor that is a Foreign Bank may issue Bank Guaranties for the
account of any Foreign Borrower in form acceptable to such Bank
Guarantor in its sole discretion; provided, however, that such Bank
Guarantor shall have no obligation to issue any Bank Guaranty; and
provided, further, that the outstanding Foreign Letter of Credit
Liabilities shall not at any time exceed the lesser of (i) the
Equivalent Amount of $10,000,000, and (ii) an amount equal to the
Equivalent Amount of the Adjusted Foreign Revolving Credit Commitment
minus the outstanding Foreign Advances.
35
(c) Each payment by the Bank Guarantor under a Bank Guaranty
shall constitute and be deemed a Foreign Advance by (i) each Canadian
Bank in its Percentage of the Adjusted Foreign Revolving Credit
Commitment to the Canadian Borrowers, or (ii) the U.K. Bank to the U.K.
Borrower, as the case may be, under such Bank's Foreign Revolving
Credit Note and this Agreement as of the day and time such payment is
made by the Bank Guarantor and in the Equivalent Amount of the
aggregate amount of such payment in Dollars.
(d) If the Revolving Credit Termination Date occurs prior to
the expiration of any Foreign Letter of Credit, (i) each such Foreign
Letter of Credit shall be replaced and returned to the Foreign Agent
undrawn and marked "canceled" on or prior to the Revolving Credit
Termination Date, (ii) the applicable Foreign Borrower or Foreign
Guarantor shall, on or before the Revolving Credit Termination Date,
secure its obligations under such Foreign Letter of Credit with a
back-to-back letter of credit that is in an amount equal to the face
amount of such Foreign Letter of Credit, in form and substance, and
issued by a financial institution, reasonably satisfactory to the
Foreign Agent, or (iii) the applicable Foreign Borrower or Foreign
Guarantor shall, on or before the Revolving Credit Termination Date,
deposit with and pledge to the Foreign Agent cash or cash equivalent
investments in an amount equal to the face amount of such Foreign
Letter of Credit.
Section 3.9 Nature of Canadian Obligations. The Canadian Borrowers are
jointly and severally liable for the Canadian Obligations. The failure of either
Canadian Borrower to perform its obligations under any of the Loan Documents
shall not affect the obligations of the other Canadian Borrower, and the
effectiveness of the Loan Documents shall not be revoked or impaired as to
either Canadian Borrower by any contingency affecting the other Canadian
Borrower, by the revocation or release of any obligation thereunder of either
Canadian Borrower, by any time or any indulgence granted to either Canadian
Borrower, or by any variation or amendment to the terms of any of the Loan
Documents.
ARTICLE IV
Borrowing Procedure: Payments; Facilities Fees;
Matters Related to Letters of Credit; Matters Related to Advances;
Designation of Additional Guarantors, Etc.
Section 4.1 Borrowing Procedure. The Domestic Borrower shall give the
Domestic Agent notice by means of a Domestic Advance Request Form of each
requested Domestic Advance (other than Swing Line Advances), the Canadian
Borrowers shall give the Foreign Agent notice, and the U.K. Borrower shall give
the U.K. Bank notice (with a copy to the Foreign Agent), by means of a Foreign
Advance Request Form of each requested Foreign Advance, at least one Business
Day before the requested date of a Base Rate Advance, and at least three (3)
Business Days before the requested date of a LIBOR Advance or an Alternate
Currency Advance, specifying: (a) the requested date of such Advance (which
shall be a Business Day),
36
(b) the amount of such Advance, (c) the Type of the Advance, (d) in the case of
a LIBOR Advance or an Alternate Currency Advance, the duration of the Interest
Period for such Advance, and (e) in the case of an Alternate Currency Advance,
the requested Alternate Currency, it being agreed that (i) all such Advances
being made on any one day shall be made in the same currency, (ii) the U.K.
Borrower shall not request Alternate Currency Advances denominated in Canadian
dollars, and (iii) the Canadian Borrowers shall not request Alternate Currency
Advances denominated in British pound sterling. The Agents and the U.K. Bank at
their option may accept telephonic requests for Advances, provided that such
acceptance shall not constitute a waiver of the Agents' or U.K. Bank's right to
delivery of the appropriate Advance Request Form in connection with subsequent
advances. Any telephonic request for an Advance by any Borrower shall be
promptly followed by submission of a properly completed Advance Request Form to
the applicable Agent or U.K. Bank (with a copy to the Foreign Agent). Each
Advance shall be in a minimum principal amount of $500,000 (or the Equivalent
Amount thereof) or a greater integral multiple of $100,000. The applicable Agent
or U.K. Bank, as the case may be, shall promptly notify each applicable Bank of
the contents of each such notice. Not later than 11:00 a.m. Houston, Texas time
on the date specified for each Domestic Advance hereunder, and not later than
10:00 a.m., Calgary, Alberta time on the date specified for each Foreign Advance
to a Canadian Borrower, each applicable Bank will make available to the
applicable Agent at its Principal Office in immediately available funds, for the
account of the applicable Borrower, its Percentage of each Advance. After the
applicable Agent's receipt of such funds and subject to the other terms and
conditions of this Agreement, such Agent will make each such Advance available
to the applicable Borrower by depositing the same, in immediately available
funds, in an account of such Borrower (designated by such Borrower) maintained
with the applicable Agent at its Principal Office. All notices under this
Section shall be irrevocable and shall be given not later than 11:00 a.m.
Houston, Texas, time for each Domestic Advance, not later than 10:00 a.m.,
Calgary, Alberta time for each Foreign Advance to a Canadian Borrower, and not
later than 11:00 a.m., London time for each Foreign Advance to the U.K.
Borrower, on the day which is not less than the number of Business Days
specified above for such notice. Solely with respect to Advances requested by
U.K. Borrower, U.K. Bank will, after receipt of the applicable notice from U.K.
Borrower, make each such Advance available to U.K. Borrower by depositing the
same, in immediately available funds, in an account of U.K. Borrower (designated
by U.K. Borrower) maintained with U.K. Bank at its Principal Office.
Section 4.2 Method of Payment.
(a) All payments of principal, interest, and other amounts to
be made by the Borrowers (other than U.K. Borrower) under this
Agreement and the other Loan Documents shall be made to the applicable
Agent at its Principal Office for the account of each applicable Bank's
Principal Office with respect to amounts to be paid in respect of
Advances, in the currency in which the applicable Advance was
originally made, and in immediately available funds, without setoff,
deduction, or counterclaim, not later than 11:00 a.m., Houston, Texas
time on the date on which such payment of Domestic Obligations shall
become due, and not later than 10:00 a.m., Calgary, Alberta time on the
date on which such payment of Foreign Obligations owed directly by a
Canadian
37
Borrower shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding
Business Day). The applicable Borrower shall, at the time of making
each such payment, specify to the applicable Agent the sums payable by
such Borrower under this Agreement and the other Loan Documents to
which such payment is to be applied (and in the event that such
Borrower fails to so specify, or if an Event of Default has occurred
and is continuing, the applicable Agent may apply such payment to the
applicable Obligations in such order and manner as it may elect in its
sole discretion, subject to Section 4.5 hereof and the Collateral
Agency Agreement). Each payment received by Agents under this Agreement
or any other Loan Document for the account of a Bank shall be paid
promptly to such Bank, in immediately available funds, for the account
of such Bank's Principal Office. Whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day
that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case
be included in the computation of the payment of interest and
commitment fee, as the case may be.
(b) All payments of principal, interest, and other amounts to
be made by U.K. Borrower under this Agreement and the other Loan
Documents shall be made to the U.K. Bank at its Principal Office for
the account of U.K. Bank's Principal Office with respect to amounts to
be paid in respect of Advances, in the currency in which the applicable
Advance was originally made, and in immediately available funds,
without setoff, deduction, or counterclaim, and not later than 11:00
a.m., London time on the date on which such payment of U.K. Obligations
shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business
Day). U.K. Borrower shall, at the time of making each such payment,
specify to U.K. Bank the sums payable by U.K. Borrower under this
Agreement and the other Loan Documents to which such payment is to be
applied (and in the event that U.K. Borrower fails to so specify, or if
an Event of Default has occurred and is continuing, U.K. Bank may apply
such payment to the U.K. Obligations in such order and manner as it may
elect in its sole discretion, subject to Section 4.5 hereof and the
Collateral Agency Agreement). Whenever any payment under this Agreement
or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included
in the computation of the payment of interest and commitment fee, as
the case may be.
Section 4.3 Voluntary Prepayment. The Borrowers may prepay the Advances
in whole at any time or from time to time in part without premium or penalty;
provided that each partial prepayment shall be in the principal amount of
$500,000.00 (or the Equivalent Amount thereof) or an integral multiple thereof
and provided further that no such prepayment shall relieve the Borrowers of
their respective obligations under Section 5.2 or 5.6 hereof.
Section 4.4 Mandatory Prepayment. If Foreign Agent ever determines in
its reasonable discretion that, as a result of fluctuations in exchange rates,
the Equivalent Amount of the aggregate amount of outstanding Foreign Advances
and Foreign Letter of Credit Liabilities
38
ever exceeds the Foreign Revolving Credit Commitment, then, upon demand, Foreign
Borrowers shall jointly and severally (a) make a mandatory prepayment of the
Foreign Advances or (b) provide cash collateral with respect to Foreign Letters
of Credit, or both, in an amount equal to such excess. Any Foreign Bank may
request that Foreign Agent determine, in which event Foreign Agent shall
promptly determine, the Equivalent Amount of the aggregate amount of outstanding
Foreign Advances and Foreign Letter of Credit Liabilities for purposes of this
Section 4.4.
Section 4.5 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each Advance shall be made by the applicable Banks pro rata in
accordance with their respective Percentages, (b) each payment of fees under
Section 2.6, Section 3.6 and letter of credit fees under Section 4.14(a) shall
be made for the account of the applicable Banks pro rata in accordance with
their respective Percentages, (c) each termination or reduction of the Revolving
Credit Commitments under Section 2.7 or 3.7 shall be applied to the Domestic
Revolving Credit Commitments or the Foreign Revolving Credit Commitments, as
applicable, pro rata according to the respective unused Domestic Revolving
Credit Commitments or Foreign Revolving Credit Commitments, (d) each Letter of
Credit and Bank Guaranty shall be deemed participated in by the applicable
Banks, pro rata in accordance with their respective Percentages; and (e) each
payment and prepayment of principal of or interest on the Domestic Advances or
the Foreign Advances by the Borrowers shall be made to the applicable Agent for
the account of the applicable Banks pro rata in accordance with the respective
unpaid principal amounts of the Domestic Advances or the Foreign Advances, as
the case may be, held by such Banks.
Section 4.6 Non-Receipt of Funds by the Agents. Unless the applicable
Agent shall have been notified by a Bank or the applicable Borrower (the
"Payor") prior to the date on which such Bank is to make payment to such Agent
of the proceeds of an Advance to be made or participated in as applicable, by it
hereunder or such Borrower is to make a payment to such Agent for the account of
one or more of the Banks, as the case may be (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to such Agent, such Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to such Agent, the recipient of such payment shall, on demand,
pay to such Agent the amount made available to it together with interest thereon
in respect of the period commencing on the date such amount was so made
available by such Agent until the date such Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such period.
Section 4.7 Taxes.
(a) Each Domestic Bank that is not incorporated under the laws
of the United States of America or a state thereof (a "Non-U.S.
Domestic Bank") agrees that it will deliver to the Domestic Borrower
and the Domestic Agent, at the time or times prescribed by applicable
law, two duly completed copies of Form W-8BEN or W-8ECI, certifying in
either case that such Bank is entitled to receive payments from the
Domestic
39
Borrower under any Loan Document without deduction or withholding of
any United States federal income or backup withholding taxes. Each Bank
which so delivers a Form W-8BEN or W-8ECI further undertakes to deliver
to the Domestic Borrower and the Domestic Agent two additional copies
of such form (or a successor form) on or before the date such form
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Domestic Borrower or the Domestic Agent, in
each case certifying that such Bank is entitled to receive payments
from the Domestic Borrower under any Loan Document without deduction or
withholding of any United States federal income or backup withholding
taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank advises the
Domestic Borrower and the Domestic Agent that it is not capable of
receiving such payments without any deduction or withholding of United
States federal income tax.
(b) Each Foreign Bank (other than Canadian Banks) agrees that
it will deliver to the applicable Foreign Borrower and the Foreign
Agent, at the time or times prescribed by applicable law, two duly
completed copies of such documentation prescribed by applicable law as
will entitle such Bank to receive payments from such Foreign Borrower
under any Loan Document without deduction or withholding of any Taxes
imposed by the jurisdiction where such Foreign Borrower is located.
Each Bank which so delivers such documentation further undertakes to
deliver to such Foreign Borrower and the Foreign Agent two additional
copies of such documentation on or before the date such documentation
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent documentation so delivered by it,
and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by such Foreign Borrower or the Foreign Agent, in
each case certifying that such Bank is entitled to receive payments
from such Foreign Borrower under any Loan Document without deduction or
withholding of any Taxes imposed by the jurisdiction where such Foreign
Borrower is located, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all
such documentation inapplicable or which would prevent such Bank from
duly completing and delivering any such documentation with respect to
it and such Bank advises such Foreign Borrower and the Foreign Agent
that it is not capable of receiving such payments without any deduction
or withholding of any Taxes imposed by the jurisdiction where such
Foreign Borrower is located.
(c) All payments by the Borrowers to or for the account of any
Bank or any Agent under any Loan Document shall be made free and clear
of and without deduction for any and all Taxes. If any Borrower shall
be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Bank or any Agent, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 4.7) such Bank or
40
Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the applicable
Borrower shall make such deductions, (iii) the applicable Borrower
shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (iv) the applicable Borrower shall
furnish to the applicable Agent the original copy of a receipt or other
documentation reasonably acceptable to the applicable Agent evidencing
payment thereof within 30 days after such payment is made.
(d) In addition, the Borrowers hereby agree to pay any present
or future stamp or documentary taxes and any other excise taxes,
charges or similar levies imposed by any Governmental Authority which
directly arise from any payment under any Loan Document or from the
execution or delivery of any Loan Document ("Other Taxes").
(e) The Borrowers hereby agree to indemnify the Agents and
each Bank for the full amount of Taxes (including, without limitation,
any such Taxes or Other Taxes imposed on amounts payable under this
Section 4.7) paid by the Agents or such Bank and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto in connection with the Loan Documents. Payments due
under this indemnification shall be made within 30 days of the date the
applicable Agent or such Bank makes demand therefor. In connection
therewith, each Bank shall deliver a written statement of such Bank to
the applicable Borrower (with a copy to the applicable Agent) as to the
amount due, if any, under this Section 4.7. Such written statement
shall set forth in reasonable detail the calculations upon which such
Bank determined such amount and shall be final, conclusive and binding
on the applicable Borrower in the absence of manifest error
(f) For any period during which a Non-U.S. Domestic Bank or a
Foreign Bank (other than Canadian Banks) has failed to provide the
Domestic Borrower or the appropriate Foreign Borrower, as the case may
be, with an appropriate form or documentation pursuant to clause (a) or
(b) of this Section 4.7 (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, occurring
subsequent to the date on which a form or renewal form was required to
be provided), such Non-U.S. Domestic Bank or applicable Foreign Bank,
as the case may be, shall not be entitled to indemnification under this
Section 4.7 with respect to taxes imposed by the applicable
jurisdiction; provided that, should a Non-U.S. Domestic Bank or a
Foreign Bank (other than Canadian Banks) which is otherwise exempt from
or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (a) or
(b) of this Section 4.7, the Domestic Borrower or the appropriate
Foreign Borrower, as the case may be, shall take (at the sole cost and
expense of such Non-U.S. Bank or Foreign Bank) such steps as such
Non-U.S. Domestic Bank or Foreign Bank shall reasonably request to
assist such Non-U.S. Domestic Bank or Foreign Bank to recover such
Taxes.
41
(g) Any Bank that is entitled to an exemption from or
reduction of withholding Tax with respect to payments under this
Agreement or any Revolving Credit Note pursuant to the law of any
relevant jurisdiction or any treaty shall deliver to the Borrowers
(with a copy to the Agents), at the time or times prescribed by
applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made
without withholding or at a reduced rate.
(h) If the U.S. Internal Revenue Service or any other
Governmental Authority of the United States or any other country or any
political subdivision thereof asserts a claim that an Agent did not
properly withhold Tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or properly
completed, because such Bank failed to notify the such Agent of a
change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Bank shall indemnify such
Agent fully for all amounts paid, directly or indirectly, by Agent as
Tax, withholding therefor, or otherwise, including penalties and
interest, and including Taxes imposed by any jurisdiction on amounts
payable to such Agent under this subsection, together with all costs
and expenses related thereto (including attorneys fees and time charges
of attorneys for such Agent, which attorneys may be employees of such
Agent). The obligations of the Banks under this Section 4.7(h) shall
survive the payment of the Obligations and termination of this
Agreement.
(i) If any Borrower is required pursuant to this Section 4.7
to make any additional payment to any Bank, the Domestic Borrower may
elect, if such amounts continue to be charged, to replace such Bank as
a Bank party to this Agreement; provided that no Default or Event of
Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such
replacement, (i) an Eligible Assignee which is reasonably satisfactory
to the Domestic Borrower and the Agents shall agree, as of such date,
to purchase for cash the Revolving Credit Advances and other
Obligations due to such Bank pursuant to an Assignment and Acceptance
and to become a Bank for all purposes under this Agreement and to
assume all obligations of the replaced Bank as of such date and to
comply with the requirements of this Agreement applicable to
assignments, and (ii) the applicable Borrower shall pay to such
replaced Bank in same day funds on the day of such replacement (A) all
interest, fees and other amounts then accrued but unpaid to such Bank
by the applicable Borrower hereunder to and including the date of
termination, including without limitation payments due to such replaced
Bank under this Section 4.7, and (B) an amount, if any, equal to the
payment which would have been due to such Bank on the day of such
replacement under Section 5.6 had the Revolving Credit Advances of such
Bank been prepaid on such date rather than sold to the replacement
Bank.
