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CREDIT AGREEMENT, dated as of June 6, 1997, among KEY ENERGY GROUP, INC., a
Maryland corporation (the "Borrower"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), PNC BANK, N.A., as Administrative Agent for the Lenders hereunder
(in such capacity, the "Administrative Agent"), NORWEST BANK OF TEXAS, N.A., as
Collateral Agent for the Lenders hereunder (in such capacity, the "Collateral
Agent") and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as advisor, arranger and syndication
agent with respect to the credit facilities contained herein (in such capacity,
the "Arranger").
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Lenders to extend credit to it to
refinance certain existing indebtedness, to pay related fees and expenses and to
finance other general corporate purposes of the Borrower and its Subsidiaries;
and WHEREAS, the Lenders are willing to extend such credit on and subject to the
terms and conditions hereafter set forth:
NOW, THEREFORE, in consideration of
the premises and the mutual agreements hereafter set forth, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Adjustment Date": each date on or after September 30, 1997 that is the
second Business Day following receipt by the Lenders of both (i) the financial
statements required to be delivered pursuant to Section 6.1(a) or 6.1(b), as
applicable, for the most recently completed fiscal period (which shall be June
30, 1997, in the case of the Adjustment Date occurring on September 30, 1997)
and (ii) the related compliance certificate required to be delivered pursuant to
Section 6.2(b) with respect to such fiscal period.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors of such Person or (b)
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise. Notwithstanding the foregoing (i) no
Subsidiary of the Borrower shall be deemed to be an Affiliate of the Borrower
and (ii) no Affiliate of any investment company that controls the Borrower shall
be deemed to be an Affiliate of the Borrower solely because such investment
company Affiliate is in control of, is controlled by, or is under common control
with, such investment company.
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"Agents": the collective reference to the Arranger, the Collateral Agent
and the Administrative Agent.
"Aggregate Outstanding Revolving Extensions of Credit": as to any Revolving
Credit Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, supplemented or otherwise
modified from time to time.
"Applicable Margin": (a) 1-3/4% for Term Loans which are Base Rate Loans,
(b) 2-3/4% for Term Loans which are Eurodollar Loans and, (c) during the period
from the Closing Date until the first Adjustment Date, 1.00% for Revolving
Credit Loans which are Base Rate Loans and 2.25% for Revolving Credit Loans
which are Eurodollar Loans. The Applicable Margin for Revolving Credit Loans
will be adjusted on each Adjustment Date to the applicable rate per annum set
forth under the heading "Applicable Margin for Revolving Credit Loans which are
Eurodollar Loans" or "Applicable Margin for Revolving Credit Loans which are
Base Rate Loans", as the case may be, on Annex I which corresponds to the
Consolidated Leverage Ratio as determined from the financial statements and
compliance certificate relating to the end of the fiscal period immediately
preceding such Adjustment Date; provided that in the event that the financial
statements required to be delivered pursuant to Section 6.1(a) or 6.1(b), as
applicable, and the related compliance certificate required to be delivered
pursuant to Section 6.2(b), are not delivered when due, then
(i if such financial statements and compliance certificate are delivered
after the date such financial statements and compliance certificate were
required to be delivered (without giving effect to any applicable cure period)
and the Applicable Margin increases from that previously in effect as a result
of the delivery of such financial statements, then the Applicable Margin in
respect of the Revolving Credit Loans during the period from the date upon which
such financial statements were required to be delivered (without giving effect
to any applicable cure period) until the date upon which they actually are
delivered shall, except as otherwise provided in clause (iii) below, be the
Applicable Margin as so increased;
(ii if such financial statements and compliance certificate are delivered
after the date such financial statements and compliance certificate were
required to be delivered and the Applicable Margin decreases from that
previously in effect as a result of the delivery of such financial statements,
then such decrease in the Applicable Margin shall not become applicable until
the date upon which the financial statements and certificate actually are
delivered; and
(iii if such financial statements and compliance certificate are not
delivered prior to the expiration of the applicable cure period, then, effective
upon such expiration, for the period from the date upon which such financial
statements and
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compliance certificate were required to be delivered (after the expiration
of the applicable cure period) until two Business Days following the date upon
which they actually are delivered, the Applicable Margin in respect of Revolving
Credit Loans shall be 1-1/4% per annum, in the case of Base Rate Loans, and
2-1/2% per annum, in the case of Eurodollar Loans (it being understood that the
foregoing shall not limit the rights of the Administrative Agent and the Lenders
set forth in Section 8).
