1
EXHIBIT 10.1
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AMENDED AND RESTATED
SENIOR SECURED REVOLVING CREDIT AGREEMENT
among
DI INDUSTRIES, INC., AS BORROWER,
DRILLER, INC., AS BORROWER,
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
THE LENDING INSTITUTIONS LISTED HEREIN,
BANKERS TRUST COMPANY,
AS AGENT AND ADMINISTRATIVE AGENT,
and
ING (US) CAPITAL CORPORATION,
AS CO-AGENT AND DOCUMENTATION AGENT.
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Dated as of December 31, 1996,
as amended and restated as of April 30, 1997
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$50,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Minimum Borrowing Amounts, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03. Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04. Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.05. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.06. Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.07. Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.08. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09. Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.10. Increased Costs, Illegality, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.11. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.12. Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.13. Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.14. Joint and Several Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.15. Amendment and Restatement Effective Date;
Effect of Amendment and Restatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.01. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.02. Letter of Credit Requests; Notices of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.03. Agreement to Repay Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.04. Letter of Credit Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.05. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3. Fees; Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.01. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.02. Voluntary Termination or Reduction of Total
Unutilized Revolving Loan Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.03. Mandatory Reduction of Revolving Loan Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4. Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.01. Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.02. Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.03. Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.04. Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 5. Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.01. Execution of Agreement; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.02. No Default; Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.03. Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.04. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.05. Corporate Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.06. Adverse Change, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.07. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.08. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.09. Consummation of the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.10. [deleted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.11. Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.12. Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.13. Existing Indebtedness Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.14. Solvency Certificate; Evidence of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.15. Rig Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.16. Environmental Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.17. Pro Forma Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.18. Notice of Borrowing; Letter of Credit Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6. Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.01. Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.02. Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.03. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.04. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.05. Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.06. Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.07. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.08. Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.09. True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.10. Financial Condition; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.11. Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.12. Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.13. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.14. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.15. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.16. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.17. Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.19. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.20. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.21. Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.22. Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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SECTION 7. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.01. Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.02. Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.03. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.04. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.05. Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.06. Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.07. Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.08. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.09. Good Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.10. End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.11. Additional Security; Further Assurances;
Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.12. Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.01. Changes in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.02. Consolidation, Merger, Sale or Purchase of Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . 59
8.03. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.04. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.05. Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.06. Dividends, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.07. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.08. Working Capital; Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.09. Asset Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.10. Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.11. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.12. Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and
Certain Other Agreements; Issuances of
Capital Stock; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.13. Limitation on Certain Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.14. Limitation on the Creation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.01. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.02. Representations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.03. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.04. Default Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.05. Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.06. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.07. Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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9.08. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.09. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.10. Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 10. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 11. The Agent and Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.01. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.02. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.03. Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.04. Reliance by Agent and Co-Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.05. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.06. Nonreliance on Agent and Co-Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . 99
11.07. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.08. Agent or Co-Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.09. Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.10. Resignation of the Agent or Co-Agent; Successor Agent or Co-Agent . . . . . . . . . . . . . . . . . 102
SECTION 12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.01. Payment of Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.02. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
12.04. Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
12.05. No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
12.06. Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
12.07. Calculations; Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
12.08. Governing Law; Submission to Jurisdiction; Venue . . . . . . . . . . . . . . . . . . . . . . . . . . 108
12.09. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
12.10. Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.11. Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.12. Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.13. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
12.14. Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
12.15. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
12.16. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 13. Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
13.01. The Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
13.02. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
13.03. Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
13.04. Independent Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
13.05. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
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13.06. Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
13.07. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
13.08. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
ANNEX I List of Lenders and Commitments
ANNEX II Lender Addresses
ANNEX III Existing Letters of Credit
ANNEX IV Drilling Rigs
ANNEX V Existing Investments
ANNEX VI Subsidiaries
ANNEX VII Existing Indebtedness
ANNEX VIII Insurance
ANNEX IX Existing Liens
ANNEX X Assets Held For Sale
SCHEDULE 6.04 Litigation
SCHEDULE 6.10 Financial Condition
SCHEDULE 6.18 Environmental Matters
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B -- Form of Revolving Note
EXHIBIT C -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT D-1 -- Form of Opinion of Company's Counsel
EXHIBIT D-2 -- Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
EXHIBIT E -- Form of Officers' Certificate
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- [intentionally omitted]
EXHIBIT I -- Form of Solvency Certificate
EXHIBIT K -- Form of Assignment and Assumption Agreement
EXHIBIT L -- Form of Compliance Certificate
EXHIBIT M -- Form of Collateral Report
-v-
7
This AMENDED AND RESTATED SENIOR SECURED REVOLVING CREDIT
AGREEMENT, dated as of December 31, 1996 (the "Agreement"), among DI
INDUSTRIES, INC., a Texas corporation (the "Company"), DRILLERS, INC., a Texas
corporation ("DI" and, with the Company, the "Borrowers"), each of the
Subsidiary Guarantors party hereto (the "Subsidiary Guarantors"), the lending
institutions from time to time party hereto (each a "Lender" and, collectively,
the "Lenders") and BANKERS TRUST COMPANY, as Agent and Administrative Agent,
and ING (US) CAPITAL CORPORATION, as Co-Agent and Documentation Agent. Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 10 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Company, DI, the Subsidiary Guarantors, the
Lenders, Bankers Trust Company, as Agent, and ING (US) Capital Corporation, as
Co-Agent, are parties to a Senior Secured Reducing Revolving Credit Agreement
dated as of December 31, 1996 (the "Existing Credit Agreement"), pursuant to
which the Lenders made available to the Borrowers a loan facility in an
aggregate amount up to $35,000,000;
WHEREAS, the Borrowers desire to incur additional Loans from
the Lenders, the proceeds of which will be applied, to the extent necessary, to
repay existing debt, to provide ongoing working capital to the Borrowers and
for general corporate purposes;
WHEREAS, the parties hereto desire to amend and restate the
Existing Credit Agreement in order to, among other things, increase the Total
Commitment to $50,000,000; and
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lenders are willing to make Revolving Loans to the Borrowers and
issue Letters of Credit for the purposes described herein;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein, each of the Borrowers, the
Subsidiary Guarantors, the Lenders, the Agent and the Co-Agent hereby agrees as
follows:
SECTION 1. Amount and Terms of Credit.
1.01. Commitments. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees, at any time and from
time to time on and after the Initial
8
-2-
Borrowing Date and prior to the Final Maturity Date, to make a revolving loan
or loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to
the Borrowers, which Revolving Loans: (i) shall be denominated in U.S.
Dollars, (ii) except as hereinafter provided, shall, at the option of the
Borrowers, be incurred and maintained as and/or converted into Base Rate Loans
or Eurodollar Loans; and further provided that all Revolving Loans made as part
of the same Borrowing shall, unless otherwise specifically provided herein,
consist of Revolving Loans of the same Type, (iii) may be repaid and reborrowed
in accordance with the provisions hereof and (iv) shall not exceed for any
Lender at any time outstanding that aggregate principal amount which, when
combined with Letter of Credit Outstandings (exclusive of Unpaid Drawings
relating to Letters of Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time, equals the Revolving Loan Commitment of such Lender at
such time.
1.02. Minimum Borrowing Amounts, etc. The aggregate
principal amount of each Borrowing of Loans shall not be less than the Minimum
Borrowing Amount applicable to such Loans. More than one Borrowing may be
incurred on any day; provided that at no time shall there be outstanding more
than five Borrowings of Eurodollar Loans.
1.03. Notice of Borrowing. (a) Whenever a Borrower desires
to incur Revolving Loans hereunder, it shall give the Agent at the Notice
Office, prior to 10:00 A.M. (New York time), at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Eurodollar Loans and at least one Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Base Rate Loans to be made hereunder. Each such notice (each a
"Notice of Borrowing") shall, except as provided in Section 1.10, be
irrevocable, and, in the case of each written notice and each confirmation of
telephonic notice, shall be in the form of Exhibit A-1, appropriately completed
to specify (i) the aggregate principal amount of the Revolving Loans to be made
pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day) and (iii) whether the respective Borrowing shall consist of Base
Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall promptly give each Lender written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing, of such
9
-3-
Lender's proportionate share thereof and of the other matters covered by the
Notice of Borrowing.
(b) Without in any way limiting the obligation of the
Borrowers to confirm in writing any telephonic notice permitted to be given
hereunder, the Agent or the Letter of Credit Issuer (in the case of the
issuance of Letters of Credit), as the case may be, may prior to receipt of
written confirmation act without liability upon the basis of such telephonic
notice, believed by the Agent or the Letter of Credit Issuer, as the case may
be, in good faith to be from an Authorized Officer of a Borrower. The Agent's
or the Letter of Credit Issuer's record of the terms of such telephonic notice
shall be final, conclusive and binding absent manifest error.
1.04. Disbursement of Funds. (a) Not later than 1:00 P.M.
(New York time) on the date specified in each Notice of Borrowing, each Lender
will make available its pro rata share, if any, of each Borrowing requested to
be made on such date in the manner provided below. All amounts shall be made
available to the Agent in U.S. Dollars and in immediately available funds at
the Payment Office and the Agent promptly will make available to the applicable
Borrower by depositing to its account at the Payment Office the aggregate of
the amounts so made available in the type of funds received. Unless the Agent
shall have been notified by any Lender prior to the date of Borrowing that such
Lender does not intend to make available to the Agent its portion of the
Borrowing or Borrowings to be made on such date, the Agent may assume that such
Lender has made such amount available to the Agent on such date of Borrowing,
and the Agent, in reliance upon such assumption, may (in its sole discretion
and without any obligation to do so) make available to the applicable Borrower
a corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Lender and the Agent has made available same to
the applicable Borrower, the Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrowers, and the Borrowers shall immediately pay
such corresponding amount to the Agent, which payment may be made, subject to
the terms and conditions of this Agreement, from the proceeds of a Loan. The
Agent shall also be entitled to recover from the Lender or the Borrowers, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Agent to the
Borrowers to the date such corresponding amount is recovered by the Agent, at a
rate per annum equal to (x) if
10
-4-
paid by such Lender, the overnight Federal Funds Rate or (y) if paid by the
Borrowers, the then applicable rate of interest, calculated in accordance with
Section 1.08.
(b) Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrowers may have against any Lender as a result of any default by
such Lender hereunder.
1.05. Notes. (a) The Borrowers' obligation to pay the
principal of, and interest on, all the Loans made to it by each Lender shall be
evidenced in the case of Revolving Loans, by a promissory note substantially in
the form of Exhibit B-1 with blanks appropriately completed in conformity
herewith (each a "Revolving Note" and, collectively, the "Revolving Notes").
(b) The Revolving Note issued to each Lender shall (i) be
executed by the Borrowers, (ii) be payable to such Lender or its registered
assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal
amount equal to the Revolving Loan Commitment of such Lender and be payable in
the principal amount of the outstanding Revolving Loans evidenced thereby, (iv)
mature on the Final Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of the Credit
Documents.
(c) Each Lender will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will prior to
any transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrowers' obligations in respect of such
Loans.
1.06. Conversions. The Borrowers shall have the option to
convert on any Business Day occurring on or after the Initial Borrowing Date,
all or a portion at least equal to the applicable Minimum Borrowing Amount of
the outstanding principal amount of Revolving Loans made pursuant to one or
more Borrowings of one or more Types of Revolving Loans into a Borrowing or
Borrowings of another Type of Revolving Loan; provided that (i) except as
otherwise provided in Section 1.10(b), no partial conversion of a Borrowing of
Eurodollar Loans shall
11
-5-
reduce the outstanding principal amount of the Eurodollar Loans made pursuant
to such Borrowing to less than the Minimum Borrowing Amount applicable thereto,
(ii) Base Rate Loans may only be converted into Eurodollar Loans if no payment
Default, or Event of Default, is in existence on the date of the conversion,
and (iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall
be limited in number as provided in Section 1.02. Each such conversion shall
be effected by the applicable Borrower by giving the Agent at the Notice
Office, prior to 10:00 A.M. (New York time), at least two Business Days' (or
one Business Day's in the case of a conversion into Base Rate Loans) prior
written notice (or telephonic notice promptly confirmed in writing) (each a
"Notice of Conversion") specifying the Revolving Loans to be so converted, the
Borrowing(s) pursuant to which the Revolving Loans were made and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Lender prompt notice
of any such proposed conversion affecting any of its Revolving Loans.
1.07. Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be made by the Lenders pro rata on the basis of
their Revolving Loan Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender of its obligation to make
Revolving Loans hereunder and that each Lender shall be obligated to make the
Revolving Loans to be made by it hereunder, regardless of the failure of any
other Lender to fulfill its commitments hereunder.
1.08. Interest. (a) The unpaid principal amount of each
Base Rate Loan shall bear interest from the date of the Borrowing thereof until
the earlier of (i) the maturity (whether by acceleration or otherwise) of such
Base Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06, at a rate per annum which shall at all times be
the Applicable Base Rate Margin in excess of the Base Rate in effect from time
to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such Eurodollar Loan and
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall
at all times be the Applicable Eurodollar Margin in excess of the relevant
Eurodollar Rate.
12
-6-
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate per
annum equal to the greater of (x) the rate which is 2% in excess of the rate
then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans from time to time. Interest which
accrues under this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof (determined in
accordance with Section 4.03) and shall be payable (i) in respect of each Base
Rate Loan, quarterly in arrears on each Quarterly Payment Date, (ii) in respect
of each Eurodollar Loan, on (x) the date of any prepayment or repayment thereof
(on the amount prepaid or repaid), (y) the date of any conversion into a Base
Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable (on the
amount so converted) and (z) the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrowers and the Lenders thereof.
1.09. Interest Periods. At the time a Borrower gives a
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 10:00 A.M. (New York time) on
the second Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Loans, such Borrower shall have the
right to elect by giving the Agent written notice (or telephonic notice
promptly confirmed in writing) of the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of such Borrower (but
otherwise subject to clause (y) of the proviso to Section 1.01(a)(ii)), be a
one, two, three or six month period. Notwithstanding anything to the contrary
contained above:
(i) all Eurodollar Loans comprising a single Borrowing
shall have the same Interest Period;
13
-7-
(ii) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of
such Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(iii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period shall be elected which extends
beyond the Final Maturity Date;
(vi) no Interest Period may be elected at any time when a
payment Default or any Event of Default is then in existence;
provided, however, that at any time when a non-payment Default is in
existence, only a one- month Interest Period may be elected; and
(vii) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall be elected which extends beyond any date upon
which a mandatory prepayment of Revolving Loans is required to be made
under Section 4.02(a), as a result of reductions to the Total
Revolving Loan Commitment pursuant to Section 3.03(b), unless the
aggregate principal amount of Revolving Loans which are maintained as
Base Rate Loans or which have Interest Periods which will expire on or
before such date will be sufficient to make such required payment.
If, upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrowers have failed to elect, or are not permitted to
elect by virtue of the application of clause (vi) above, a new Interest Period
to be applicable to the respective Borrowing of Eurodollar Loans as
14
-8-
provided above, the Borrowers shall be deemed to have elected to convert such
Borrowing into a Borrowing of Base Rate Loans effective as of the expiration
date of such current Interest Period.
1.10. Increased Costs, Illegality, etc. (a) In the event
that (x) in the case of clause (i) below, the Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for
any Interest Period, that, by reason of any changes arising after the
date of this Agreement affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of net income taxes or similar
charges) because of (x) any change since the date of this Agreement in
any applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the
interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to,
a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included
in the computation of the Eurodollar Rate) and/or (y) other
circumstances affecting such Lender, the interbank Eurodollar market
or the position of such Lender in such market; or
(iii) at any time since the date of this Agreement, that
the making or continuance of any Eurodollar Loan has become unlawful
by compliance by such Lender in good faith with any law, governmental
rule, regulation, guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not having the force
of law but with which such Lender customarily complies even though
the failure to comply therewith would not be
15
-9-
unlawful), or has become impracticable as a result of a contingency
occurring after the date of this Agreement which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Agent in the case of clause
(i) above) shall (x) within five Business Days after any such event and (y)
within five Business Days of the date on which such event no longer exists give
notice (by telephone confirmed in writing) to the Borrowers and (except in the
case of clause (i)) to the Agent of such determination (which notice the Agent
shall promptly transmit to each of the other Lenders). Thereafter, (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice by the Agent no longer exist (which
notice the Agent shall endeavor to give promptly after any determination
thereof by the Agent), and any Notice of Borrowing or Notice of Conversion
given by a Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by the Borrowers, (y) in the case of clause
(ii) above, the Borrowers agree to pay to such Lender, upon written demand
therefor (accompanied by the written notice referred to below), such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Lender, showing the basis for
the calculation thereof, submitted to the Borrowers by such Lender shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrowers shall take one
of the actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrowers may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Borrowers shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that a Borrower
was notified by a Lender pursuant to Section 1.10(a)(ii) or (iii)), or (ii) if
the affected Eurodollar Loan is then outstanding, upon at least two Business
Days' notice to the Agent, require the affected Lender to
16
-10-
convert each such Eurodollar Loan into a Base Rate Loan (which conversion, in
the case of the circumstances described in Section 1.10(a)(iii), shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan (or such earlier date as shall be required by applicable law));
provided that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, in each
case, after the date of this Agreement, has or would have the effect of
reducing the rate of return on such Lender's or such other corporation's
capital or assets as a consequence of such Lender's Revolving Loan Commitment
or obligations hereunder to a level below that which such Lender or such other
corporation could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's or such other corporation's
policies with respect to capital adequacy), then from time to time, upon
written demand by such Lender (with a copy to the Agent), accompanied by the
notice referred to in the last sentence of this clause (c), the Borrowers shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such other corporation for such reduction. Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrowers, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrowers' obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11. Compensation. The Borrowers shall compensate each
Lender, promptly upon its written request (which request shall set forth the
basis for requesting such compensation), for all reasonable losses, expenses
and liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Lender to fund its Eurodollar Loans but
17
-11-
excluding loss of anticipated profit with respect to any Eurodollar Loans)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Agent) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrowers or deemed withdrawn pursuant to
Section 1.10(a) or (b)); (ii) if any repayment (including any repayment made
pursuant to Section 4.01 or 4.02 or as a result of an acceleration of the Loans
pursuant to Section 9) or conversion of any Eurodollar Loans occurs on a date
which is not the last day of an Interest Period applicable thereto; (iii) if
any prepayment of any Eurodollar Loans is not made on any date specified in a
notice of prepayment given by a Borrower; or (iv) as a consequence of (x) any
other default by the Borrowers to repay Eurodollar Loans when required by the
terms of this Agreement or (y) an election made pursuant to Section 1.10(b).
Calculation of all amounts payable to a Lender under this Section 1.11 shall be
made as though that Lender had actually funded its relevant Eurodollar Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of that Loan, having maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Lender to a domestic office of that
Lender in the United States of America; provided, however, that each Lender may
fund each of its Eurodollar Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this Section 1.11. It is further understood and agreed that if any repayment
of Eurodollar Loans pursuant to Section 4.01 or any conversion of Eurodollar
Loans pursuant to Section 1.06 in either case occurs on a date which is not the
last day of an Interest Period applicable thereto, such repayment or conversion
shall be accompanied by any amounts owing to any Lender pursuant to this
Section 1.11.
1.12. Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), 1.10(c), 2.05 or 4.04 with respect to such Lender, it
will, if requested by the Company, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event; provided that such
designation is made on such terms that, in the sole judgment of such Lender,
such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequences of the event giving
rise to the operation of any such Section. Nothing in this Section 1.12 shall
affect or postpone any of the obligations of
18
-12-
the Borrowers or the right of any Lender provided in Section 1.10, 2.05 or
4.04.
1.13. Replacement of Lenders. (x) If any Lender becomes a
Defaulting Lender, (y) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or
Section 4.04 with respect to any Lender which results in such Lender charging
to the Borrowers increased costs in excess of those being generally charged by
the other Lenders or (z) in the case of a refusal by a Lender to consent to a
proposed change, waiver, discharge or termination with respect to this
Agreement which has been approved by the Required Lenders as provided in
Section 12.12(b) the Borrowers shall have the right, if no Default or Event of
Default then exists or, in the case of clause (z) above, would exist after
giving effect to such replacement, to replace such Lender (the "Replaced
Lender") with one or more other Eligible Transferee or Transferees, none of
whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender") and each of whom shall be acceptable
to the Agent; provided that (i) at the time of any replacement pursuant to this
Section 1.13, the Replacement Lender shall enter into one or more Assignment
and Assumption Agreements pursuant to Section 12.04(b) (and with all fees
payable pursuant to said Section 12.04(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire the Revolving Loan
Commitment and outstanding Revolving Loans of, and in each case participations
in Letters of Credit by, the Replaced Lender and, in connection therewith,
shall pay to (x) the Replaced Lender in respect thereof an amount equal to the
sum of (A) an amount equal to the principal of, and all accrued interest on,
all outstanding Revolving Loans of the Replaced Lender, (B) an amount equal to
all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Lender, together with all then unpaid interest with respect thereto at
such time and (C) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Lender pursuant to Section 3.01, (y) each Letter of
Credit Issuer an amount equal to such Replaced Lender's Percentage of any
Unpaid Drawing relating to Letters of Credit issued by such Letter of Credit
Issuer (which at such time remains an Unpaid Drawing) to the extent such
amount was not theretofore funded by such Replaced Lender and (ii) all
obligations of the Borrowers then owing to the Replaced Lender (other than
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid, but
including all amounts, if any, owing under Section 1.11) shall be paid in full
to such Replaced Lender concurrently with such
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replacement. Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts referred to in clauses (i) and (ii) above,
recordation of the assignment on the Register by the Agent pursuant to Section
7.12 and, if so requested by the Replacement Lender of the appropriate
Revolving Note or Revolving Notes executed by the Borrowers, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 2.05, 4.04, 12.01 and 12.06), which shall survive as to such Replaced
Lender.