Section 4.8 Computation of Interest. Interest on the Advances and all
other amounts payable by the Borrowers hereunder shall be computed on the basis
of a year of 360 days and the actual number of days elapsed (including the first
day but excluding the last day) unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be.
42
Section 4.9 Conversions and Continuation. The Borrowers shall have the
right from time to time to Convert all or part of an Advance of one Type into an
Advance of another Type or to Continue LIBOR Advances or Alternate Currency
Advances of one Type as Advances of the same Type by giving the applicable Agent
written notice at least one (l) Business Day before Conversion into a Base Rate
Advance, and at least three (3) Business Days before Conversion into or
Continuation of a LIBOR Advance or Alternative Currency Advances, specifying:
(a) the Conversion or Continuation date, (b) the amount of the Advance to be
Converted or Continued, (c) in the case of Conversions, the Type of Advance to
be Converted into, (d) in the case of Alternate Currency Advances, the requested
Alternate Currency, and (e) in the case of a Continuation of or Conversion into
a LIBOR Advance or Alternate Currency Advance, the duration of the Interest
Period applicable thereto; provided that (i) LIBOR Advances and Alternate
Currency Advances may only be Converted on the last day of the applicable
Interest Period, and (ii) except for Conversions into Base Rate Advances, no
Conversions shall be made while a Default or an Event of Default has occurred
and is continuing. All notices under this Section shall be irrevocable and shall
be given not later than 11:00 a.m. Houston, Texas time for Domestic Advances,
not later than 10:00 a.m., Calgary, Alberta time for Foreign Advances to a
Canadian Borrower, and not later than 11:00 a.m., London time for Foreign
Advances to the U.K. Borrower, on the day which is not less than the number of
Business Days specified above for such notice. If the applicable Borrower shall
fail to give the applicable Agent the notice as specified above for Continuation
or Conversion of a LIBOR Advance or Alternate Currency Advances prior to the end
of the Interest Period with respect thereto, such LIBOR Advance or Alternate
Currency Advance shall be Converted automatically into a Base Rate Advance on
the last day of the then current Interest Period for such LIBOR Advance or
Alternate Currency Advance.
Section 4.10 Limitation on Foreign Borrowers and Domestic Guarantors,
Liability for the Obligations. Notwithstanding any provision of this Agreement
or any other Loan Documents to the contrary, (a) no Foreign Borrower or any
Guarantor shall be liable for any Obligations in excess of the sum of (i) the
Secured Obligations plus (ii) Permitted Subsidiary Indebtedness, and (b) no
Foreign Borrower or Foreign Guarantor shall be liable for any of the Domestic
Obligations.
Section 4.11 Application of Payments. If an Event of Default has
occurred, all principal payments shall first be applied to that principal
portion of the Obligations that does not constitute Secured Obligations, but
neither the Agents nor any Bank shall be required to keep any separate records
in respect thereof, and this agreement regarding application shall apply
automatically.
Section 4.12 Letter of Credit Procedure.
(a) Issuance. Each Letter of Credit shall be issued upon
receipt by the Issuing Bank of a written request of the applicable
Borrower (a "Credit Request"), together with a duly executed Letter of
Credit Agreement, not later than 11:00 a.m. Houston, Texas time, for
Domestic Letters of Credit, not later than 10:00 a.m., Calgary, Alberta
time for Foreign Letters of Credit issued in respect of a Canadian
Borrower, and not later than
43
11:00 a.m., London time for Foreign Letters of Credit issued in respect
of the U.K. Borrower, three Business Days prior to the date set for the
issuance of such Letter of Credit. Each Credit Request shall contain or
specify, among other things:
(i) the proposed date of the issuance of the Letter
of Credit, which shall be a Business Day;
(ii) the stated amount and the requested currency of
the Letter of Credit;
(iii) the date of expiration of the Letter of Credit;
(iv) the name and address of the beneficiary of the
Letter of Credit;
(v) the documents to be presented by the beneficiary
of the Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be presented
by the beneficiary in case of any drawing thereunder; and
(vii) the purpose of the Letter of Credit.
Promptly upon receipt of a request for a Letter of Credit and prior to
issuance thereof, the applicable Issuing Bank shall give written notice
to the applicable Agent of the proposed terms and conditions of such
Letter of Credit and shall not issue such Letter of Credit until such
Agent confirms that the conditions precedent to such issuance have been
satisfied. Promptly upon issuance of any Letter of Credit, the
applicable Issuing Bank shall provide to the applicable Agent a copy of
the executed Letter of Credit if the applicable Agent so requests.
(b) Payments. Issuing Bank shall promptly notify the
applicable Agent and the applicable Borrower of the date and amount of
any draft presented for honor under any Letter of Credit (but failure
to give notice will not affect the applicable Borrower's obligations
under this Agreement). Issuing Bank shall pay the requested amount upon
presentment of a draft unless presentment on its face does not strictly
comply with the terms of the applicable Letter of Credit. When making
payment, Issuing Bank may disregard (i) any default or potential
default that exists under any other agreement and (ii) obligations
under any other agreement that have or have not been performed by the
beneficiary or any other Person (and Issuing Bank is not liable for any
of those obligations). The Obligated Parties' reimbursement obligations
to Issuing Bank and Banks, and each Bank's obligations to Issuing Bank,
under this section are absolute and unconditional irrespective of, and
Issuing Bank is not responsible for, (i) the validity, enforceability,
sufficiency, accuracy, or genuineness of documents or endorsements
(even if they are in any respect invalid, unenforceable, insufficient,
inaccurate, fraudulent, or forged), (ii) any dispute by any Obligated
Party with or any Obligated Party's claims, setoffs, defenses,
counterclaims, or other rights against Issuing Bank, any Bank, or any
44
other Person, or (iii) the occurrence of any Default or Event of
Default. However, nothing in this Agreement constitutes a waiver of the
applicable Borrower's rights to assert any claim or defense against the
Issuing Bank, and such Issuing Bank may be liable to the Borrowers to
the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrowers which
they prove were caused by (A) such Issuing Bank's gross negligence or
willful misconduct or (B) payment of the relevant Letter of Credit on a
presentation that does not appear on its face strictly to comply with
the terms and conditions of such Letter of Credit. Issuing Bank shall
promptly pay to the applicable Agent for the applicable Agent to
promptly distribute reimbursement payments received from the applicable
Borrower to all of the applicable Banks according to their Percentages.
(c) Reimbursement Obligation of the Borrower. To induce
Issuing Banks to issue and maintain Letters of Credit, and to induce
Banks to participate in issued Letters of Credit (other than those
issued in respect of the U.K. Borrower), the Borrowers agree that the
applicable Borrower shall pay or reimburse Issuing Bank (or cause
another Obligated Party to pay or reimburse Issuing Bank) (i) the
amount paid by Issuing Bank (A) prior to 4:00 p.m. Houston, Texas time,
for Domestic Letters of Credit, prior to 3:00 p.m., Calgary, Alberta
time for Foreign Letters of Credit issued in respect of a Canadian
Borrower, and not later than 3:00 p.m., London time for Foreign Letters
of Credit issued in respect of the U.K. Borrower, on the first Business
Day after the applicable Borrower receives notice from Issuing Bank
that it has made payment under a Letter of Credit if such notice is
received prior to 10:00 a.m. Houston, Texas time, for Domestic Letters
of Credit, prior to 9:00 a.m., Calgary, Alberta time for Foreign
Letters of Credit issued in respect of a Canadian Borrower, or prior to
10:00 a.m., London time for Foreign Letters of Credit issued in respect
of the U.K. Borrower or (B) prior to 4:00 p.m. Houston, Texas time, for
Domestic Letters of Credit, prior to 3:00 p.m., Calgary, Alberta time
for Foreign Letters of Credit issued in respect of a Canadian Borrower,
or prior to 3:00 p.m., London time for Foreign Letters of Credit issued
in respect of the U.K. Borrower, on the second Business Day after the
applicable Borrower receives notice from Issuing Bank that it has made
payment under a Letter of Credit if such notice is received after 10:00
a.m. Houston, Texas time, for Domestic Letters of Credit, after 9:00
a.m., Calgary, Alberta time for Foreign Letters of Credit issued in
respect of a Canadian Borrower, or after 10:00 a.m., London time for
Foreign Letters of Credit issued in respect of the U.K. Borrower, and
(ii) on demand, the amount of any additional fees Issuing Bank
customarily charges for amending Letter of Credit Agreements, for
honoring drafts under Letters of Credit, and for taking similar action
in connection with letters of credit. If the applicable Borrower or
another Obligated Party has not reimbursed Issuing Bank for any drafts
paid by the date on which reimbursement is required under this section,
then the applicable Agent or U.K. Bank, as the case may be, is
irrevocably authorized to fund the applicable Borrower's reimbursement
obligations as a Base Rate Advance if proceeds are available under the
applicable Revolving Credit Commitment and if the conditions in this
Agreement for such an Advance (other than any notice requirements or
minimum funding amounts) have, to the applicable Agent's or U.K. Bank's
knowledge, as the case may be, been satisfied. The proceeds of that
Advance shall be advanced directly to Issuing Bank
45
to pay the applicable Borrower's unpaid reimbursement obligations. If
funds cannot be advanced under the applicable Revolving Credit
Commitment, then the applicable Borrower's reimbursement obligation
shall constitute a demand obligation. From the date that Issuing Bank
pays a draft under a Letter of Credit until the applicable Borrower or
another Obligated Party either reimburses or is obligated to reimburse
Issuing Bank for that draft under this section, the amount of that
draft bears interest payable to Issuing Bank at the rate then
applicable to Base Rate Advances. From the due date of the respective
amounts due under this section, to the date paid (including any payment
from proceeds of a Base Rate Advance), unpaid reimbursement amounts
accrue interest that is payable on demand at the Default Rate.
(d) Obligation of Banks. If an Obligated Party fails to
reimburse Issuing Bank as provided herein by the date on which
reimbursement is due hereunder, and funds cannot be advanced under the
applicable Revolving Credit Commitment to satisfy the reimbursement
obligations, then, solely with respect to Letters of Credit not issued
to U.K. Borrower by U.K. Bank, the applicable Agent shall promptly
notify each applicable Bank of such failure, of the date and amount
paid, and of each applicable Bank's Percentage of the unreimbursed
amount. Each applicable Bank shall promptly and unconditionally make
available to the applicable Agent in immediately available funds its
Percentage of the unpaid reimbursement obligation, subject to the
limitations of Section 2.1 or Section 3.1, as applicable. Funds are due
and payable to the applicable Agent before the close of business on the
Business Day when the applicable Agent gives notice to each applicable
Bank of such reimbursement failure (if notice is given before 1:00
p.m.) or on the next succeeding Business Day (if notice is given after
1:00 p.m.). All amounts payable by any applicable Bank accrue interest
after the due date at the Federal Funds Rate from the day the
applicable draft or draw is paid by the applicable Agent to (but not
including) the date the amount is paid by the applicable Bank to the
applicable Agent. Upon receipt of those funds, the applicable Agent
shall make them available to Issuing Bank.
(e) Duties of Issuing Bank. Each Issuing Bank agrees with each
Borrower and each Bank that it will exercise and give the same care and
attention to each Letter of Credit as it gives to its other letters of
credit. Each Bank and the Borrowers agree that, in paying any draft
under any Letter of Credit, Issuing Bank has no responsibility to
obtain any document (other than any documents expressly required by the
respective Letter of Credit) or to ascertain or inquire as to any
document's validity, enforceability, sufficiency, accuracy, or
genuineness or the authority of any Person delivering it. In honoring
or dishonoring any presentation under a Letter of Credit, the
applicable Issuing Bank agrees to observe at least the standard of
practice of financial institutions that regularly issue letters of
credit. Neither Issuing Bank nor its representatives will be liable to
any Bank or any Obligated Party for any Letter of Credit's use or for
any beneficiary's acts or omissions. Any action, inaction, error,
delay, or omission taken or suffered by Issuing Bank or any of its
representatives in connection with any Letter of Credit, applicable
drafts or documents, or the transmission, dispatch, or delivery of any
related message or advice, if in good faith and in conformity with
applicable laws and in
46
accordance with the standards of care specified in the Uniform Customs
and Practices for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 (as amended or modified), is
binding upon the Obligated Parties and Banks and, except as expressly
provided herein, does not place Issuing Bank or any of its
representatives under any resulting liability to any Obligated Party or
any Bank. Agents are not liable to any Obligated Party or any Bank for
any action taken or omitted, in the absence of gross negligence or
willful misconduct, by Issuing Bank or its representative in connection
with any Letter of Credit.
Section 4.13 Amendments to Letters of Credit. Any request for amendment
to or extension of the expiry date of any previously issued Letter of Credit
shall be submitted pursuant to a Credit Request by the applicable Borrower to
the Issuing Bank not later than three Business Days prior to the date of the
proposed amendment or extension. The Issuing Bank shall not amend or extend the
expiry date of any Letter of Credit if the issuance of a new Letter of Credit
having the same terms and conditions as such Letter of Credit as so amended or
extended would be prohibited by any provision of this Agreement.
Section 4.14 Letter of Credit Fees. The Borrowers agree in all
instances, to pay (a) to the Domestic Agent with respect to Domestic Letters of
Credit and to the Foreign Agent or U.K. Bank, as applicable, with respect to
Foreign Letters of Credit, a non-refundable letter of credit fee, due and
payable quarterly in arrears on each Quarterly Fee Payment Date and on the
Revolving Credit Termination Date, for the account of the applicable Banks
(except that with respect to Letters of Credit issued to U.K. Borrower by U.K.
Bank, such fee shall be paid by the U.K. Borrower to the U.K Bank), which fee
shall be equal to a percentage of the Applicable Margin for LIBOR Advances on
the date of payment multiplied by the Equivalent Amount of the face amount of
each Letter of Credit (with a $300 minimum letter of credit fee per Letter of
Credit issued), and based on a year of 360 days, which percentage shall be equal
to 100% for standby Letters of Credit and 50% for documentary Letters of Credit,
(b) a fronting fee, due and payable on the date of issuance of any Letter of
Credit, for the sole account of the Issuing Bank, which fee shall be equal to
0.125% per annum of the face amount of each such Letter of Credit, and (c)
solely for the account of the Issuing Bank, other administrative fees
customarily charged by the Issuing Bank and agreed to by the applicable Borrower
in connection with the issuance, amendment, or renewal of, or honoring of drafts
under, Letters of Credit.
Section 4.15 Participation by Banks. By the issuance of any Letter of
Credit or Bank Guaranty (except those issued to U.K. Borrower by U.K. Bank) and
without any further action on the part of the Issuing Bank or any of the Banks
in respect thereof, the Issuing Bank (in the case of a Letter of Credit) or Bank
Guarantor (in the case of a Bank Guaranty) hereby grants to each applicable Bank
and each applicable Bank hereby agrees to acquire from the Issuing Bank or the
Bank Guarantor a participation in each such Letter of Credit or Bank Guaranty
and the related Letter of Credit Liabilities, effective upon the issuance
thereof without recourse or warranty, equal to such Bank's Percentage of such
Letter of Credit or Bank Guaranty and Letter of Credit Liabilities. The Issuing
Bank shall provide a copy of each Letter of Credit and Bank Guaranty to each
other applicable Bank promptly after issuance. This agreement to grant and
acquire participations is an agreement between the Issuing Bank, the Bank
Guarantor and the
47
Banks, and neither the Borrowers nor any beneficiary of a Letter of Credit or
Bank Guaranty shall be entitled to rely thereon. The Borrowers agree that each
Bank purchasing a participation from the Issuing Bank pursuant to this Section
4.15 may exercise all its rights to payment against the applicable Borrower
including the right of setoff, with respect to such participation as fully as if
such Bank were the direct creditor of the applicable Borrower in the amount of
such participation.
Section 4.16 Obligations Absolute. The obligations of the Canadian
Borrowers with respect to payment and performance of the Canadian Obligations
shall be joint and several, and the obligations of all of the Borrowers under
this Agreement and the other Loan Documents (including without limitation the
obligation of the Borrower to reimburse the Issuing Bank for draws under any
Letter of Credit) shall be, subject to Section 4.10 hereof, absolute,
unconditional, and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement and the other Loan Documents under all
circumstances whatsoever, including without limitation the following
circumstances:
(a) Any lack of validity or enforceability of any Letter of
Credit or any other Loan Document;
(b) Any amendment or waiver of or any consent to departure
from any Loan Document;
(c) The existence of any claim, set-off, counterclaim, defense
or other rights which the Borrowers, any Obligated Party, or any other
Person may have at any time against any beneficiary of any Letter of
Credit, the Issuing Bank, or any other Person, whether in connection
with this Agreement or any other Loan Document or any unrelated
transaction; or
(d) Any statement, draft, or 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 whatsoever.
Section 4.17 Limitation of Liability. The Borrowers assume all risks of
the acts or omissions of any beneficiary of any Letter of Credit with respect to
its use of such Letter of Credit. Neither the Issuing Bank, the Agents, any Bank
nor any of their officers or directors shall have any responsibility or
liability to the Borrowers or any other Person for: (a) errors, omissions,
interruptions, or delays in transmission or delivery of any messages, or (b) the
validity, sufficiency, or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should
in fact prove to be in any and all respects invalid, insufficient, fraudulent,
or forged or any statement therein is untrue or inaccurate in any respect,
provided that in each case such actions taken or omitted by the Issuing Bank,
the Agents or any Bank are done or omitted in the absence of gross negligence or
willful misconduct. The Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
48
Section 4.18 Letter of Credit Agreements. Certain additional provisions
regarding the obligations, liabilities, rights, remedies and agreements of the
Borrowers and the Issuing Bank relative to the Letters of Credit shall be set
forth in the Letter of Credit Agreements.