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any sale or other disposition by the Borrower or any of its
Subsidiaries of any property, business or assets of the Borrower or such
Subsidiary (excluding any sale and leaseback of assets and any mortgage of real
property); provided that any sale or other disposition expressly permitted by
clauses (a), (c) or (d) of Section 7.6 shall not constitute an "Asset Sale"
hereunder, and the Net Cash Proceeds from any such excluded sale or other
disposition shall not be subject to Section 2.9.
"Assignee": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at any time, an
amount equal to the excess, if any, of (a) such Lender's Revolving Credit
Commitment over (b) such Lender's Aggregate Outstanding Revolving Extensions of
Credit.
"Base Rate": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day, and (b) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum established from time to time by PNC Bank, N.A. as its prime rate in
effect at its principal office in Pittsburgh (the Prime Rate not being intended
to be the lowest rate of interest charged by PNC Bank, N.A. in connection with
extensions of credit to debtors); and "Federal Funds Effective Rate" shall mean,
for any day, 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 on the next succeeding Business Day by the Federal
Reserve Bank 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 the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. Any change in the Base Rate due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is based
upon the Base Rate.
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"Board": the Board of Governors of the Federal Reserve System of the United
States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.2 or 2.4 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"Business Day": (a) for all purposes other than as covered by clause (b)
below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (b) 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 (a) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a Financing Lease) of fixed or capital
assets or additions to equipment (including replacements and improvements during
such period) which should be capitalized under GAAP on a consolidated balance
sheet of such Person and its Subsidiaries; provided that "Capital Expenditures"
shall not include (i) expenditures for Permitted Acquisitions or
(ii) expenditures by any Person prior to the time such Person was acquired by
the Borrower or any Subsidiary in a Permitted Acquisition.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any Financing Lease and, for the
purposes of this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares of capital stock of a corporation, and
any and all equivalent ownership interests in a Person (other than a
corporation).
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b) demand
deposits, certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of twelve months or less from the date
of acquisition issued by any Lender or by any commercial bank organized under
the laws of the United States or any state thereof having combined capital and
surplus of not less than $250,000,000; (c) commercial paper of (i) an issuer
rated at least A-1 by Standard & Poor's Ratings Services or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc., or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally or (ii) the holding
company of any Lender, and, in either case, maturing within twelve months from
the date of acquisition; and
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(d) money market funds the assets of which consist primarily of obligations
of the types referred to in clauses (a) through (c) above.
"Change of Control": a "Change of Control" shall be deemed to occur if a
"Change of Control" (as defined in the Indenture or, if the Indenture shall have
been terminated, as defined in the Indenture immediately prior to such
termination) shall occur.
"Closing Date": the date on which the conditions precedent set forth in
Section 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended.
"Collateral": all assets of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Collateral Agent": as defined in the preamble hereto.
"Commercial Letter of Credit": as defined in Section 3.1(a).
"Commitment": as to any Lender, the sum of the Term Loan Commitment and the
Revolving Credit Commitment of such Lender.
"Commonly Controlled Entity": an entity, whether or not incorporated, which
is under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group which includes the Borrower and which is treated as
a single employer under Section 414 of the Code.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated as of May, 1997 with respect to the Borrower and the credit
facilities provided for herein.
"Consolidated" or "consolidated": when used in respect of any Subsidiary or
any financial statements or financial term relating to the Borrower and its
Subsidiaries, refers to the Borrower and the Subsidiaries of the Borrower
(including Excluded Subsidiaries) whose accounts are consolidated with the
Borrower's accounts in accordance with GAAP.
"Consolidated Current Assets": at a particular date, all amounts (other
than cash and cash equivalents) which would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at a particular date, all amounts which
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.
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"Consolidated EBITDA": with respect to any Person for any period,
Consolidated Net Income of such Person for such period plus, without duplication
and to the extent reflected as a charge in the statement of such Consolidated
Net Income for such period, the sum of (a) total income tax expense, (b)
interest expense, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization costs,
(e) any extraordinary expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, losses on sales of assets outside of the ordinary course of
business), (f) any other noncash charges and (g) if applicable, restructuring
charges, write-off of goodwill and licensing agreements, and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (c) any other noncash
income (other than any income represented by a receivable that in the ordinary
course would be expected to be paid in cash), all as determined on a
consolidated basis.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA of the Borrower and its Subsidiaries for such period to
(b) the sum of (without duplication) (i) income tax expense actually paid in
cash during such period, (ii) Capital Expenditures actually paid in cash (and
not financed) during such period, (iii) Consolidated Interest Expense for such
period and (iv) scheduled payments required to have been made during such period
on account of principal of Indebtedness of the Borrower or any of its
Subsidiaries (including scheduled payments in respect of the Loans, but
excluding any portion of such scheduled payments made as a voluntary prepayment
pursuant to Section 2.8).