1.14. Joint and Several Liability. (a) The Borrowers shall
have joint and several liability in respect of all Obligations hereunder and
under any other Credit Document to which any Borrower is a party, without
regard to any defense (other than the defense that payment in full has been
made), set-off or counterclaim which may at any time be available to or be
asserted by any other Credit Party against the Lenders, or by any other
circumstance whatsoever (with or without notice to or knowledge of the
Borrowers) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrowers' liability hereunder, in bankruptcy or in
any other instance, and the Obligations of the Borrowers hereunder shall not be
conditioned or contingent upon the pursuit by the Lenders or any other Person
at any time of any right or remedy against the Borrowers or against any other
Person which may be or become liable in respect of all or any part of the
Obligations or against any Collateral or guarantee therefor or right of offset
with respect thereto. The Borrowers hereby acknowledge that this Agreement is
the independent and several obligation of each Borrower (regardless of which
Borrower shall have delivered a Notice of Borrowing) and may be enforced
against each Borrower separately, whether or not enforcement of any right or
remedy hereunder has been sought against the other Borrower. Each Borrower
hereby expressly waives, with respect to any of the Loans made to the other
Borrower hereunder and any of the amounts owing hereunder by such other Credit
Parties in respect of such Loans, diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Agent or any
Lender exhaust any right, power or remedy or proceeds against such other Credit
Parties under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of such amounts owing hereunder.
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(b) Notwithstanding any other provisions of this Agreement or
the other Credit Documents, the maximum aggregate amount for which a Borrower
shall be liable hereunder with respect to Loans to the other Borrower and other
Obligations of the other Borrower shall not exceed the maximum aggregate amount
of Obligations which does not render this Section 1.14, as it relates to such
Borrower, void or voidable under applicable laws relating to fraudulent
conveyance or fraudulent transfer. Subject to the preceding sentence, each
Borrower shall be liable for payment of Obligations when due and not for
collection thereof and each Lender may, from time to time, enforce this
provision against any Borrower up to the full amount of the Obligations owed to
such Lender without proceeding against the other Borrower, against any security
for the Obligations, against any Subsidiary Guarantor or under any Subsidiary
Guarantee covering the Obligations.
(c) The Borrowers hereby agree, as between themselves, that
if any Borrower (an "Excess Funding Borrower") shall pay amounts in excess of
the portion of the then outstanding Obligations which have arisen in respect of
extensions of credit to or for the benefit of the Excess Funding Borrower the
other Borrower shall, on demand (but subject to the next sentence hereof), pay
to the Excess Funding Borrower an amount equal to such excess. The payment
obligation of any Borrower to any Excess Funding Borrower under this Section
1.14(c) shall be subordinate in right of payment to, and subject to, the prior
payment and satisfaction in full of the Obligations of such Borrower under the
other provisions of this Agreement and the other Credit Documents and such
Excess Funding Borrower shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of the Obligations;
in addition, no Borrower shall be obligated to pay to the Excess Funding
Borrower an amount under this Section 1.14(c) greater than the amount which,
when taken together with the aggregate of the amounts paid by it under this
Credit Agreement and all other payments under this Section 1.14, would exceed
the portion of the then outstanding Obligations which have arisen in respect
of extensions of credit to or for the benefit of such Borrower.
1.15. Amendment and Restatement Effective Date; Effect of
Amendment and Restatement. (a) This Agreement shall become effective as
provided in Section 12.10.
(b) Upon the effectiveness of this Agreement in accordance
with the terms hereof:
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(i) the terms and conditions of the Existing Credit
Agreement shall be restated in their entirety, but only with respect
to the rights, duties and obligations among the Agent, the Co-Agent,
the Lenders, the Guarantors and the Borrowers accruing from and after
the Amendment and Restatement Effective Date;
(ii) this Agreement shall not in any way release or impair
the rights, duties, obligations or Liens created pursuant to the
Existing Credit Agreement or any other Credit Document or affect the
relative priorities thereof, in each case to the extent in force and
effect hereunder and thereunder as of the Amendment and Restatement
Effective Date and except as modified hereby or thereby or by
documents, instruments and agreements executed and delivered in
connection herewith or therewith, and all of such rights, duties,
obligations and Liens are ratified and affirmed by the parties hereto;
(iii) notwithstanding any other provisions of this
Agreement, all indemnification obligations of the Borrowers under the
Existing Credit Agreement and any other Credit Document shall survive
the execution and delivery of this Agreement and shall continue in
full force and effect for the benefit of the Agent, the Co- Agent and
the Lenders;
(iv) the obligations incurred under the Existing Credit
Agreement shall, to the extent outstanding on the Amendment and
Restatement Effective Date, continue to be outstanding under this
Agreement and shall not be deemed to be paid, released, discharged or
otherwise satisfied by the execution of this Agreement, and this
Agreement shall not be deemed to constitute a refinancing,
substitution or novation of such obligations;
(v) all of the outstanding loans under the Existing
Credit Agreement immediately prior to the Closing Date of each Lender
which shall be a party to this Agreement shall thereafter constitute a
portion of the Revolving Loans in the amounts set forth on Schedule I;
(vi) the execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy
of any of the Lenders or the Agent or Co-Agent under the Existing
Credit Agreement, nor constitute a waiver of any covenant, agreement
or obligation of the Borrowers under the Existing Credit Agreement,
except to
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the extent that any such covenant, agreement or obligation is no
longer set forth in this Agreement or is modified hereby;
(vii) any and all references in the Credit Documents to the
Existing Credit Agreement shall, without further action of the
parties, be deemed a reference to the Existing Credit Agreement as
amended and restated by this Agreement (including all references in
the Security Agreement and Pledge Agreement to "$35,000,000" are
hereby replaced with references to "$50,000,000"), and as this
Agreement shall be further amended or amended and restated from time
to time hereafter; and
(viii) on the Amendment and Restatement Effective Date, the
Lenders holding notes (each an "Existing Lender" and together, the
"Existing Lenders") executed and delivered under the Existing Credit
Agreement (the "Existing Notes") shall surrender such Existing Notes
to the Borrowers; upon the Agent's receipt of such Existing Notes from
each Existing Lender, the Borrowers shall execute and deliver to the
Agent for delivery to each Existing Lender a Revolving Note in the
principal amount of such Lender's Revolving Loan Commitment in
accordance with the provisions of Section 1.01.
SECTION 2. Letters of Credit.
2.01. Letters of Credit. (a) Subject to and upon the terms
and conditions herein set forth, the Borrowers may request the Letter of Credit
Issuer at any time and from time to time on or after the Initial Borrowing Date
and prior to the Business Day preceding the Final Maturity Date to issue, for
the account of the Borrowers and in support of, on a standby basis, L/C
Supportable Indebtedness of the Borrowers or any Subsidiary of either Borrower
to any other Person, irrevocable letters of credit in such form as may be
approved by such Letter of Credit Issuer (each such letter of credit, a "Letter
of Credit" and, collectively, the "Letters of Credit"). Notwithstanding the
foregoing, no Letter of Credit Issuer shall be under any obligation to issue
any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Letter of Credit Issuer from issuing such Letter of
Credit or any requirement of law
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applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over such Letter of Credit Issuer shall
prohibit, or request that such Letter of Credit Issuer refrain from,
the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon such Letter of Credit Issuer with
respect to such Letter of Credit any restriction or reserve or capital
requirement (for which such Letter of Credit Issuer is not otherwise
compensated pursuant to the terms hereof) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Letter of Credit Issuer as of
the date hereof and which such Letter of Credit Issuer in good ▇▇▇▇▇
▇▇▇▇▇ material to it; or
(ii) such Letter of Credit Issuer shall have received
notice from the Borrowers or the Required Lenders prior to the
issuance of such Letter of Credit of the type described in clause (vi)
of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) the Letter of Credit Sublimit or (y) when added to the
aggregate principal amount of all Revolving Loans then outstanding, the Total
Revolving Loan Commitment at such time; (ii) each Letter of Credit shall have
an expiry date occurring not later than one year after such Letter of Credit's
date of issuance; provided that any such Letter of Credit may be automatically
extendable for periods of up to one year so long as such Letter of Credit
provides that the respective Letter of Credit Issuer retains an option,
satisfactory to such Letter of Credit Issuer, to terminate such Letter of
Credit within a specified period of time prior (but not less than 30 days) to
each scheduled extension date; provided, further, that each Letter of Credit
shall state and shall provide that it shall, in no event, expire no later than
five Business Days prior to the Final Maturity Date; (iii) each Letter of
Credit shall be denominated in U.S. Dollars; (iv) each Letter of Credit shall
provide that the Stated Amount of each Letter of Credit shall not be less than
$100,000 or such lesser amount as is acceptable to the respective Letter of
Credit Issuer; (v) no Letter of Credit Issuer will issue any Letter of Credit
after it has received written notice from a Borrower or the Required Lenders
stating that a Default or an Event of Default exists until such
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time as such Letter of Credit Issuer shall have received a written notice of
(x) rescission of such notice from the party or parties originally delivering
the same or (y) a waiver of such Default or Event of Default by the Required
Lenders and (vi) no Letter of Credit in support of L/C Supportable Indebtedness
of a Foreign Subsidiary shall be issued the Stated Amount of which, when added
to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter of
Credit) in support of L/C Supportable Indebtedness of Foreign Subsidiaries at
such time, would exceed $1 million.
(c) Notwithstanding the foregoing, in the event a Lender
Default exists, no Letter of Credit Issuer shall be required to issue any
Letter of Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrowers to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders, including by cash collateralizing such
Defaulting Lender's or Lenders' Percentage of the Letter of Credit
Outstandings, as the case may be. No such arrangement shall prejudice the
right of the Borrowers or the Letter of Credit Issuer to pursue any available
remedies it may have against any Defaulting Lender.
2.02. Letter of Credit Requests; Notices of Issuance. (a)
Whenever the Borrowers desires that a Letter of Credit be issued, a Borrower
shall give the Agent and the respective Letter of Credit Issuer written notice
(or notice by facsimile) thereof prior to 12:00 Noon (New York time) at least
two Business Days (or such shorter period as may be acceptable to the
respective Letter of Credit Issuer) prior to the proposed date of issuance
(which shall be a Business Day) which written notice shall be in the form of
Exhibit A-2 (each, a "Letter of Credit Request"). Each Letter of Credit
Request shall include any other documents as such Letter of Credit Issuer
customarily requires in connection therewith.
(b) Each Letter of Credit Issuer shall, promptly after each
issuance of, or amendment or modification to, a Letter of Credit issued by it,
give the Agent, each Lender and the Borrowers written notice of the issuance
of, or amendment or modification to, such Letter of Credit, accompanied by a
copy of the Letter of Credit or Letters of Credit issued by it and each such
amendment or modification thereto.
2.03. Agreement to Repay Letter of Credit Drawings. (a) The
Borrowers hereby agree to reimburse each Letter of
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Credit Issuer, by making payment to the Agent in immediately available funds at
the Payment Office, for any payment or disbursement made by such Letter of
Credit Issuer under any Letter of Credit issued by it (each such amount so paid
or disbursed until reimbursed, an "Unpaid Drawing") no later than one Business
Day following the date of such payment or disbursement, with interest on the
amount so paid or disbursed by such Letter of Credit Issuer, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not
including the date such Letter of Credit Issuer is reimbursed therefor at a
rate per annum which shall be the Applicable Base Rate Margin in excess of the
Base Rate as in effect from time to time (plus an additional 2% per annum if
not reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand. Each Letter of
Credit Issuer shall provide the Borrowers prompt notice of any payment or
disbursement made by it under any Letter of Credit issued by it, although the
failure of, or delay in, giving any such notice shall not release or diminish
the obligations of the Borrowers under this Section 2.03(a) or under any other
Section of this Agreement.
(b) The Borrowers' obligation under this Section 2.03 to
reimburse the respective Letter of Credit Issuer with respect to Unpaid
Drawings (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrowers or any of its
Subsidiaries may have or have had against such Letter of Credit Issuer, the
Agent or any Lender, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit issued by it to conform to the
terms of the Letter of Credit or any nonapplication or misapplication by the
beneficiary of the proceeds of such drawing; provided, however, that the
Borrowers shall not be obligated to reimburse such Letter of Credit Issuer for
any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit issued by it as a result of acts or omissions that have been found to
constitute willful misconduct or gross negligence on the part of such Letter of
Credit Issuer.
2.04. Letter of Credit Participations. (a) Immediately upon
the issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter
of Credit Issuer shall be deemed to have sold and transferred to each other
Lender, and each such Lender (each a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from such
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Letter of Credit Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Participant's Percentage, in such
Letter of Credit, each substitute Letter of Credit, each drawing made
thereunder and the obligations of the Borrowers under this Agreement with
respect thereto (although Letter of Credit Fees shall be payable directly to
the Agent for the account of the Lenders as provided in Section 3.01(b) and the
Participants shall have no right to receive any portion of any Facing Fees with
respect to such Letters of Credit) and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments of the
Lenders pursuant to Section 1.13 or 12.04(b), it is hereby agreed that, with
respect to all outstanding Letters of Credit and Unpaid Drawings with respect
thereto, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Percentages of the assigning and
assignee Lender.
(b) In determining whether to pay under any Letter of Credit,
no Letter of Credit Issuer shall have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Letter of Credit Issuer
under or in connection with any Letter of Credit issued by it if taken or
omitted in the absence of such a finding of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrowers shall not
have reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.03(a), such Letter of Credit Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Participant of such failure, and each
such Participant shall promptly and unconditionally pay to the Agent for the
account of such Letter of Credit Issuer, the amount of such Participant's
Percentage of such payment in U.S. Dollars and in same day funds; provided,
however, that no Participant shall be obligated to pay to the Agent its
Percentage of such unreimbursed amount for any wrongful payment made by such
Letter of Credit Issuer under a Letter of Credit issued by it as a result of
acts or omissions that have been found to constitute willful misconduct or
gross negligence on the part of such Letter of Credit Issuer. If the Agent so
notifies any Participant required to fund a payment
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under a Letter of Credit prior to 11:00 A.M. (New York time) on any Business
Day, such Participant shall make available to the Agent for the account of the
respective Letter of Credit Issuer such Participant's Percentage of the amount
of such payment on such Business Day in same day funds (and, to the extent such
notice is given after 11:00 A.M. (New York time) on any Business Day, such
Participant shall make such payment on the immediately following Business Day).
If and to the extent such Participant shall not have so made its Percentage of
the amount of such payment available to the Agent for the account of the
respective Letter of Credit Issuer, such Participant agrees to pay to the Agent
for the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Agent for the account of the Letter of Credit
Issuer at the overnight Federal Funds Rate. The failure of any Participant to
make available to the Agent for the account of the respective Letter of Credit
Issuer its Percentage of any payment under any Letter of Credit issued by it
shall not relieve any other Participant of its obligation hereunder to make
available to the Agent for the account of such Letter of Credit Issuer its
applicable Percentage of any payment under any such Letter of Credit on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to the Agent for the
account of such Letter of Credit Issuer such other Participant's Percentage of
any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment
of a reimbursement obligation as to which the Agent has received for the
account of such Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the
Agent and the Agent shall promptly pay to each Participant which has paid its
Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to
such Participant's Percentage of the principal amount thereof and interest
thereon accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to
the Agent for the account of the respective Letter of Credit Issuer with
respect to each Letter of Credit issued by it shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
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(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrowers or any of their Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Agents, any Letter of Credit Issuer, any Lender,
or other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrowers, or any of their Subsidiaries and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or other document presented
under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05. Increased Costs. If the adoption or effectiveness of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Letter of Credit Issuer or any
Participant with any request or directive (whether or not having the force of
law) by any such authority, central bank or comparable agency, in each case,
after the date hereof, shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Participant's
participation therein, or (ii) impose on any Letter of Credit Issuer or any
Participant any other conditions affecting this Agreement, any Letter of Credit
or such Participant's participation therein; and the result of any of the
foregoing is to increase the cost to such Letter of Credit Issuer or such
Participant of issuing, maintaining or participating in any Letter of Credit,
or to reduce the amount of any sum
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received or receivable by such Letter of Credit Issuer or such Participant
hereunder, then, upon written demand to the Borrowers by such Letter of Credit
Issuer or such Participant (a copy of which notice shall be sent by such Letter
of Credit Issuer or such Participant to the Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the Borrowers
shall pay to such Letter of Credit Issuer or such Participant such additional
amount or amounts as will compensate such Letter of Credit Issuer or such
Participant for such increased cost or reduction. A certificate submitted to
the Borrowers by such Letter of Credit Issuer or such Participant, as the case
may be (a copy of which certificate shall be sent by such Letter of Credit
Issuer or such Participant to the Agent), setting forth the basis for the
determination of such additional amount or amounts necessary to compensate such
Letter of Credit Issuer or such Participant as aforesaid shall be final and
conclusive and binding on the Borrowers absent manifest error, although the
failure to deliver any such certificate shall not release or diminish the
Borrowers' obligations to pay additional amounts pursuant to this Section 2.05
upon subsequent receipt of such certificate.
SECTION 3. Fees; Commitments.
3.01. Fees. (a) The Borrowers shall pay to the Agent for
distribution to each Non-Defaulting Lender a commitment fee (the "Commitment
Fee") for the period from and including the Effective Date to but not including
the Final Maturity Date (or such earlier date as the Total Revolving Loan
Commitment shall have been terminated), computed at a rate for each day equal
to .50% per annum on the daily average Unutilized Revolving Loan Commitment of
such Lender. Accrued Commitment Fees shall be due and payable on a pro rata
basis quarterly in arrears on each Quarterly Payment Date and the date upon
which the Total Revolving Loan Commitment is terminated.
(b) The Borrowers shall pay to the Agent for the account of
the Lenders pro rata on the basis of their Percentages, a fee in respect of
each Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum
equal to the Applicable Eurodollar Margin then in effect on the daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon and
until the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
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(c) The Borrowers shall pay to the Agent for the account of
each Letter of Credit Issuer a fee in respect of each Letter of Credit issued
by such Letter of Credit Issuer (the "Facing Fee") computed at the rate of 1/4
of 1% per annum on the daily Stated Amount of such Letter of Credit; provided
that in no event shall the annual Facing Fee with respect to each Letter of
Credit be less than $500; it being agreed that, on the date of issuance of any
Letter of Credit and on each anniversary thereof prior to the termination of
such Letter of Credit, if $500 will exceed the amount of Facing Fees that will
accrue with respect to such Letter of Credit for the immediately succeeding
12-month period, the full $500 shall be payable on the date of issuance of such
Letter of Credit and on each such anniversary thereof prior to the termination
of such Letter of Credit. Except as provided in the immediately preceding
sentence, accrued Facing Fees shall be due and payable quarterly in arrears on
each Quarterly Payment Date and upon the first day on or after the termination
of the Total Revolving Loan Commitment upon which no Letters of Credit remain
outstanding.
(d) The Borrowers shall pay directly to the Letter of Credit
Issuer upon each payment under, and/or amendment of, a Letter of Credit issued
by the Letter of Credit Issuer such amount as shall at the time of such payment
or amendment be the administrative charge which the Letter of Credit Issuer is
customarily charging for payments under, or amendments of, letters of credit
issued by it.
(e) The Borrowers shall pay to the Agent and Co-Agent such
fees as may be agreed to from time to time between the Borrowers and the Agent
and Co-Agent when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02. Voluntary Termination or Reduction of Total Unutilized
Revolving Loan Commitment. Upon at least two Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) to the Agent at the
Notice Office (which notice the Agent shall promptly transmit to each of the
Lenders), the Borrowers shall have the right, without premium or penalty, to
terminate or partially reduce the Total Unutilized Revolving Loan Commitment;
provided that (x) any such termination or partial reduction shall apply to
proportionately and permanently reduce the Revolving Loan Commitment of each of
the Lenders and (y) any partial reduction pursuant to this Section 3.02(a)
shall be in the amount of at least $1,000,000.
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3.03. Mandatory Reduction of Revolving Loan Commitments. (a)
The Total Revolving Loan Commitment shall be permanently reduced on each date
on which the Company or any of its Subsidiaries receives Net Cash Proceeds from
any sales of Collateral in excess of $1,000,000 individually or $2,000,000 in
the aggregate in any consecutive twelve month period to the extent of the Net
Cash Proceeds so received.
(b) The Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Lender) shall terminate in its entirety on the Final
Maturity Date.
(c) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall apply proportionately to reduce the
Revolving Loan Commitment of each Lender.
SECTION 4. Payments.
4.01. Voluntary Prepayments. The Borrowers shall have the
right to prepay the Loans, in whole or in part, without premium or penalty
except as otherwise provided in this Agreement, from time to time on the
following terms and conditions: (i) a Borrower shall give the Agent at the
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, the amount of such prepayment and
(in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which
such Loans were made, which notice shall be given by a Borrower prior to 11:00
A.M. (New York time) (x) at least one Business Day prior to the date of such
prepayment in the case of Revolving Loans maintained as Base Rate Loans and (y)
at least three Business Days prior to the date of such prepayment in the case
of Eurodollar Loans, which notice shall promptly be transmitted by the Agent to
each of the Lenders; (ii) each prepayment shall be in an aggregate principal
amount of at least $1,000,000; provided that no partial payment of Eurodollar
Loans made pursuant to a Borrowing shall reduce the aggregate principal amount
of the Eurodollar Loans outstanding pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount applicable thereto; and (iii) each
prepayment in respect of any Revolving Loans made pursuant to a Borrowing shall
be applied pro rata among such Revolving Loans; provided that such prepayment
shall not be applied to any Revolving Loans of a Defaulting Lender.
4.02. Mandatory Prepayments. (a) If on any date the sum of
(i) the aggregate outstanding principal amount of Revolving Loans (after giving
effect to all other repayments thereof on such date) plus (ii) the Letter of
Credit
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Outstandings on such date exceeds the Total Revolving Loan Commitment as then
in effect, the Borrowers shall repay on such date the principal of Revolving
Loans in an aggregate amount equal to such excess. If, after giving effect to
the prepayment of all outstanding Revolving Loans, the aggregate amount of
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Company shall pay to the Agent on such date an amount in
cash and/or Cash Equivalents equal to such excess (up to the aggregate amount
of Letter of Credit Outstandings at such time) and the Agent shall hold such
payment as security for the obligations of the Borrowers hereunder pursuant to
a cash collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent (which shall permit certain investments in Cash
Equivalents reasonably satisfactory to the Agent until the proceeds are applied
to the secured obligations); provided that any such Cash collateral shall be
released to the Borrowers at any time at which such excess shall no longer
exist.