Section 4.19 Replacement of the Issuing Banks. The Borrowers may, with
the approval of the Required Banks, appoint successor Issuing Banks hereunder
upon the condition precedent that such successor Issuing Bank shall become a
party to this Agreement and expressly agree to be bound by the terms and
conditions contained in this Agreement pertaining to the Issuing Banks. Upon the
appointment of any successor Issuing Bank, the Issuing Bank replaced by such
successor Issuing Bank shall cease to issue Letters of Credit but shall continue
to carry out its obligations hereunder and shall continue to have the benefit of
this Agreement and the other Loan Documents with respect to the outstanding
Letters of Credit issued by it until all such Letters of Credit have expired and
any drawings thereunder have been reimbursed in full.
Section 4.20 No Advances. Neither the Agents nor any Bank shall have
any obligation to make any Advance, if an Event of Default has occurred and is
continuing.
Section 4.21 Designation of Additional Guarantors.
(a) The Domestic Borrower may designate any Domestic
Subsidiary which is not a Domestic Guarantor to be a Domestic Guarantor
by delivering to the Agents notice that such Domestic Subsidiary is to
be a Domestic Guarantor and causing such Domestic Subsidiary to execute
and deliver to Agents a Guaranty Agreement-Domestic Subsidiary and a
Security Agreement-Domestic Guarantor. Any such Domestic Subsidiary
shall be deemed a Domestic Guarantor five Business Days following the
date on which the Domestic Borrower delivers the documents described
above to the Agents.
(b) The Domestic Borrower may designate any Foreign Subsidiary
which is not a Foreign Guarantor to be a Foreign Guarantor by
delivering to the Agents notice that such Foreign Subsidiary is to be a
Foreign Guarantor and causing such Foreign Subsidiary to execute and
deliver to Agents a Guaranty Agreement-Foreign Subsidiary and a
Security Agreement-Foreign Guarantor. Any such Foreign Subsidiary shall
be deemed a Foreign Guarantor five Business Days following the date on
which the Domestic Borrower delivers the documents described above to
the Agents.
Section 4.22 Judgment Currency. If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due from a Borrower
hereunder or under any of the Revolving Credit Notes in the currency expressed
to be payable herein or under the Revolving Credit Notes (the "Specified
Currency") into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the applicable Agent
could purchase the Specified Currency with such other currency at its Principal
Office on the Business Day preceding that on which the final, non-appealable
judgment is given. The obligations of the Borrowers in respect of any sum due to
any Bank, any Issuing Bank or any Agent hereunder or under any Revolving Credit
Note shall, notwithstanding any judgment in a currency other than
49
the Specified Currency, be discharged only to the extent that on the Business
Day immediately following receipt by such Bank, such Issuing Bank or such Agent
(as the case may be) of any sum adjudged to be so due in such other currency
such Bank, such Issuing Bank or such Agent (as the case may be) may in
accordance with normal, reasonable banking procedures purchase the Specified
Currency with such other currency. If the amount of the Specified Currency which
could be so purchased is less than the sum originally due to such Bank, such
Issuing Bank or such Agent, as the case may be, in the Specified Currency, the
applicable Borrower agrees, to the fullest extent that it may effectively do so,
as a separate obligation and notwithstanding any such judgment, to indemnify
such Bank or such Agent, as the case may be, against such loss, and if the
amount of the Specified Currency which could be so purchased exceeds (a) the sum
originally due to any Bank, any Issuing Bank or any Agent, as the case may be,
in the Specified Currency and (b) any amounts shared with the other Banks as a
result of allocations of such excess as a disproportionate payment to such Bank
under Section 13.3, such Bank, such Issuing Bank or such Agent, as the case may
be, agrees to remit such excess to the applicable Borrower. Without prejudice to
the survival of any of the other agreements of the Borrowers hereunder, the
agreements and obligations of the Borrowers under this Section 4.22 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.
ARTICLE V
Yield Protection and Illegality
Section 5.1 Capital Adequacy. If after the date hereof, any adoption or
implementation of any applicable law, rule, or regulation regarding capital
adequacy (including, without limitation, any law, rule, or regulation
implementing the Basle Accord) , or any change therein, or any change in the
interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Bank (or its parent) with any guideline, request,
or directive regarding capital adequacy (whether or not having the force of law)
of any such central bank or other Governmental Authority (including, without
limitation, any guideline or other requirement implementing the Basle Accord),
has or would have the effect of reducing the rate of return on such Bank's (or
its parent's) capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which such Bank (or its
parent) could have achieved but for such adoption, implementation, change, or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within ten Business Days after demand by such Bank (with a copy to
the Agents), the Domestic Borrower agrees to pay to such Bank (or its parent)
such additional amount or amounts as will compensate such Bank for such
reduction. Any such demand shall be accompanied by a certificate of such Bank
claiming compensation under this Section and setting forth in reasonable detail
the calculation of the additional amount or amounts to be paid to it hereunder
shall be conclusive (absent manifest error), provided that the determination
thereof is made on a reasonable basis. In determining such amount or amounts,
such Bank may use any reasonable averaging and attribution methods.
50
Section 5.2 Additional Costs. The applicable Borrower shall pay
(without duplication of amounts owing under Section 4.7 and other Sections of
this Article V) directly to each Bank from time to time such amounts as such
Bank may determine to be necessary to compensate it for any costs incurred by
such Bank which the Bank determines are attributable to its making or
maintaining of any LIBOR Advances or Alternate Currency Advances hereunder or
its obligation to make any of such Advances hereunder, or any reduction in any
amount receivable by such Bank hereunder in respect of any such Advances or such
obligation (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any Regulatory Change which:
(a) changes the basis of taxation of any amounts payable to
such Bank under this Agreement or its Revolving Credit Notes or Swing
Line Note in respect of any of such Advances (other than Excluded Taxes
imposed on such Bank or its Applicable Lending Office for any of such
Advances);
(b) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio, or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, the Bank (including (i) any LIBOR
Advances or any deposits referred to in the definition of "LIBOR" in
Section 1.1, or (ii) any Alternate Currency Advances or any deposits
referred to in the definition of "Alternate Currency Rate" in Section
1.1); or
(c) imposes any other condition affecting this Agreement, the
Revolving Credit Notes, the Swing Line Note or any of such extensions
of credit or liabilities or commitments.
Each Bank will notify the applicable Borrower of any event occurring after the
date of this Agreement which will entitle such Bank to compensation pursuant to
this Section 5.2 as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation, and will designate a different
Applicable Lending Office for the Advances affected by such event if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Bank, violate any law, rule, or
regulation or be in any way disadvantageous to such Bank, provided that such
Bank shall have no obligation to so designate an Applicable Lending Office
located in the United States of America. Each Bank will furnish the applicable
Borrower with a certificate setting forth in reasonable detail the basis and the
amount of each request of such Bank for compensation under this Section 5.2, and
the applicable Borrower shall not be obligated to pay under this Section 5.2
prior to receipt of such certificate. If a Bank requests compensation from the
applicable Borrower under this Section 5.2, the applicable Borrower may, by
notice to such Bank and the Agents suspend the obligation of such Bank to make
or Continue making, or Convert Advances into, Advances of the Type with respect
to which such compensation is requested until the Regulatory Change giving rise
to such request ceases to be in effect (in which case the provisions of Section
5.5 hereof shall be applicable). Determinations and allocations by a Bank for
purposes of this Section 5.2 of the effect of any Regulatory Change on its costs
of maintaining its obligations to make Advances or of making or maintaining
Advances or on amounts receivable by it in respect
51
of Advances, and of the additional amounts required to compensate such Bank in
respect of any Additional Costs, shall be conclusive absent manifest error,
provided that such determinations and allocations are made on a reasonable basis
and in good faith.
If any Borrower is required pursuant to this Section 5.2 to make any additional
payment to any Bank, the Domestic Borrower may elect, if such amounts continue
to be charged, to replace such Bank as a Bank party to this Agreement; provided
that no Default or Event of Default shall have occurred and be continuing at the
time of such replacement, and provided further that, concurrently with such
replacement, (i) an Eligible Assignee which is reasonably satisfactory to the
Domestic Borrower and the Agents shall agree, as of such date, to purchase for
cash the Revolving Credit Advances and other Obligations due to such Bank
pursuant to an Assignment and Acceptance and to become a Bank for all purposes
under this Agreement and to assume all obligations of the replaced Bank to be
terminated as of such date and to comply with the requirements of this Agreement
applicable to assignments, and (ii) the applicable Borrower shall pay to such
replaced Bank in same day funds on the day of such replacement (A) all interest,
fees and other amounts then accrued but unpaid to such Bank by the applicable
Borrower hereunder to and including the date of termination, including without
limitation payments due to such replaced Bank under this Section 5.2, and (B) an
amount, if any, equal to the payment which would have been due to such Bank on
the day of such replacement under Section 5.6 had the Revolving Credit Advances
of such Bank been prepaid on such date rather than sold to the replacement Bank.
Section 5.3 Limitation on Types of Advances. Anything herein to the
contrary notwithstanding, if with respect to any LIBOR Advances or Alternate
Currency Advances for any Interest Period therefor:
(a) The applicable Agent determines (which determination shall
be conclusive absent manifest error) that quotations of interest rates
for the relevant deposits referred to in the definition of "LIBOR" and
"Alternate Currency Rate" in Section 1.1 hereto are not being provided
in the relative amounts or for the relative maturities for purposes of
determining the rate of interest for such Advances as provided in this
Agreement;
(b) A Bank determines (which determination shall be conclusive
absent manifest error) that the relevant rates of interest referred to
in the definition of "LIBOR" and "Alternate Currency Rate" in Section
1.1 hereto on the basis of which the rate of interest for such Advances
for such Interest Period is to be determined do not accurately reflect
the cost to such Bank of making or maintaining such Advances for such
Interest Period; or
(c) There occurs on or before the date an Alternate Currency
Advance is to be made any material adverse change in national or
international financial, political or economic conditions or currency
exchange rates or exchange controls which would in the opinion of the
Foreign Agent make it impracticable for the Alternate Currency Advance
to be denominated in the Alternate Currency specified by the applicable
Borrower;
52
then such Bank shall give the Borrowers prompt notice thereof and the relevant
amounts or periods, and so long as such condition remains in effect, such Bank
shall be under no obligation to make additional Restricted Advances or Alternate
Currency Advances or to Convert Base Rate Advances into Restricted Advances and
the Borrowers shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Restricted Advances, either prepay such Advances or Convert
such Advances into Unaffected Advances in accordance with the terms of this
Agreement.
Section 5.4 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for a Bank or its Applicable
Lending Office to (a) honor its obligation to make LIBOR Advances or Alternate
Currency Advances hereunder or (b) maintain LIBOR Advances or Alternate Currency
Advances hereunder, then such Bank shall promptly notify the Borrowers thereof
and such Bank's obligation to make or maintain such affected LIBOR Advances or
Alternate Currency Advances and to Convert Base Rate Advances into such affected
LIBOR Advances or Alternate Currency Advances hereunder shall be suspended until
such time as such Bank may again make and maintain such affected LIBOR Advances
or Alternate Currency Advances (in which case the provisions of Section 5.5
hereof shall be applicable).
Section 5.5 Treatment of Certain Advances. If the LIBOR Advances or
Alternate Currency Advances of a Bank are to be Converted pursuant to Section
5.2, 5.3 or 5.4 hereof, such Bank's LIBOR Advances or Alternate Currency
Advances shall be automatically Converted into Unaffected Advances on the last
day(s)of the then current Interest Period(s) for the LIBOR Advances or Alternate
Currency Advances (or, in the case of a Conversion required by Section 5.4
hereof, on such earlier date as such Bank may specify to the Borrowers, such
earlier date to be not earlier than the date the Bank gives notice thereof to
the Borrowers) and, unless and until such Bank gives notice as provided below
that the circumstances specified in Section 5.2, 5.3 or 5.4 hereof which gave
rise to such Conversion no longer exist:
(a) To the extent that the Bank's LIBOR Advances or Alternate
Currency Advances have been so Converted, all payments and prepayments
of principal which would otherwise be applied to such Bank's LIBOR
Advances or Alternate Currency Advances shall be applied instead to its
Unaffected Advances; and
(b) All Advances which would otherwise be made or Continued by
a Bank as LIBOR Advances or Alternate Currency Advances shall be made
as or Converted into Unaffected Advances and all Advances of such Bank
which would otherwise be Converted into LIBOR Advances or Alternate
Currency Advances shall be Converted instead into (or shall remain as)
Unaffected Advances.
If a Bank gives notice to the Borrowers that the circumstances specified in
Section 5.2, 5.3 or 5.4 hereof which gave rise to the Conversion of such Bank's
LIBOR Advances or Alternate Currency Advances pursuant to this Section 5.5 no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when any LIBOR Advances or Alternate Currency
Advances are outstanding, the Bank's Unaffected Advances shall be
53
automatically Converted to LIBOR Advances or Alternate Currency Advances, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding
LIBOR Advances or Alternate Currency Advances to the extent necessary so that,
after giving effect thereto, all Advances held by the Bank holding LIBOR
Advances or Alternate Currency Advances and by such Banks are held pro rata (as
to principal amounts, Types, and Interest Periods) in accordance with their
respective Revolving Credit Commitments.
Section 5.6 Compensation. The applicable Borrower shall pay (without
duplication of amounts owing under other Sections of this Article V) to the
applicable Banks, upon the request of the applicable Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Agent) to
compensate such Banks for any actual loss, cost, or expense incurred by them as
a result of:
(a) Any payment, prepayment or Conversion of a LIBOR Advance
or Alternate Currency Advance for any reason (including, without
limitation, the acceleration of the outstanding Advances pursuant to
Section 12.2) on a date other than the last day of an Interest Period
for such Advance; or
(b) Any failure by such Borrower for any reason (including,
without limitation, the failure of any conditions precedent specified
in Article VII to be satisfied) to borrow, Convert, or prepay a LIBOR
Advance or Alternate Currency Advance on the date for such borrowing,
Conversion, or prepayment, specified in the relevant notice of
borrowing, prepayment, or Conversion under this Agreement.
The applicable Agent shall furnish the applicable Borrower with a certificate
setting forth in reasonable detail the basis and amount of each request for
compensation under this Section 5.6, and the applicable Borrower shall not be
obligated to pay under this Section 5.6 prior to receipt of such certificate.
ARTICLE VI
Security
Section 6.1 Collateral. To secure full and complete payment and
performance of the Secured Obligations, the Borrowers shall execute and deliver
or cause to be executed and delivered the documents described below covering the
property and collateral described in this Section 6.1 each in form and substance
satisfactory to the Agents, (which, together with any other property and
collateral which may now or hereafter secure the Secured Obligations or any part
thereof, is sometimes herein called the "Collateral"):
(a) The Domestic Borrower and the Domestic Guarantors shall
respectively execute the Security Agreement-Borrower and the Security
Agreements-Domestic Guarantors pursuant to which such Persons shall,
subject to the provisions of Section 6.3, grant to the Agents for the
benefit of the Banks a first priority security interest in all of their
respective (i) domestic, and as applicable, foreign, trade accounts and
accounts
54
receivable whether now owned or hereafter acquired, whether evidenced
by open account, instrument or chattel paper, including Unbilled
Receivables, and (ii) all products and proceeds related to any of the
above, which security interest shall secure payment and performance of
all of the Secured Obligations.
(b) The Domestic Borrower and the Domestic Guarantors shall
execute and cause to be executed, subject to the provisions of Section
6.3, such further documents and instruments, including without
limitation, as applicable, financing statements under the Uniform
Commercial Code, as the Domestic Agent, in its sole discretion, deems
necessary or desirable to create, preserve, evidence, and perfect its
liens and security interests in the Collateral described in the
documents described in clause (a) above.
(c) The Canadian Borrowers shall respectively execute the
Security Agreements-Borrower pursuant to which such Persons shall,
subject to the provisions of Section 6.3, grant to the Foreign Agent
for the benefit of the Foreign Banks a first priority security interest
in all of their respective (i) domestic, and as applicable, foreign,
trade accounts and accounts receivable whether now owned or hereafter
acquired, whether evidenced by open account, instrument or chattel
paper, including Unbilled Receivables, and (ii) all products and
proceeds related to any of the above, which security interest shall
secure payment and performance of the Foreign Obligations.
(d) The U.K. Borrower shall execute the Security
Agreement-Borrower pursuant to which U.K. Borrower shall, subject to
the provisions of Section 6.3, grant to the Foreign Agent for the
benefit of the Foreign Banks a first priority security interest in all
of its respective (i) domestic, and as applicable, foreign, trade
accounts and accounts receivable whether now owned or hereafter
acquired, whether evidenced by open account, instrument or chattel
paper, including Unbilled Receivables, and (ii) all products and
proceeds related to any of the above, which security interest shall
secure payment and performance of the Foreign Obligations.
(e) The Foreign Guarantors shall respectively execute the
Security Agreements-Foreign Guarantor pursuant to which such Persons
shall, subject to the provisions of Section 6.3, grant to the Foreign
Agent for the benefit of the Foreign Banks a first priority security
interest in all of their respective (i) domestic, and as applicable,
foreign, trade accounts and accounts receivable whether now owned or
hereafter acquired, whether evidenced by open account, instrument or
chattel paper, including Unbilled Receivables, and (ii) all products
and proceeds related to any of the above, which security interest shall
secure payment and performance of the Foreign Obligations.
(f) The Foreign Borrowers and the Foreign Guarantors shall
execute and cause to be executed, subject to the provisions of Section
6.3, such further documents and instruments, including without
limitation, as applicable, financing statements under the Uniform
Commercial Code and the laws of the applicable Provinces of Canada and
such similar documents as may be required under the laws of England,
Wales, Brazil and Australia, as applicable, as the Foreign Agent, in
its sole discretion, deems necessary or
55
desirable to create, preserve, evidence, and perfect its liens and
security interests in the Collateral described in the documents
described in clauses (c), (d) and (e) above.