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA of the Borrower and its Subsidiaries for such period to
(b) Consolidated Interest Expense for such period.
"Consolidated Interest Expense": for any period, total interest expense
(including that attributable to Capital Lease Obligations), both expensed and
capitalized, of the Borrower and its Subsidiaries for such period with respect
to all outstanding Indebtedness of the Borrower 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 under Interest Rate Protection Agreements to the extent such net costs are
allocable to such period in accordance with GAAP), determined on a consolidated
basis in accordance with GAAP, net of interest income of the Borrowers and its
Subsidiaries for such period (determined on a consolidated basis in accordance
with GAAP).
"Consolidated Lease Expense": for any period, the aggregate amount of fixed
and contingent rentals payable by the Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP, for such period with respect to
leases of real and personal property; provided that amounts payable under
Financing Leases and oil and gas leases shall be excluded from Consolidated
Lease Expense.
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"Consolidated Leverage Ratio": on the date of any determination thereof,
the ratio of (a) Consolidated Total Debt on such date, less the amount of cash
and Cash Equivalents in excess of $5,000,000 held by the Borrower and its
Subsidiaries on such date to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for the four full fiscal quarters ending on such date; provided
that for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period of four full fiscal quarters, the Consolidated
EBITDA of any Person acquired by the Borrower or its Subsidiaries during such
period shall be included on a pro forma basis for such period of four full
fiscal quarters (assuming the consummation of each such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred on
the first day of such period of four full fiscal quarters and assuming only such
cost reductions as are related to such acquisition and are realizable on or
before the date of calculation) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated statements
of income and stockholders' equity and of cash flows for such period (i) have
been previously provided to the Administrative Agent and the Lenders and
(ii) either (A) have been reported on without a qualification arising out of the
scope of the audit (other than a "going concern" or like qualification or
exception) by independent certified public accountants of nationally recognized
standing or (B) have been found acceptable by the Administrative Agent.
"Consolidated Net Income": with respect to any Person for any period, the
consolidated net income (or loss) of such Person for such period, determined on
a consolidated basis in accordance with GAAP.
"Consolidated Total Debt": at any date, the aggregate principal amount of
all Indebtedness of the Borrower and its Subsidiaries at such date, which on a
consolidated basis in accordance with GAAP would be required to be reflected on
a consolidated balance sheet of the Borrower and its Subsidiaries as a
liability.
"Consolidated Working Capital": the excess, if any, of Consolidated Current
Assets over Consolidated Current Liabilities.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Convertible Subordinated Debentures": the 7% Convertible Subordinated
Debentures due 2003 issued by the Borrower pursuant to the Indenture.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Dollars" and "$": dollars in lawful currency of the United States.
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"Domestic Subsidiary": any Subsidiary of the Borrower organized under the
laws of any jurisdiction within the United States.
"Environmental Consultant": as defined in Section 6.8(c).
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable requirements
(including, without limitation, common law) of any foreign government, the
United States, or any state, local, municipal or other governmental authority,
regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and safety,
as has been, is now, or at any time hereafter is, in effect.
"Environmental Permits": any and all permits, licenses, registrations,
approvals, notifications, exemptions and any other authorization required under
any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum of interest
determined on the basis of the rate for deposits in Dollars for a period equal
to such Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Telerate Service (or otherwise on
such service), the "Eurodollar Base Rate" for purposes of this definition shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent
or, in the absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is based
upon the Eurodollar Rate.
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"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate 1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans that are
Term Loans or Revolving Credit Loans, as the case may be, the then current
Interest Periods with respect to all of which begin on the same date and end on
the same later date (whether or not such Loans shall originally have been made
on the same day).