(b) In addition to any other mandatory prepayments pursuant
to this Section 4.02, on each date on or after the Initial Borrowing Date on
which the Company or any of its Subsidiaries receives Net Cash Proceeds from an
Asset Sale or Sales, disregarding for purposes of this Section 4.02(b) clause
(iii) of the definition of "Asset Sale", in excess of $500,000 individually or
$1,000,000 in the aggregate in any consecutive twelve month period, any
Borrowings and Letter of Credit Outstandings shall be reduced by an amount
equal to 100% of such excess Net Cash Proceeds so received.
(c) In addition to any other mandatory prepayments pursuant
to this Section 4.02, on each date on or after the Initial Borrowing Date on
which the Company or any of its Subsidiaries receives any cash proceeds from
any incurrence of Indebtedness (other than Indebtedness permitted to be
incurred pursuant to Section 8.04) by the Company or any of its Subsidiaries,
any Borrowings and Letter of Credit Outstandings shall be reduced by an amount
equal to 100% of the cash proceeds (net of all underwriting discounts, fees
and commissions and other costs and expenses associated therewith) of the
respective incurrence of Indebtedness.
(d) In addition to any other mandatory prepayments pursuant
to this Section 4.02, on each date on or after the Initial Borrowing Date on
which the Company or any of its Subsidiaries receives any cash proceeds, from
any sale or issuance of preferred or common equity of (or cash capital
contributions to) the Company or any of its Subsidiaries (other than proceeds
33
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received from (x) issuances of options to purchase the Company Common Stock to
management, directors, non-employee consultants, and employees of the Company
and its Subsidiaries, (y) issuances of the Company Common Stock (including as a
result of the exercise of any options with regard thereto) to management,
directors, non-employee consultants, and employees of the Company and its
Subsidiaries and (z) equity contributions to any Subsidiary of the Company made
by the Company or any other Subsidiary of the Company), any Borrowings and
Letter of Credit Outstandings shall be reduced by an amount equal to 100% of
such cash proceeds (net of all underwriting discounts, fees and commissions and
other costs and expenses associated therewith) of the respective equity
issuance or capital contribution.
(e) In addition to any other mandatory prepayments pursuant
to this Section 4.02, within 10 days following each date on or after the
Initial Borrowing Date on which the Company or any of its Subsidiaries receives
proceeds from any insurance on any assets of either of the Borrowers and such
proceeds are in excess of $500,000 individually or $1,000,000 in the aggregate
in any consecutive twelve month period, and such proceeds are not otherwise
reinvested (or contractually committed to be reinvested) in like assets within
90 days of receipt, any Borrowings and Letter of Credit Outstandings shall be
reduced by an amount equal to 100% of such excess insurance proceeds; provided,
however, that any proceeds in excess of $2 million shall be deposited in a cash
collateral account, pursuant to documentation acceptable to the Agent, pending
application of such proceeds in accordance herewith.
(f) With respect to each repayment of Revolving Loans
required by this Section 4.02, the Borrowers may designate the Types of
Revolving Loans which are to be repaid and, in the case of Eurodollar Loans,
the specific Borrowing(s) pursuant to which such Loans were made; provided that
(i) Eurodollar Loans may be designated for repayment pursuant to this Section
4.02 only on the last day of an Interest Period applicable thereto unless all
Eurodollar Loans with Interest Periods ending on such date of required
prepayment and all Base Rate Loans have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans to an amount less than the Minimum Borrowing
Amount, such Borrowing shall be immediately converted into Base Rate Loans; and
(iii) each repayment of any Revolving Loans made pursuant to a Borrowing shall
be applied pro rata among such Revolving Loans. In the absence of a
designation by the Borrowers as described in the preceding
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sentence, the Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs
owing under Section 1.11.
(g) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, all then outstanding Revolving Loans and Letter of
Credit Outstandings shall be repaid in full on the Final Maturity Date.
4.03. Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Note shall be made to the Agent for the ratable account of the Lenders entitled
thereto, not later than 2:00 P.M. (New York time) on the date when due and
shall be made in immediately available funds and in U.S. Dollars at the Payment
Office, it being understood that written, telex or facsimile transmission
notice by a Borrower to the Agent to make a payment from the funds in such
Borrower's account at the Payment Office shall constitute the making of such
payment to the extent of such funds held in such account. Any payments under
this Agreement or under any Note which are made later than 2:00 P.M. (New York
time) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day (unless otherwise provided herein),
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.04. Net Payments. (a) All payments made by the Borrowers
hereunder or under any Note will be made without setoff, counterclaim or other
defense (which payment shall not be deemed a waiver by the Borrowers of any
claims arising under this Agreement). Except as provided in Section 4.04(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payment (but excluding, except as provided in the
second succeeding sentence, any tax (including any franchise tax) imposed on or
measured by the net income or net profits of a Lender pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all
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such nonexcluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Borrowers agree to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to
the preceding sentence, the Borrowers agree to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or net profits of such Lender pursuant to the laws of the jurisdiction
in which the principal office or applicable lending office of such Lender is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which the principal office or applicable lending
office of such Lender is located and for any withholding of taxes as such
Lender shall determine are payable by, or withheld from, such Lender in respect
of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Lender pursuant to this sentence; provided, however, that no such reimbursement
shall be required unless such Lender determines that the amount of such Taxes
exceeds the amount of any credit, allowance or deduction allowable to such
Lender as an offset against any Taxes payable on behalf of such Lender and in
such event reimbursement shall not be required in any amount greater than such
excess. The Borrowers will furnish to the Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrowers. The Borrowers agree,
jointly and severally, to indemnify and hold harmless each Lender and the
Agent, and reimburse such Lender and the Agent upon their written request, for
the amount of any Taxes so levied or imposed and paid by such Lender or the
Agent. A certificate as to the amount of any such required indemnification
payment prepared by such Lender or the Agent shall be final, conclusive and
binding for all purposes absent manifest error.
(b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrowers and the Agent on or prior to the Effective Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 12.04 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to
36
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such Lender, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note, or
(ii) if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or
4224 pursuant to clause (i) above, (x) a certificate substantially in the form
of Exhibit C (any such certificate, a "Section 4.04(b)(ii) Certificate") and
(y) two accurate and complete original signed copies of Internal Revenue
Service Form W-8 (or successor form) certifying to such Lender's entitlement to
a complete exemption from United States withholding tax with respect to
payments of interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver
promptly to the Borrowers and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as
may be required in order to confirm or establish the entitlement of such Lender
to a continued exemption from or reduction in United States withholding tax
with respect to payments under this Agreement and any Note, or it shall
immediately notify the Borrowers and the Agent of its inability to deliver any
such Form or Certificate in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 12.04(b) and the immediately succeeding sentence, (x) the
Borrowers shall be entitled, to the extent they are required to do so by law,
to deduct or withhold income or similar taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein) from
interest, fees or other amounts payable hereunder for the account of any Lender
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent
that such Lender has not provided to the Borrowers U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrowers shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to a Lender in respect of income
withholding or similar taxes imposed by the United States if (I) such Lender
has not provided to the Borrowers the Internal Revenue Service Forms required
to be provided to the Borrowers pursuant to this Section 4.04(b) or
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(II) in the case of a payment, other than interest, to a Lender described in
clause (ii) above, to the extent that such Forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 4.04
and except as set forth in Section 12.04(b), the Company agrees to indemnify
each Lender and the Agent in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent. The obligation of each
Lender to make each Loan to a Borrower hereunder, and the obligation of the
Letter of Credit Issuer to issue each Letter of Credit hereunder, is subject,
at the time of each such Credit Event (except as otherwise hereinafter
indicated), to the satisfaction of the following conditions:
5.01. Execution of Agreement; Notes. (a) On or prior to the
Initial Borrowing Date, (i) the Effective Date shall have occurred and (ii)
there shall have been delivered to the Agent for the account of each Lender the
appropriate Revolving Note executed by the Borrowers.
(b) On or prior to the Amendment and Restatement Effective
Date, (i) this Agreement shall have become effective as provided in Section
12.10 and (ii) there shall have been delivered to the Agent for the account of
each Lender the appropriate Revolving Note executed by the Borrowers and in the
amount, maturity and as otherwise provided herein.
5.02. No Default; Representations and Warranties. At the
time of each Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents in effect at such
time shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the date
of such Credit Event, unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
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5.03. Officer's Certificate. (a) On the Initial Borrowing
Date, the Agent and Co-Agent shall have received a certificate dated such date
signed by an appropriate officer of the Company stating that all of the
applicable conditions set forth in Sections 5.02, 5.06, 5.07, 5.08, 5.09
(deleting the reference to the Agent and Co- Agent therein), 5.10(a) and (b)
(deleting the reference to the Agent and Co-Agent therein), 5.14, exist as of
such date.
(b) On the Amendment and Restatement Effective Date, the
Agent and Co-Agent shall have received a certificate dated such date signed by
an appropriate officer of the Company stating that all of the applicable
conditions set forth in Sections 5.02, 5.06, 5.07, 5.08 and 5.14 exist as of
such date.
5.04. Opinions of Counsel. On the Initial Borrowing Date and
on the Amendment and Restatement Effective Date, the Agent and Co-Agent shall
have received opinions, addressed to the Agent and Co-Agent and each of the
Lenders and dated the Initial Borrowing Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.,
counsel to the Credit Parties, in the form of Exhibit D-1, which opinion shall
cover such matters incident to the transactions contemplated herein and in the
other Credit Documents as the Agent and Co-Agent may reasonably request and
shall be in form and substance reasonably satisfactory to the Agent and
Co-Agent.
5.05. Corporate Proceedings. (a) On the Initial Borrowing
Date and on the Amendment and Restatement Effective Date, the Agent and
Co-Agent shall have received from each Credit Party a certificate, dated the
Initial Borrowing Date, signed by the chairman, a vice chairman, the president
or any vice-president of such Credit Party, and attested to by the secretary or
any assistant secretary of such Credit Party, in the form of Exhibit E with
appropriate insertions, together with copies of the Certificate of
Incorporation and By-Laws of such Credit Party and the resolutions of such
Credit Party referred to in such certificate and all of the foregoing
(including each such Certificate of Incorporation and By-Laws) shall be
reasonably satisfactory to the Agent and Co-Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by the Credit Documents shall be reasonably
satisfactory in form and substance to the Agent and Co-Agent, and the Agent
and Co-Agent shall have received all information and copies of all
certificates, documents and papers, including good standing certificates,
bring-down certificates and any other records of corporate
39
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proceedings and governmental approvals, if any, which the Agent and Co-Agent
reasonably may have requested in connection therewith, such documents and
papers, where appropriate, to be certified by proper corporate or governmental
authorities.
5.06. Adverse Change, etc. At the time of each Credit Event
and after giving effect thereto, nothing shall have occurred since September
30, 1996 (and neither the Lenders nor the Agent and Co-Agent shall have become
aware of any facts or conditions not previously known) which (a) have, or could
reasonably be expected to have, a material adverse effect on the rights or
remedies of the Lenders or the Agent and Co-Agent, or on the ability of any
Credit Party to perform its obligations to them hereunder or under any other
Credit Document or (b) have, or could reasonably be expected to have, a
Material Adverse Effect.
5.07. Litigation. At the time of each Credit Event and after
giving effect thereto, there shall be no actions, suits or proceedings pending
or threatened (a) with respect to this Agreement or any other Document or the
Acquisition or (b) which could reasonably be expected to (i) have a Material
Adverse Effect or (ii) have a material adverse effect on the Acquisition, the
rights or remedies of the Lenders or the Agent or Co-Agent hereunder or under
any other Credit Document or on the ability of any Credit Party to perform its
respective obligations to the Lenders or the Agent or Co-Agent hereunder or
under any other Credit Document.
5.08. Approvals. On or prior to the Initial Borrowing Date,
all necessary governmental (domestic and foreign) and third party approvals in
connection with the Acquisition, the transactions contemplated by the Credit
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect, and all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Acquisition, the transactions contemplated by the Documents and otherwise
referred to herein or therein. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the consummation of the
Acquisition or the making of Loans.
5.09. Consummation of the Acquisition. On the Initial
Borrowing Date, DI shall have consummated the Acquisition
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in accordance with the terms and conditions of the Acquisition Agreement,
without amendment thereto or the waiver of any of the conditions to closing
therein other than any amendment or waiver satisfactory to the Agent and the
Co-Agent.
5.10. [deleted]
5.11. Security Documents. (a) On the Initial Borrowing
Date, each Credit Party shall have duly authorized, executed and delivered a
Pledge Agreement in the form of Exhibit F (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the "Pledge
Agreement") and shall have delivered to the Collateral Agent, as pledgee
thereunder, all of the Pledged Securities referred to therein accompanied by
executed and undated stock powers in the case of capital stock, and the Pledge
Agreement shall be in full force and effect.
(b) On the Initial Borrowing Date, each Credit Party shall
have duly authorized, executed and delivered a Security Agreement in the form
of Exhibit G (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Security Agreement")
covering all of the Security Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1)
or appropriate local equivalent in appropriate form for filing under
the UCC or appropriate local equivalent of each jurisdiction as may be
necessary to perfect the security interests purported to be created by
the Security Agreement;
(B) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, each of a recent date
listing all effective financing statements that name the Company or
any of its Domestic Subsidiaries as debtor and that are filed in the
jurisdictions referred to in clause (A) above, together with copies of
such financing statements that name the Company or any of its Domestic
Subsidiaries as debtor (none of which shall cover the Collateral
except (x) those with respect to which appropriate termination
statements executed by the secured lender thereunder have been
delivered to the Agent and Co-Agent and (y) to the extent evidencing
Permitted Liens);
(C) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable
41
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opinion of the Collateral Agent, desirable, to perfect the security
interests purported to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Security Agreement
have been taken;
and the Security Agreement shall be in full force and effect; and
(c) On the Amendment and Restatement Effective Date, each
Credit Party shall have executed and delivered amendments (Form UCC-3) to the
UCC-1s, in form and substance satisfactory to the Agent.
5.12. Payment of Fees. On or before the Initial Borrowing
Date and thereafter on the Amendment and Restatement Effective Date and at the
time of each Credit Event and after giving effect thereto, all costs, fees and
expenses, and all other compensation related to the transactions contemplated
by this Agreement due to the Agent or Co- Agent or the Lenders (including,
without limitation, legal fees and expenses) shall have been paid to the extent
then due.
5.13. Existing Indebtedness Agreements. On or prior to the
Initial Borrowing Date, there shall have been delivered to the Agent or
Co-Agent copies, certified as true and correct by an appropriate officer of the
Company, of:
(a) all agreements evidencing or relating to the Existing
Indebtedness that are to remain in effect after giving effect to the
consummation of the Acquisition (collectively, the "Existing
Indebtedness Agreements"); and
(b) all agreements and documents relating to the Acquisition
(collectively, the "Transaction Documents");
all of which agreements and documents shall be (x) in form and substance
satisfactory to the Agent or Co-Agent and (y) in full force and effect on the
Initial Borrowing Date.
Prior to the Initial Borrowing Date, the Norex Loan shall have
been paid in full and all debts thereunder permanently retired. The agreements
and documents reflecting such payments and termination of the Norex Loan shall
be (x) in form and substance satisfactory to the Agent and Co-Agent and
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(y) delivered to the Agent and in full force and effect on the Initial
Borrowing Date.
5.14. Solvency Certificate; Evidence of Insurance. On the
Initial Borrowing Date and on the Amendment and Restatement Effective Date, the
Agent and Co-Agent shall have received:
(a) one or more solvency certificates in the form of Exhibit
I from the chief financial officer of the Company and of DI and dated
the Initial Borrowing Date or dated the Amendment and Restatement
Effective Date, as the case may be, in each case, addressed to the
Agent and Co-Agent and each Lender, and reciting that, both prior to
(in the case of the Initial Borrowing Date)and after giving effect to
the Acquisition and post-Initial Borrowing Date acquisitions, as the
case may be, and the incurrence of all financings contemplated herein,
the Company and DI (on a stand-alone basis) are not and will not be
rendered insolvent or inadequately capitalized for the respective
businesses they intend to conduct and have not and will not have
incurred debts beyond their ability to pay as they mature and that,
(x) the total assets of the Company and DI exceed the amount necessary
to pay all of their liabilities and to pay any distribution
preference on any outstanding preferred stock upon dissolution and (y)
the amount by which the total assets of the Company and DI exceeds and
will exceed their liabilities is no less than their stated capital;
and that neither the Company nor any of its Subsidiaries is entering
into this Agreement with the intent to hinder, delay or defraud any
creditor of the Company or any of its Subsidiaries; and
(b) (i) a report from a third party, in form and substance
satisfactory to the Agent and Co-Agent, regarding the adequacy of the
insurance coverage on the assets of the Company and its Subsidiaries
and (ii) evidence of insurance complying with the requirements of
Section 7.03 for the business and properties of the Company and its
Subsidiaries, in scope, form and substance reasonably satisfactory to
the Agent and Co- Agent and naming the Collateral Agent as an
additional insured and/or loss payee, and stating that such insurance
shall not be canceled or revised without at least 30 days' (or 10
days' in the case of non-payment of premium) prior written notice by
the insurer to the Collateral Agent.
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5.15. Rig Appraisals. On or prior to the Initial Borrowing
Date, the Agent and Co-Agent shall have received an appraisal of the value of
each rig owned by the Company and its Subsidiaries, in form and substance
satisfactory to the Agent and Co-Agent, from an Approved Appraiser. A complete
record of all drilling rigs, as of the Amendment and Restatement Effective
Date, including location, owned by the Company and its Subsidiaries is set
forth in Annex IV hereto.
5.16. Environmental Report. On or prior to the Initial
Borrowing Date, the Agent and Co-Agent shall have received a Phase I
environmental report pertaining to the Real Properties of the Company and its
Subsidiaries, in form and substance satisfactory to the Agent and Co-Agent.
5.17. Pro Forma Balance Sheet. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Agent and Co-Agent an
unaudited pro forma consolidated balance sheet of the Company and its
Subsidiaries as of December 31, 1996 after giving effect to the Acquisition and
the borrowings to occur on the Initial Borrowing Date, together with a related
funds flow statement, which pro forma balance sheet and funds flow statement
shall be reasonably satisfactory in form and substance to the Agent and
Co-Agent and the Required Lenders.
5.18. Notice of Borrowing; Letter of Credit Request. The
Agent shall have received a Notice of Borrowing satisfying the requirements of
Section 1.03 with respect to each incurrence of Loans; and the Agent and the
Letter of Credit Issuer shall have received a Letter of Credit Request
satisfying the requirements of Section 2.02 with respect to each issuance of a
Letter of Credit.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to the Agent and
Co-Agent and each of the Lenders that all of the applicable conditions
specified above exist as of the date of such Credit Event. All of the
certificates, legal opinions and other documents and papers referred to in this
Section 5, unless otherwise specified, shall be delivered to the Agent at the
Notice Office for the account of each of the Lenders and, except for the Notes,
in sufficient counterparts for each of the Lenders and shall be reasonably
satisfactory in form and substance to the Agent and Co-Agent and the Required
Lenders.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this
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Agreement and to make the Loans and issue and/or participate in the Letters of
Credit provided for herein, the Borrowers, jointly and severally, make the
following representations, warranties and agreements with the Lenders, all of
which shall survive the execution and delivery of this Agreement, the making of
the Loans and the issuance of the Letters of Credit (with the occurrence of the
Initial Borrowing Date, the Amendment and Restatement Effective Date and each
Credit Event being deemed to constitute a representation and warranty that the
matters specified in this Section 6 are true and correct in all material
respects on and as of the date of each such Credit Event, unless stated to
relate to a specific earlier date in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date):
6.01. Corporate Status. Each of the Company and its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization, (ii) has the
requisite corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in all jurisdictions where it is required to be so qualified and
where the failure to be so qualified would have a Material Adverse Effect.
6.02. Corporate Power and Authority. Each Credit Party has
the requisite corporate power and authority to execute, deliver and carry out
the terms and provisions of the Credit Documents to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. Each Credit Party
has duly executed and delivered each Credit Document to which it is a party and
each such Credit Document constitutes the legal, valid and binding obligation
of such Credit Party enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
6.03. No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party
nor compliance by any Credit Party with the terms and provisions thereof, nor
the consummation of the transactions contemplated herein or therein, (i) will
contravene any applicable provision of any law, statute, rule or
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regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Security
Documents) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the Company or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, credit agreement or any other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which it or any
of its property or assets are bound or to which it may be subject, other than
such conflicts, inconsistencies, breaches, defaults or impositions which could
not, individually or in the aggregate, have a Material Adverse Effect or (iii)
will violate any provision of the Certificate of Incorporation or By-Laws of
the Company or any of its Subsidiaries.
6.04. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened, with respect to the Company or any of its Subsidiaries (i) that are
likely to have a Material Adverse Effect, except as set forth on Schedule
6.04, or (ii) that could reasonably be expected to have a material adverse
effect on the rights or remedies of the Agent or Co-Agent or the Lenders or on
the ability of any Credit Party to perform its respective obligations to the
Agent or Co-Agent or the Lenders hereunder and under the other Credit Documents
to which it is, or will be, a party. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the occurrence of any Credit Event.
6.05. Use of Proceeds; Margin Regulations. (a) The proceeds
of the Loans shall be utilized (I) on the Initial Borrowing Date to (i)
consummate the Acquisition, (ii) pay existing debt and (iii) pay fees and
expenses in connection with the Acquisition and (II) on and after the Initial
Borrowing Date (subject to the terms and conditions contained in the Credit
Documents) (i) to make other land rig acquisitions and (ii) for the general
corporate purposes of the Company and its Subsidiaries.
(b) Neither the making of any Loan, nor the use of the
proceeds thereof, will violate the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to
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purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06. Governmental Approvals. Except for filings with
applicable governmental authority contemplated by the Security Documents, all
of which shall be made in accordance with such Security Documents, no order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or domestic
governmental or public body or authority, or any subdivision thereof, is
required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document.
6.07. Investment Company Act. Neither the Company nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08. Public Utility Holding Company Act. Neither the
Company nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.09. True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Company or any of its Subsidiaries in writing to the Agent, Co-Agent or any
Lender (including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with the Credit Documents or any
transaction contemplated therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Persons in
writing to the Agent, Co-Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary
to make such information (taken as a whole) not misleading at such time.