Section 6.2 Setoff. If an Event of Default shall have occurred and is
continuing, the Agents, the Issuing Bank and each Bank are hereby authorized at
any time and from time to time, without notice to any Borrower (any such notice
being hereby expressly waived by the Borrowers), to set off and apply any and
all deposits (general, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by any of the Issuing Banks, the Agents
or such Bank to or for the credit or the account of any Borrower against any and
all of the obligations of such Borrower now or hereafter existing under this
Agreement, the Revolving Credit Notes, the Swing Line Note or any other Loan
Document, irrespective of whether or not the Agents, the Issuing Banks or such
Bank shall have made any demand under this Agreement, the Revolving Credit
Notes, the Swing Line Note or any other Loan Document and although such
Obligations may be unmatured; provided that the Agents, the Issuing Banks and
the Banks may not set off deposits of any Foreign Borrower against the Domestic
Obligations. The Issuing Banks, the Agents and each Bank agree promptly to
notify the Borrowers (with a copy to the Agents) after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights and remedies of the Issuing
Banks, the Agents and each Bank hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Issuing Bank, the Agent and such Bank may have.
Section 6.3 Special Provision Regarding Security Interests and Security
Agreements. Notwithstanding any provision of this Agreement or any other Loan
Document to the contrary, the Liens created by the Security Agreements-Borrower,
the Security Agreements-Domestic Guarantors and the Security Agreements-Foreign
Guarantor shall not cover or apply to any Obligations which are not Secured
Obligations.
ARTICLE VII
Conditions Precedent
Section 7.1 Conditions to Initial Domestic Advance. This Agreement is
not effective until the Initial Effective Date, and the obligation of each
Domestic Bank to make the initial Domestic Advance or of any Domestic Issuing
Bank to issue the initial Domestic Letter of Credit is subject to the condition
precedent that the Domestic Agent shall have received (or waived or postponed in
writing the requirement that it receive) on or before the day of such Domestic
Advance or Domestic Letter of Credit issuance all of the items set forth below
in form and substance satisfactory to the Domestic Agent.
(a) Certificate - Domestic Borrower. A certificate of the
Secretary or an Assistant Secretary of the Domestic Borrower certifying
(i) resolutions of the Board of Directors of the Domestic Borrower
which authorize the execution, delivery and performance by the Domestic
Borrower of this Agreement and the other Loan Documents
56
to which the Domestic Borrower is or is to be a party hereunder, and
(ii) the names and signatures of the officers of the Domestic Borrower
authorized to sign this Agreement and each of the other Loan Documents
to which the Domestic Borrower is or is to be a party hereunder.
(b) Certificate - Domestic Guarantors. A certificate of the
Secretary or an Assistant Secretary of each Domestic Guarantor
certifying (i) resolutions of the Board of Directors of such Domestic
Guarantor which authorize the execution, delivery and performance by
such Domestic Guarantor of the Loan Documents to which such Domestic
Guarantor is or is to be a party hereunder, and (ii) the names and
signatures of the officers of such Domestic Guarantor authorized to
sign the Loan Documents to which such Domestic Guarantor is or is to be
a party hereunder.
(c) Articles of Incorporation - Domestic Borrower and Domestic
Guarantors. The articles of incorporation of the Domestic Borrower and
each Domestic Guarantor certified by the Secretary of State of state of
incorporation of such Person.
(d) Bylaws - Domestic Borrower and Domestic Guarantors. The
bylaws of the Domestic Borrower and each Domestic Guarantor, certified
by the Secretary or an Assistant Secretary of such Person.
(e) Governmental Certificates - Domestic Borrower.
Certificates of the appropriate government officials of the state of
organization of the Domestic Borrower as to the existence and good
standing of the Domestic Borrower.
(f) Governmental Certificates - Domestic Guarantors.
Certificates of the appropriate government officials of the
jurisdiction of organization of each Domestic Guarantor as to the
existence and good standing of such Domestic Guarantor.
(g) Domestic Revolving Credit Notes. The Domestic Revolving
Credit Notes executed by the Domestic Borrower.
(h) Swing Line Note. The Swing Line Note executed by the
Domestic Borrower.
(i) Security Agreement-Borrower. A Security Agreement-Borrower
executed by the Domestic Borrower.
(j) Security Agreements-Domestic Guarantors. A Security
Agreement-Domestic Guarantor executed by each of the Domestic
Guarantors.
(k) Financing Statements. Uniform Commercial Code or other
applicable financing statements executed by the Domestic Borrower and
the Domestic Guarantors and covering the Collateral described in the
applicable Security Agreement - Borrower and Security Agreements -
Domestic Guarantors.
57
(l) Guaranty Agreements-Domestic Subsidiaries. A Guaranty
Agreement - Domestic Subsidiary executed by each Domestic Guarantor.
(m) Guaranty Agreement-Domestic Borrower. A Guaranty Agreement
- Domestic Borrower executed by Domestic Borrower.
(n) Fees. Payment of all fees required by the Fee Letter to be
paid on or prior to the Domestic Effective Date.
(o) UCC Searches. Uniform Commercial Code searches showing all
financing statements on file against the Domestic Borrower and the
Domestic Guarantors in the offices of the Secretary of State of Texas
and Delaware.
(p) Opinion of Counsel. A favorable opinion of legal counsel
to the Domestic Borrower and the Domestic Guarantors in substantially
the form of Exhibit H hereto.
Section 7.2 Conditions to Initial Foreign Advance. This Agreement is
not effective until the Initial Effective Date, and the obligation of each
Foreign Bank to make the initial Foreign Advance or of any Foreign Issuing Bank
to issue the initial Foreign Letter of Credit is subject to the condition
precedent that the Foreign Agent shall have received (or waived or postponed in
writing the requirement that it receive) on or before the day of such Foreign
Advance or Foreign Letter of Credit issuance all of the items set forth below in
form and substance satisfactory to the Agents.
(a) Certificate -- Foreign Borrowers. A certificate of the
Secretary, an Assistant Secretary or other appropriate officer of each
Foreign Borrower certifying (i) resolutions of the Board of Directors
or other appropriate governing body of such Foreign Borrower which
authorize the execution, delivery and performance by such Foreign
Borrower of the Loan Documents to which such Foreign Borrower is or is
to be a party hereunder, and (ii) the names and signatures of the
officers of such Foreign Borrower authorized to sign the Loan Documents
to which such Foreign Borrower is or is to be a party hereunder.
(b) Certificate -- Foreign Guarantors. A certificate of the
Secretary, an Assistant Secretary or other appropriate officer of each
Foreign Guarantor certifying (i) resolutions of the Board of Directors
or other appropriate governing body of such Foreign Guarantor which
authorize the execution, delivery and performance by such Foreign
Guarantor of the Loan Documents to which such Foreign Guarantor is or
is to be a party hereunder, and (ii) the names and signatures of the
officers of such Foreign Guarantor authorized to sign the Loan
Documents to which such Foreign Guarantor is or is to be a party
hereunder.
(c) Organizational Documents -- Foreign Borrowers. The
organizational documents of each Foreign Borrower and the general
partners of the Partnership, certified by the appropriate governmental
official of the jurisdiction of organization of such Person.
58
(d) Organizational Documents -- Foreign Guarantors. The
organizational documents of each Foreign Guarantor, certified by the
appropriate governmental official of the jurisdiction of organization
of such Person.
(e) Governing Documents -- Foreign Borrowers. The articles and
bylaws or, as applicable, other similar governing documents of each
Foreign Borrower and the general partners of the Partnership, certified
by the Secretary, an Assistant Secretary or other applicable officer of
such Person.
(f) Governing Documents -- Foreign Guarantors. The articles
and bylaws or, as applicable, other similar governing documents of each
Foreign Guarantor, certified by the Secretary, an Assistant Secretary
or other applicable officer of such Person.
(g) Partnership Agreement. The partnership agreement of the
Partnership certified by all of the partners of the Partnership.
(h) Governmental Certificates-Foreign Borrowers. Certificates
of the appropriate government officials of the jurisdiction of
organization of each Foreign Borrower (other than the Partnership) and
the partners of the Partnership as to the existence of each such
Person.
(i) Governmental Certificates-Foreign Guarantors. Certificates
of the appropriate government officials of the jurisdiction of
organization of each Foreign Guarantor as to the existence of each such
Person.
(j) Foreign Revolving Credit Notes. The Foreign Revolving
Credit Notes executed by the Foreign Borrowers.
(k) Security Agreements-Borrowers. A Security
Agreement-Borrower executed by each of the Foreign Borrowers, together
with any other documents which may be required by the jurisdiction of
organization of such Persons in order to perfect the Foreign Agent's
Liens with respect to the Collateral in such jurisdiction.
(l) Security Agreements-Foreign Guarantors. A Security
Agreement-Foreign Guarantor executed by each of the Foreign Guarantors,
together with any other documents which may be required by the
jurisdiction of organization of each such Person in order to perfect
the Foreign Agent's Liens with respect to the Collateral in such
jurisdiction.
(m) Guaranty Agreements-Foreign Subsidiaries. A Guaranty
Agreement - Foreign Subsidiary executed by each Foreign Guarantor.
(n) Guaranty Agreement-Canadian Borrowers. A Guaranty
Agreement - Canadian Borrower executed by each Canadian Borrower.
59
(o) Guaranty Agreement-U.K. Borrower. A Guaranty Agreement -
U.K. Borrower executed by U.K. Borrower.
(p) Fees. Payment of all fees required by the Fee Letter to be
paid on or prior to the Foreign Effective Date.
(q) Evidence of Filing or Other Perfection. Evidence that the
Charge Debenture (U.K.) executed by U.K. Borrower has been recorded or
filed as necessary to perfect the Liens created thereby in favor of the
Foreign Agent.
(r) Canadian Searches. Personal property registry or other
applicable searches showing all financing statements and other
documents or instruments on file against the Partnership and Energy
Services in the Province of Alberta, Canada, and evidencing that there
are no registered Liens against the accounts receivable of the
Partnership, except Liens in favor of the Foreign Agent.
(s) Opinions of Counsel. A favorable opinion of legal counsel
to each Foreign Borrower and Foreign Guarantor in form and substance
satisfactory to Foreign Agent and its special counsel located in the
jurisdiction of such Foreign Borrower or Foreign Guarantor.
(t) Other Foreign Searches. A company registry search for U.K.
Borrower in England and Wales and such searches as Foreign Agent deems
necessary or appropriate with respect to Veritas Australia and Veritas
Brazil evidencing that there are no Liens against the accounts
receivable of such Foreign Borrowers, except Liens in favor of the
Foreign Agent.
(u) Collateral Agency Agreement. An amendment to the
Collateral Agency Agreement, providing for sharing arrangements among
the Foreign Banks.
(v) Certain Domestic Conditions. The items required to be
delivered under Section 7.1 (other than items described in clauses (g),
(h) and (n) thereof).
Section 7.3 All Advances. The obligation of each Bank to make any
Advance and of the Issuing Bank to issue any Letter of Credit is subject to the
additional conditions precedent set forth below.
(a) Items Required by Agreement. The applicable Agent shall
have received the items required by Section 4.1 and 4.12, as
applicable.
(b) No Default. No Default shall have occurred and be
continuing, or would result from such Advance and/or Letter of Credit
issuance, as applicable.
(c) Representations and Warranties. All of the representations
and warranties contained in Article VIII hereof and in the other Loan
Documents shall be true and correct on and as of the date of such
Advance and/or Letter of Credit issuance, as
60
applicable with the same force and effect as if such representations
and warranties had been made on and as of such date.
(d) Additional Documentation. The applicable Agent shall have
received such additional approvals, opinions, or documents as the
applicable Agent or its legal counsel may request.
ARTICLE VIII
Representations and Warranties
To induce the Agents, the Issuing Banks and the Banks to enter into
this Agreement, the Borrowers represent and warrant to each such Person that:
Section 8.1 Corporate Existence. The Domestic Borrower and each
Subsidiary (a) is a corporation or partnership duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation or
organization (except that, solely with respect to U.K. Borrower and Veritas
Australia, this representation shall only be deemed to be made on and after the
Foreign Effective Date); (b) has all requisite corporate and partnership, as
applicable, power and authority to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a material adverse effect
on its business, condition (financial or otherwise), operations, prospects, or
properties. The Borrowers and each Domestic Guarantor have the corporate or
partnership, as applicable, power and authority to execute, deliver and perform
its obligations under this Agreement and the other Loan Documents to which it is
or may become a party.
Section 8.2 Financial Statements. The Domestic Borrower has delivered
to the Domestic Agent audited consolidated financial statements of the Domestic
Borrower and its Subsidiaries as at and for the fiscal year ended July 31, 2000
and interim financial statements dated April 30, 2001. Such financial statements
have been prepared in accordance with GAAP, and fairly and accurately present,
on a consolidated basis, the financial condition of the Domestic Borrower and
its subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Neither the Domestic
Borrower nor any of its Subsidiaries has any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or unrealized
or anticipated losses from any unfavorable commitments except as referred to or
reflected on such financial statements. There has been no material adverse
change in the business, condition (financial or otherwise), operations,
prospects, or properties of the Domestic Borrower or any of its Subsidiaries
since the effective date of the most recent financial statements referred to in
this Section.
Section 8.3 Corporate Action: No Breach. The execution, delivery, and
performance by the Borrowers of this Agreement and the other Loan Documents to
which the Borrowers are or may become a party and compliance with the terms and
provisions hereof and thereof have
61
been duly authorized by all requisite corporate action on the part of the
Borrowers and do not and will not (a) violate or conflict with, or result in a
breach of, or require any consent under (i) the articles of incorporation or
bylaws or other organizational documents of the Domestic Borrower or any of its
Subsidiaries, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator, or (iii) any
agreement or instrument to which the Domestic Borrower or any of its
Subsidiaries is a party or by which any of them or any of their property is
bound or subject, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien (except as
provided in Article VI) upon any of the revenues or assets of the Domestic
Borrower or any Subsidiary.
Section 8.4 Operation of Business. The Domestic Borrower and each of
its Subsidiaries possess all material licenses, permits, franchises, patents,
copyrights, trademarks, and trade names, or rights thereto, material necessary
to conduct their respective businesses substantially as now conducted and as
presently proposed to be conducted, and the Domestic Borrower and each of its
Subsidiaries are not in violation of any valid rights of others with respect to
any of the foregoing in any respect that could reasonably be expected to have a
Material Adverse Effect.
Section 8.5 Litigation and Judgments. Except as disclosed on Schedule
8.5 hereto, there is no action, suit, investigation, or proceeding before or by
any Governmental Authority or arbitrator pending (in respect of which process
has been served on the Domestic Borrower or any of its Subsidiaries), or to the
knowledge of any Borrower, threatened against or affecting the Domestic Borrower
or any Subsidiary, that would, if adversely determined, have a Material Adverse
Effect. There are no outstanding judgments against the Domestic Borrower or any
Subsidiary, except as disclosed on Schedule 8.5 hereto.
Section 8.6 Rights in Properties: Liens. The Domestic Borrower and each
Subsidiary have good and indefeasible title to or valid leasehold interests in
all material respects in their respective properties and assets, real and
personal, including the properties, assets and leasehold interests reflected in
the financial statements described in Section 8.2, and none of the properties,
assets or leasehold interests of the Domestic Borrower or any Subsidiary is
subject to any Lien, except as permitted by Section 10.2.
Section 8.7 Enforceability. This Agreement constitutes, and the other
Loan Documents to which the Borrowers are party, when delivered, and subject to
Section 6.3, shall constitute legal, valid, and binding obligations of the
Borrowers, enforceable against the Borrowers in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors' rights and by general
equitable principles.
Section 8.8 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrowers
of this Agreement and the other Loan Documents to which the Borrowers are or may
become a party or the validity or enforceability thereof, except for (a) and
subject to Section 6.3, filings and recordings in respect of the Liens
62
created pursuant to Loan Documents, (b) those which have been obtained or made
prior to the date hereof, and (c) authorizations, approvals, consents, filings
and registrations to be made in the ordinary course of business in connection
with the Borrowers' performance of its obligations hereunder.
Section 8.9 Debt. The Domestic Borrower and its Subsidiaries have no
Debt, except Debt permitted by Section 10.1.
Section 8.10 Taxes. The Domestic Borrower and each Subsidiary have
filed all tax returns (federal, state, provincial, municipal, local and foreign)
required to be filed, including all income, franchise, employment, property, and
sales tax returns, and have paid all of their respective material liabilities
for taxes, assessments, governmental charges and other levies that are due and
payable, other than those which are being contested by appropriate proceedings.
Except as set forth on Schedule 8.10, the Borrowers know of no pending
investigation of the Domestic Borrower or any Subsidiary by any taxing authority
or of any pending but unassessed tax liability of the Borrower or any
Subsidiary.
Section 8.11 Use of Proceeds: Margin Securities. Neither the Domestic
Borrower nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations G, U, or X of the Board
of Governors of the Federal Reserve System), and no part of the proceeds of any
Advance will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying margin stock.
Section 8.12 ERISA. The Domestic Borrower and each Subsidiary are in
compliance in all material respects with all applicable provisions of ERISA and
the applicable provisions of the Code relating thereto. No Reportable Event
which is required to be reported to the PBGC pursuant to Section 4043(b) of
ERISA or Prohibited Transaction which could reasonably be expected to have a
Material Adverse Effect has occurred and is continuing with respect to any Plan.
No notice of intent to terminate a Plan has been filed, nor has any Plan been
terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither the Domestic
Borrower nor any ERISA Affiliate (nor any predecessor to the Domestic Borrower
or any ERISA Affiliate) has completely or partially withdrawn from a
Multiemployer Plan. The Domestic Borrower and each ERISA Affiliate have met
their minimum funding requirements under ERISA with respect to all of their
Plans, and the present value of all vested benefits under each Plan do not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
ERISA. Neither the Domestic Borrower nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA.