"Event of Default": any of the events specified in Section 8, provided that
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess of (a)
the sum, without duplication, of (i) Consolidated Net Income of the Borrower and
its Subsidiaries for such fiscal year, (ii) the net decrease, if any, in
Consolidated Working Capital during such fiscal year and (iii) to the extent
deducted in computing such Consolidated Net Income, (A) non-cash interest
expense, depreciation, depletion and amortization, (B) extraordinary non-cash
losses, (C) deferred income tax expense, (D) non-cash losses in connection with
asset dispositions whether or not constituting extraordinary losses, and (E)
non-cash ordinary losses over (b) the sum, without duplication, of (i) the
aggregate amount of permitted cash Capital Expenditures of the Borrower and its
Subsidiaries during such fiscal year, (ii) the net increase, if any, in
Consolidated Working Capital during such fiscal year, (iii) the aggregate amount
of payments of principal in respect of any Indebtedness not prohibited hereunder
during such fiscal year (other than (x) optional prepayments of Revolving Credit
Loans not accompanied by reductions of the Revolving Credit Commitments, (y)
mandatory prepayments pursuant to Section 2.9 and (z) payments in respect of
short-term Indebtedness) and (iv) to the extent added in computing such
Consolidated Net Income, (A) deferred income tax credit, (B) extraordinary
non-cash gains, (C) non-cash gains in connection with asset dispositions whether
or not constituting extraordinary gains and (D) non-cash ordinary gains.
"Excess Cash Flow Application Date": as defined in Section 2.9(d).
"Excluded Subsidiary" or "Excluded Subsidiaries": (a) Amidrill, Inc.,
Production Systems, Inc., WellTech, Inc. (California), WellTech, Inc. de
Venezuela, WellTech, Inc. de Mexico, WellTech, Inc. (Northeast), WellTech, Inc.,
WellTech Oilfield Services (Canada), Ltd., WellTech Oilfield Services Limited,
WellTech (Overseas) Limited, and ▇▇▇▇▇▇▇ Transport, Inc., (b) Thunderbird Tool
Company, (c) KEG Canal Properties, Inc., KEG ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., KEG Pearl
Acres, Inc., KEG ▇▇▇▇ Heights, Inc., KEG Orleans Place, Inc., and Pyramid Land
Corporation, and (d) any other entity which becomes a Subsidiary of Borrower
after the date of this Agreement if such entity has assets with a book value of
$1,000,000 or less and annual revenues of $1,000,000 or less; provided that all
entities deemed to be Excluded Subsidiaries
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under this subsection (d) may not have, in the aggregate, assets with a
book value exceeding $5,000,000 or annual revenues exceeding $5,000,000.
"Existing Credit Facilities": as defined in Section 4.16.
"Existing Letters of Credit": as defined in Section 3.1.
"Financing Lease": any lease (or other similar arrangement conveying the
right to use) of property, real or personal, the obligations of the lessee in
respect of which are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.
"Foreign Subsidiary": any Subsidiary of the Borrower organized under the
laws of any jurisdiction outside the United States.
"GAAP": generally accepted accounting principles in the United States in
effect from time to time.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such
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guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Hedge Obligations": as defined in the Master Guarantee and Collateral
Agreement.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables and accrued expenses incurred in the ordinary course of such Person's
business not more than 150 days past due or being contested in good faith), (c)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, (e) all Capital Lease Obligations of such Person, (f)
all obligations, contingent or otherwise, of such Person as an account party
under acceptance, letter of credit or similar facilities (other than obligations
in respect of undrawn letters of credit securing trade payables or performance
obligations incurred in the ordinary course of business not more than 150 days
past due or being contested in good faith), (g) all obligations of such Person
to purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
Indebtedness of others and (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation (but if not so assumed, the amount of such obligation shall be deemed
not to exceed the fair market value of the property subject to the Lien).
"Indenture": the Indenture, dated as of July 3, 1996, between the Borrower
and American Stock Transfer & Trust Company, as trustee.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Policies": (i) the insurance policies the Borrower is required
to maintain pursuant to Section 6.5 and (ii) the insurance policies the Borrower
is required to maintain pursuant to Section 5.3 of the Master Guarantee and
Collateral Agreement.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding, (b)
as to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period.
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(ii any Interest Period that would otherwise extend beyond the Revolving
Credit Termination Date (in the case of Revolving Credit Loans) or beyond the
Term Loan Maturity Date (in the case of the Term Loans) shall end on the
Revolving Credit Termination Date or the Term Loan Maturity Date, as applicable;
(iii any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(iv the Borrower shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period for such
Loan.
"Interest Rate Protection Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement, to or under which the Borrower or
any Subsidiary is a party or a beneficiary on the date hereof or becomes a party
or a beneficiary after the date hereof.
"Interest Rate Protection Agreement Obligation": in respect of any Loan
Party, the obligation of such Loan Party under an Interest Rate Protection
Agreement to make a payment to the counterparty thereto in the event of a
termination event or similar occurrence thereunder.