6.10. Financial Condition; Financial Statements. (a) On and
as of the Initial Borrowing Date, on a pro forma basis after giving effect to
the Acquisition and to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith, (x)
the sum of the assets, at a fair valuation (i.e., the
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amount that may be realized within a reasonable time, considered to be six
months to one year, either through collection or sale at the regular market
value, conceiving the latter as the amount that would be obtained for such
assets within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling conditions),
of each of the Company and its Subsidiaries (on a consolidated basis) and DI
(on a stand-alone basis) will exceed its debts, (y) each Credit Party has not
incurred nor intended to, nor believes that it will, incur debts beyond its
ability to pay such debts as such debts mature and (z) each Credit Party will
have sufficient capital with which to conduct its business. For purposes of
this Section 6.10, "debt" means any liability on a claim, and "claim" means (i)
right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured; provided that to the extent any such "claim" is not fixed, the
amount thereof shall equal the Company's good faith estimate of the likely
maximum amount thereof.
(b) The annual and interim financial statements included in
the Company's Proxy Statement mailed on or about August 2, 1996, as
supplemented by the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996 and the Company's current report on Form 8-K dated
November 4, 1996 (both as to the Company and as to its Subsidiaries on a
combined basis) (including statements of income and cash flows and changes in
shareholders' equity), present fairly in all material respects the financial
condition of the relevant Persons at the dates of said statements and the
results for the periods covered thereby. All such financial statements have
been prepared in accordance with GAAP consistently applied (except as therein
noted) and the financial statements as of and for the fiscal years have been
audited by and accompanied by the opinion of Deloitte & Touche, LLP or KPMG
Peat Marwick, independent public accountants.
(c) Since September 30, 1996 and except as disclosed to the
Agent and the Co-Agent in a memorandum dated December 6, 1996 (the
"Memorandum"), nothing has occurred that has had or could reasonably be
expected to have a Material Adverse Effect.
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(d) Except as fully reflected in the financial statements
described in Section 6.10(b) and the Indebtedness incurred under this Agreement
and except as set forth in Schedule 6.10 hereto, (i) there were as of the
Initial Borrowing Date (and after giving effect to any Loans made on such
date), no liabilities or obligations (excluding obligations or liabilities (x)
incurred in the ordinary course of business, which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
and (y) disclosed to the Agent and the Co- Agent in the Memorandum) with
respect to the Company or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due),
and (ii) neither the Company nor any of its Subsidiaries knows of any basis for
the assertion against the Company or any of its Subsidiaries of any such
liability or obligation which, either individually or in the aggregate, has, or
could be reasonably likely to have, a Material Adverse Effect.
6.11. Security Interests. On and after the Initial Borrowing
Date, each of the Security Documents creates (or after the execution and
delivery thereof and, where applicable, filing and/or recording thereof will
create), as security for the Obligations, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto,
superior to and prior to the rights of all third Persons, and subject to no
Liens other than Prior Liens and Liens permitted under the Security Documents.
No filings or recordings are required in order to perfect the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made on or prior to the Initial Borrowing Date as contemplated by Section
5.11(b) or on or prior to the execution and delivery thereof as contemplated by
Sections 7.11 and 8.14.
6.12. Acquisition. At the time of consummation of the
Acquisition, all consents and approvals of, and filings and registrations with,
and all other actions in respect of, all governmental agencies, authorities or
instrumentalities required to make or consummate the Acquisition shall have
been obtained, given, filed or taken or waived and are or will be in full force
and effect (or effective judicial relief with respect thereto has been
obtained) except where the failure to obtain, give, file, or take would not
reasonably be expected to have a Material Adverse Effect. All applicable
waiting periods with respect thereto have or, prior to the time when required,
will have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, or
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imposes material adverse conditions upon the Acquisition. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Acquisition, or the occurrence of any
Credit Event or the performance by the Company and its Subsidiaries of their
obligations under the Documents and all applicable laws. The Acquisition has
been consummated in accordance with the Acquisition Agreement and all
applicable laws.
6.13. Compliance with ERISA. (a) The Company, its
respective Subsidiaries and its respective ERISA Affiliates are in compliance
with all applicable provisions of ERISA and the Code and the published
regulations and interpretations thereunder with respect to all employee benefit
plans (as defined in Section 3(3) of ERISA); no Reportable Event has occurred
with respect to a Plan; no Plan is insolvent or in reorganization; no Plan has
an Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for a waiver of the minimum funding standard or an extension of any
amortization period within the meaning of Section 412 of the Code; all
contributions required to be made with respect to a Plan and a Foreign Pension
Plan have been timely made; neither the Company nor any Subsidiary of the
Company nor any ERISA Affiliate has incurred any liability to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the
Code or reasonably expects to incur any liability (including any indirect,
contingent or secondary liability) under any of the foregoing Sections with
respect to any Plan (other than liabilities of any ERISA Affiliate which could
not, by operation of law or otherwise, become a liability of the Company or any
of its Subsidiaries); no proceedings have been instituted to terminate, or to
appoint a trustee to administer, any Plan; no condition exists which presents a
material risk to the Company or any Subsidiary of the Company or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; using actuarial assumptions and
computation methods consistent with subpart 1 of subtitle E of Title IV of
ERISA, the aggregate liabilities of the Company and its Subsidiaries and its
ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Plan ended prior to the date of the most recent Credit Event, would not,
singly or in the aggregate, result in a Material Adverse Effect; no lien
imposed under the Code or ERISA on the assets of the Company or any Subsidiary
of the Company or any ERISA Affiliate exists or is reasonably likely
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to arise on account of any Plan; and the Company and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to which could reasonably be expected, singly or in
the aggregate, to have a Material Adverse Effect.
(b) Notwithstanding the foregoing, the representations,
warranties and agreements contained in this Section 6.13 are qualified such
that a breach or failure thereof shall not be treated as such unless the
circumstances of such breach or failure have resulted in or are reasonably
expected to result in either (i) a Material Adverse Effect or (ii) the
imposition of a lien on the assets of the Company or any Subsidiary.
6.14. Capitalization. On the Initial Borrowing Date, the
authorized capital stock of the Company shall consist of (i) 300,000,000 shares
of common stock, $.10 par value per share (the "Company Common Stock"), of
which approximately 123,283,934 shares are issued and outstanding as of
December 26, 1996 (plus up to 1,750,000 shares to be issued in connection with
the cancellation of the Norex Loan) and (ii) 10,000 shares of Series B
Preferred Stock, $1.00 par value per share, none of which are outstanding. All
outstanding shares of the Company Common Stock have been duly and validly
issued, and are fully paid and nonassessable. The Company does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating
to, its capital stock except for options to purchase the Company Common Stock
issued or to be issued to certain officers, employees and directors and
consultants of the Company and its Subsidiaries and except for approximately
720,000 shares of mandatorily redeemable Series A Preferred Stock of the
Company.
6.15. Subsidiaries. On and as of the Amendment and
Restatement Effective Date, the Company has no Subsidiaries other than those
Subsidiaries listed on Annex VI. Annex VI correctly sets forth, as of the
Amendment and Restatement Effective Date the percentage ownership (direct and
indirect) of the Company in each class of capital stock of each of its
Subsidiaries and also identifies the direct owner thereof. The
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Company owns all of the issued and outstanding capital stock of DI, and no
other Person has any securities convertible into or exchangeable for any
capital stock of DI, or any rights to subscribe for or to the purchase, or any
options for the purchase of, or any calls, commitments or claims relating to,
any of DI's capital stock.
6.16. Intellectual Property. Each of the Company and each of
its Subsidiaries owns or holds a valid license to use all the patents,
trademarks, permits, service marks, trade names, technology, know-how and
formulas or other rights with respect to the foregoing, free from restrictions
that are adverse to the use thereof, that are used in the operation of the
business of the Company and each of its Subsidiaries as presently conducted,
except where any failure to do so or restrictions could, individually or in the
aggregate, have a Material Adverse Effect.
6.17. Compliance with Statutes, etc. Each of the Company and
each of its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (provided, however, that this
Section 6.17 does not apply to (i) compliance with respect to Environmental
Laws, as to which no representation is made in this Section 6.17, but which is
covered by Section 6.18 hereof, (ii) compliance with respect to Taxes, as to
which no representation is made in this Section 6.17, but which is covered by
Section 6.21 hereof, (iii) compliance with respect to ERISA, as to which no
representation is made in this Section 6.17, but which is covered by Section
6.13 hereof, and (iv) compliance with respect to labor relations matters, as to
which no representation is made in this Section 6.17, but which is covered by
Section 6.20), except such non-compliance as is not likely to, individually or
in the aggregate, have a Material Adverse Effect.
6.18. Environmental Matters. Except as set forth in Schedule
6.18:
(a) Each of the Company and each of its Subsidiaries, and
their respective businesses and Real Property, has complied with, and
on the date of each Credit Event is in compliance with, all applicable
Environmental Laws and the requirements of any permits, licenses or
other authorizations issued under such Environmental Laws. There are
no pending or past or, to the best knowledge of
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the Company and its Subsidiaries, threatened Environmental Claims
against the Company or any of its Subsidiaries or any Real Property
currently or formerly owned or operated by the Company or any of its
Subsidiaries. There are no facts, circumstances, conditions or
occurrences on any Real Property currently or formerly owned or
operated by the Company or any of its Subsidiaries or, to the best
knowledge of the Company and its Subsidiaries, on any property
adjoining or in the vicinity of any such Real Property that would
reasonably be expected (i) to form the basis of an Environmental Claim
against the Company or any of its Subsidiaries or any such Real
Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of
such Real Property by the Company or any of its Subsidiaries under
any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real
Property currently or formerly owned or operated by the Company or any
of its Subsidiaries where such generation, use, treatment or storage
has violated or could reasonably be expected to violate any
Environmental Law. Hazardous Materials have not at any time been
Released on or from any Real Property currently or formerly owned or
operated by the Company or any of its Subsidiaries. There are not now
any underground storage tanks or related piping located on any Real
Property currently or formerly owned or operated by the Company or any
of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section
6.18, the representations made in this Section 6.18 shall only be
untrue if either the individual or aggregate effect of all conditions,
failures, noncompliances, Environmental Claims, Releases and presence
of underground storage tanks or related piping, in each case of the
types described above, could reasonably be expected to have a Material
Adverse Effect.
6.19. Properties. Each of the Company and each of its
Subsidiaries has good and marketable title to, or a validly subsisting
leasehold interest in, all material properties owned or leased by it, including
all Real Property reflected in the financial statements referred to in Section
6.10(b), free and clear of all Liens, other than Prior Liens and Permitted
Liens.
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6.20. Labor Relations. Neither the Company nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Company or any of its Subsidiaries or
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of its
Subsidiaries or, to the best knowledge of the Company, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending against
the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against the Company or any of its Subsidiaries and (iii) no
union representation question existing with respect to the employees of the
Company or any of its Subsidiaries and no union organizing activities are
taking place, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.
6.21. Tax Returns and Payments. All Federal, state and other
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of the Company and/or any of its Subsidiaries have been timely filed with the
appropriate taxing authority. The Returns accurately reflect all liability for
taxes of the Company and its Subsidiaries for the periods covered thereby. The
Company and each of its Subsidiaries have paid all taxes payable by them other
than immaterial taxes and other taxes which are not yet due and payable, and
other than taxes contested in good faith and for which adequate reserves have
been established in accordance with GAAP. Except as disclosed in the financial
statements referred to in Section 6.10(b), (a) there is no material action,
suit, proceeding, investigation, audit or claim now pending or threatened by
any authority regarding any taxes relating to the Company or any of its
Subsidiaries and (b) neither the Company nor any of its Subsidiaries (nor any
other person on their behalf or as part of a consolidated group) has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Company or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods
of the Company or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Company nor any of its
Subsidiaries (nor any other person on their behalf or as part of a
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consolidated group) has provided, with respect to themselves or property held
by them, any consent under Section 341 of the Code. Neither the Company nor
any of its Subsidiaries has incurred, or will incur, any material tax liability
in connection with the Acquisition and the other transactions contemplated
hereby.
6.22. Existing Indebtedness. Annex VII sets forth a true and
complete list of all Indebtedness of the Company and its Subsidiaries (other
than (i) Indebtedness consisting of Capital Lease Obligations related to motor
vehicles not in excess of $1,500,000 in the aggregate and (ii) other
Indebtedness which in the aggregate does not exceed $50,000) as of the
Amendment and Restatement Effective Date and which is to remain outstanding and
the incurrence of Loans on such date (excluding the Loans and the Letters of
Credit, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any other
entity which directly or indirectly guaranteed such debt. Annex III sets forth
a true and complete list of all Existing Letters of Credit (the "Existing
Letters of Credit") of the Company and its Subsidiaries as of the Amendment and
Restatement Effective Date.
SECTION 7. Affirmative Covenants. The Borrowers, jointly and
severally, hereby covenant and agree that as of the Initial Borrowing Date and
thereafter for so long as this Agreement is in effect and until the Total
Revolving Loan Commitment has terminated, no Letters of Credit or Notes are
outstanding and the Loans and Unpaid Drawings, together with interest, Fees and
all other Obligations (other than any indemnities described in Section 12.13
which are not then due and payable) incurred hereunder, are paid in full:
7.01. Information Covenants. The Company will furnish to
each Lender:
(a) Monthly Reports. (i) Within 45 days after the end of
each fiscal month of the Company, the consolidated balance sheet of
the Company and its Subsidiaries as at the end of such fiscal month
and the related consolidated statements of income and statements of
cash flows for such fiscal month and for the elapsed portion of the
fiscal year ended with the last day of such fiscal month, in each case
setting forth comparable budgeted figures for the current fiscal month
and year-to-date results, all of which shall be certified by the chief
financial officer or other Authorized Officer of the Company, subject
to normal
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year-end audit adjustments and the absence of footnotes, (ii) within
15 days after the end of each fiscal month of the Company, a report as
of the last day of such month detailing the status of all operating
Drilling Rigs including (x) the location of each such Drilling Rig,
(y) the projected term of, type of and parties to any contract
relating to each such Drilling Rig and (z) the day rates under such
contract for each such Drilling Rig and (iii) within 15 days after the
end of each fiscal month of the Company, a Collateral Report in the
form of Exhibit M hereto.
(b) Quarterly Financial Statements. Within 45 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of the Company, the consolidated balance sheet of the
Company and its Subsidiaries as at the end of such quarterly
accounting period and the related consolidated statements of income,
statements of changes in stockholders equity and statements of cash
flows for such quarterly accounting period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly
accounting period; all of which shall be in the form such information
is submitted to the SEC if the Company is a reporting company, and, if
not, in the same form as would have been submitted to the SEC and
accompanied by a certification by the chief financial officer or other
Authorized Officer of the Company that they fairly present in all
material respects the financial condition of the Company and its
Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated,
subject in all cases to normal year-end audit adjustments and the
absence of footnotes.
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of the Company, the consolidated balance
sheet of the Company and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income, statements of
changes in stockholders equity and statements of cash flows for such
fiscal year and certified by KPMG Peat Marwick or such other
independent certified public accountants of recognized national
standing, in each case to the effect that such statements fairly
present in all material respects the financial condition of the
Company and its Subsidiaries as of the dates indicated and the results
of their operations and cash flows, together with a certificate of
such accounting firm stating that in the course of its
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regular audit of the business of the Company and its Subsidiaries,
which audit was conducted in accordance with generally accepted
auditing standards, no Default or Event of Default which has occurred
and is continuing has come to their attention insofar as such Default
or Event of Default relates to financial and accounting matters or, if
such a Default or an Event of Default has come to their attention a
statement as to the nature thereof.
(d) Budgets, etc. Except for the 1997 budget which shall be
delivered before January 31, 1997, no later than the commencement of
each fiscal year of the Company, budgets of and for the Company and
its Subsidiaries in reasonable detail for each month of the
succeeding fiscal year, as customarily prepared by management for its
internal use setting forth, with appropriate discussion, the principal
assumptions upon which such budgets are based.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Section 7.01(b) and (c), a
certificate of the chief financial officer or other Authorized Officer
of the Company to the effect than no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to establish whether the Company and its
Subsidiaries were in compliance with the provisions of Sections
8.04(d) and (g), 8.08, 8.09, 8.10 and 8.11, as at the end of such
fiscal quarter or fiscal year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within five Business Days (or 10 Business Days in the case of
clause (y) below) after any executive or senior officer of the Company
obtains actual knowledge thereof, notice of (x) the occurrence of any
event which constitutes a Default or an Event of Default, which notice
shall specify the nature thereof, the period of existence thereof and
what action the Company proposes to take with respect thereto and (y)
the commencement of, or threat of, any litigation or governmental
proceeding pending against the Company or any of its Subsidiaries
which is reasonably likely to have a Material Adverse Effect, or a
material adverse effect on the ability of any Credit Party to perform
its respective obligations hereunder or under any other Credit
Document.
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(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each report or "management letter" submitted to the Company or any
of its Subsidiaries by its independent accountants in connection with
any annual, interim or special audit made by them of the books of the
Company or any of its Subsidiaries.
(h) Environmental Matters. Promptly, and in any event,
within five Business Days after obtaining knowledge of any of the
following (but only to the extent that any of the following, either
individually or in the aggregate, could have a Material Adverse
Effect), written notice of:
(i) any pending or threatened Environmental Claim
against the Company or any of its Subsidiaries or any Real
Property currently or formerly owned or operated by the
Company or any of its Subsidiaries;
(ii) any condition or occurrence on any Real
Property currently or formerly owned or operated by the
Company or any of its Subsidiaries that (x) results in
material noncompliance by the Company or any of its
Subsidiaries with any applicable Environmental Law or (y)
could reasonably be anticipated to form the basis of an
Environmental Claim against the Company or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real
Property currently or formerly owned or operated by the
Company or any of its Subsidiaries that could reasonably be
anticipated to cause such Real Property to be subject to any
material restrictions on the ownership, occupancy, use or
transferability by the Company or its Subsidiary, as the case
may be, of its interest in such Real Property under any
Environmental Law; and
(iv) the taking of any material removal, remedial
corrective or other response action in response to the actual
or alleged presence of any Hazardous Material on any Real
Property currently or formerly owned or operated by the
Company or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal, remedial,
corrective or other response action
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and the Company's response thereto. In addition, the Company agrees
to provide the Lenders with copies of all material written
communications by or to the Company or any of its Subsidiaries with or
from any Person, government or governmental agency relating to any of
the matters set forth in clauses (i)-(iv) above, and such detailed
reports relating to any of the matters set forth in clauses (i)-(iv)
above as may reasonably be requested by the Agent, Co-Agent or the
Required Lenders.
(i) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the SEC
by the Company or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Company or
any of its Subsidiaries shall send generally to analysts or the
holders of their capital stock in their capacity as such holders (to
the extent not theretofore delivered to the Lenders pursuant to this
Agreement) and, with reasonable promptness, such other information or
documents (financial or otherwise) as the Agent or Co-Agent on their
own behalf or on behalf of the Required Lenders may reasonably request
from time to time.
7.02. Books, Records and Inspections. The Company will, and
will cause each of its Subsidiaries to, permit, upon notice to the chief
financial officer or other Authorized Officer of the Company, officers and
designated representatives of the Agent, Co-Agent or the Required Lenders to
visit and inspect any of the properties or assets of the Company and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account of
the Company and of any of its Subsidiaries and discuss the affairs, finances
and accounts of the Company and of any of its Subsidiaries with, and be advised
as to the same by, their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the Agent,
Co-Agent or the Required Lenders may desire.
7.03. Insurance. The Company will, and will cause each of
its Subsidiaries to, at all times maintain in full force and effect insurance
with reputable and solvent insurance carriers in such amount, covering such
risks and liabilities and with such deductibles or self-insured retentions as
are in accordance with past practice of the Company and its Subsidiaries. The
Company will furnish to the Agent on the Initial Borrowing Date (see Annex VIII
hereto) and on each such later date as the Agent, Co-Agent or the Required
Lenders may reasonably request a summary of the insurance carried in respect of
the
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Company and its Subsidiaries and the assets of the Company and its Subsidiaries
together with certificates of insurance and other evidence of such insurance,
if any, naming the Collateral Agent as an additional insured and/or loss payee
as required pursuant to the next paragraph of this Section 7.03.
Each policy or certificate with respect to insurance of the
Pledged Collateral shall be endorsed to Collateral Agent's satisfaction for the
benefit of Collateral Agent (including, without limitation, by naming
Collateral Agent as an additional named insured or sole loss payee, as
required by Collateral Agent) and such policy or certificate shall be delivered
to Collateral Agent. Each such policy shall state that it cannot be canceled
without 30 days' prior written notice to Collateral Agent. At least 10 days
prior to the expiration of any such policy of insurance, the appropriate Credit
Party shall deliver to Collateral Agent an extension or renewal policy or an
insurance certificate evidencing renewal or extension of such policy. If any
such Credit Party shall fail to insure such Pledged Collateral in accordance
with this Section 7.03 or if any Credit Party shall fail to so endorse and
deposit, or to extend or renew, all such insurance policies or certificates
with respect thereto, Collateral Agent shall have the right (but shall be under
no obligation) to advance funds to procure or renew or extend such insurance
and each Credit Party agrees to reimburse Collateral Agent for all costs and
expenses thereof, with interest on all such funds from the date advanced until
paid in full at the highest rate then in effect under the Credit Agreement.
Collateral Agent agrees that it shall provide notice to the applicable Credit
Party that it has advanced funds on its behalf pursuant to this Section 7.03.
7.04. Payment of Taxes. The Company will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful claims for sums that
have become due and payable which, if unpaid, might become a Lien not otherwise
permitted under Section 8.03(a) or charge upon any properties of the Company or
any of its Subsidiaries; provided that neither the Company nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it
has maintained adequate reserves with respect thereto in accordance with GAAP.
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7.05. Corporate Franchises. The Company will do, and will
cause each of its Subsidiaries to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its material
rights, franchises and authority to do business; provided, however, that any
transaction permitted by Section 8.02 will not constitute a breach of this
Section 7.05.
7.06. Compliance with Statutes, etc. The Company will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (provided, however, that this
Section 7.06 does not apply to applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls, as to which no
covenant is made in this Section 7.06, but which are referred to in Section
7.07 hereof) except for such noncompliance as would not, singly or in the
aggregate, have a Material Adverse Effect or a material adverse effect on the
ability of any Credit Party to perform its obligations under any Credit
Document to which it is a party.