Section 8.13 Disclosure. No statement, information, report,
representation, or warranty made by the Borrowers in this Agreement or in any
other Loan Document or furnished to the Agent or any Bank in connection with
this Agreement or any of the transactions contemplated hereby (but excluding all
projections and proforma financial statements which shall have been
63
prepared in good faith and based upon reasonable assumptions) contains any
untrue statement of a material fact and all such statements, information,
reports, representations and warranties, taken as a whole, do not omit to state
any material fact necessary to make the statements herein or therein not
misleading. There is no fact known to the Borrowers which has a Material Adverse
Effect, or which could reasonably be expected to have, in the reasonable
judgment of the Borrowers, in the future a Material Adverse Effect, that has not
been disclosed in writing to the Agents.
Section 8.14 Subsidiaries. The Domestic Borrower has no Subsidiaries
other than those listed on Schedule 8.14 hereto, and Schedule 8.14 sets forth
the jurisdiction of organization or incorporation of each Subsidiary and the
percentage of the Domestic Borrower and its Subsidiaries ownership of the
outstanding voting stock of each such Subsidiary. All of the outstanding capital
stock of each Subsidiary has been validly issued, is fully paid, and is
nonassessable.
Section 8.15 Agreements: Indenture Defaults.
(a) Neither any Borrower nor any Guarantor is a party to any
indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate
restriction which could reasonably be expected to have a Material
Adverse Effect. Neither any Borrower nor any Guarantor is in default in
any respect in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any agreement or
instrument material to its business to which it is a party where such
default or the effect thereof could reasonably be expected to result in
a Material Adverse Effect.
(b) Neither the making of any Advance nor the issuance of any
Letter of Credit will constitute or result in the creation of a Default
or an Event of Default (as defined in the Indenture) under the terms
and provisions of the Indenture. No Default or Event of Default (as
defined in the Indenture) exists under the terms and provisions of the
Indenture.
Section 8.16 Compliance with Laws. Neither the Domestic Borrower nor
any Subsidiary is in violation of any law, rule, regulation, order, or decree of
any Governmental Authority or arbitrator except where such Person's failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
Section 8.17 Investment Company Act. Neither the Domestic Borrower nor
any Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.18 Public Utility Holding Company Act. Neither the Domestic
Borrower nor any Subsidiary is a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
64
Section 8.19 Environmental Matters. Except as disclosed on Schedule
8.19 hereto:
(a) The Domestic Borrower, each Subsidiary, and all of their
respective properties, assets, and operations are in full compliance
with all Environmental Laws, except for occurrences of noncompliance
which could not individually, or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Domestic Borrower is
not aware of, nor has the Domestic Borrower received notice of, any
past, present, or future conditions, events, activities, practices, or
incidents which may interfere with or prevent the compliance or
continued compliance of the Domestic Borrower and its Subsidiaries with
all Environmental Laws, except for occurrences of noncompliance which
could not individually, or in the aggregate, reasonably be expected to
have a Material Adverse Effect;
(b) The Domestic Borrower and each Subsidiary have obtained
all permits, licenses, and authorizations that are required under
applicable Environmental Laws, and all such permits are in good
standing and the Domestic Borrower and its Subsidiaries are in
compliance with all of the terms and conditions of such permits, except
where failure to obtain or comply with such permits, licenses or
authorizations could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(c) No Hazardous Materials exist on, about, or within or have
been used, generated, stored, transported, disposed of on, or Released
from any of the properties or assets of the Domestic Borrower or any
Subsidiary except (i) in amounts that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect and (ii) for dynamite and other explosives for which such Person
possesses all licenses and permits necessary to comply with all
Environmental Laws and other federal, state, local and foreign laws,
regulations and requirements pertaining to the use, possession,
disposal, storage or sale thereof, and such use, possession, disposal,
storage or sale thereof is in compliance with Environmental Laws and
such other laws, regulations and requirements except where failure to
obtain or comply with such licenses or permits or to comply with such
laws, regulations or requirements could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The use which the Domestic Borrower and its Subsidiaries make and
intend to make of their respective properties and assets will not
result in the use, generation, storage, transportation, accumulation,
disposal, or Release of any Hazardous Material on, in, or from any of
their properties or assets except (i) in amounts that, individually or
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect and (ii) for dynamite and other explosives for which
such Person possesses all licenses and permits necessary to comply with
all Environmental Laws and other federal, state, local and foreign
laws, regulations and requirements pertaining to the use, possession,
disposal, storage or sale thereof, and such use, possession, disposal,
storage or sale thereof is in compliance with Environmental Laws and
such other laws, regulations and requirements, except where failure to
comply with such laws, regulations or requirements could not,
individually or in the aggregate reasonably be expected to have a
Material Adverse Effect;
65
(d) Neither the Domestic Borrower nor any of its Subsidiaries
nor any of their respective currently or previously owned or leased
properties or operations is subject to any outstanding or, to the best
of its knowledge, threatened order from or agreement with any
Governmental Authority or other Person or subject to any judicial or
docketed administrative proceeding with respect to (i) failure to
comply with Environmental Laws, (ii) Remedial Action, or (iii) any
Environmental Liabilities arising from a Release or threatened Release,
which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect;
(e) There are no conditions or circumstances associated with
the currently or previously owned or leased properties or operations of
the Domestic Borrower or any of its Subsidiaries that could reasonably
be expected to have a Material Adverse Effect;
(f) Neither the Domestic Borrower nor any of its Subsidiaries
is a treatment, storage, or disposal facility requiting a permit under
the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et. seq.
regulations thereunder or any comparable provision of state law. The
Domestic Borrower and its Subsidiaries are in compliance with all
applicable financial responsibility requirements of all Environmental
Laws except where failure to be in such compliance could not reasonably
be expected to have a Material Adverse Effect;
(g) Neither the Domestic Borrower nor any of its Subsidiaries
has filed or failed to file any notice required under applicable
Environmental Law reporting a Release, which Release or any aggregation
thereof, or failure to file, could reasonably be expected to have a
Material Adverse Effect; and
Section 8.20 Environmental Law. To the best of the Domestic Borrower's
knowledge, no Lien arising under any Environmental Law has attached to any
property or revenues of the Domestic Borrower or its Subsidiaries.
ARTICLE IX
Affirmative Covenants
The Borrowers covenant and agree that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or any
Issuing Bank has any obligation to issue any Letter of Credit hereunder or any
Letter of Credit Liabilities exist, the Borrowers will perform and observe the
following positive covenants:
Section 9.1 Reporting Requirements. The Borrowers will furnish the
items set forth below to the Agents, the Issuing Banks and the Banks.
(a) Annual Financial Statements. As soon as available, but no
later than 105 days after the end of the Borrower's Fiscal Year, the
Borrower's Form 10-K Annual Report, including (i) the consolidated
balance sheets of the Borrower and its Subsidiaries,
66
as of the end of such Fiscal Year and (ii) the consolidated statements
of earnings of the Domestic Borrower and its Subsidiaries and
consolidated statements of changes in shareholders' equity of the
Domestic Borrower and its Subsidiaries, and statements of changes in
cash flow of the Domestic Borrower and its Subsidiaries as of and
through the end of such Fiscal Year, all of which are prepared in
accordance with GAAP, and certified by independent certified public
accountants acceptable to the Agents, whose opinion shall be in scope
and substance in accordance with generally accepted auditing standards
and shall be unqualified.
(b) Quarterly 10-Q of the Borrower. As soon as available, but
no later than 50 days after the end of each Fiscal Quarter of the
Domestic Borrower, the Domestic Borrower's Form 10-Q Quarterly Report.
(c) Compliance Certificate. Concurrently with the delivery of
the Form 10-K's or Form 1O-Q's, as applicable, referred to in
subsections 9.1(a) and 9.1(b), a Compliance Certificate of the chief
financial officer, the chief accounting officer, the treasurer or the
assistant treasurer of the Domestic Borrower or another officer of the
Domestic Borrower acceptable to the Agents (i) stating, among other
things, that no Default or Event of Default has occurred and is
continuing, or if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which
is proposed to be taken with respect thereto, (ii) stating the
aggregate amount of Domestic Letter of Credit Liabilities and Foreign
Letter of Credit Liabilities existing as of the end of such Fiscal
Quarter, and (iii) showing in reasonable detail the calculations
demonstrating compliance with Article XI.
(d) Annual Projected Financial Statements and Capital
Expenditure Projections. Concurrently with the delivery of the Form
10-K's referred to in subsection 9.1(a) above, projected financial
statements for the upcoming fiscal year of the Domestic Borrower and
its Subsidiaries, including projected Capital Expenditures, in form and
detail satisfactory to the Agents and prepared under the supervision of
the chief financial officer or the chief accounting officer of the
Domestic Borrower or another officer of the Domestic Borrower
acceptable to the Agents.
(e) Additional Restricted Subsidiaries. Not less than 50 days
after the end of each Fiscal Quarter the names of any Subsidiaries
which became Restricted Subsidiaries during such Fiscal Quarter and any
Subsidiaries which ceased to be Restricted Subsidiaries during such
Fiscal Quarter.
(f) Notice of Litigation. Promptly after the service of
process or notice thereof, notice of all actions, suits, and
proceedings before any Governmental Authority or arbitrator affecting
the Domestic Borrower or any Subsidiary which could, in the opinion of
the management of the Domestic Borrower, reasonably be expected to have
a Material Adverse Effect.
67
(g) Notice of Default. As soon as possible and in any event
within 15 days after any of the chief executive officer, the chief
financial officer, the chief accounting officer, the treasurer or any
other employee serving in a comparable capacity (regardless of title)
of any Borrower or any Guarantor obtains any knowledge, becomes aware
or should have known through the exercise of prudent business judgment
of the occurrence of any Default, a written notice setting forth the
details of such Default and the action that the Borrowers have taken
and propose to take with respect thereto.
(h) ERISA Reports. Upon the request of the Agents from time to
time copies of all reports, including annual reports, and notices which
the Domestic Borrower or any Subsidiary files with or receives from the
PBGC, the U.S. Department of Labor under ERISA or the Internal Revenue
Service under the Code; and as soon as possible and in any event within
five days after the Domestic Borrower or any Subsidiary knows or has
reason to know that any Reportable Event which is required to be
reported to the PBGC pursuant to Section 4043 (b) of ERISA or
Prohibited Transaction which could be reasonably expected to have a
Material Adverse Effect has occurred with respect to any Plan or that
the PBGC or the Domestic Borrower or any Subsidiary has instituted or
will institute proceedings under Title IV of ERISA to terminate any
Plan, a certificate of the chief financial officer of the Domestic
Borrower setting forth the details as to such Reportable Event or
Prohibited Transaction or Plan termination and the action that the
Domestic Borrower proposes to take with respect thereto.
(i) Notice of Material Adverse Change. As soon as possible and
in any event within 15 days after any of the chief executive officer,
the chief financial officer, the chief accounting officer, the
treasurer or any other employee serving in a comparable capacity
(regardless of title) of any Borrower or any Guarantor obtains any
knowledge, becomes aware or should have known through the exercise of
prudent business judgment of the occurrence thereof, written notice of
any matter that could reasonably be expected to have a Material Adverse
Effect.
(j) ▇▇▇▇▇ Filings. Promptly following the filing thereof,
written notice of each proxy statement or other document filed with
▇▇▇▇▇.
(k) Notice of Actual or Contingent Liabilities. As soon as
possible, and in any event within five Business Days after any of the
chief executive officer, the chief financial officer, the chief
accounting officer, the treasurer or any other employee serving in a
comparable capacity (regardless of title) of any Borrower or any
Guarantor obtains any knowledge, becomes aware or should have known
through the exercise of prudent business judgment of the occurrence
thereof, written notice of any actual or contingent liabilities which,
if resolved adversely to such Person could reasonably be expected to
have a Material Adverse Effect.
(l) General Information. Within such a time period as Agent
may reasonably request, such additional information and statements,
lists of assets and liabilities, tax returns, financial statements,
reporting statements and any other reports with respect to
68
the Domestic Borrower's or any Subsidiary's financial condition,
business operations and properties as the Agent may reasonably request
from time to time.
Section 9.2 Maintenance of Existence: Conduct of Business. Except as
provided in Section 10.3, the Borrowers will preserve and maintain, and will
cause each Guarantor to preserve and maintain, its corporate or partnership
existence and all of its leases, privileges, licenses, permits, franchises,
qualifications, and rights that are necessary or desirable in the ordinary
conduct of its business, except if (a) in the reasonable business judgment of
the Borrowers or such Guarantor, as applicable, it is in the best economic
interest not to preserve and maintain such rights and franchises, and (b) such
failure to preserve and maintain such leases, privileges, licenses, permits,
franchises, qualifications and rights could not reasonably be expected to have a
Material Adverse Effect. The Domestic Borrower will conduct, and will cause each
Subsidiary to conduct, its businesses in an orderly and efficient manner in
accordance with good business practices.
Section 9.3 Maintenance of Properties. The Domestic Borrower will
maintain, keep, and preserve, and cause each Subsidiary to maintain, keep, and
preserve, in all material respects, all of its properties (tangible and
intangible) necessary in the proper conduct of its business in good working
order and condition.
Section 9.4 Taxes and Claims. The Domestic Borrower will pay or
discharge, and will cause each Subsidiary to pay or discharge, at or before
maturity or before becoming delinquent all material taxes, levies, assessments,
and governmental charges imposed on it or its income or profits or any of its
property; provided, however, that neither the Domestic Borrower nor any
Subsidiary shall be required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves have been
established to the extent required by GAAP.
Section 9.5 Insurance. The Domestic Borrower will maintain, and will
cause each Subsidiary to maintain, insurance with financially sound and
reputable insurance companies in such amounts and covering such risks as is
usually carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Domestic Borrower and its
Subsidiaries operate, provided that in any event the Domestic Borrower will
maintain and will cause each Subsidiary to maintain workmen's compensation
insurance, property insurance, comprehensive general liability insurance, and
business interruption insurance with respect to processing centers in accordance
with the Domestic Borrower's and such Subsidiaries' current practices reasonably
satisfactory to the Agents.
Section 9.6 Inspection Rights. At any reasonable time during business
hours and from time to time, the Domestic Borrower will permit, and will cause
each Subsidiary to permit, representatives of the Agents, the Banks and the
Issuing Banks to examine, copy, and make extracts from its books and records, to
visit and inspect its properties, and to discuss its business, operations, and
financial condition with its officers, employees, and independent certified
public accountants.
69
Section 9.7 Keeping Books and Records. The Domestic Borrower will
maintain, and will cause each Subsidiary to maintain, proper books of record and
account in which full, true, and correct entries in conformity with GAAP shall
be made of all dealings and transactions in relation to its business and
activities.
Section 9.8 Compliance with Laws. The Domestic Borrower will comply,
and will cause each Subsidiary to comply with all applicable laws, rules,
regulations, orders, and decrees of any Governmental Authority or arbitrator if
its failure to comply could reasonably be expected to result in a Material
Adverse Effect.
Section 9.9 Compliance with Agreements. The Domestic Borrower will
comply, and will cause each Subsidiary to comply with all agreements, contracts,
and instruments binding on it or affecting its properties or business if its
failure to comply could reasonably be expected to result in a Material Adverse
Effect.
Section 9.10 Further Assurances. The Domestic Borrower will, and will
cause each Subsidiary to, execute and deliver such further agreements and
instruments and take such further action as may be requested by the Agents or
any Bank to carry out the provisions and purposes of this Agreement and the
other Loan Documents and, when applicable as provided in Section 6.3, to create,
preserve, and perfect the Liens of the Agents in the Collateral.
Section 9.11 ERISA. The Domestic Borrower will comply, and will cause
each Subsidiary to comply, with all minimum funding requirements, and all other
material requirements of ERISA and the applicable provisions of the Code
relating thereto, if applicable, so as not to give rise to any liability
thereunder if its failure to comply could reasonably be expected to result in a
Material Adverse Effect.
Section 9.12 Contracts.
(a) The Borrowers shall disclose to the Agents each
geophysical or seismic service contract to which any Borrower or any
Guarantor shall hereafter become a party, and each amendment,
supplement, addendum, or modification hereafter made to any existing
geophysical or seismic service contract, that contains an express
provision that restricts such Person from freely assigning its rights
to payment under such contract.
(b) To the extent practicable, the Borrowers will use
reasonable efforts to select, and shall cause each Guarantor to use
reasonable efforts to select, as the choice of law to govern future
geophysical or seismic service contracts to which such Person is a
party, the law of a state of the United States, a province of Canada,
England, or a foreign jurisdiction that permits free transferability of
the rights to payment under such contracts.
Section 9.13 Additional Material Subsidiaries as Guarantors: Execution
of Additional Security Agreements-Guarantors.
(a) If any Domestic Subsidiary (i) which was not determined to
be a Material Subsidiary on the Domestic Effective Date is later
determined to be a Material
70
Subsidiary, or (ii) upon its creation or acquisition becomes a Material
Subsidiary, then the Domestic Borrower will promptly give the Agents
notice of such event and will promptly cause such Domestic Subsidiary
to execute and deliver to the Agents a Guaranty Agreement-Domestic
Subsidiary, unless the Required Banks determine that such Domestic
Subsidiary is not to be a Domestic Guarantor.
(b) Contemporaneously with the delivery by any Material
Subsidiary that is a Domestic Subsidiary of a Guaranty
Agreement-Domestic Subsidiary pursuant to paragraph (a) of this Section
9.13, such Material Subsidiary will execute and deliver to the Agents
(i) a Security Agreement-Domestic Guarantor pursuant to which such
Material Subsidiary will grant to the Agents a security interest in its
accounts receivable, and (ii) uniform commercial code or other
applicable financing statements or documents with respect to such
security interest; provided, that the grant of such security interests,
the Security Agreements-Domestic Guarantors, financing statements all
other documents or acts related thereto shall be subject to the
provisions of Sections 4.10 and 6.3.