"Issuing Lender": (a) with respect to the Existing Letters of Credit,
Norwest Bank, and (b) with respect to any Letters of Credit issued after the
Closing Date, any Lender designated as "Issuing Lender" hereunder by the
Borrower with the consent of the Arranger, the Administrative Agent and such
Lender, in its capacity as issuer of any Letter of Credit.
"L/C Commitment": $10,000,000.
"L/C Fee Payment Date": the last day of each March, June, September and
December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving Credit
Lenders other than the Issuing Lender.
"▇▇▇▇▇▇": ▇▇▇▇▇▇ Commercial Paper Inc.
"Lenders": as defined in the preamble hereto (which shall include the
Issuing Lender).
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing) and any filing
of or agreement to give any financing statement under the Uniform Commercial
Code (or equivalent statutes) of any jurisdiction.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes, the Applications and the
Security Documents. "Loan Parties": the Borrower and each Domestic Subsidiary of
the Borrower which is, or is required by the terms hereof to be, a party to a
Loan Document.
"Master Guarantee and Collateral Agreement": the Master Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and each of
its Domestic Subsidiaries, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"Material Adverse Effect": a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent, the Collateral Agent, the
Arranger or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower and/or
its Subsidiaries under any Environmental Law in excess of $2,500,000 for
remedial costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products, polychlorinated
biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants,
radioactive materials, and any other substances of any kind, whether or not any
such substance is defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or could give rise to liability under any
Environmental Law.
"Mortgage": the mortgage or deed of trust to be made by the appropriate
Loan Party in favor of, or for the benefit of, the Collateral Agent for the
benefit of the Lenders, substantially in the form of Exhibit B (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded), as the same may be amended,
supplemented or otherwise modified from time to time.
"Mortgaged Property": the real property listed on Schedule 1.1B, as to
which the Collateral Agent for the benefit of the Lenders shall be granted a
Lien pursuant to the Mortgages and the real property as to which the Collateral
Agent for the benefit of the Lenders shall be granted a Lien in accordance with
Section 6.10.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) of such Asset Sale or Recovery Event,
net of attorneys' fees, accountants' fees, investment banking fees, brokers' and
underwriters' commissions paid to third parties, amounts required to be applied
to the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset which is the subject of such Asset Sale or Recovery Event (other
than any Lien in favor of the Collateral Agent for the benefit of the Lenders),
the aggregate amount of reserves required in the reasonable judgment of the
Borrower to pay contingent liabilities with respect to such Asset Sale (provided
that amounts deducted from aggregate proceeds pursuant to this clause and not
actually paid by the Borrower or any of its Subsidiaries in liquidation of such
contingent liabilities shall be deemed to be Net Cash Proceeds and shall be
applied in accordance with Section 2.9(c) at such time as the Borrower shall
reasonably determine that such amounts are not required to pay contingent
liabilities with respect to such Asset Sale) and other customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing arrangements
with any Person other than the Borrower and its Subsidiaries) and (b) in
connection with any issuance or sale of Capital Stock or debt securities or
instruments or the incurrence of Indebtedness, the cash proceeds received from
such issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Non-U.S. Lender": as defined in Section 2.18(b).
"Norwest Bank": Norwest Bank Texas, N.A.
"Notes": the collective reference to the Term Notes and the Revolving
Credit Notes.
"Obligations": the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Notes and all other
obligations and liabilities of the Borrower to the Arranger, the Administrative
Agent or to any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under
this Agreement, any other Loan Document, the Letters of Credit, any Interest
Rate Protection Agreement entered into with any Lender or any other document
made, delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Arranger, the Administrative Agent and the Collateral Agent) or
otherwise.
"Oil and Gas Mortgages": mortgages in favor of the Collateral Agent for the
ratable benefit of the Lenders, in form and substance reasonably satisfactory to
the Collateral Agent, covering the Oil and Gas Properties. "Oil and Gas
Properties": the oil and gas properties described in Schedule 1.1C which are to
be mortgaged pursuant hereto and the oil and gas property as to which the
Collateral Agent for the benefit of the Lenders shall be granted a Lien in
accordance with Section 6.10.
"Participant": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisitions": the acquisition by the Borrower and its
Subsidiaries of (a) rigs and other well service equipment (b) well service
companies (including the acquisition of the minority interests in Servicios for
an aggregate amount not to exceed $5,000,000) and (c) oil and gas properties and
related equipment, provided that (i), after giving effect to such acquisitions
and any borrowings hereunder in connection therewith, (x) the Consolidated
Leverage Ratio shall not be more than 3.75 to 1.00 and (y) the sum of (1) the
Borrower's cash and Cash Equivalents on hand and (2) the aggregate Available
Revolving Credit Commitments shall be at least $10,000,000 or (ii) after giving
effect to such acquisition the Consolidated Leverage Ratio is not increased and
such acquisition is funded solely with the Borrower's Capital Stock.