7.07. Compliance with Environmental Laws. (a) The Company
will pay, and will cause each of its Subsidiaries to pay, all costs and
expenses incurred by it in keeping in compliance in all material respects with,
and avoiding liability under, all Environmental Laws, and will keep or cause to
be kept all Real Properties owned or operated by the Company or any of its
Subsidiaries free and clear of any Liens imposed pursuant to such Environmental
Laws; and (b) neither the Company nor any of its Subsidiaries will generate,
use, treat, store, release or dispose of, or permit the generation, use,
treatment, storage, release or disposal of, Hazardous Materials on any Real
Property owned or operated by the Company or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, where the failure to comply with clause (a) or clause (b)
above, either individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. If the Company or any of its
Subsidiaries, or any tenant or occupant of any Real Property owned or operated
by the Company or any of its Subsidiaries, causes or permits any intentional or
unintentional act or omission resulting in, or otherwise discovers, the
presence or Release of any Hazardous Material (except in compliance with
applicable Environmental Laws), the Company agrees to undertake, and/or to
cause any of its Subsidiaries, tenants or occupants to undertake, promptly and
at their sole
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expense, any clean up, investigation, removal, remedial, corrective or other
action required pursuant to Environmental Laws to investigate, remove or
cleanup any Hazardous Materials from any Real Property where the failure to do
so, either individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect; provided that neither the Company nor any
of its Subsidiaries shall be required to comply with any such order or
directive which is being contested in good faith and by proper proceedings so
long as it has maintained adequate reserves with respect to such compliance to
the extent required in accordance with GAAP.
7.08. ERISA. As soon as possible and, in any event, within
30 days after the Company knows or has reason to know of the occurrence of any
of the following events to the extent that one or more of such events is
reasonably likely to result in a material liability to the Company or any
Subsidiary of the Company, the Company will deliver to each of the Lenders a
certificate of the chief financial officer or other Authorized Officer of the
Company setting forth details as to such occurrence and the action, if any,
which the Company, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Company, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred; that an accumulated funding deficiency (as such
term is defined in Section 412(a) of the Code) has been incurred or an
application is reasonably expected to be or has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan; that
a contribution required to be made to a Plan or Foreign Pension Plan has not
been timely made; that a Plan has been or is reasonably expected to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability giving rise to a lien
under ERISA or the Code; that proceedings are reasonably expected to be or have
been instituted to terminate or appoint a trustee to administer a Plan; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that the Company, any Subsidiary of the
Company or any ERISA Affiliate will or is reasonably expected to incur any
material liability (including any contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29),
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4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA; or
that the Company or any Subsidiary of the Company has or is reasonably expected
to incur any material liability under any employee welfare benefit plan (within
the meaning of Section 3(l) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA). At the request of any Lender, the Company will deliver to such Lender
a complete copy of the annual report (Form 5500) of each Plan required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Lenders pursuant to the first sentence hereof, at the
request of the Agent and Co-Agent or any Lender, copies of annual reports and
any notices received by the Company or any Subsidiary of the Company or any
ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to the Lenders no later than 30 days after the date such report has
been filed with the Internal Revenue Service or received by the Company or the
Subsidiary or the ERISA Affiliate.
7.09. Good Repair. The Company will, and will cause each of
its Subsidiaries to, ensure that its material properties, its operating
drilling rigs and other equipment used in its business are kept in good repair,
working order and condition, normal wear and tear and damage by casualty
excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the
manner useful or customary for companies in similar businesses.
7.10. End of Fiscal Years; Fiscal Quarters. The Company
will, for financial reporting purposes, cause (i) its fiscal years to end on or
about December 31 of each year and (ii) its fiscal quarters to end on or about
March 31, June 30 and September 30 of each year; provided that the Company may
change such fiscal year to any other fiscal year period of twelve consecutive
months with the consent of the Agent and Co-Agent.
7.11. Additional Security; Further Assurances; Appraisals.
(a) Promptly, and in any event within 30 days after the acquisition of assets
of the type that would have constituted Collateral (if the person acquiring
such assets had executed an appropriate Security Document on the Initial
Borrowing Date) at the Initial Borrowing Date (the "Additional Collateral"),
the Company will, and will cause each of the Guarantors
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to, at the request of the Collateral Agent following consultation with the
Company as to the value of any such Additional Collateral, take all necessary
action, including entering into the appropriate security documents and filing
the appropriate financing statements under the provisions of the UCC or
applicable foreign, domestic or local laws, rules or regulations in each of
the offices where such filing is necessary or appropriate to grant the
Collateral Agent a perfected Lien in such Collateral (or comparable interest
under foreign law in the case of foreign Collateral) pursuant to and to the
full extent required by the Security Documents and this Agreement; provided
that no such action will be required by the Company or any Guarantor to the
extent that any such Additional Collateral is subject to a preexisting
agreement which prohibits the granting of any additional liens; provided
further that such preexisting agreement was not entered into in connection
with, or in anticipation of or contemplation of, the acquisition of such assets
by the Company or any of its Subsidiaries. In the event that the Company or a
Guarantor acquires an interest in Real Property with a value in excess of $3
million, the Company or such Guarantor, as the case may be, will take such
actions and execute such documents as the Collateral Agent shall require to
create a mortgage on such Real Property for the benefit of the Lenders. All
actions taken by the parties in connection with the pledge of Additional
Collateral, including, without limitation, costs of counsel for the Collateral
Agent, shall be for the account of the Company, which shall pay all sums due on
demand.
(b) The Company will, and will cause each of the Guarantors
to, at the expense of the Company, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Company shall cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Collateral Agent to assure itself that this Section 7.11 has
been complied with.
(c) The Company will provide to the Agent and Co-Agent a
formal Appraisal of Fair Market Value, which shall be in form and substance
reasonably satisfactory to the Agent and Co-Agent, prepared in respect of the
Drilling Rigs and Related
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Equipment constituting Collateral, with such appraisals to be provided (x)
annually (within 45 days after the end of each fiscal year beginning at the end
of fiscal year 1997) at the Company's expense, (y) upon request from the Agent
on behalf of the Lenders one additional time per year at the Company's expense
and (z) at any time at the Lenders' expense. Any such appraisal requested
pursuant to (y) or (z) in the preceding sentence shall be supplied to the Agent
and Co-Agent within 30 days of such request.
(d) The Company agrees that each action required above by
Section 7.11(a) and (b) shall be completed within 60 days after such action is
either requested to be taken by the Agent or the Required Lenders or required
to be taken by the Company or any Subsidiary Guarantor pursuant to the terms of
this Section 7.11; provided that in no event shall the Company or any of its
Subsidiaries be required to take any action, other than using its best efforts,
to obtain consents from third parties with respect to its compliance with this
Section 7.11.
7.12. Register. The Borrower hereby designates the Agent to
serve as the Borrower's agent, solely for purposes of this Section 7.12, to
maintain a register (the "Register") on which they will record the Revolving
Loan Commitment from time to time of each of the Lenders, the Revolving Loans
made by each of the Lenders and each repayment in respect of the principal
amount of the Revolving Loans of each Lender. Failure to make any such
recordation, or any error in such recordation shall not affect the Borrower's
obligations in respect of such Revolving Loans. With respect to any Lender,
the transfer of the Revolving Loan Commitment of such Lender and the rights to
the principal of, and interest on, any Revolving Loan made pursuant to such
Revolving Loan Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Revolving Loan Commitment and Revolving Loans and prior to such
recordation all amounts owing to the transferor with respect to such Revolving
Loan Commitment and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving Loan
Commitment and Revolving Loans shall be recorded by the Agent on the Register
only upon the acceptance by the Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 12.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the Agent
for acceptance and registration of assignment or transfer of all or part of a
Revolving Loan, or as soon thereafter as practicable, the assigning or
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transferor Lender shall surrender the Revolving Note evidencing such Revolving
Loan, and thereupon one or more new Revolving Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender. The Borrower agrees to indemnify the Agent from and against
any and all losses, claims, damages and liabilities of whatsoever nature which
may be imposed on, asserted against or incurred by the Agent in performing its
duties under this Section 7.12, except to the extent that any such losses,
claims, damages or liabilities are found to have resulted from the gross
negligence or willful misconduct of the Agent.
SECTION 8. Negative Covenants. The Borrowers, jointly and
severally, hereby covenant and agree that as of the Initial Borrowing Date and
thereafter for so long as this Agreement is in effect and until the Total
Revolving Loan Commitment has terminated, no Letters of Credit or Notes are
outstanding and the Loans, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 12.13 which are
not then due and payable) incurred hereunder, are paid in full:
8.01. Changes in Business. The Company and its Subsidiaries
will not engage in any business other than the businesses in which the Company
and its Subsidiaries are engaged in as of the Effective Date and activities
incidental thereto, and similar or related businesses.
8.02. Consolidation, Merger, Sale or Purchase of Assets, etc.
The Company will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than sales, transfers or other dispositions of inventory in the
ordinary course of business, including sales of inventory on consignment in the
ordinary course of business), or enter into any partnerships, joint ventures or
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business) of any Person, except that the following shall be
permitted:
(a) the Company and its Subsidiaries may, as lessee or
lessor, enter into operating leases in the ordinary
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course of business with respect to real or personal property;
(b) the advances, investments and loans permitted pursuant to
Section 8.05;
(c) the Company and its Subsidiaries may sell or discount, in
each case without recourse, accounts receivable arising in the
ordinary course of business, but only in connection with the
compromise or collection thereof;
(d) without limitation to clause (c), the Company and its
Subsidiaries may sell or exchange specific items of machinery or
equipment, so long as the proceeds of each such sale or exchange is
used (or contractually committed to be used) to acquire (and results
within 180 days of such sale or exchange in the acquisition of)
replacement items of machinery or equipment which are the functional
equivalent of the item of equipment so sold or exchanged;
(e) the Company and its Subsidiaries may, in the ordinary
course of business, license, as licensor or licensee, patents,
trademarks, copyrights and know-how to third Persons and to one
another, so long as any such license by the Company or its
Subsidiaries in its capacity as licensor is permitted to be assigned
pursuant to the Security Agreement (to the extent that a security
interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the granting of a
Lien by the Company or any of its Subsidiaries pursuant to the
Security Agreement in the intellectual property covered by such
license;
(f) the assets of any Foreign Subsidiary of the Company may
be transferred to the Company or any of its Subsidiaries, and any
Foreign Subsidiary of the Company may be merged with and into, or be
dissolved or liquidated into, the Company or any of its Subsidiaries
so long as the Company or such Subsidiary is the surviving corporation
of any such merger, dissolution or liquidation;
(g) any Domestic Subsidiary of the Company (other than DI)
may transfer assets to the Company or to any other Domestic Subsidiary
of the Company, so long as (i) if the transferee is a Subsidiary, such
Subsidiary is a Credit Party and (ii) the security interests granted
to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets so
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transferred shall remain in full force and effect and perfected (to
at least the same extent as in effect immediately prior to such
transfer);
(h) any Domestic Subsidiary of the Company (other than DI)
may merge with and into, or be dissolved or liquidated into, the
Company so long as (i) the Company is the surviving corporation of any
such merger, dissolution or liquidation and (ii) the security
interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of
such Domestic Subsidiary shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
(i) any Domestic Subsidiary of the Company (other than DI)
may merge with and into, or be dissolved or liquidated into, any
Domestic Subsidiary of the Company so long as (i) such Domestic
Subsidiary is a Credit Party and is the surviving corporation of any
such merger, dissolution or liquidation and (ii) the security
interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of
such Domestic Subsidiary shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior
to such merger, dissolution or liquidation);
(j) so long as no Default or Event of Default then exists or
would result therefrom (including giving pro forma effect to such
acquisition and any additional Indebtedness resulting therefrom or
incurred or assumed in connection therewith as if such acquisition had
occurred and such Indebtedness had been incurred as of the first day
of the most recently completed Test Period (including any other
Permitted Acquisition that occurred, and related Indebtedness that was
incurred, during such Test Period)), the Company and its Wholly-Owned
Subsidiaries may acquire assets or the capital stock of any Person
(any such acquisition permitted by this clause (j), a "Permitted
Acquisition"); provided that (i) such Person (or the assets so
acquired) was, immediately prior to such acquisition, engaged (or
used) primarily in the business permitted pursuant to Section 8.01,
(ii) if such acquisition is structured as a stock or other equity
acquisition, then either (A) the Person so acquired becomes a
Wholly-Owned Subsidiary of the Company or (B) such Person is merged
with and
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into the Company or a Wholly-Owned Subsidiary of the Company (with the
Company or such Wholly-Owned Subsidiary being the surviving
corporation of such merger), and in any case, all of the provisions of
Section 8.14 have been complied with in respect of such Person and
(iii) any Liens or Indebtedness assumed or issued in connection with
such acquisition is otherwise permitted under Section 8.03 or 8.04, as
the case may be; provided, however, that in connection with Permitted
Acquisitions effected by Foreign Subsidiaries or involving the direct
or indirect acquisition of assets located outside the continental
United States or the stock of an entity incorporated in any
jurisdiction which is not part of the United States, the aggregate
consideration (other than Indebtedness incurred or assumed in
connection with such Permitted Acquisitions) for all such Permitted
Acquisitions shall not exceed $1 million; and provided, further, that
the Company shall have delivered to the Agent and Co-Agent a
certificate of the Chief Financial Officer of the Company showing
compliance (in reasonable detail as to pro forma calculations) with
all of the provisions of this paragraph (j);
(k) leases or subleases granted by the Company or any of its
Subsidiaries to third Persons not interfering in any material respect
with the business of the Company or any of its Subsidiaries;
(l) "inactive" or "shell" Subsidiaries may be dissolved or
otherwise liquidated; and
(m) sales of those assets listed on Annex X hereto.
To the extent the Required Lenders waive the provisions of this Section 8.02
with respect to the sale or other disposition of any Collateral, or any
Collateral is sold or otherwise disposed of as permitted by this Section 8.02,
such Collateral in each case shall be sold or otherwise disposed of free and
clear of the Liens created by the Security Documents and the Collateral Agent
shall take such actions as are appropriate in connection therewith.
8.03. Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien upon or with
respect to any item constituting Collateral except for the Lien of the Security
Documents relating thereto, the Prior Liens applicable thereto and other Liens
expressly permitted by such Security Documents. The Company will not, and
will not permit any of its Subsidiaries to,
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create, incur, assume or suffer to exist any Lien upon or with respect to any
property or assets of the Company or such Subsidiary which does not constitute
Collateral, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets or assign any right to receive income, or
file or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, except
the following (collectively referred to as "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental
charges of levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with GAAP;
(b) Liens in respect of property or assets of the Company or
any of its Subsidiaries imposed by law which were incurred in the
ordinary course of business or in connection with any Capital
Expenditure permitted by the terms of this Agreement and which have
not arisen to secure Indebtedness for borrowed money, such as
carriers', warehousemen's and mechanics' Liens, statutory landlord's
Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially
detract from the value of such property or assets or materially impair
the use thereof in the operation of the business of the Company or any
of its Subsidiaries or (y) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to
such Lien;
(c) Liens in existence on the Initial Borrowing Date which
are listed, and the property subject thereto described, in Annex IX,
and extensions, renewals or related refinancings thereof, provided
that such extensions, renewals or related refinancings pursuant to
Section 8.04(b) (x) do not increase the obligations so secured and (y)
do not apply to additional assets not subject to the lien being
extended or renewed;
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
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(e) Liens incurred or deposits made (x) in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of
the payment for borrowed money); and (y) to secure the performance of
leases of Real Property, to the extent incurred or made in the
ordinary course of business consistent with past practices;
(f) licenses, leases or subleases granted to third Persons
not interfering in any material respect with the business of the
Company or any of its Subsidiaries;
(g) easements, zoning restrictions, rights-of-way,
restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of the Company or
any of its Subsidiaries;
(h) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(i) any interest or title of a licensor, lessor or sublessor
under any license or lease permitted by this Agreement;
(j) Liens created pursuant to Capital Leases permitted
pursuant to Section 8.04(d);
(k) Liens arising pursuant to purchase money mortgages or
security interests securing Indebtedness representing the purchase
price (or financing of the purchase price within 90 days after the
respective purchase) of assets acquired after the Initial Borrowing
Date; provided that (i) any such Liens attach only to the assets so
purchased, (ii) the Indebtedness secured by any such Lien (including
refinancings thereof) does not exceed 100% of the lesser of the fair
market value or the purchase price of the property being purchased at
the time of the incurrence of such Indebtedness and (iii) the
Indebtedness secured thereby is permitted to be incurred pursuant to
Section 8.04(d);
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(l) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Company in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition; provided that (i) any Indebtedness that is
secured by such Liens is permitted to exist under Section 8.04(i), and
(ii) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such Permitted Acquisition and do
not attach to any other asset of the Company or any of its
Subsidiaries;
(m) Liens granted with respect to Indebtedness incurred
pursuant to Section 8.04(g); provided that the collateral subject to
such Lien is Cash or Cash Equivalents and does not have an aggregate
value in excess of $250,000; and
(n) additional Liens (on assets other than the Collateral)
incurred by the Company and its Subsidiaries so long as the aggregate
value of the property subject to such Liens, and the Indebtedness and
other obligations secured thereby, do not exceed $350,000.
8.04. Indebtedness. The Company will not, and will not
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Existing Indebtedness outstanding on the Amendment and
Restatement Effective Date and listed on Annex VII, including any
extensions, refinancings, replacements or restructurings thereof,
provided that the then outstanding principal amount thereof is not
increased nor the maturity thereof shortened;
(c) Indebtedness under Interest Rate Protection Agreement and
Other Hedging Agreements permitted by Section 8.05(d);
(d) Capitalized Lease Obligations and Indebtedness of the
Company and its Subsidiaries incurred pursuant to purchase money Liens
permitted under Section 8.03(k); provided that the sum of (x) the
aggregate Capitalized Lease Obligations (excluding up to $1,500,000 of
Motor Vehicle Capitalized Lease Obligations) outstanding at any time
plus (y) the aggregate principal amount of such purchase
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money Indebtedness (excluding therefrom any insurance premiums paid in
monthly installments) outstanding at such time shall not exceed
$500,000 (including Capital Lease Obligations referred to on Annex
VII);
(e) Indebtedness constituting Intercompany Loans to the
extent permitted by Section 8.05(g);
(f) Indebtedness consisting of guaranties (x) by the Company
of Indebtedness, leases and other contractual obligations permitted to
be incurred by Subsidiaries of the Company that are Guarantors and (y)
by Foreign Subsidiaries of the Company of Indebtedness, leases and
other contractual obligations permitted to be incurred by the Company
and its Subsidiaries;
(g) third party letters of credit to support the workmens
compensation obligations of the Company and its Domestic Subsidiaries
in an aggregate face amount not to exceed $2 million and only secured
by Liens permitted pursuant to Section 8.03(m);
(h) additional third party unsecured letters of credit in an
aggregate face amount not to exceed $1 million; and
(i) additional Indebtedness of the Company and its
Subsidiaries not otherwise permitted hereunder not exceeding $1
million in aggregate principal amount at any time outstanding.
8.05. Advances, Investments and Loans. The Company will not,
and will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or purchase or own a futures contract or otherwise become liable
for the purchase or sale of currency or other commodities at a future date in
the nature of a futures contract, or hold any cash, Cash Equivalents
(collectively, "Investments"), except:
(a) the Company and its Subsidiaries may invest in Cash and
Cash Equivalents, and the Company's Foreign Subsidiaries may invest in
Foreign Cash Equivalents;
(b) the Company and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in
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the ordinary course of business and payable or dischargeable in
accordance with customary trade terms (including the dating of
receivables) of the Company or such Subsidiary;
(c) the Company and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into to
protect the Company against fluctuations in interest rates in respect
of the Obligations and other Hedging Agreements;
(e) advances, loans and investments in existence on the
Initial Borrowing Date and listed on Annex V shall be permitted,
without giving effect to any additions thereto or replacements thereof
(except those additions or replacements which are existing obligations
as of the Initial Borrowing Date but only to the extent such further
obligations are described on such Annex V);
(f) deposits made in the ordinary course of business
consistent with past practices to secure the performance of leases or
other contractual arrangements shall be permitted;
(g) the Company may make intercompany loans and advances to
any of its Subsidiaries that are Guarantors and any Subsidiary of the
Company may make intercompany loans and advances to the Company or any
other Subsidiary of the Company that is a Guarantor (collectively,
"Intercompany Loans");
(h) loans and advances by the Company and its Subsidiaries to
employees of the Company and its Subsidiaries for moving and travel
expenses and other similar expenses or in connection with stock
purchases in each case incurred in the ordinary course of business and
consistent with past practices shall be permitted in an aggregate
principal amount not to exceed $100,000 at any one time outstanding;
(i) the Company and its Subsidiaries may acquire and hold
promissory notes and/or equity securities issued by
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the purchaser or purchasers in connection with the sale of receivables
to the extent permitted under Section 8.02(c); and
(j) the Company may contribute cash to one or more of its
Subsidiaries that are or become Guarantors formed after the Initial
Borrowing Date in accordance with Section 8.14 so long as such
Subsidiary remains a Guarantor.
8.06. Dividends, etc. The Company will not, and will not
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in common stock of the Company or any such Subsidiary,
as the case may be) or return any capital to, its stockholders or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire,
directly or indirectly, for any consideration, any shares of any class of its
capital stock, now or hereafter outstanding (or any warrants for or options or
stock appreciation rights (other than such rights as are granted only to
employees as compensation for their employment) in respect of any of such
shares), or set aside any funds for any of the foregoing purposes, and the
Company will not permit any of its Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capital stock of the
Company or any Subsidiary of the Company now or hereafter outstanding (or any
options or warrants or such stock appreciation rights issued by such Person
with respect to its capital stock) (all of the foregoing "Dividends", it being
understood that the payments made in accordance with the clauses contained in
the proviso of Section 8.07 shall not be deemed to be Dividends), except that
any Subsidiary of the Company may pay Dividends to the Company or any
Wholly-Owned Subsidiary of the Company.