(c) If any Foreign Subsidiary (i) which was not determined to
be a Material Subsidiary on the Foreign Effective Date is later
determined to be a Material Subsidiary, or (ii) upon its creation or
acquisition becomes a Material Subsidiary, then the Domestic Borrower
will promptly give the Agents notice of such event and will promptly
cause such Foreign Subsidiary to execute and deliver to the Agents a
Guaranty Agreement- Foreign Subsidiary, unless the Required Banks
determine that such Foreign Subsidiary is not to be a Foreign
Guarantor.
(d) Contemporaneously with the delivery by any Material
Subsidiary that is a Foreign Subsidiary of a Guaranty Agreement-Foreign
Subsidiary pursuant to paragraph (c) of this Section 9.13, such
Material Subsidiary will execute and deliver to the Agents (i) a
Security Agreement-Foreign Guarantor pursuant to which such Material
Subsidiary will grant to the Agents a security interest in its accounts
receivable, and (ii) personal property registry or other applicable
financing statements or documents with respect to such security
interest; provided, that the grant of such security interests, the
Security Agreements-Foreign Guarantors, financing statements all other
documents or acts related thereto shall be subject to the provisions of
Sections 4.10 and 6.3.
Section 9.14 Continuity of Operations. The Borrowers will continue to
conduct, and will cause each of the Guarantors to continue to conduct, its
primary businesses as conducted as of the Initial Effective Date and to continue
its operations in such businesses.
ARTICLE X
Negative Covenants
The Borrowers covenant and agree that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment thereunder or
any Issuing Bank has any obligation
71
to issue any Letter of Credit hereunder or any Letter of Credit Liabilities
exist, the Borrowers will observe the following covenants:
Section 10.1 Debt. The Domestic Borrower will not incur, create,
assume, or permit to exist, and will not permit any Subsidiary to incur, create,
assume, or permit to exist, any Debt, except:
(a) Debt and Contingent Liabilities pursuant to the Loan
Documents;
(b) the Senior Debt;
(c) Existing Debt and Contingent Liabilities described on
Schedule 10.1 hereto;
(d) Extensions, renewals, amendments or replacements of Debt
permitted by clauses (b) and (c) above provided that no such extension,
renewal or replacement shall (i) if such Debt is Subordinated Debt,
amend or modify any subordination provisions, if any, contained in the
original Debt so that the Debt, as extended, renewed or replaced, is no
longer Subordinated Debt, or (ii) shorten the fixed maturity or
increase the principal amount of, or increase the rate of interest to a
rate greater than the current market rate at the time of the extension,
renewal or replacement of the original Debt;
(e) Subordinated Debt;
(f) Additional unsecured and purchase money Debt and secured
Debt assumed in connection with a transaction permitted by Section
10.3(c)(iv) in an aggregate principal amount not to exceed $25,000,000
at any time outstanding; provided, however, that the collateral for any
such Debt which is secured shall not consist of assets of a nature
described in clause (d) of the definition of Permitted Liens contained
in the Indenture.
(g) Debt of a Borrower to another Borrower or to a Guarantor
or of a Guarantor to a Borrower or another Guarantor, as applicable;
and
(h) Debt of the Domestic Borrower or any Subsidiary incurred
in connection with foreign exchange transactions undertaken by the
Domestic Borrower or any Subsidiary.
Section 10.2 Limitation on Liens. The Domestic Borrower will not incur,
create, assume, or permit to exist, and will not permit any Subsidiary to incur,
create, assume, or permit to exist, any Lien upon any of their respective
properties, assets, or revenues, whether now owned or hereafter acquired, except
the following (herein referred to as "Permitted Liens")
(a) Liens disclosed on Schedule 10.2 hereto;
72
(b) Liens in favor of either Agent for the benefit of the
applicable Banks and the applicable Issuing Bank;
(c) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of property that do not
(individually or in the aggregate) materially affect the value of the
assets encumbered thereby or materially impair the ability of the
Domestic Borrower or its Subsidiaries to use such assets in their
respective businesses, and none of which is violated in any material
respect by existing or proposed structures or land use;
(d) Liens for taxes, assessments, or other governmental
charges which are not delinquent for longer than ninety (90) days or
which are being contested in good faith and for which adequate reserves
have been established;
(e) Liens of landlords, tenants, vendors, mechanics,
materialmen, warehousemen, carriers, or other similar statutory Liens
securing obligations that are not delinquent for longer than ninety
(90) days and are incurred in the ordinary course of business or which
are being contested in good faith and for which adequate reserves have
been established;
(f) Liens resulting from good faith deposits to secure
payments of workmen's compensation or other social security programs or
to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, or contracts (other than for payment of Debt) , or
leases made in the ordinary course of business;
(g) Liens on assets, the value of which shall not exceed 7.5%
of Consolidated Tangible Net Worth, provided that such assets may not
include (i) the Collateral or (ii) the accounts receivable of any of
Domestic Borrower's Foreign Subsidiaries;
(h) Licenses of surveys or portions thereof in the Data
Library to others in the ordinary course of business;
(i) Inchoate Liens arising under ERISA; and
(j) Rights of set-off or banker's liens created by law in
favor of commercial banks.
Section 10.3 Mergers, Dissolutions, Etc. The Domestic Borrower will
not, and will not permit any Subsidiary to, be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, or sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any
receivables, except for the following:
(a) any such merger or consolidation, sale, transfer,
conveyance, lease or assignment of or by any Affiliate of the Domestic
Borrower
73
into the Domestic Borrower or into, with or to any other Affiliate of
the Domestic Borrower; provided that (i) if such event involves the
Domestic Borrower, the Domestic Borrower shall be the surviving
corporation, and (ii) if such event involves a Guarantor, a Guarantor
shall be the surviving corporation;
(b) any such purchase or other acquisition by the Domestic
Borrower of the assets or stock of any Guarantor or any Affiliate of
the Domestic Borrower, or by any Guarantor or any Affiliate of the
Domestic Borrower of the assets or stock of any Affiliate of the
Domestic Borrower; and
(c) any such merger or consolidation of the Domestic Borrower
or an Affiliate of the Domestic Borrower into, with or to any other
Person or any such purchase or other acquisition by the Borrower or any
Affiliate of the Domestic Borrower of the assets or stock of any other
Person where (i) immediately before and immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred
and be continuing; (ii) the Domestic Borrower and its Subsidiaries are
in pro forma compliance with all the financial covenants set forth in
Article XI taking into account such purchase or acquisition; (iii) such
Person (or its board of directors or similar body) has approved such
acquisition or other purchase; (iv) the consideration to be paid (other
than consideration to be paid in common stock of the Domestic Borrower)
or Funded Debt incurred (or assumed) by the Domestic Borrower and its
Subsidiaries in connection with any such purchase or acquisition is not
greater than 10% of Consolidated Tangible Net Worth; and (v) after
giving effect to any such acquisition or purchase for which a portion
of the consideration is to be paid in cash or Funded Debt incurred (or
assumed), the pro-forma, post-closing availability under the Revolving
Credit Commitment shall be at least $25,000,000.
Section 10.4 Loans and Investments. The Domestic Borrower will not
make, and will not permit any Subsidiary to make, any advance, loan, extension
of credit, or capital contribution to or investment in, or purchase, or permit
any Subsidiary to purchase, any stock, bonds, notes, debentures or other
securities of, any Person, except:
(a) advances or loans to, or investments in, Subsidiaries
(other than the Foreign Borrowers and the Guarantors) not to exceed 10%
of Consolidated Tangible Net Worth in the aggregate at any time
outstanding (net of repayments of advances and loans by such
Subsidiaries taken as a group and of returns on such investments);
(b) the non-cash allocation of overhead by the Domestic
Borrower to its various Subsidiaries in accordance with its historical
practices;
(c) investments in and loans and advances by the Domestic
Borrower or any Foreign Borrower or Guarantor to the Domestic Borrower
or another Foreign Borrower or Guarantor, as applicable;
(d) extensions of credit to customers in the ordinary course
of business;
74
(e) stocks, bonds, notes, debentures and other securities
accepted from customers in connection with good faith workouts of past
due receivables or in bankruptcy, insolvency or similar proceedings;
(f) loans and advances to employees of the Domestic Borrower
or any Subsidiary for travel, entertainment and relocation expenses
incurred in the ordinary course of business;
(g) any bonds or other obligations of the United States of
America which, as to principal and interest, constitute direct
obligations or are guaranteed by the United States of America;
(h) any bonds, debentures, participation certificates, notes
or other obligations of any agency or corporation or instrumentality of
the United States of America, the obligations of which are
unconditionally guaranteed by the United States of America;
(i) obligations of a state, territory or possession of the
United States, the interest on which is excluded from gross income for
federal income taxation purposes and which bear a rating in one of the
two highest rating categories by S&P or Moody's;
(j) interest bearing accounts, interest bearing deposits,
Eurodollar investments, or certificates of deposit issued by or bankers
acceptances drawn or accepted by, banks or trust companies, including
the Domestic Agent, organized under the laws of the United States or
any state thereof, but only with institutions whose capital and surplus
is in excess of $300,000,000;
(k) commercial paper, floating rate notes or master notes
rated A-2 or better by S&P or A-2 or better by Moody's;
(l) repurchase agreements collateralized by obligations issued
or guaranteed as to the payment of principal and interest by the full
faith and credit of the United States;
(m) units of taxable money market mutual funds comprised of
obligations described in (g) through (l) above;
(n) the making or acquisition of beneficial interests in, or
the making of loans, advances or capital contributions to, one or more
joint ventures as to which the Domestic Borrower or any Subsidiary is a
venturer, so long as such joint ventures are formed for the purpose of
operating seismic data acquisition or processing businesses (or for
allied, ancillary, related or supporting businesses), in an aggregate
principal amount not to exceed $50,000,000 at any time outstanding;
(o) loans, advances, extensions of credit, capital
contributions to or investments in, or purchases of stocks, bonds,
notes, debentures, or other securities in an aggregate principal amount
not to exceed $25,000,000 at any time outstanding;
75
(p) purchases of up to $20,000,000 of stock of the Domestic
Borrower; and
(q) loans, advances, extensions of credit, and investments
outstanding on the Initial Effective Date and described on Schedule
10.4 hereto
Section 10.5 Transactions With Affiliates. The Borrowers will not enter
into, and will not permit any Guarantor to enter into, any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate of the Borrowers or any
Guarantor, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrowers' or such Guarantor's business and upon fair and
reasonable terms no less favorable to the applicable Borrower or such Guarantor
than would be obtained in a comparable arm's-length transaction with a Person
not an Affiliate of such Borrower or such Guarantor; provided that the foregoing
shall not prohibit the Borrowers or the Guarantors from entering into management
contracts with Affiliates upon fair and reasonable terms in the ordinary course
of business or from entering into transactions with Affiliates pursuant to the
reasonable requirements of their business upon fair and reasonable terms that
comply with the transfer pricing laws of the taxing jurisdiction in which the
applicable Borrower or Guarantor is formed or incorporated or in which the
transaction occurs, or from entering into transactions otherwise permitted by
this Agreement. This Section does not apply to transactions between or among the
Borrowers or any Guarantors.
Section 10.6 Disposition of Assets. The Domestic Borrower will not
sell, lease, assign, transfer, or otherwise dispose of any of its assets, nor
permit any Subsidiary to do so with any of its assets, except (a) licensing of
surveys in the Data Library in the ordinary course of business, (b) dispositions
of inventory in the ordinary course of business, and, (c) dispositions of
tangible personal property of the Domestic Borrower and the Subsidiaries made in
the best business judgment of the Domestic Borrower, if (i) no Event of Default
has occurred and is continuing, (ii) no Event of Default would arise as a result
of any such disposition, and (iii) the aggregate book value of all such assets
disposed of in connection with such dispositions does not exceed 15% of
Consolidated Tangible Net Worth.
Section 10.7 Sale and Leaseback. The Borrowers will not enter into, and
will not permit any Guarantor to enter into, any arrangement with any Person
pursuant to which any of them leases from such Person real or personal property
that has been or is to be sold or transferred, directly or indirectly, by any of
them to such Person, except that the Borrowers and the Guarantors may enter into
such arrangements as long as the aggregate book value of the property sold and
which at any time remains subject to a lease does not exceed $15,000,000.
Section 10.8 Nature of Business. The Borrowers will not, and will not
permit any Guarantor to, engage in any business other than the businesses in
which they are engaged as of the date hereof and other businesses reasonably
related thereto.
Section 10.9 Environmental Protection. If, as a result thereof, a
Material Adverse Effect could be reasonably be expected to result therefrom, the
Domestic Borrower will not, and will not permit any Subsidiary to, (a) use (or
permit any tenant to use) any of their respective
76
properties or assets for the handling, processing, storage, transportation, or
disposal of any Hazardous Material except in compliance with Environmental Law,
(b) generate any Hazardous Material except in compliance with Environmental Law,
(c) conduct any activity that is likely to cause a Release or threatened Release
of any Hazardous Material, or (d) otherwise conduct any activity or use any of
their respective properties or assets in any manner that is likely to violate
any Environmental Law or create any Environmental Liabilities for which the
Domestic Borrower or any of its Subsidiaries would be responsible.
Section 10.10 Accounting. The Domestic Borrower will not, and will not
permit any of its Subsidiaries to, make any change (a) in accounting treatment
or reporting practices, except as required or permitted by GAAP, or (b) in tax
reporting treatment, except as required or permitted by law.
Section 10.11 Contracts. The Borrowers will not and will not permit any
Guarantor to, assign the rights to payment under a geophysical or seismic
service contract to any Person, other than to one of the Agents.
ARTICLE XI
Financial Covenants
The Borrowers covenant and agree that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or the
Issuing Bank has any obligation to issue Letters of Credit hereunder or any
Letter of Credit Liabilities exist, the Borrower will observe and perform the
following financial covenants:
Section 11.1 Consolidated Tangible Net Worth. The Domestic Borrower
will at all times maintain Consolidated Tangible Net Worth in an amount which is
not less than the sum of (a) 85% of Consolidated Tangible Net Worth as of
January 31, 2001, plus (b) 50% of the following (without deductions for losses)
for the period beginning on February 1, 2001 and ending on the date on which
such calculation is made: (i) Consolidated Net Income (to the extent it is a
positive number), less (ii) the amount of any write-downs of goodwill, to the
extent such amounts are added in calculating Consolidated Net Income, plus (c)
85% of the sum of (i) the net proceeds of any equity issued by the Domestic
Borrower or any of its Subsidiaries (on a consolidated basis) after the Initial
Effective Date and (ii) equity contributed to the Domestic Borrower or any of
its Subsidiaries (on a consolidated basis) after the Initial Effective Date in
connection with the purchase or other acquisition by the Domestic Borrower or
any Subsidiary of the assets or stock of any other Person. Consolidated Tangible
Net Worth shall be calculated and tested quarterly as of the last day of each
Fiscal Quarter.
Section 11.2 Consolidated Net Tangible Assets. The Domestic Borrower
will at all times maintain Consolidated Net Tangible Assets in an amount which
is not less than $500,000,000. Consolidated Net Tangible Assets shall be
calculated and tested quarterly as of the last day of each Fiscal Quarter.
77
Section 11.3 Fixed Charge Coverage Ratio. The Domestic Borrower and its
Subsidiaries will at all times maintain, on a consolidated basis, a Fixed Charge
Coverage Ratio of not less than 1.10 to 1.00. The Fixed Charge Coverage Ratio
shall be calculated and tested quarterly as of the last day of each Fiscal
Quarter for the Calculation Period ending on the last day of such Fiscal
Quarter.
Section 11.4 Funded Debt to EBITDA Ratio. The Domestic Borrower and its
Subsidiaries will maintain at all times, on a consolidated basis, a Funded Debt
to EBITDA Ratio of not greater than (a) 2.50 to 1.00 from the Initial Effective
Date through and including April 30, 2002, and (b) 2.25 to 1.00 at all times
thereafter. The Funded Debt to EBITDA Ratio shall be calculated and tested
quarterly as of the last day of each Fiscal Quarter for the Calculation Period
ending on the last day of such Fiscal Quarter.
Section 11.5 Subsidiary Assets. The Domestic Borrower will at all times
cause the aggregate value of the assets of all Subsidiaries that are not
Guarantors or Foreign Borrowers to be less than or equal to 15% of the aggregate
value of the assets of the Domestic Borrower and all of its Subsidiaries. The
requirement under this Section 11.5 shall be calculated and tested quarterly as
of the last day of each Fiscal Quarter.
ARTICLE XII
Default
Section 12.1 Events of Default. Each of the following shall be deemed
an "Event of Default":
(a) Any Borrower shall fail to pay (i) any interest or
principal portion of the Obligations when due or (ii) any other portion
of the Obligations, in each case, within five days after notice from
either Agent or any Bank.
(b) Any representation or warranty made or deemed made by any
Borrower or any Obligated Party (or any of their respective officers)
in any Loan Document or in any certificate, report, notice, or
financial statement furnished at any time in connection with this
Agreement shall be false, misleading, or erroneous in any material
respect when made or deemed to have been made.
(c) Any Borrower or any Obligated Party shall fail to perform,
observe, or comply with any covenant, agreement, or term contained in
Article X or Article XI of this Agreement.
(d) Any Borrower or any Obligated Party shall fail to perform,
observe, or comply with any covenant, agreement, or term contained in
this Agreement (other than the covenants, agreements and terms the
subject of Sections 12.1(a) or 12.1(c) above) or any other Loan
Document and such failure shall continue unremedied for a period 30
consecutive days after written notice from the Agent or any Bank.
78
(e) Any Borrower or any Obligated Party shall commence a
voluntary proceeding seeking liquidation, reorganization, or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law nor or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian, or other
similar official of it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for
the benefit of creditors or shall generally fail to pay its debts as
they become due or shall take any corporate action to authorize any of
the foregoing.
(f) An involuntary proceeding shall be commenced against any
Borrower or any Obligated Party seeking liquidation, reorganization, or
other relief with respect to it or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian, or other
similar official for its or a substantial part of its property, and
such involuntary proceeding shall remain undismissed and unstayed for a
period of 60 days.