8.07. Transactions with Affiliates. The Company will not,
and will not permit any of its Subsidiaries to, enter into any transaction or
series of transactions with any Affiliate other than in the ordinary course of
business and on terms and conditions substantially as favorable to the Company
or such Subsidiary as would be reasonably expected to be obtainable by the
Company or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate; provided that the following shall in any
event be permitted: (i) the Acquisition, (ii) transactions between or among
the Company and its Subsidiaries to the extent that such transactions are
otherwise specifically permitted under this Agreement, (iii) all transactions
between or among the Credit Parties and (iv) all immaterial transactions with
Affiliates.
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8.08. Working Capital; Minimum Net Worth. The Company shall
not permit its Working Capital (excluding for the purposes of this Section 8.08
the current portion of Indebtedness under this Agreement) on the last day of
any fiscal quarter to be less than $5 million.
The Company will not permit Consolidated Net Worth at any time
to be less than the Minimum Net Worth.
8.09. Asset Coverage Ratio. The Company shall at all times
maintain an Asset Coverage Ratio greater than 2.0:1.0.
8.10. Interest Coverage Ratio. The Company will not permit
the Interest Coverage Ratio to be less than 3.0:1.0.
8.11. Leverage Ratio. The Company will not permit the
Leverage Ratio at any time to be greater than .60.
8.12. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; Issuances of Capital Stock; etc. The Company will
not, and will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities
before due for the purpose of paying when due) any Indebtedness,
including any Existing Indebtedness;
(ii) amend or modify in any material respect or in any
manner adverse to the Company or the Lenders, or permit such an
amendment or modification of, any provision of the Existing
Indebtedness;
(iii) amend, modify or change in any way adverse to the
interests of the Lenders, its Certificate of Incorporation (including,
without limitation, by the filing or modification of any certificate
of designation) or By-Laws; and
(iv) issue any class of capital stock other than common
stock.
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8.13. Limitation on Certain Restrictions on Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Company or any Subsidiary
of the Company, or pay any Indebtedness owed to the Company or a Subsidiary of
the Company, (b) make loans or advances to the Company or any of the Company's
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) the Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Company or a Subsidiary of the Company,
(iv) customary provisions restricting assignment of any licensing agreement
entered into by the Company or a Subsidiary of the Company in the ordinary
course of business, (vi) customary provisions restricting the transfer of
assets pursuant to Liens permitted under Section 8.03(j), (k), (l), (m) or (n)
and (vii) restrictions or encumbrances pursuant to Indebtedness of a Subsidiary
acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the
time of a Permitted Acquisition) or on an asset securing such Indebtedness,
provided that such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition, and provided,
further, that such restrictions or encumbrances apply solely to such Subsidiary
or asset so acquired.
8.14. Limitation on the Creation of Subsidiaries.
Notwithstanding anything to the contrary contained in this Agreement, the
Company will not, and will not permit any of its Subsidiaries to, establish,
create or acquire after the Initial Borrowing Date any Subsidiary; provided
that the Company and its Wholly-Owned Subsidiaries shall be permitted to
establish or create Subsidiaries as a result of investments made pursuant to
Section 8.05(j) or Section 8.02(g) so long as, in each case, (i) at least 15
days' prior written notice thereof is given to the Agent (or such shorter
period of time as is acceptable to the Agent), (ii) unless otherwise consented
to by the Agent because such Subsidiary is a Foreign Subsidiary, the capital
stock of such new Subsidiary is promptly pledged pursuant to, and to the extent
required by, this Agreement and the Pledge Agreement and the certificates, if
any, representing such stock, together with stock powers duly executed in
blank, are delivered to the Collateral Agent, (iii) unless otherwise consented
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to by the Agent because such Subsidiary is a Foreign Subsidiary, such new
Subsidiary promptly executes a counterpart of the Guaranty, the Pledge
Agreement and the Security Agreement, and (iv) to the extent requested by the
Agent, the Co- Agent or the Required Lenders, takes all actions required
pursuant to Section 7.11, provided that no such action will be required by any
new Subsidiary (that is not a Wholly-Owned Subsidiary) to the extent such new
Subsidiary is a party to a preexisting agreement which prohibits such new
Subsidiary from executing a Guaranty; provided, further, such preexisting
agreement was not entered into for the purpose of avoiding the requirements of
Section 8.14 and the restrictions contained therein are no more adverse to the
Company and its Subsidiaries than to the other equity owners in such new
Subsidiary. In addition, each new Subsidiary that is required to execute any
Credit Document shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in Section 5
as such new Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Initial Borrowing Date.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01. Payments. The Borrowers shall (i) default in the
payment when due of any principal of the Loans or (ii) default, and such
default shall continue for two or more Business Days, in the payment when due
of any Unpaid Drawing, any interest on the Loans or any Fees or any other
amounts owing hereunder or under any other Credit Document;
9.02. Representations, etc. Any representation, warranty or
statement made by any Credit Party in any Credit Document or in any statement
or certificate delivered pursuant thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
9.03. Covenants. Any Credit Party shall (a) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8, or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Section
9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
notice to the defaulting party by the Agent, Co-Agent or the Required Lenders,
provided that if any such default covered by this clause (b) (i) is not capable
of
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being remedied within such 30-day period, (ii) is capable of being remedied
within an additional 30-day period and (iii) the Credit Party is diligently
pursuing such remedy during the periods contemplated by (i) and (ii) and has
advised the Agent as to the remedy thereof, the first 30-day period referred to
in this clause (b) shall be extended for an additional 30-day period but only
so long as (x) the Credit Party continues to diligently pursue such remedy and
(y) such default remains capable of being remedied within such period; or
9.04. Default Under Other Agreements. (a) The Company or
any of its Subsidiaries shall (i) default in any payment on or with respect to
any Indebtedness (other than the Obligations) beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, any such
Indebtedness to become due prior to its stated maturity; or (b) any
Indebtedness (other than the Obligations) of the Company or any of its
Subsidiaries shall be declared to be due and payable, or shall be required to
be prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (unless such required prepayment or mandatory prepayment
results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the stated maturity thereof; provided that it shall
not constitute an Event of Default pursuant to clause (a) or (b) of this
Section 9.04 unless the principal amount of any one issue of such Indebtedness,
or the aggregate amount of all such Indebtedness referred to in clauses (a) and
(b) above, exceeds $350,000 at any one time; or
9.05. Bankruptcy, etc. The Company or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11
of the United States Code entitled "Bankruptcy," as now or hereafter in effect,
or any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Company or any of its Subsidiaries and the petition is
not controverted within 30 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Company or any of its Subsidiaries; or the Company or any of its
Subsidiaries
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commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating
to the Company or any of its Subsidiaries; or there is commenced against the
Company or any of its Subsidiaries any such proceeding which remains
undismissed for a period of 60 days; or the Company or any of its Subsidiaries
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Company or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Company or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
the Company or any of its Subsidiaries for the purpose of effecting any of the
foregoing; or
9.06. ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan is, shall have been or is likely to
be terminated or the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, a contribution required to be made to
a Plan or a Foreign Pension Plan has not been timely made, the Company or any
Subsidiary of the Company or any ERISA Affiliate has incurred or is likely to
incur a liability to or on account of a Plan under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(2), 4971, 4975 or 4980 of the Code, or the Company or any Subsidiary of
the Company has incurred or is likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA) which
provide benefits to retired employees and other former employees (other than as
required by Section 601 of ERISA) or employee pension benefit plans (as defined
in Section 3(2) of ERISA) or Foreign Pension Plans; (b) there shall result from
any such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of imposition of a lien, granting
of a security interest or incurring a liability; and (c) which lien, security
interest or liability which arises from such event or events is reasonably
likely to have a Material Adverse Effect; or
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9.07. Security Documents. (a) Any Security Document shall
cease to be in full force and effect, or shall cease to give the Collateral
Agent the Liens, rights, powers and privileges purported to be created thereby
in favor of the Collateral Agent with respect to any portion of the Collateral
which is not de minimis, or (b) any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
shall continue beyond any cure or grace period specifically applicable thereto
pursuant to the terms of any such Security Document; or
9.08. Guarantees. The Guarantees or any provision thereof
shall cease to be in full force and effect, or any Guarantor or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under any Guaranty or any Guarantor shall default in
the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any Guaranty; or
9.09. Judgments. One or more judgments or decrees shall be
entered against the Company or any of its Subsidiaries involving a liability
(to the extent not paid or not fully covered (which coverage has not been
denied) by insurance) in excess of $350,000 for all such judgments and decrees
and all such judgments or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within 60 days from the entry thereof; or
9.10. Ownership. A Change of Control Event shall have
occurred;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent may (and shall, upon the written
request of the Required Lenders), by written notice to the Borrowers, take any
or all of the following actions, without prejudice to the rights of the Agent
or Co-Agent or any Lender to enforce its claims against any Guarantor or the
Borrowers, except as otherwise specifically provided for in this Agreement
(provided that if an Event of Default specified in Section 9.05 shall occur
with respect to the Borrowers the result which would occur upon the giving of
written notice by the Agent as specified in clauses (i) and (ii) below shall
occur automatically without the giving of any such notice): (i) declare the
Total Revolving Loan Commitment terminated, whereupon the Revolving Loan
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
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of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all Obligations owing hereunder (including Unpaid Drawings) to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; (iii) enforce, as Collateral Agent (or direct
the Collateral Agent to enforce), any or all of the Liens and security
interests created pursuant to the Security Documents; (iv) terminate any Letter
of Credit which may be terminated in accordance with its terms; and (v) direct
the Borrowers to pay (and the Borrowers hereby agree upon receipt of such
notice, or upon the occurrence of any Event of Default specified in Section
9.05, to pay) to the Collateral Agent at the Payment Office such additional
amounts of cash, to be held as security for the Borrowers' reimbursement
obligations in respect of Letters of Credit then outstanding, equal to the
aggregate Stated Amount of all Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquisition" shall mean the acquisition of certain assets by
the Company of Diamond M Onshore, Inc. pursuant to the Acquisition Agreement.
"Acquisition Agreement" shall mean the Acquisition Agreement,
dated as of November 12, 1996, between DI and Diamond M Onshore, Inc.,
including the Exhibits and Schedules thereto.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and executive officers of such Person), controlled by, or under
direct or indirect common control with such Person. A Person shall be deemed
to control a corporation if such Person possesses, directly or indirectly, the
power (i) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such corporation or (ii) to direct or cause
the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" shall mean BTCo and shall include any successor
appointed pursuant to Section 11.10.
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"Agreement" shall mean this Amended and Restated Credit
Agreement, as the same may be from time to time modified, amended and/or
supplemented.
"Amendment and Restatement Effective Date" has the meaning
provided in Section 12.10.
"Applicable Base Rate Margin" and "Applicable Eurodollar
Margin" shall mean, at any time following the date upon which consolidated
financial results for four full fiscal quarters are provided pursuant to
Section 7.01, the applicable percentage set forth below opposite the Debt to
EBITDA Ratio:
====================================================================================
Debt to EBITDA Ratio LIBOR Rate Loans ABR Loans
====================================================================================
Greater than 3.5 to 1.0 2.50% 1.50%
------------------------------------------------------------------------------------
Greater than 3.0 to 1.0 and 2.25% 1.25%
less than or equal to 3.5
to 1.0
------------------------------------------------------------------------------------
Greater than 2.5 to 1.0 and 2.00% 1.00%
less than or equal to 3.0
to 1.0
------------------------------------------------------------------------------------
Less than 2.5 to 1.0 1.75% .75%
====================================================================================
"Appraisal of Fair Market Value" shall mean a report
establishing Fair Market Value of an asset or property. The values in such
appraisal shall be determined by using the market data approach. The market
data approach is that approach to value where recent sales and/or offering
prices of similar assets or property are analyzed to arrive at an indication of
the most probable selling price for the asset or property being appraised.
"Approved Appraiser" shall mean Superior Appraisals and Hadco
International, Inc. or any other appraiser acceptable to the Agent.
"Asset Coverage Ratio" shall mean the ratio of (i) the Fair
Market Value (as determined in the most recent Appraisal delivered pursuant to
Section 7.11(c)) of Domestic
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Drilling Rigs and Related Equipment to (ii) the Total Commitment.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Company or any of its Subsidiaries to any Person of any
asset (including, without limitation, any capital stock or other securities of
another Person, but excluding the sale by such Person of its own capital stock)
of the Company or such Subsidiary other than (i) sales, transfers or other
dispositions of inventory made in the ordinary course of business, (ii) sales
of assets pursuant to, Sections 8.02(e), (f), (g), (h) and (i) and (iii) sales
of those assets listed on Annex X hereto.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit K
(appropriately completed).
"Authorized Officer" shall mean any senior officer of a
Borrower designated as such in writing to the Agent and Co-Agent by the
Borrowers to the extent reasonably acceptable to the Agent and Co-Agent.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" at any time shall mean the highest of (x) the
Prime Lending Rate and (y) the rate which is 1/2 of 1% in excess of the Federal
Funds Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" and "Borrowers" shall have the meanings provided in
the first paragraph of this Agreement.
"Borrowing" shall mean and include the borrowing of one Type
of Revolving Loan from all of the Lenders on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period; provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
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"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be added to the fixed assets
account on the consolidated balance sheet of such Person in accordance with
GAAP, including all such expenditures with respect to plant, property or
equipment (including, without limitation, expenditures for maintenance and
repairs which should be capitalized in accordance with GAAP).
"Capital Lease," as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as
lessee which, in conformity with GAAP, should be accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Company or any of its Subsidiaries in each case
taken at the amount thereof that should be accounted for as liabilities in
accordance with GAAP.
"Cash" shall mean U.S. dollars.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (ii) U.S. dollar
denominated time deposits, certificates of deposit and banker acceptances of
(x) any Lender or (y) any bank whose short-term commercial paper rating from
S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1
or the equivalent thereof (any such bank or Lender, an "Approved Lender"), in
each case with maturities of not more than twelve months from the date of
acquisition, (iii) commercial paper issued by any Approved Lender or by the
parent company of any Approved Lender and commercial paper issued by, or
guaranteed
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by, any industrial or financial company with a short-term commercial paper
rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Moody's, as the case may be, and in each case maturing
within twelve months after the date of acquisition, (iv) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within twelve months from the date of acquisition thereof and, at the
time of acquisition having one of the two highest ratings obtainable from
either S&P or Moody's, (v) any repurchase agreement entered into with any
Approved Lender which is secured by any obligation of the type described in any
of clauses (i) through (iii) and (vi) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset
Sale, other than the portion of such deferred payment constituting interest,
but only as and when so received) received by the Company and/or any of its
Subsidiaries from such Asset Sale.
"Change of Control Event" shall mean (a) the Company shall
cease to own directly 100% on a fully diluted basis of the economic and voting
interest in the capital stock of Drillers, Inc. and DI International, Inc. or
(b) any Person or "group" (within the meaning of Rules 13d-3 and 13d-5 under
the Securities Exchange Act of 1934, as in effect on the Effective Date), shall
have (A) acquired beneficial ownership of 30% or more on a fully diluted basis
of the voting and/or economic interest in the Company's capital stock or (B)
obtained the power (whether or not exercised) to elect a majority of the
Company's directors or (c) the Board of Directors of the Company shall cease to
consist of a majority of Continuing Directors or (d) Norex Drilling Ltd.,
Somerset Drilling Associates, L.L.C., and Somerset Capital Partners shall cease
to own or control at least 30% on a fully diluted basis of the voting interest
in the capital stock of the Company.
"Co-Agent" shall mean ING Capital and shall include any
successor to the Co-Agent appointed pursuant to Section 11.10.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated
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and ruling issued thereunder. Section references to the Code are to the Code,
as in effect at the date of this Agreement and any subsequent provisions of the
Code amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Pledged Collateral and
Pledged Securities.
"Collateral Agent" shall mean BTCo acting as collateral agent
for the Lenders.
"Commitment Fee" shall have the meaning provided in Section
3.01(a).
"Company" shall have the meaning provided in the first
paragraph of this Agreement.
"Company Common Stock" shall have the meaning provided in
Section 6.14.
"Consolidated Current Assets" shall mean the current assets,
including the available Unutilized Revolving Loan Commitment, of the Company
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Current Liabilities" shall mean the current
liabilities of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, but excluding the current portion of and the
accrued but unpaid interest on any Indebtedness under this Agreement.
"Consolidated Debt" shall mean, at any time, all Indebtedness
of the Company and its Subsidiaries determined on a consolidated basis;
provided that for purposes of this definition, the amount of Indebtedness in
respect of Interest Rate Protection Agreements and Other Hedging Agreements
shall be at any time equal to the unrealized net loss position, if any, of the
Company and/or its Subsidiaries thereunder on a marked to market basis
determined no more than one month prior to such time.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income, before total interest expense (inclusive of amortization of
deferred financing fees, premiums on Interest Rate Protection Agreements and
any original issue discount) of the Company and its Subsidiaries determined on
a consolidated basis and provisions for taxes based on income, whether paid or
deferred.
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"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT, adjusted by adding thereto the amount of all depreciation expense and
amortization expense plus non-cash compensation expenses relating to restricted
stock and stock-option grants, in each case, that were deducted in determining
Consolidated EBIT for such period, plus net earnings of any Person (other than
a consolidated Subsidiary that is a Guarantor) in which the Company or any
consolidated Subsidiary has an ownership interest to the extent such net
earnings shall have actually been received by the Company or such consolidated
Subsidiary in the form of cash distributions.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to (A) any rent paid in
respect of Capital Leases which is or should be allocable to interest expense
in accordance with GAAP and (B) interest capitalized during the construction of
any Capital Expenditure) of the Company and its Subsidiaries determined on a
consolidated basis with respect to all outstanding Indebtedness of the Company
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under Interest Rate Protection
Agreements, but excluding, however, amortization of any payments made to obtain
any Interest Rate Protection Agreement and Other Hedging Agreements and
deferred financing costs and any interest expense on deferred compensation
arrangements to the extent included in total interest expense.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss), after provisions for income taxes (other than with respect to
net income taxes attributable to items that are excluded from the calculation
of Consolidated Net Income in the period), of the Company and its Subsidiaries
on a consolidated basis for such period taken as a single accounting period in
conformity with GAAP but excluding in any event (a) any extraordinary gains
(net of extraordinary losses) but with giving effect to gains or losses from
sales of assets sold in the ordinary course of business; (b) net earnings of
any person (other than a consolidated Subsidiary that is a Guarantor) in which
the Company or any consolidated Subsidiary has an ownership interest unless
such net earnings shall have actually been received by the Company or such
consolidated Subsidiary in the form of cash distributions; (c) any portion of
the net earnings of any consolidated Subsidiary which is unavailable for
payment of dividends to the Company or any other consolidated Subsidiary by
reason of the provisions of any agreement or applicable law or regulation
(including, without
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limitation, those agreements referred to in the exceptions set forth in Section
8.13); (d) earnings resulting from any reappraisal, revaluation or write-up of
assets; (e) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of such Person or is merged into or consolidated with such
Person or any of its Subsidiaries or that Person's assets are acquired by such
Person or any of its Subsidiaries; (f) the aggregate net gain (or loss) during
such period arising from the revaluation (but not sale) of readily marketable
securities; (g) the income (or loss) from discontinued operations; and (h)
non-cash charges relating to the Acquisition and repayment of Indebtedness
incurred under the Existing Credit Agreement.
"Consolidated Net Worth" shall mean, at any time, the net
worth of the Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligations 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 such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection or standard contractual
indemnities entered into, in each case in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
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"Continuing Directors" shall mean the directors of the Company
on the Initial Borrowing Date and each other director if such director's
nomination for the election to the Board of Directors of the Company is
recommended by a majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, each of the
Notes and each Security Document.
"Credit Event" shall mean the making of a Loan or the issuance
of a Letter of Credit.
"Credit Party" shall mean the Borrowers and each Guarantor.
"Debt to EBITDA Ratio" shall mean the ratio of (a)
Consolidated Debt to (b) Consolidated EBITDA.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to
which a Lender Default is in effect.
"Dividends" shall have the meaning provided in Section 8.07.
"Documents" shall mean the Credit Documents.
"Domestic Drilling Rigs and Related Equipment" shall mean
Drilling Rigs and Related Equipment owned by the Company or its Domestic
Subsidiaries and located in the 48 contiguous states.
"Domestic Subsidiary" shall mean each Subsidiary of the
Company incorporated or organized in the United States or any State or
territory thereof.
"Drilling Rig(s) and Related Equipment" shall mean all
drilling and workover rigs owned by the Company and its Subsidiaries, and all
pumps, drilling equipment, machinery, equipment, supplies, parts and other
goods of any description whatsoever installed on or affixed to or to be used in
connection with any such rig.
"Effective Date" shall mean December 31, 1996.
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"Eligible Transferee" shall mean a commercial bank, financial
institution or other institutional "accredited investor" (as defined in
Regulation D of the Securities Act).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance, deficiency, liability or violation, investigations
or proceedings relating in any way to any violation or liability (or alleged
violation or liability) by the Company or any of its Subsidiaries under any
Environmental Law (hereafter "Claims") or any permit, license or other
authorization issued to the Company or any of its Subsidiaries under any such
law, including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, remedial, corrective,
response or other actions or damages pursuant to any Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law" shall mean any foreign, federal, state or
local policy, statute, law, rule, regulation, ordinance, code or rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment (for purposes of this
definition (collectively, "Laws")), relating to the environment or Hazardous
Materials, or health and safety to the extent such health and safety issues
arise under the Occupational Safety and Health Act of 1970, as amended, or any
such similar Laws.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in
effect at the date of this Agreement and any subsequent provisions of ERISA
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Company or any Subsidiary of the
Company would be deemed to be a "single employer" within the meaning of Section
414(b) or (c) of the Code or (to the extent required by operation of Title IV
of ERISA or Section 412 of the Code or Section 302 of ERISA) Section 414(m) or
(o) of the Code.
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"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the arithmetic average (rounded to the
nearest 1/16 of 1%) of the offered quotation to first-class banks in the
interbank Eurodollar market by BTCo for U.S. dollar deposits of amounts in same
day funds generally comparable to the aggregate principal amount of the
Eurodollar Loan for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such
Eurodollar Loan, determined as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period divided
(and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Existing Credit Agreement" shall have the meaning provided in
the Recitals hereto
"Existing Indebtedness" shall have the meaning provided in
Section 6.22.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.13.
"Existing Letters of Credit" shall have the meaning provided
in Section 6.22.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Fair Market Value" shall mean with respect to any asset the
amount of Net Proceeds which could be expected upon a sale by a willing and
informed seller to a willing and informed buyer, both exercising prudent
judgment and not acting with undue haste.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period
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to the weighted average of the rates on overnight Federal Funds transactions
with members of the Federal Reserve System arranged by Federal Funds brokers,
as published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Lender of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the Agent and Co-
Agent from three Federal Funds brokers of recognized standing selected by the
Agent and Co-Agent.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Final Maturity Date" shall mean April 30, 2000.
"Foreign Cash Equivalents" shall mean dollar denominated
certificates of deposit or bankers acceptances of any bank organized under the
laws of the jurisdiction of incorporation of a Foreign Subsidiary, provided
that the short-term commercial paper rating of such bank from S&P is at least
A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof, in each case with maturities of not more than twelve months
from the date of acquisition.
"Foreign Subsidiary" shall mean each Subsidiary of the Company
other than a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8 and the definition of Interest Reduction Discount, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 12.07(a).
"Guaranteed Creditors" shall mean and include each of the
Agent, the Co-Agent, the Collateral Agent, the Lenders and the Letter of Credit
Issuer.
"Guaranteed Obligations" shall mean the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the principal and interest on each Note issued by the Borrowers to each
Lender, and Loans made, under this Agreement and all reimbursement obligations
and Unpaid Drawings with respect to Letters of Credit, together with all the
other obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code,
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would become due) and liabilities (including, without limitation, indemnities,
fees and interest thereon) of the Borrowers or any Guarantor to such Lender,
the Agent, the Co-Agent and the Collateral Agent now existing or hereafter
incurred under, arising out of or in connection with any Credit Document and
the due performance and compliance with all the terms, conditions and
agreements contained in each of the Credit Documents by the Borrowers.
"Guarantees" shall mean the Subsidiary Guarantees.
"Guarantors" shall mean the Subsidiary Guarantors.
"Hazardous Materials" shall mean (a) any petrochemical or
petroleum products or wastes (including crude oil or any fraction thereof),
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any Environmental Law.
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services payable to the sellers thereof or any of
such seller's assignees which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person but excluding deferred rent
as determined in accordance with GAAP, (iii) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by
any Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed; provided, however, that in the event that the
liability of such first Person is non-recourse to such Person and is recourse
only to specified assets of such Person, the amount of Indebtedness attributed
thereto shall not exceed the greater of the market value of such assets or the
book value of such assets, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e., take-or-pay
and similar obligations, (vii) all obligations under
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Interest Rate Protection Agreements and Other Hedging Agreements and (viii) all
Contingent Obligations of such Person; provided that Indebtedness shall not
include trade payables and accrued expenses, in each case arising and payable
in the ordinary course of business and consistent with past practice and in no
event 120 days past the invoice date (so long as so paid in the ordinary course
of business and consistent with past practice).
"ING Capital" shall mean ING (US) Capital Corporation, in its
individual capacity, and any successor corporation thereto by merger,
consolidation or otherwise.
"Initial Borrowing Date" shall mean the date upon which the
initial Borrowing of Loans occurs.
"Intercompany Loan" shall have the meaning provided in Section
8.05(g).
"Interest Coverage Ratio" shall mean, for the three-month
period most recently ended for which consolidated financial information is
available, commencing with March 31, 1997, the ratio of Consolidated EBITDA to
Consolidated Interest Expense for such period; provided, however, that for
purposes of calculating this ratio, interest expense on the Norex Loan shall
not constitute Consolidated Interest Expense.
"Interest Period," with respect to any Eurodollar Loan, shall
mean the interest period applicable thereto, as determined pursuant to Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"L/C Supportable Indebtedness" shall mean (i) obligations of
the Company or its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers' compensation, surety bonds
and other similar statutory obligations and (ii) such other obligations of the
Company or any of its Subsidiaries as are reasonably acceptable to the Agent
and the Letter of Credit Issuer and otherwise permitted to exist pursuant to
the terms of this Agreement.
"Lease" shall mean any lease, sublease, franchise agreement,
license, occupancy or concession agreement.
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"Leasehold" of any Person shall mean all of the right, title
and interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Default" shall mean (i) the refusal (which has not
been retracted) of a Lender to make available its portion of any Borrowing or
to fund its portion of any unreimbursed payment under Section 2.04(c) or (ii) a
Lender having notified the Agent and Co-Agent and/or the Company that it does
not intend to comply with the obligations under Section 1.01(a) or 2.04(c), in
the case of either clause (i) or (ii) above as a result of the appointment of a
receiver or conservator with respect to such Lender at the direction or
request of any regulatory agency or authority.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fees" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Letter of Credit Sublimit" shall mean $5,000,000.
"Leverage Ratio" shall mean, at any time, the ratio of (x)
Consolidated Debt on such date to (y) Total Capitalization.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording
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or notice statute, and any lease having substantially the same effect as the
foregoing).
"Loan" shall mean each Revolving Loan.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole
and after giving effect to the Acquisition.
"Minimum Borrowing Amount" shall mean for Revolving Loans,
$1,000,000.
"Minimum Net Worth" shall mean the sum of (x) $60 million, (y)
50% of Consolidated Net Income, if positive, for the period from and including
January 1, 1997 to and including the final day of the most recent period for
which consolidated financial information of the Company is available and (z)
50% of the increase to stockholders' equity of the Company attributable to the
issuance of Company Common Stock.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Motor Vehicle Capitalized Lease Obligations" shall mean
Capitalized Lease Obligations with respect to Capital Leases of motor vehicles.
"Multiemployer Plan" shall mean a Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA).
"Net Cash Proceeds" shall mean, with respect to any Asset
Sale, the Cash Proceeds resulting therefrom net of (a) cash expenses of sale
(including, without limitation, brokerage fees, if any, transfer taxes and
payment of principal, premium and interest of Indebtedness other than the Loans
required to be repaid as a result of such Asset Sale), (b) all foreign,
federal, state and local taxes to the extent payable as a direct consequence of
any such Asset Sale and (c) deduction of reasonable amounts, determined in
accordance with GAAP, required to be provided by the Company or such Subsidiary
as a reserve against any liabilities retained by the Company or any Subsidiary
of the Company associated with such assets after such Asset Sale, including,
without limitation, any indemnification, pension and other post-employment
benefit
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liabilities, workers compensation liabilities, liabilities associated with
retiree benefits and liabilities relating to environmental matters, except and
until such reserves are reversed, in which case the amount of such reversal
shall constitute Net Cash Proceeds.
"Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.
"Norex Loan" shall mean the $4,000,000 term loan to the
Company from Norex Drilling Ltd., dated August 29, 1996.
"Note" shall mean each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of BTCo located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the BTCo may
designate to the Company and the Lenders from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Agent, the Co-Agent, the Collateral Agent or any Lender pursuant
to the terms of any Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect the Company and its Subsidiaries against fluctuations in
currency values.
"Participant" shall have the meaning provided in Section
2.04(a)(i).
"Payment Office" shall mean the office of BTCo located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as BTCo may
designate to the Company and the Lenders from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
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"Percentage" shall mean, at any time for each Lender, the
percentage obtained by dividing such Lender's Revolving Loan Commitment at such
time by the Total Revolving Loan Commitment then in effect; provided that if
the Total Revolving Loan Commitment has been terminated, the Percentage of each
Lender shall be determined by dividing such Lender's Revolving Loan Commitment
as in effect immediately prior to such termination by the Total Revolving Loan
Commitment as in effect immediately prior to such termination.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(j).
"Permitted Liens" shall have the meaning provided in Section
8.03.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company or partnership,
association, trust or other enterprise or any government or political
subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer plan or single-employer
plan as defined in Section 4001 of ERISA, which is maintained or contributed to
by (or to which there is an obligation to contribute of) the Company, any of
its Subsidiaries or any ERISA Affiliate and each such plan for the five
calendar year period immediately following the latest date on which the
Company, any of its Subsidiaries or any ERISA Affiliate maintained, contributed
to or had an obligation to contribute to such plan or any such plan as to which
the Company, any of its Subsidiaries or any ERISA Affiliate may have any
liability, provided, however, the term "Plan" shall not include any Foreign
Pension Plan.
"Pledge Agreement" shall have the meaning provided in Section
5.11(a) and shall include any additional pledge agreement executed by the
Company or any of its Subsidiaries pursuant to Section 7.11.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreements.
"Pledged Collateral" shall have the meaning assigned to such
term in the Security Agreements.
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreements.
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"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate.
"Prior Liens" shall mean Liens which, pursuant to the
provisions of any Security Document, are or may be superior to the Lien of such
Security Document.
"Quarterly Payment Date" shall mean the last Business Day of
each fiscal quarter (including the fourth fiscal quarter) of the Company.
"Real Property" of any Person shall mean all of the right,
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Register" shall have the meaning provided in Section 7.12.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or
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upon any land or water or air, or otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC by regulation.
"Required Lenders" shall mean collectively (and not
individually) Non-Defaulting Lenders the sum of whose Revolving Loan
Commitments (or, if after the Total Revolving Loan Commitment has been
terminated, outstanding Revolving Loans and Letter of Credit Outstandings)
constitute greater than 66-2/3% of the Total Revolving Loan Commitment less the
aggregate Revolving Loan Commitments of Defaulting Lenders (or, if after the
Total Revolving Loan Commitment has been terminated, the total outstanding
Revolving Loans of Non-Defaulting Lenders and Letter of Credit Outstandings at
such time).
"Returns" shall have the meaning provided in Section 6.21.
"Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Revolving Loan Commitment" shall mean, with respect to each
Lender, the amount set forth opposite such Lender's name in Annex I directly
below the column entitled "Revolving Loan Commitment," as the same may be
reduced from time to time pursuant to Section 3.02, Section 3.03, Section 9
and/or the definition of "Total Revolving Loan Commitment."
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the
Security Documents.
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"Security Agreement" shall have the meaning provided in
Section 5.11(b) and shall include any additional security agreement executed by
the Company or any of its Subsidiaries pursuant to Section 7.11.
"Security Documents" shall mean and include the Security
Agreements and the Pledge Agreements.
"S&P" shall mean Standard & Poors' Ratings Service.
"Stated Amount" of each Letter of Credit shall mean the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity (other than a corporation) in which
such Person, directly or indirectly through Subsidiaries, has more than a 50%
equity interest at the time; provided, however, that for purposes of this
Agreement Indrillers LLC shall not be deemed to be a Subsidiary of the Company.
"Subsidiary Guarantee" shall mean the Guarantee contained in
Section 13 hereof.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Company executing a Subsidiary Guarantee.
"Taxes" shall have the meaning provided in Section 4.04.
"Total Capitalization" shall mean on any date the sum of
Consolidated Debt and Consolidated Net Worth at such time.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the Lenders it being understood that the
Total Revolving Loan Commitment as of the Amendment and Restatement Effective
Date shall be $50,000,000.
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"Total Revolving Outstandings" shall mean, at any time, the
sum of (i) the aggregate principal amount of all Revolving Loans outstanding at
such time and (ii) the aggregate amount of all Letter of Credit Outstandings at
such time.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, (i) the Total Revolving Loan Commitment at such time less (ii) Total
Revolving Outstandings at such time.
"Type" shall mean any type of Revolving Loan determined with
respect to the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year exceeds
the fair market value of the assets allocable thereto, each determined in
accordance with Statement of Financial Accounting Standards No. 87, based upon
the actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"Unutilized Revolving Loan Commitment" with respect to any
Lender at any time shall mean such Lender's Revolving Loan Commitment at such
time less the sum of (i) the aggregate then outstanding principal amount of all
Revolving Loans made by such Lender and (ii) such Lender's Percentage of the
then Letter of Credit Outstandings.
"U.S. Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States of America.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is a Domestic
Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is a Foreign
Subsidiary.
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"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares and/or other nominal amounts of shares required to be held other than by
such Person under applicable law) is at the time owned by such Person and/or
one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at
such time.
"Working Capital" shall mean the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"Written" (whether lower or upper case) or "in writing" shall
mean any form of written communication or a communication by means of telex,
facsimile device, or telegraph or cable.
SECTION 11. The Agent and Co-Agent.
11.01. Appointment. Each Lender hereby irrevocably
designates and appoints BTCo as Agent and ING Capital as Co- Agent of such
Lender (such term to include for purposes of this Section 11, BTCo acting as
Collateral Agent) to act as specified herein and in the other Credit Documents,
and each such Lender hereby irrevocably authorizes BTCo as Agent and ING
Capital as Co-Agent to take such action on its behalf under the provisions of
the Credit Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent and Co-Agent by the terms of the Credit
Documents, together with such other powers as are reasonably incidental
thereto. The Agent and Co-Agent agree to act as such upon the express
conditions contained in this Section 11. Notwithstanding any provision to the
contrary elsewhere in any Credit Document, the Agent and Co-Agent shall not
have any duties or responsibilities, except those expressly set forth in the
Credit Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise (including by operation of law)
to exist against the Agent or Co-Agent. The provisions of this Section 11 are
solely for the benefit of the Agent and Co-Agent and the Lenders, and neither
the Company nor any of its Subsidiaries or Affiliates shall have any rights as
a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Agent and Co-Agent shall act
solely as agents of the Lenders and the Agent and Co-Agent do not assume and
shall not be deemed to have assumed any obligation or relationship
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of agency or trust with or for the Company or any of its Subsidiaries or
Affiliates.
11.02. Delegation of Duties. Each of the Agent and Co-Agent
may execute any of its duties under any Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent and Co-Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by either of them with reasonable care except to the
extent otherwise required by Section 11.03.
11.03. Exculpatory Provisions. Neither of the Agent or
Co-Agent nor any of their Affiliates or any of their officers, directors,
employees, agents or attorneys-in-fact shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person in its capacity as
Agent or Co-Agent under or in connection with any Credit Document (except to
the extent found to have resulted from such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Company,
any of its Subsidiaries or any of their respective officers contained in any
Credit Document, any other Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent or
Co-Agent under or in connection with, any Document or for any failure of the
Company or any of its Subsidiaries or any of their respective officers to
perform its obligations hereunder or thereunder. Neither the Agent or Co-Agent
shall be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
condition of, any Document, or to inspect the properties, books or records of
the Company or any of its Subsidiaries. The Agent and the Co-Agent shall not
be responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of any Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection
herewith or therewith furnished or made by the Agent or Co-Agent to the Lenders
or by or on behalf of the Company or any of its Subsidiaries to the Agent or
Co-Agent or any Lender or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
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11.04. Reliance by Agent and Co-Agent. Each of the Agent and
Co-Agent shall be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, facsimile, telex or teletype message, statement,
order or other document or conversation reasonably believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company or any of its Subsidiaries), independent
accountants and other experts selected by the Agent or Co-Agent. Each of the
Agent and Co-Agent shall be fully justified in failing or refusing to take any
action under any Credit Document unless is shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent and Co-Agent shall in all cases be fully
protected in acting, or in refraining from acting, under any of the Credit
Documents in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.
11.05. Notice of Default. The Agent and Co-Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default unless the Agent and Co-Agent have actually received notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Agent and Co-Agent receive such a notice, the Agent and Co-Agent
shall give prompt notice thereof to the Lenders. The Agent and Co-Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that, unless and until
the Agent and Co-Agent shall have received such directions, the Agent and
Co-Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as they
shall deem advisable in the best interests of the Lenders.
11.06. Nonreliance on Agent and Co-Agent and Other Lenders.
Each Lender expressly acknowledges that neither of the Agent or Co-Agent nor
any of their Affiliates nor any of their respective officers, directors,
employees, agents or attorneys-in-fact have made any representations or
warranties to them and that no act by the Agent or Co-Agent hereinafter
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taken, including any review of the affairs of the Company or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent or Co-Agent or any such other Person to any Lender. Each Lender
represents to the Agent and Co-Agent that it has, independently and without
reliance upon the Agent or Co-Agent or any such other Person or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other condition, prospects and
creditworthiness of the Company and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
Co- Agent or any such other Person or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Company
and its Subsidiaries. The Agent and Co-Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Agent or Co-Agent or any
of their Affiliates or any of their officers, directors, employees, agents or
attorneys-in-fact.
11.07. Indemnification. The Lenders agree to indemnify each
of the Agent and Co-Agent in its capacity as such ratably according to their
respective "percentages" as used in determining the Required Lenders at such
time (with such "percentages" to be determined as if there are no Defaulting
Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed
on, incurred by or asserted against the Agent or Co-Agent in its capacity as
such in any way relating to or arising out of any Credit Document, or any
documents contemplated by or referred to herein or therein, or the transactions
contemplated hereby or thereby or any action taken or omitted to be taken by
the Agent or Co-Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by the Company or any
of its Subsidiaries; provided that
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no Lender shall be liable to the Agent or Co-Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent found to have
resulted solely from the gross negligence or willful misconduct of such Agent
or Co-Agent. To the extent any Lender would be required to indemnify the Agent
or Co-Agent pursuant to the immediately preceding sentence but for the fact
that it is a Defaulting Lender, such Defaulting Lender shall not be entitled to
receive any portion of any payment or other distribution hereunder (including,
without limitation as to principal of or interest on any Loans) until each
other Lender shall have been reimbursed for the excess, if any, of the
aggregate amount paid by such Lender under this Section 11.07 over the
aggregate amount such Lender would have been obligated to pay had such first
Lender not been a Defaulting Lender. If any indemnity furnished to the Agent
or Co-Agent for any purpose shall, in the opinion of such Agent or Co-Agent be
insufficient or become impaired, the Agent or Co-Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section 11.07
shall survive the payment of all Obligations.
11.08. Agent or Co-Agent in Its Individual Capacity. The
Agent or Co-Agent and their respective Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Company and
its Subsidiaries and Affiliates as though the Agent or Co-Agent were not an
Agent or Co-Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, the Agent and Co-Agent shall have the same rights and
powers under this Agreement as any Lender and may exercise the same as though
it were not an Agent or Co-Agent and the terms "Lender" and "Lenders" shall
include each of the Agent or Co-Agent in its individual capacity.
11.09. Holders. The Agent or Co-Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with the Agent. Any request, authority or
consent of any Person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
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11.10. Resignation of the Agent or Co-Agent; Successor Agent
or Co-Agent. The Agent or Co-Agent may resign as the Agent or Co-Agent upon 60
days' notice to the Lenders and the Company. Upon the resignation the Agent or
Co-Agent, the Required Lenders shall appoint from among the Lenders a
successor Agent or Co-Agent which is a bank or a trust company for the Lenders
subject to prior approval by the Company (such approval not to be unreasonably
withheld, provided that such approval shall not be required if a Default or an
Event of Default then exists), whereupon such successor agent shall succeed to
the rights, powers and duties of the Agent or Co-Agent, as the case may be, and
the term "Agent" or "Co-Agent" shall include such successor agent effective
upon its appointment, and the resigning Agent's or Co-Agent's rights, powers
and duties as the Agent or Co-Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or Co-Agent or any of the
parties to this Agreement. After the resignation of the Agent or Co-Agent
hereunder, the provisions of this Section 11 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Agent or
Co-Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01. Payment of Expenses, Etc. The Borrowers agree,
jointly and severally, to: (i) whether or not the transactions herein
contemplated are consummated, pay all out-of-pocket costs and expenses of each
of the Agent and Co-Agent (including, without limitation, the reasonable fees
and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇) in connection with the
negotiation, preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein and any amendment, waiver or
consent relating thereto and in connection with the Agent's and Co- Agent's
syndication efforts with respect to this Agreement; (ii) pay all out-of-pocket
costs and expenses of each of the Agent and Co-Agent, each Letter of Credit
Issuer and each of the Lenders in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein and, after a
Default or an Event of Default shall have occurred and be continuing, the
protection of the rights of each of the Agent and Co-Agent, each Letter of
Credit Issuer and each of the Lenders thereunder (including, without
limitation, the fees and disbursements of counsel for each of the Agent and
Co-Agent, for each Letter of Credit Issuer and for each of the Lenders); (iii)
pay and hold each of the Lenders harmless from and against any and all present
and future stamp and other similar taxes with respect to the foregoing matters
and save each of the Lenders harmless
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from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Lender) to pay
such taxes; and (iv) indemnify each of the Agent, the Co-Agent, the
Collateral Agent, each Letter of Credit Issuer and each Lender and each of
their Affiliates, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all losses, liabilities, claims, damages or expenses incurred by any of them as
a result of, or arising out of, or in any way related to, or by reason of, (a)
any investigation, litigation or other proceeding (whether or not any such
Person is a party thereto and whether or not any such investigation, litigation
or other proceeding is between or among any such Person, or any third Person or
otherwise) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any other transactions contemplated in any Credit Document (but excluding
any such losses, liabilities, claims, damages or expenses to the extent found
to have been incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified), or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or on the surface
or subsurface of any Real Property or any Environmental Claim, in each case,
including, without limitation, the reasonable fees and disbursements of counsel
and independent consultants incurred in connection with any such investigation,
litigation or other proceeding.
12.02. Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
of the Agent, the Co-Agent, each Letter of Credit Issuer and each Lender is
hereby authorized at any time or from time to time, without presentment,
demand, protest or any other notice of any kind to the Company or any of its
Subsidiaries or any Guarantor or any other Person, any such notice, to the full
extent permitted by applicable law, being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by the Agent, Co-Agent, such
Letter of Credit Issuer or such Lender (including, without limitation, by
branches and agencies of the Agent, Co-Agent, such Letter of Credit Issuer and
such Lender wherever located) to or for the credit or the account of the
Borrowers or any Guarantor against and on account of the Obligations of the
Borrowers or any Guarantor to the Agent, Co-Agent, such Letter of Credit Issuer
or such Lender under this Agreement or under any of the other Credit Documents,
including, without
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limitation, all interests in Obligations of the Borrowers or any Guarantor
purchased by such Lender pursuant to Section 12.06(b), and all other claims of
any nature or description arising out of or connected with any Credit Document,
irrespective of whether or not such Agent, Co-Agent, such Letter of Credit
Issuer or such Lender shall have made any demand hereunder and although said
Obligations shall be contingent or unmatured.