(g) Any Borrower or any Obligated Party shall fail to
discharge within a period of thirty (30) days after the commencement
thereof any attachment, sequestration, or similar proceeding or
proceedings involving an aggregate amount in excess of $5,000,000
against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in
excess of $5,000,000 in the aggregate shall be rendered by a court or
courts against the Domestic Borrower, any of its Subsidiaries, or any
Obligated Party and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within 30 days from the date of entry thereof
and the Borrower or the relevant Subsidiary or Obligated Party shall
not, within said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appealed therefrom and
cause the execution thereof to be stayed during such appeal.
(i) The Domestic Borrower, any Subsidiary, or any Obligated
Party shall be in default under any agreement, instrument or other
document evidencing or in any way related to any Debt (other than the
Obligations), which default permits any holder of such Debt to
accelerate the maturity of such Debt or require all or any portion of
such Debt to be prepaid prior to the stated maturity thereof, whether
or not the maturity of such Debt shall actually have been accelerated
or such prepayment shall actually have been demanded.
(j) This Agreement or any other Loan Document shall cease to
be in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
the Domestic Borrower, any Subsidiary, any Obligated Party or any of
their respective shareholders, or the Domestic Borrower or any
Obligated Party shall deny that it has any further liability or
obligation under any of the Loan Documents, or, subject to the
provisions of Section 6.3, any lien or security interest
79
created by the Loan Documents shall for any reason cease to be a valid,
first priority perfected security interest in and lien upon any of the
Collateral purported to be covered thereby.
(k) The Domestic Borrower, any of its Subsidiaries, or any
Obligated Party, or any of their properties, revenues, or assets, shall
become subject to an order of forfeiture, seizure, or divestiture
(whether under RICO or otherwise) and the same shall not have been
discharged within thirty (30) days from the date of entry thereof.
(l) At any time while the Indenture is in effect, a Change of
Control (as such term is defined in the Indenture) shall have occurred.
Section 12.2 Remedies Upon Default. If any Event of Default shall occur
and be continuing, the Agents may (and if directed by Required Banks, shall)
without notice terminate the Revolving Credit Commitments and declare the
Obligations or any part thereof to be immediately due and payable, and the same
shall thereupon become immediately due and payable, without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any
kind, all of which are hereby expressly waived by the Borrowers; provided,
however, that upon the occurrence of an Event of Default under Section 12.1 (e)
or Section 12.1(f), the Revolving Credit Commitments shall automatically
terminate, and the Obligations shall become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, notice of intent to demand, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrowers. Except as otherwise expressly set forth herein, if any Event of
Default shall occur and be continuing, the Agents may take the actions
authorized by Section 6.3 and exercise all rights and remedies available to them
in law or in equity, under the Loan Documents, or otherwise.
Section 12.3 Letter of Credit. If any Event of Default shall occur and
be continuing, the applicable Borrower shall, if requested by the applicable
Agent, immediately deposit with and pledge to the applicable Agent cash or cash
equivalent investments in an amount equal to outstanding Letter of Credit
Liabilities.
Section 12.4 Performance by the Agent. If the Borrowers shall fail to
perform any covenant or agreement contained in any of the Loan Documents, the
Agents may, at the direction of the Required Banks, perform or attempt to
perform such covenant or agreement on behalf of the Borrowers. In such event,
the Borrowers shall, at the request of the Agents, promptly pay any amount
expended by the Agents or the Banks in connection with such performance or
attempted performance to the Agents, together with interest thereon at the
Default Rate from and including the date of such expenditure to but excluding
the date such expenditure is paid in full. Notwithstanding the foregoing, it is
expressly agreed that neither the Agents, the Issuing Banks nor any Bank shall
have any liability or responsibility for the performance of any obligation of
the Borrowers under this Agreement or any other Loan Document.
80
ARTICLE XIII
The Agents
Section 13.1 Appointment, Powers and Immunities.
(a) In order to expedite the various transactions contemplated
by this Agreement, subject to Section 13.7, the Domestic Banks and the
Domestic Issuing Bank hereby irrevocably appoint and authorize Domestic
Agent to act as their Agent hereunder and under each of the other Loan
Documents. The Domestic Agent consents to such appointment and agrees
to perform the duties of the Domestic Agent as specified herein. The
Domestic Banks and the Domestic Issuing Bank authorize and direct the
Domestic Agent to take such action in their name and on their behalf
under the terms and provisions of the Loan Documents and to exercise
such rights and powers thereunder as are specifically delegated to or
required of the Domestic Agent for the Domestic Banks and the Domestic
Issuing Bank, together with such rights and powers as are reasonably
incidental thereto. The Domestic Agent is hereby expressly authorized
to act as the Domestic Agent on behalf of itself, the other Domestic
Banks and the Domestic Issuing Bank:
(i) To receive on behalf of each of the Domestic
Banks, the Domestic Issuing Bank and the Domestic Agent any
payment of principal, interest, fees or other amounts paid
pursuant to this Agreement, the Domestic Revolving Credit
Notes, and the Swing Line Note and to distribute to each
Domestic Bank, the Domestic Issuing Bank and the Domestic
Agent, or any or some of them its share of all payments so
received as provided in this Agreement;
(ii) To receive all documents and items to be
furnished under the Loan Documents;
(iii) To act as nominee for and on behalf of the
Domestic Banks, the Domestic Issuing Bank and the Domestic
Agent in and under the Loan Documents.
(iv) To arrange for the means whereby the funds of
the Domestic Banks are to be made available to the Domestic
Borrower;
(v) To distribute to the Domestic Banks and the
Domestic Issuing Bank information, requests, notices,
payments, prepayments, documents and other items received from
the Domestic Borrower, the other Obligated Parties, and other
Persons;
(vi) To execute and deliver to the Domestic Borrower,
the other Obligated Parties, and other Persons, all requests,
demands, approvals, notices, and consents received from the
Domestic Banks and the Domestic Issuing Bank;
81
(vii) To the extent permitted by the Loan Documents,
to exercise on behalf of itself, each Domestic Bank and the
Domestic Issuing Bank all rights and remedies of Domestic
Banks upon the occurrence of any Event of Default;
(viii) To accept, execute, and deliver any security
documents as the secured party, including, without limitation
all financing statements;
(ix) To enter into the Collateral Agency Agreement;
and
(x) To take such other actions as may be requested by
Required Banks.
(b) In order to expedite the various transactions contemplated
by this Agreement, subject to Section 13.7, the Foreign Banks and the
Foreign Issuing Bank hereby irrevocably appoint and authorize Foreign
Agent to act as their Foreign Agent hereunder and under each of the
other Loan Documents. The Foreign Agent consents to such appointment
and agrees to perform the duties of the Foreign Agent as specified
herein. The Foreign Banks and the Foreign Issuing Bank authorize and
direct the Foreign Agent to take such action in their name and on their
behalf under the terms and provisions of the Loan Documents and to
exercise such rights and powers thereunder as are specifically
delegated to or required of the Foreign Agent for the Foreign Banks and
the Foreign Issuing Bank, together with such rights and powers as are
reasonably incidental thereto. The Foreign Agent is hereby expressly
authorized to act as the Foreign Agent on behalf of itself, the other
Foreign Banks and the Foreign Issuing Bank:
(i) To receive on behalf of each of the Canadian
Banks, the Foreign Issuing Banks (other than U.K. Bank) and
the Foreign Agent any payment of principal, interest, fees or
other amounts paid pursuant to this Agreement and the Foreign
Revolving Credit Notes and to distribute to each Canadian
Bank, the Foreign Issuing Banks (other than U.K. Bank) and the
Foreign Agent, or any or some of them its share of all
payments so received as provided in this Agreement;
(ii) To receive all documents and items to be
furnished under the Loan Documents;
(iii) To act as nominee for and on behalf of the
Foreign Banks, the Foreign Issuing Bank and the Foreign Agent
in and under the Loan Documents;
(iv) To arrange for the means whereby the funds of
the Canadian Banks are to be made available to the Canadian
Borrowers;
(v) To distribute to the Foreign Banks and the
Foreign Issuing Banks information, requests, notices,
payments, prepayments, documents and other items received from
the Foreign Borrowers, the other Obligated Parties, and other
Persons;
82
(vi) To execute and deliver to the Foreign Borrowers
(other than the U.K. Borrower), the other Obligated Parties,
and other Persons, all requests, demands, approvals, notices,
and consents received from the Foreign Banks and the Foreign
Issuing Bank;
(vii) To the extent permitted by the Loan Documents,
to exercise on behalf of itself, each Foreign Bank and the
Foreign Issuing Bank all rights and remedies of Foreign Banks
upon the occurrence of any Event of Default;
(viii) To accept, execute, and deliver any security
documents as the secured party, including, without limitation
all financing statements;
(ix) To enter into the Collateral Agency Agreement;
and
(x) To take such other actions as may be requested by
Required Banks.
Neither Agents nor any of their respective Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
this Agreement or any of the other Loan Documents except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Agents (i) may treat the payee of any Revolving Credit
Note as the holder thereof until the applicable Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to the applicable Agent; (ii) shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents, and
shall not by reason of this Agreement or any other Loan Document be a trustee or
fiduciary for any Bank or any Issuing Bank; (iii) shall not be required to
initiate any litigation or collection proceedings hereunder or under any other
Loan Document except to the extent requested by the Required Banks; (iv) shall
not be responsible to the Banks or the Issuing Bank for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document or for the value, validity, effectiveness, enforceability, or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder; (v) may consult with
legal counsel (including counsel for the Borrowers), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by this Agreement, the Agents shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks; provided, however, that the Agents shall not be required to
take any action which
83
exposes either Agent to personal liability or which is contrary to this
Agreement or any other Loan Document or applicable law.
Section 13.2 Rights of Agents as Banks. With respect to its Commitment,
the Advances made by it and the Revolving Credit Notes, and, with respect to the
Domestic Agent, the Swing Line Note issued to it, the Agents in their capacity
as Banks hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though they were not acting as an Agent or an
Issuing Bank and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agents in their individual capacity. The Agents and their
respective Affiliates may (without having to account therefor to any Banks or
any Issuing Bank) accept deposits from, lend money to, act as trustee under
indentures of, provide merchant banking services to, and generally engage in any
kind of business with the Domestic Borrower, any of its Subsidiaries, any other
Obligated Party, and any other Person who may do business with or own securities
of the Domestic Borrower, any Subsidiary, or any other Obligated Party, all as
if it were not acting as an Agent and without any duty to account therefor to
the Banks or any Issuing Bank.
Section 13.3 Sharing of Payments, Etc.
(a) Subject to the Collateral Agency Agreement, if any
Domestic Bank shall obtain any payment of any principal of or interest
on any Domestic Advance made by it under this Agreement or payment of
any other obligation under the Loan Documents then owed by Domestic
Borrower or any other Obligated Party to such Domestic Bank on account
of the Domestic Obligations, whether voluntary, involuntary, through
the exercise of any right of setoff, banker's lien, counterclaim or
similar right, or otherwise, in excess of its pro rata share, such
Domestic Bank shall promptly purchase from the other Domestic Banks
participations in the Domestic Advances held by them hereunder in such
amounts, and make such other adjustments from time to time as shall be
necessary to cause such purchasing Domestic Bank to share the excess
payment ratably with each of the other Domestic Banks in accordance
with its pro rata portion thereof. To such end, all of the Domestic
Banks shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if all or any portion of
such excess payment is thereafter rescinded or must otherwise be
restored. The Domestic Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Domestic Bank so
purchasing a participation in the Domestic Advances made by the other
Domestic Banks may exercise all rights of setoff, banker's lien,
counterclaim, or similar rights with respect to such participation as
fully as if such Domestic Bank were a direct holder of Domestic
Advances to the Domestic Borrower in the amount of such participation.
Nothing contained herein shall require any Domestic Bank to exercise
any such right or shall affect the right of any Domestic Bank to
exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Domestic
Borrower.
(b) Subject to the Collateral Agency Agreement, if any
Canadian Bank shall obtain any payment of any principal of or interest
on any Foreign Advance made by it
84
under this Agreement or payment of any other obligation under the Loan
Documents then owed by any Canadian Borrower or any other Obligated
Party to such Canadian Bank on account of the Canadian Obligations,
whether voluntary, involuntary, through the exercise of any right of
setoff, banker's lien, counterclaim or similar right, or otherwise, in
excess of its pro rata share, such Canadian Bank shall promptly
purchase from the other Canadian Banks participations in the Foreign
Advances held by them hereunder in such amounts, and make such other
adjustments from time to time as shall be necessary to cause such
purchasing Canadian Bank to share the excess payment ratably with each
of the other Canadian Banks in accordance with its pro rata portion
thereof. To such end, all of the Canadian Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if all or any portion of such excess payment is thereafter
rescinded or must otherwise be restored. The Canadian Borrowers agree,
to the fullest extent they may effectively do so under applicable law,
that any Canadian Bank so purchasing a participation in the Foreign
Advances made by the other Canadian Banks may exercise all rights of
setoff, banker's lien, counterclaim, or similar rights with respect to
such participation as fully as if such Canadian Bank were a direct
holder of Foreign Advances to the applicable Canadian Borrower in the
amount of such participation. Nothing contained herein shall require
any Canadian Bank to exercise any such right or shall affect the right
of any Canadian Bank to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or
obligation of the Canadian Borrowers.
Section 13.4 Indemnification. THE BANKS HEREBY AGREE TO INDEMNIFY THE
AGENTS FROM AND HOLD THE AGENTS AND THE ISSUING BANKS HARMLESS AGAINST (TO THE
EXTENT NOT REIMBURSED UNDER SECTIONS 14.1 AND 14.2, BUT WITHOUT LIMITING THE
OBLIGATIONS OF THE BORROWERS UNDER SECTIONS 14.1 AND 14.2), RATABLY IN
ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST THE AGENTS OR THE ISSUING BANKS IN ANY WAY RELATING TO OR ARISING OUT OF
ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE
AGENTS OR THE ISSUING BANKS UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS;
PROVIDED, THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE
EXTENT CAUSED BY EITHER AGENT'S OR ISSUING BANK'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF
THE BANKS THAT THE AGENTS AND THE ISSUING BANKS SHALL BE INDEMNIFIED HEREUNDER
FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE
OF THE AGENTS OR THE ISSUING BANKS.
85
WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION, EACH BANK AGREES TO
REIMBURSE THE AGENTS AND THE ISSUING BANKS PROMPTLY UPON DEMAND FOR ITS PRO RATA
SHARE (CALCULATED ON THE BASIS OF THE COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET
EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE AGENTS OR THE ISSUING BANKS
IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE AGENTS OR THE
ISSUING BANKS ARE NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
Section 13.5 Independent Credit Decisions. Each Bank agrees that it has
independently and without reliance on the Agents, the Issuing Banks, or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and the Obligated
Parties and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agents, the Issuing Banks, or any
other Bank, and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agents shall not be required to keep themselves informed as to
the performance or observance by the Borrowers or any Obligated Party of this
Agreement or any other Loan Document or to inspect the properties or books of
the Borrowers or any Obligated Party. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agents hereunder or under the other Loan Documents, the Agent shall not have any
duty or responsibility to provide the Issuing Banks or any Bank with any credit
or other financial information concerning the affairs, financial condition or
business of the Borrowers or any Obligated Party (or any of their Affiliates)
which may come into the possession of the Agents or any of their Affiliates.
Section 13.6 Several Commitments. The Commitments and other obligations
of the Banks under this Agreement are several. The default by any Bank in making
an Advance in accordance with its Commitment shall not relieve the other Banks
of their obligations under this Agreement. In the event of any default by any
Bank in making any Advance, each nondefaulting Bank shall be obligated to make
its Advance but shall not be obligated to advance the amount which the
defaulting Bank was required to advance hereunder. In no event shall any Bank be
required to advance an amount or amounts which shall in the aggregate exceed
such Bank's Commitment. No Bank shall be responsible for any act or omission of
any other Bank.
Section 13.7 Successor Agents. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks and the Borrowers and either Agent
may be removed at any time with or without cause by the Required Banks. Upon any
such resignation or removal, the Required Banks (with the consent of the
Borrowers, with consent will not be unreasonably withheld) will have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
by the Required Banks and shall have accepted such appointment within thirty
(30) days after the
86
retiring Agent's giving notice of resignation or the Required Banks' removal of
the retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint
a successor Agent, which shall be a commercial bank organized under the laws of
(a) the United States of America or any State thereof, if the retiring Agent is
the Domestic Agent, and (b) Canada or any Province thereof, if the retiring
Agent is the Foreign Agent, and having combined capital and surplus of at least
$300,000,000.00. Upon the acceptance of its appointment as successor Agent, such
successor Agent shall thereupon succeed to and become vested with all rights,
powers, privileges, immunities, and duties of the resigning or removed Agent,
and the resigning or removed Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any Agent's
resignation or removal as Agent, the provisions of this Article XIII shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was the Agent.
ARTICLE XIV
Miscellaneous
Section 14.1 Expenses. Except for legal fees described in the Fee
Letter, the Borrowers hereby agree to pay on demand (a) all reasonable costs and
expenses of the Agents in connection with the preparation, negotiation,
execution, and delivery of this Agreement and the other Loan Documents and any
and all amendments, modifications, renewals, extensions, and supplements thereof
and thereto, including, without limitation, the reasonable fees and expenses of
legal counsel for the Agents, the Issuing Banks and/or the Banks, (b) all
reasonable costs and expenses of the Agents, the Issuing Banks and/or the Banks
in connection with any Default and the enforcement of this Agreement or any
other Loan Document, including, without limitation, the reasonable fees and
expenses of legal counsel for the Agents, the Issuing Banks and/or the Banks,
(c) all transfer, stamp, documentary, or other similar taxes, assessments, or
charges levied by any Governmental Authority in respect of this Agreement or any
of the other Loan Documents, (d) all costs, expenses, assessments, and other
charges incurred in connection with any filing, registration, recording, or
perfection of any security interest or Lien contemplated by this Agreement or
any other Loan Document, and (e) all other reasonable costs and expenses
incurred by the Agents, the Issuing Banks and/or the Banks in connection with
this Agreement or any other Loan Document, including, without limitation, all
costs, expenses, and other charges incurred in connection with obtaining audit,
or appraisal in respect of the Collateral.