12.03. Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, facsimile or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered, if to any Credit
Party, at the address specified opposite its signature below or in the other
relevant Credit Documents, as the case may be; if to any Lender, at its address
specified for such Lender on Annex II; or, at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied or cabled or sent by overnight courier, and shall be effective when
received. For all purposes hereunder, notice delivered to one Borrower shall
be deemed to be notice to each Borrower.
12.04. Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, neither the
Borrowers nor any Guarantor may assign or transfer any of its rights,
obligations or interest under any Credit Document without the prior written
consent of the Lenders; and provided, further, that, although any Lender may
transfer, assign or grant participations in its rights hereunder, such Lender
shall remain a "Lender" for all purposes hereunder (and may not transfer or
assign all or any portion of its Revolving Loan Commitment hereunder except as
provided in Section 12.04(b)) and the transferee, assignee or participant, as
the case may be, shall not constitute a "Lender" hereunder; and provided,
further, that no Lender shall transfer or grant any participation under which
the participant shall have rights to approve any amendment to or waiver of any
Credit Document except to the extent such amendment or waiver would (i) extend
the Final Maturity Date, or reduce the rate or extend the time of payment of
interest or Fees on Loans or Letters of Credit in which such participant is
participating (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof
(it being understood that any amendment or
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modification to the financial definitions in this Agreement shall not
constitute a reduction in any rate of interest or fees for purposes of this
clause (i), or increase the amount of the participant's participation over the
amount thereof, or increase the amount of the participant's participation over
the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Revolving
Loan Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Revolving Loan Commitment or Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrowers of any of their rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided in
the Credit Documents) supporting the Loans in which such participant is
participating. In the case of any such participation, the participant shall
not have any rights under any of the Credit Documents (the participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the participant relating
thereto) and all amounts payable by the Borrowers hereunder shall be determined
as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder) to
any Affiliate of such Lender which is at least 50% owned by such Lender or its
parent company or to one or more Lenders or (y) assign all, or if less than
all, a portion equal to at least $2,000,000 in the aggregate for the assigning
Lender or assigning Lenders, of such Revolving Loan Commitment (and related
outstanding Obligations hereunder) to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a Lender by execution
of an Assignment and Assumption Agreement; provided that (i) at such time Annex
I shall be deemed modified to reflect the Revolving Loan Commitments of such
new Lender and of the existing Lenders, (ii) upon surrender of the old
Revolving Notes, new Revolving Notes will be issued, at the Borrowers' expense,
to such new Lender and to the assigning Lender, such new Revolving Notes to be
in conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Revolving Loan
Commitments, (iii) the consent of the Agent shall be required in connection
with any such assignment pursuant to
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clause (y) of this Section 12.04(b) and (iv) the Agent shall receive at the
time of each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500; and provided, further,
that such transfer or assignment will not be effective until recorded by the
Agent on the Register pursuant to Section 7.12. To the extent of any
assignment pursuant to this Section 12.04(b), the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitment. At the time of each assignment pursuant to this Section
12.04(b) to a Person which is not already a Lender hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes, the respective assignee Lender shall
provide to the Borrowers and the Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b).
(c) Any Lender may at any time pledge or assign all or any
portion of its rights under this Agreement and the other loan documents to any
Federal Reserve Bank without notice to or consent of the Borrowers. No such
pledge or assignment shall release the transferor Lender from its obligations
hereunder.
12.05. No Waiver; Remedies Cumulative. No failure or delay
on the part of any party in exercising any right, power or privilege under any
Credit Document and no course of dealing between any Credit Party and the
Agent, Co- Agent or any Lender shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege under any Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which any party would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent, Co-Agent or the Lenders to any
other or further action in any circumstances without notice or demand.
12.06. Payments Pro Rata. (a) The Agent agrees that
promptly after its receipt of each payment from or on behalf of any Credit
Party in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata
share of such payment) pro rata based upon their respective
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shares, if any, of the Obligations with respect to which such payment was
received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of such Obligation then owed and due to such Lender bears to the
total of such Obligation then owed and due to all of the Lenders immediately
prior to such receipt, determined in accordance with the terms of this
Agreement, then such Lender receiving such excess payment shall purchase for
cash without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
12.07. Calculations; Computations. (a) The financial
statements to be furnished to the Lenders pursuant hereto shall be made and
prepared in accordance with GAAP consistently applied throughout the periods
involved (except as set forth in the notes thereto or as otherwise disclosed in
writing by the Company to the Lenders); provided that except as otherwise
specifically provided herein, all computations determining compliance with
Sections 3.03 and 8, including definitions used therein shall, (x) in each
case, utilize accounting principles and policies in effect at the time of the
preparation of, and in conformity with those used to prepare, the 1996
financial statements delivered to the Lenders pursuant to Section 6.10(b), and
(y) to the extent any period covered by such computation (including any Test
Period) includes a period prior to the date of the consummation of the
Acquisition, such computation shall be made on a pro forma basis as if the
Acquisition had occurred at the beginning of such period.
(b) All computations of interest and Fees hereunder shall be
based on the actual number of days elapsed over a year of 360 days (except for
interest payable in respect of Base Rate Loans based on the Prime Lending
Rate, which shall be computed on the bases of a 365/66 day year).
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12.08. Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND (EXCEPT AS OTHERWISE EXPRESSLY STATED THEREIN)
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Agreement or any other Credit Document may be brought in the courts of the
State of New York or of the United States for the Southern District of New
York, and, by execution and delivery of this Agreement, each Credit Party
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. Each Credit
Party hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such Credit Party, and agrees not to plead or claim, in any
legal action or proceeding with respect to any Credit Document brought in any
of the aforesaid courts, that any such court lacks jurisdiction over such
Credit Party. Each Credit Party irrevocably consents to the service of process
in any such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to such Credit Party, at its address for
notices pursuant to Section 12.03, such service to become effective 30 days
after such mailing. Each Credit Party hereby irrevocably waives any objection
to such service of process and further irrevocably waives and agrees not to
plead or claim in any action or proceeding commenced under any Credit Document
that service of process was in any way invalid or ineffective. Nothing herein
shall affect the right of the Agent, Co-Agent, any Lender or the holder of any
Note to serve process in any other manner permitted by applicable law or to
commence legal proceedings or otherwise proceed against any Credit Party in any
other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with any
Credit Document brought in the courts referred to in clause (a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
12.09. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set
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of counterparts executed by all of the parties hereto shall be lodged with the
Borrower and the Agent.
12.10. Effectiveness. This Agreement shall become effective
on the date (the "Amendment and Restatement Effective Date") on which the
Borrowers, each Guarantor, the Agent, the Co-Agent and each of the Lenders
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Lenders, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give the Borrowers and each Lender prompt written notice of the occurrence of
the Amendment and Restatement Effective Date.
12.11. Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
12.12. Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Lenders; provided that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) (with Obligations being directly affected thereby in the case of the
following clause (i)), (i) extend the Final Maturity Date, or reduce the rate
or extend the time of payment of interest or Fees on any Loan or Letter of
Credit thereon, or reduce the principal amount thereof (it being understood
that any amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in any rate of interest or fees for
purposes of this clause (i)), (ii) release all or substantially all of the
Collateral (except as expressly provided in the Security Documents) under all
the Security Documents, or release any Guarantor (other than in connection with
a sale otherwise permitted hereby), (iii) amend, modify or waive any provision
of this Section 12.12, (iv) reduce the percentage specified in the definition
of Required Lenders (it being understood that, with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially the same
basis as the extensions of Revolving Loan Commitments are included on the
Effective Date) or (v) consent to the assignment
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or transfer by the Borrowers of any of their rights and obligations under this
Agreement; provided, further, that no such change, waiver, discharge or
termination shall (w) increase the Revolving Loan Commitments of any Lender
over the amount thereof then in effect without the consent of such Lender (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Revolving Loan Commitment shall not constitute an increase of the
Revolving Loan Commitment of any Lender, and that an increase in the available
portion of any Revolving Loan Commitment of any Lender shall not constitute an
increase in the Revolving Loan Commitment of such Lender), (x) without the
consent of BTCo., amend, modify or waive any provision of Section 2 or alter
its rights or obligations with respect to Letters of Credit, (y) without the
consent of the Agent and Co-Agent, amend, modify or waive any provision of
Section 11 as the same applies to the Agent and Co-Agent or any other provision
as the same relates to the rights or obligations of the Agent and Co-Agent and
(z) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination of any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then the Borrowers shall have the right, so long as all
non-consenting Lenders whose individual consent is required are treated as
described below, to replace each such non-consenting Lender or Lenders with one
or more Replacement Lenders pursuant to Section 1.13 so long as at the time of
such replacement, each Replacement Lender consents to the proposed change,
waiver, discharge or termination; but only if, in each such case, such
Replacement Lender at the time of such action is acceptable to the Agent,
provided that the Borrowers shall not have the right to replace a Lender solely
as a result of the exercise of such Lender's rights (and the withholding of any
required consent by such Lender) pursuant to the second proviso to Section
12.12(a).
12.13. Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
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12.14. Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender; provided that the Company shall not be responsible
for costs arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any
such transfer (other than a transfer pursuant to Section 1.12) to the extent
such costs would not otherwise be applicable to such Lender in the absence of
such transfer.
12.15. Confidentiality. Each of the Lenders agrees that it
will use its reasonable efforts not to disclose without the prior consent of
the Company (other than to Affiliates of such Lenders and their respective
directors, employees, auditors, counsel or other professional advisors) any
confidential information with respect to the Company or any of its Subsidiaries
which is furnished pursuant to this Agreement; provided that any Lender may
disclose any such information (a) that is or has become generally available to
the public, (b) as may be required or appropriate (x) in any report, statement
or testimony submitted to any municipal, state or Federal or other governmental
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors or (y) in connection with any request or requirement of any such
regulatory body, (c) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (d) to comply with
any law, order, regulation or ruling applicable to such Lender, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Lender; provided that such
prospective transferee agrees to be bound by this Section 12.15 to the same
extent as such Lender.
12.16. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 13. Subsidiary Guarantees.
13.01. The Subsidiary Guarantees. (a) In order to induce
the Lenders to enter into this Agreement and to extend credit hereunder and in
recognition of the direct and indirect benefits to be received by each
Subsidiary Guarantor from the proceeds of the Loans and the issuance of the
Letters of Credit, each Subsidiary Guarantor hereby agrees with the Lenders
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as follows: each Subsidiary Guarantor hereby unconditionally and irrevocably,
jointly and severally, guarantees, as primary obligor and not merely as surety
the full and prompt payment when due, whether upon maturity, acceleration or
otherwise, of any and all of the Guaranteed Obligations of the Borrowers to the
Guaranteed Creditors. If any or all of the Guaranteed Obligations of the
Borrowers to the Guaranteed Creditors becomes due and payable hereunder, each
Subsidiary Guarantor, jointly and severally, and unconditionally promises to
pay such indebtedness to the Guaranteed Creditors, or order, on demand,
together with any and all expenses (including reasonable legal fees and
expenses) which may be incurred by the Guaranteed Creditors in collecting or
enforcing any of the Guaranteed Obligations. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrowers), then and in such event each Subsidiary Guarantor
agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon such Subsidiary Guarantor, notwithstanding any revocation of this
Subsidiary Guarantee or any other instrument evidencing any liability of the
Borrowers, and each Subsidiary Guarantor shall be and remain jointly and
severally liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee. This is a guarantee of payment and not of
collection.
(b) Anything contained in this Subsidiary Guarantee to the
contrary notwithstanding, the obligations of each Subsidiary Guarantor
hereunder shall be limited to a maximum aggregate amount equal to the largest
amount that would not render its obligations and/or the grant of security
interests in Collateral to secure its Obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of the
Bankruptcy Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving
effect to all other liabilities of such Subsidiary Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Subsidiary Guarantor in respect of
intercompany Indebtedness to the Company or other Affiliates of the Company to
the extent that such Indebtedness would be discharged in an amount equal to the
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amount paid by such Subsidiary Guarantor hereunder, and after giving effect (x)
to the direct and indirect benefits received by such Subsidiary Guarantor as a
result of the Credit Documents and the Loans and (y) as assets to the value (as
determined under the applicable provisions of the Fraudulent Transfer Laws) of
any rights to subrogation, reimbursement, indemnification or contribution of
such Subsidiary Guarantor pursuant to applicable law or pursuant to the terms
of any agreement (including without limitation any such right of contribution
under Section 13.01(c)).
(c) Subsidiary Guarantors under this Subsidiary Guarantee
together desire to allocate among themselves in a fair and equitable manner
their obligations arising under this Subsidiary Guarantee. Accordingly, in the
event any payment or distribution is made on any date by any Subsidiary
Guarantor under this Subsidiary Guarantee (a "Funding Guarantor") that exceeds
its Fair Share (as defined below) as of such date, that Funding Guarantor shall
be entitled to a contribution from each of the other Subsidiary Guarantors in
the amount of such other Subsidiary Guarantor's Fair Share Shortfall (as
defined below) as of such date, with the result that all such contributions
will cause each Subsidiary Guarantor's Aggregate Payments (as defined below) to
equal its Fair Share as of such date. "Fair Share" means, with respect to a
Subsidiary Guarantor as of any date of determination, an amount equal to (i)
the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect to
such Subsidiary Guarantor to (y) the aggregate of the Adjusted Maximum Amounts
with respect to all Subsidiary Guarantors, multiplied by (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Subsidiary Guarantee in respect of the obligations guaranteed.
"Fair Share Shortfall" means, with respect to a Subsidiary Guarantor as of any
date of determination, the excess, if any, of the Fair Share of such Subsidiary
Guarantor over the Aggregate Payments of such Subsidiary Guarantor. "Adjusted
Maximum Amount" means, with respect to a Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of such
Subsidiary Guarantor under this Subsidiary Guarantee, determined as of such
date in accordance with this Section 13.01; provided that, solely for purposes
of calculating the "Adjusted Maximum Amount" with respect to any Subsidiary
Guarantor for purposes of this Section 13.01(c), any assets or liabilities of
such Subsidiary Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Subsidiary Guarantor. "Aggregate Payments" means, with respect to a Subsidiary
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Guarantor as of any date of determination, an amount equal to (i) the aggregate
amount of all payments and distributions made on or before such date by such
Subsidiary Guarantor in respect of this Subsidiary Guarantee (including,
without limitation, in respect of this Section 13.01(c)) minus (ii) the
aggregate amount of all payments received on or before such date by such
Subsidiary Guarantor from the other Subsidiary Guarantors as contributions
under this Section 13.01(c). The amounts payable as contributions hereunder
shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among Subsidiary
Guarantors of their obligations as set forth in this Section 13.01(c) shall not
be construed in any way to limit the liability of any Subsidiary Guarantor
hereunder.
13.02. Bankruptcy. Additionally, each Subsidiary Guarantor
unconditionally and irrevocably, jointly and severally, guarantees the payment
of any and all of the Guaranteed Obligations of the Borrowers or any Guarantor
to the Guaranteed Creditors whether or not due or payable by the Borrowers upon
the occurrence of any of the events specified in Section 9.05, and
unconditionally, and jointly and severally, promises to pay such indebtedness
to the Guaranteed Creditors, or order, on demand, in lawful money of the United
States.
13.03. Nature of Liability. (a) The liability of each
Subsidiary Guarantor hereunder is joint and several and exclusive and
independent of any security for or other guarantee of the Guaranteed
Obligations of the Borrowers or any Guarantor whether executed by such
Guarantor, any other Guarantor, any other guarantor or by any other party, and
the liability of each Subsidiary Guarantor hereunder is not affected or
impaired by (a) any direction as to application of payment by the Borrowers or
by any other party, or (b) any other continuing or other guarantee, undertaking
or maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations of the Borrowers, or (c) any payment on or in reduction of any such
other guarantee or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrowers, or (e) any payment
made to the Guaranteed Creditors on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrowers pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Subsidiary Guarantor, to the extent permitted by
applicable law, waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
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(b) It is the desire and intent of each Subsidiary Guarantor
and the Guaranteed Creditors that this Subsidiary Guarantee shall be enforced
against each Subsidiary Guarantor to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. If, however, and to the extent that, the obligations of any Subsidiary
Guarantor under this Subsidiary Guarantee shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations of such Subsidiary
Guarantor shall be deemed to be reduced and such Subsidiary Guarantor shall pay
the maximum amount of the Guaranteed Obligations which would be permissible
under applicable law.
13.04. Independent Obligation. The obligations of each
Subsidiary Guarantor hereunder are independent of the obligations of any other
Subsidiary Guarantor, any other guarantor, any other party or the Borrowers,
and a separate action or actions may be brought and prosecuted against each
Subsidiary Guarantor whether or not action is brought against any other
Subsidiary Guarantor, any other guarantor, any other party or the Borrowers and
whether or not any other guarantor, any other party or the Borrowers are joined
in any such action or actions. Each Subsidiary Guarantor waives, to the full
extent permitted by law, the benefit of any statute of limitations affecting
its liability hereunder or the enforcement thereof. Any payment by the
Borrowers or other circumstance which operates to toll any statute of
limitations as to the Borrowers shall operate to toll the statute of
limitations as to any Subsidiary Guarantor.
13.05. Authorization. Each Subsidiary Guarantor authorizes
the Guaranteed Creditors without notice or demand (except as shall be required
by applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Subsidiary Guarantee herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
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(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrowers or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrowers or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrowers to
its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrowers to the Guaranteed
Creditors regardless of what liability or liabilities of the Borrowers
remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, this Agreement, any other Credit Document or any of
the instruments or agreements referred to herein or therein, or
otherwise amend, modify or supplement this Agreement, any other Credit
Document or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of any Subsidiary Guarantor from its liabilities under this
Subsidiary Guarantee.
13.06. Reliance. It is not necessary for the Guaranteed
Creditors to inquire into the capacity or powers of the Borrowers or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
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13.07. Subordination. Any of the indebtedness of the
Borrowers now or hereafter owing to any Subsidiary Guarantor is hereby
subordinated to the Guaranteed Obligations of the Borrowers owing to the
Guaranteed Creditors; and if the Agent so requests at a time when an Event of
Default exists, all such indebtedness of the Borrowers to any Subsidiary
Guarantor shall be collected, enforced and received by such Subsidiary
Guarantor for the benefit of the Guaranteed Creditors and be paid over to the
Agent on behalf of the Guaranteed Creditors on account of the Guaranteed
Obligations of the Borrowers to the Guaranteed Creditors, but without affecting
or impairing in any manner the liability of any Subsidiary Guarantor under the
other provisions of this Subsidiary Guarantee (other than the reduction of any
such liability attributable to such payment). Prior to the transfer by any
Subsidiary Guarantor of any note or negotiable instrument evidencing any of the
indebtedness of the Borrowers to such Subsidiary Guarantor, such Subsidiary
Guarantor shall ▇▇▇▇ such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, each Subsidiary Guarantor hereby agrees with the Guaranteed
Creditors that it will not exercise any right of subrogation which it may at
any time otherwise have as a result of this Subsidiary Guarantee (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
13.08. Waiver. (a) Each Subsidiary Guarantor waives any
right (except as shall be required by applicable statute and cannot be waived)
to require any Guaranteed Creditor to (i) proceed against the Borrowers, any
other Guarantor, any other guarantor or any other party, (ii) proceed against
or exhaust any security held from the Borrowers, any other Guarantor, any other
guarantor or any other party or (iii) pursue any other remedy in any Guaranteed
Creditor's power whatsoever. Each Subsidiary Guarantor waives any defense
based on or arising out of any defense of the Borrowers, any other Guarantor,
any other guarantor or any other party, other than payment in full of the
Guaranteed Obligations, based on or arising out of the disability of the
Borrowers, any other Guarantor, any other guarantor or any other party, or the
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrowers other
than payment in full of the Guaranteed Obligations. The Guaranteed Creditors
may, at their election, foreclose on any security held by the Agent, the
Collateral Agent or any other Guaranteed Creditor by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
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reasonable (to the extent such sale is permitted by applicable law), or
exercise any other right or remedy the Guaranteed Creditors may have against
the Borrowers or any other party, or any security, without affecting or
impairing in any way the liability of any Subsidiary Guarantor hereunder except
to the extent the Guaranteed Obligations have been paid. Each Subsidiary
Guarantor waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of such Subsidiary
Guarantor against the Borrowers or any other party or any security.
(b) Each Subsidiary Guarantor waives all presentments,
demands for performance, protests and notices, including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Subsidiary Guarantee, and notices of the existence, creation
or incurring of new or additional Guaranteed Obligations. Each Subsidiary
Guarantor assumes all responsibility for being and keeping itself informed of
the Borrowers' financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which each Subsidiary Guarantor assumes
and incurs hereunder, and agrees that the Guaranteed Creditors shall have no
duty to advise any Subsidiary Guarantor of information known to them regarding
such circumstances or risks.
125
S-1
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address for all Credit Parties: DI INDUSTRIES, INC.
as Borrower
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ ------------------------------------
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Title: Senior Vice President and
Chief Financial Officer
DRILLERS, INC.
as Borrower
By /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Title: Senior Vice President and
Chief Financial Officer
DI INTERNATIONAL, INC.
as Guarantor
By /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Title: Senior Vice President and
Chief Financial Officer
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇
------------------------------------
Title: Assistant Vice President
ING (US) CAPITAL CORPORATION,
Individually and as Co-Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Senior Associate
126
S-2
NORDLANDSBANKEN ASA,
as Lender
By ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: Assistant General Manager
127
ANNEX I
LIST OF LENDERS AND COMMITMENTS
Amounts
Revolving Outstanding on
Lender Loan Commitment the Amendment Date
------ --------------- ------------------
Bankers Trust Company $21,500,000 $13,200,000
ING (US) Capital Corporation 21,500,000 13,200,000
Nordlandsbanken ASA 7,000,000 6,600,000
----------- -----------
Total: $50,000,000 $33,000,000
128
ANNEX II
LENDER ADDRESSES
Lender Address
------ -------
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ING (US) Capital Corporation ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Nordlandsbanken ASA ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇-▇▇-▇▇-▇▇-▇▇
Facsimile No.: 011-47-22-33-67-10
129
-2-
ANNEX IV
130
-3-
ANNEX VI
131
-4-
ANNEX VII