Section 14.2 Indemnification. THE BORROWERS SHALL INDEMNIFY EACH OF THE
AGENTS, THE ISSUING BANKS, AND THE BANKS AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD
EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENT, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS'
FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE
FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,
ADMINISTRATION, OR ENFORCEMENT OF ANY OF
87
THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY ANY BORROWER OF ANY REPRESENTATION, WARRANTY,
COVENANT, CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE,
THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL
LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE
BORROWER OR ANY SUBSIDIARY, OR (E) ANY INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING.
Section 14.3 Limitation of Liability. Neither the Agents, the Issuing
Banks or the Banks nor any Affiliate, officer, director, employee, attorney, or
agent of the Agents, the Issuing Banks or the Banks shall have any liability
with respect to, and the Borrowers hereby waive, release, and agree not to ▇▇▇
any of them upon, any claim for any special, indirect, incidental, or
consequential damages suffered or incurred by any Borrower in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any
of the other Loan Documents. The Borrowers hereby waive, release, and agree not
to ▇▇▇ the Agents, the Issuing Banks or the Banks or any of such Person's
Affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
Nothing contained in this Section shall affect the rights of the Borrowers to
collect actual damages awarded to them against any of the Agents, the Issuing
Banks, the Banks or any Affiliate of any of the foregoing Persons.
Section 14.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by any of the Agents, the Issuing
Banks or the Banks shall have the right to act exclusively in the interest of
such Persons and shall have no duty of disclosure, duty of loyalty, duty of
care, or other duty or obligation of any type or nature whatsoever to the
Borrowers or any of the Borrowers' shareholders or any other Person.
Section 14.5 Bank Not Fiduciary. The relationship between the
Borrowers, on one hand, and the Agents, the Issuing Banks and the Banks, on the
other hand, is solely that of debtor and creditor, and no such Person has any
fiduciary or other special relationship with the Borrowers, and no term or
condition of any of the Loan Documents shall be construed so as to deem the
relationship between the Borrowers and such Persons to be other than that of
debtor and creditor.
Section 14.6 No Waiver; Cumulative Remedies. No failure on the part of
any of the Agents, the Issuing Banks or the Banks to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power, or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power, or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right,
88
power or privilege. The rights and remedies provided for in this Agreement and
the other Loan Documents are cumulative and not exclusive of any rights and
remedies provided by law.
Section 14.7 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. The Borrowers may not assign or transfer any of their rights
or obligations hereunder without the prior written consent of the
Agents and all of the Banks. Any Bank may sell participations to one or
more banks or other institutions in or to all or a portion of its
rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its
Revolving Credit Commitments and the Advances owing to it); provided,
however, that (i) such Bank's obligations under this Agreement and the
other Loan Documents (including, without limitation, its Revolving
Credit Commitments) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the Borrowers for the performance of such
obligations, (iii) such Bank shall remain the holder of its Revolving
Credit Notes for all purposes of this Agreement, and (iv) the Borrowers
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement and the
other Loan Documents. Participants have no rights under the Loan
Documents except as provided below. Subject to the following, each Bank
may obtain, on behalf of its participants, the benefits of Article V
with respect to all participations in its part of the Obligations
outstanding from time to time, so long as Borrowers are not obligated
to pay any amount in excess of the amount that would be due to that
Bank under Article V calculated as though no participations have been
made. No Bank may sell any participating interest under which the
participant has any rights to approve any amendment, modification, or
waiver of any Loan Document except as to matters in Section 14.9(a),
(b) and (c).
(b) The Borrowers and each of the Banks agree that any Bank
(the "Assigning Bank") may, with the Agents' consent and unless an
Event of Default has occurred, the Borrowers' consent, which consent of
the Borrowers shall not be unreasonably withheld or delayed, at any
time assign to one or more Eligible Assignees all, or a proportionate
part of all, of its rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, its Revolving
Credit Commitments and Advances) (each an "Assignee"); provided,
however, that (i) each such assignment shall be of a consistent, and
not a varying, percentage of all of the Assigning Bank's Commitments,
rights and obligations under this Agreement and the other Loan
Documents, (ii) except in the case of an assignment of all of a Bank's
rights and obligations under this Agreement and the other Loan
Documents, the amount of the Revolving Credit Commitments of the
Assigning Bank being assigned pursuant to each assignment (determined
as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $8,000,000, and (iii) the
parties to each such assignment shall execute and deliver to the
Domestic Agent for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with the
Revolving Credit Notes (and the Swing Line Note, if applicable) subject
to such
89
assignment, and a processing and recordation fee of $3,500 to be paid
by the Assignee. Upon such execution, delivery, acceptance, and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, or, if so specified in such
Assignment and Acceptance, the date of acceptance thereof by the
Agents, (x) the assignee thereunder shall be a party hereto as a "Bank"
and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder and under the Loan Documents
and (y) the Bank that is an assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement and the other Loan
Documents (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of a Bank's rights and obligations under
the Loan Documents, such Bank shall cease to be a party thereto).
(c) By executing and delivering an Assignment and Acceptance,
the Bank that is an assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such Assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, and enforceability, genuineness,
sufficiency, or value of the Loan Documents or any other instrument or
document furnished pursuant thereto; (ii) such Assigning Bank makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or any Obligated Party or
the performance or observance by the Borrowers or any Obligated Party
of its obligations under the Loan Documents; (iii) such assignee
confirms that it has received a copy of the other Loan Documents,
together with copies of the current financial statements dated a date
acceptable to such assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agents or such assignor and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Loan Documents; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agents to take such action as
agent on its behalf and exercise such powers under the Loan Documents
as are delegated to the Agents by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank.
(d) The Domestic Agent shall maintain at its Principal Office
a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Banks and the Revolving Credit Commitments of, and principal amount of
the Advances owing to, each Bank from time
90
to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents, the Issuing Banks and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder for
all purposes under the Loan Documents. The Register shall be available
for inspection by the Borrowers, the Issuing Banks or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assigning Bank and assignee representing that it is an Eligible
Assignee, together with any Revolving Credit Note (and the Swing Line
Note, if applicable) subject to such assignment, the Domestic Agent
shall, if such Assignment and Acceptance has been completed and is in
the form satisfactory to the Domestic Agent in its sole discretion, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt written notice
thereof to the Borrowers. Within five (5) Business Days after its
receipt of such notice, the Borrowers, at their expense, shall execute
and deliver to the applicable Agent in exchange for the surrendered
Revolving Credit Notes (and Swing Line Note, if applicable), new
Revolving Credit Notes (and Swing Line Note, if applicable) to the
order of such Eligible Assignee in an amount equal to the Revolving
Credit Commitments assumed by it pursuant to such Assignment and
Acceptance and, if the Assigning Bank has retained a portion of its
Revolving Credit Commitments, new Revolving Credit Notes to the order
of the Assigning Bank in an amount equal to the Revolving Credit
Commitments retained by it hereunder (each such promissory note shall
constitute a "Revolving Credit Note" for purposes of the Loan
Documents). Such new Revolving Credit Notes (and Swing Line Note, if
applicable) shall be in an aggregate principal amount of the
surrendered Revolving Credit Notes (and Swing Line Note, if
applicable), shall be dated the last interest payment date prior to the
effective date of such Assignment and Acceptance, and shall otherwise
be in substantially the form of the appropriate Revolving Credit Notes
(and Swing Line Note, if applicable) initially issued pursuant hereto
with appropriate changes.
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Borrower or its
Subsidiaries furnished to such Bank by or on behalf of the Borrower or
its Subsidiaries.
(g) Notwithstanding any other provision in this Agreement or
in any other Loan Document, any Bank may at any time create a security
interest in all or any portion of its rights and obligations under this
Agreement (including its Revolving Credit Commitments and Advances
owing to it and the Revolving Credit Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System. Any Bank that is a fund that
invests in bank loans may pledge all or any portion of the Advances
owing to it and the Revolving Credit Note or Notes, if any, held by it
to a trustee for holders of obligations owed, or securities issued, by
such fund as security for such obligations or securities; provided
that, unless
91
and until such trustee actually becomes a Bank in compliance with the
other provisions of this Section 14.7 (i) no such pledge shall release
the pledging Bank from any of its obligations under this Agreement or
the other Loan Documents, and (ii) such trustee shall not be entitled
to exercise any of the rights of a Bank under this Agreement and the
other Loan Documents even though such trustee may have acquired
ownership rights with respect to the pledged interest through
foreclosure or otherwise.
Section 14.8 Survival. All representations and warranties made in this
Agreement or any other Loan Documents or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by any of the Agents, the Issuing Banks or the Banks or any
closing shall affect the representations and warranties or the right of any such
Person to rely upon them. Without prejudice to the survival of any other
obligation of the Borrowers hereunder, the obligations of the Borrowers under
Article V and Sections 14.1 and 14.2 shall survive repayment and/or assignment
of the Revolving Credit Notes and the Swing Line Note and termination of the
Commitments.
Section 14.9 ENTIRE AGREEMENT; AMENDMENTS. THIS AGREEMENT, THE
REVOLVING CREDIT NOTES, THE SWING LINE NOTE AND THE OTHER LOAN DOCUMENTS
REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement and
the other Loan Documents to which any of the Borrowers is a party may be amended
or waived only by an instrument in writing signed by the parties hereto. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement, the Revolving Credit Notes, or the Swing Line Note shall in
any event be effective unless the same shall be in writing and signed and
delivered by Banks having an aggregate Percentage of not less than the aggregate
Percentage expressly designated herein with respect thereto or, in the absence
of such designation as to any provision of this Agreement, the Revolving Credit
Notes or the Swing Line Note by the Required Banks, and then any such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, modification, waiver
or consent shall change the Percentage of any Bank without the consent of such
Bank. Subject to Section 2.10, no amendment, modification, waiver or consent
shall (a) extend or increase the amount of the Commitments, (b) extend the date
for payment of any principal of or interest on the Advances or any fees or other
amounts payable hereunder, (c) reduce the principal amount of any Advances, the
rate of interest thereof or any fees or other amounts payable hereunder, (d)
release a Guaranty Agreement (other than with respect to a Guarantor which
ceases to be a Material Subsidiary as a result of a transaction permitted
hereunder) or all or substantially all of the Collateral or (e) reduce the
aggregate Percentage required to effect an amendment, modification, waiver or
consent without, in each case, the consent of all Banks. No provisions of
Article XIII or other
92
provision of this Agreement affecting either Agent in its capacity as such shall
be amended, modified or waived without the consent of such Agent. No provision
of this Agreement relating to the rights or duties of an Issuing Bank in its
capacity as such shall be amended, modified or waived without the consent of
such Issuing Bank.
Section 14.10 Maximum Interest Rate. No provision of this Agreement or
any other Loan Document shall require the payment or the collection of interest
in excess of the maximum amount permitted by applicable law. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
the Borrowers nor the sureties, guarantors, successors, or assigns of the
Borrowers shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event any of the Agents, the Issuing Banks or the Banks
ever receives, collects, or applies as interest any such sum, such amount which
would be in excess of the maximum amount permitted by applicable law shall be
applied as a payment and reduction of the principal of the indebtedness
evidenced by the applicable Revolving Credit Notes or the Swing Line Note, as
applicable; and, if the principal of the applicable Revolving Credit Notes and
the Swing Line Note has been paid in full, any remaining excess shall forthwith
be paid to the applicable Borrower. In determining whether or not the interest
paid or payable exceeds the Maximum Rate, the Borrowers and the Agents, the
Issuing Banks and the Banks shall, to the extent permitted by applicable law,
(a) characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof; and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the entire contemplated term of the indebtedness
evidenced by the Revolving Credit Notes and the Swing Line Note so that interest
for the entire term does not exceed the Maximum Rate.
Section 14.11 Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which any Borrower is a
party shall be in writing and may be telecopied (faxed), mailed by certified
mail return receipt requested, or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party at such other address as shall be designated by such party
in a notice to the other party given in accordance with this Section. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopy, subject to telephone
confirmation of receipt, or when personally delivered to, in the case of a
mailed notice, when duly deposited in the mails, in each case given or addressed
as aforesaid; provided, however, notices to the Agents pursuant to Articles II,
III and IV shall not be effective until received by the applicable Agent.
Section 14.12 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN ▇▇▇▇▇▇ COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR
ALL PURPOSES IN ▇▇▇▇▇▇ COUNTY, TEXAS. SUBJECT TO SECTION 14.19, ANY ACTION OR
93
PROCEEDING AGAINST THE BORROWERS UNDER OR IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN ▇▇▇▇▇▇ COUNTY, TEXAS.
THE BORROWERS HEREBY IRREVOCABLY (A) SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS, AND (B) WAIVE ANY OBJECTION THEY MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY
SUCH COURT IS AN INCONVENIENT FORUM. THE BORROWERS AGREE THAT SERVICE OF PROCESS
UPON THEM MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
AT THEIR ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 14.10. NOTHING HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT
THE RIGHT OF THE AGENTS, THE ISSUING BANKS OR THE BANKS TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR, SUBJECT TO SECTION 14.19, SHALL LIMIT THE
RIGHT OF SUCH PERSONS TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWERS OR
WITH RESPECT TO ANY OF THEIR PROPERTY IN COURTS IN OTHER JURISDICTIONS. SUBJECT
TO SECTION 14.19, ANY ACTION OR PROCEEDING BY THE BORROWERS AGAINST ANY OF THE
AGENTS, THE ISSUING BANKS OR THE BANKS SHALL BE BROUGHT ONLY IN A COURT LOCATED
IN ▇▇▇▇▇▇ COUNTY, TEXAS.
Section 14.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 14.14 Severability. Any provision of this Agreement by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 14.15 Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 14.16 Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance Code are specifically declared by
the parties hereto not to be applicable to this Agreement or any of the other
Loan Documents or to the transactions contemplated hereby.
Section 14.17 Construction. The Borrowers, the Agents, the Issuing
Banks and the Banks acknowledge that each of them has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Agreement and the other Loan Documents with its legal counsel and that this
Agreement and the other Loan Documents shall be construed as if jointly drafted
by the Borrowers, the Agents, the Issuing Banks and the Banks.
Section 14.18 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the
94
limitations of, another covenant shall not avoid the occurrence of a Default if
such action is taken or such condition exists.
Section 14.19 Waiver of Trial By Jury. To the fullest extent permitted
by applicable law, the Borrowers hereby voluntarily, knowingly, irrevocably and
unconditionally waive any right to have a jury participate in resolving any
dispute (whether based upon contract, tort or otherwise) between or among the
Borrowers and any other party to this Agreement arising out of or in any way
related to this Agreement, any other Loan Documents, or any relationship between
any other party to this Agreement and the Borrowers. This provision is a
material inducement to the Banks to provide the financing described in this
Agreement.
ARTICLE XV
Arbitration
Section 15.1 Arbitration. Upon the demand of any party, any Dispute
shall be resolved by binding arbitration (except as set forth in Section 15.5
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.
Section 15.2 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.
Section 15.3 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,
95
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.
Section 15.4 Arbitrator Qualifications and Powers Awards. Arbitrators
must be active members of the State Bar of Texas with expertise in the
substantive laws applicable to 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.
Section 15.5 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.
Section 15.6 Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceedings 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
regulations, 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 provisions most
directly related to the Loan Documents or
96
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES TO FOLLOW]
97
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWERS:
VERITAS DGC INC.
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
Address for Notices:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
VERITAS DGC LIMITED
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attorney-in-Fact
Address for Notices:
Crompton Way, Manor Royal Estates
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Fax No.: (44) (1293) 443010
Telephone No.: (44) (1293) 443000
Attention: Managing Director
VERITAS ENERGY SERVICES PARTNERSHIP,
by its general partners:
Canex Information Services Ltd.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
Enertec Geophysical Services Ltd.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
Time Seismic Exchange Ltd.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
Veritas DGC Land Ltd.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
Veritas Geoservices Ltd.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
Address for Notices:
▇▇▇▇, ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
VERITAS ENERGY SERVICES INC.
By:
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman & Chief Executive Officer
Address for Notices:
▇▇▇▇, ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
DOMESTIC AGENT:
▇▇▇▇▇ FARGO BANK TEXAS, N.A., as
Domestic Agent and a Bank
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Vice President
Address for Notices:
▇▇▇▇▇ Fargo Energy Group
1000 Louisiana, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
FOREIGN AGENT:
HSBC BANK CANADA,
as Foreign Agent and a Bank
By:
--------------------------------------
Name:
Title:
Address for Notices:
▇▇▇ - ▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
U.K. BANK:
HSBC BANK PLC,
as U.K. Bank
By:
--------------------------------------
Name:
Title:
Address for Notices:
City Business Banking Centre
▇▇-▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax No.: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Telephone No.: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
OTHER BANKS:
SOUTHWEST BANK OF TEXAS, N.A.
By:
--------------------------------------
Name:
Title:
Address for Notices:
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
THE FUJI BANK LIMITED
By:
--------------------------------------
Name:
Title:
Address for Notices:
Houston Agency - Energy Finance
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (713)
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ Polasex
COMERICA BANK
By:
--------------------------------------
Name:
Title:
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
BANK ONE, NA
By:
--------------------------------------
Name:
Title:
Address for Notices:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
ANNEX A
DOMESTIC REVOLVING CREDIT COMMITMENTS:
▇▇▇▇▇ Fargo Bank Texas, N.A. $25,750,000
Bank One, NA $25,750,000
Southwest Bank Of Texas, N.A. $12,500,000
The Fuji Bank Limited $8,000,000
Comerica Bank $8,000,000
FOREIGN REVOLVING CREDIT COMMITMENTS:
HSBC Bank Canada $20,000,000
HSBC Bank Plc $20,000,000
[SCHEDULES AND EXHIBITS OMITTED]