"Person": an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledged Notes", "Pledged Securities" and "Pledged Stock": each as defined
in the Master Guarantee and Collateral Agreement.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Properties": the collective reference to the real property owned, leased
or operated by the Borrower or any of its Subsidiaries (or with respect to
Sections 6.8 and 10.5, any of the Excluded Subsidiaries).
"Recovery Event": any settlement of or payment in respect of a property or
casualty insurance claim relating to any asset of the Borrower or any of its
Subsidiaries.
"Register": as defined in Section 10.6(e).
"Reimbursement Obligation": the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by the Borrower or any of its Subsidiaries
in connection therewith which are not applied to prepay the Revolving Credit
Loans or reduce the Revolving Credit Commitments pursuant to Section 2.9(c) as a
result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of which
the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible Officer
of the Borrower to the Administrative Agent within 60 days of an Asset Sale or
Recovery Event stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through another
Subsidiary), in good faith, intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or a Recovery Event to restore
or replace the assets in respect of which such Asset Sale or Recovery Event
occurred, to make Permitted Acquisitions, or to invest in the business of the
Borrower and its Subsidiaries, within six months from the date of receipt of
such Net Cash Proceeds and confirming that, if the affected assets constituted
Collateral, such restored or replacement assets shall also constitute
Collateral.
"Reinvestment Prepayment Amount": with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended prior
to the relevant Reinvestment Prepayment Date to restore or replace the assets in
respect of which an Asset Sale or a Recovery Event has occurred.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event, the
earliest of (a) the first date occurring after such Reinvestment Event on which
a Default or an Event of Default shall have occurred, (b) the date occurring six
months after such Reinvestment Event and (c) the date on which the Borrower
shall have determined not to, or shall have otherwise ceased to, restore or
replace the assets in respect of which a Reinvestment Event has occurred.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg. 2615.
"Required Lenders": at any date shall mean the holders of more than 50% of,
(a) until the Closing Date, the Commitments and, (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans and (ii) the aggregate
Revolving Credit Commitments, or, if the Revolving Credit Commitments have been
terminated, the Aggregate Outstanding Revolving Extensions of Credit of the
Revolving Credit Lenders.
"Requirement of Law": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Credit Loans to and/or issue or participate in
Letters of Credit issued on behalf of the Borrower hereunder in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading "Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1A, as the same may be changed from time to time pursuant to the terms hereof
and as the same shall be reduced pursuant to Section 2.3(c).
"Revolving Credit Commitment Period": the period from and including the
Closing Date to but not including the Revolving Credit Termination Date, or such
earlier date on which the Revolving Credit Commitments shall have been
terminated.
"Revolving Credit Lender": each Lender which has a Revolving Credit
Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.3(a).
"Revolving Credit Note": as defined in Section 2.6(e).
"Revolving Credit Percentage": as to any Revolving Credit Lender at any
time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments (or, at any time after
the Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Revolving
Credit Loans then outstanding constitutes of the aggregate principal amount of
the Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": June 30, 2002.
"Security Documents": the collective reference to each Mortgage, each Oil
and Gas Mortgage, the Master Guarantee and Collateral Agreement and all other
security documents hereafter delivered to the Collateral Agent granting a Lien
on any asset or assets of any Person to secure the obligations and liabilities
of the Borrower hereunder and/or under any of the other Loan Documents or to
secure any guarantee of any such obligations and liabilities.
"Seller Indebtedness": Indebtedness of the Borrower which is issued to the
seller in a Permitted Acquisition as all or a portion of the consideration for
such Permitted Acquisition.
"Servicios": Servicios WellTech, S.A., an Argentine corporation.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any date
of determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) 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 (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Standby Letter of Credit": as defined in Section 3.1(a).
"Subsidiary": as to any Person, a corporation, partnership or other entity
of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower, but such references shall not include any Excluded Subsidiary.
"Subsidiary Guarantor": each Subsidiary of the Borrower which is a party to
the Master Guarantee and Collateral Agreement.
"Term Loan Commitment": as to any Lender, the obligation of such Lender, if
any, to make a Term Loan to the Borrower hereunder in a principal amount not to
exceed the amount set forth under the heading "Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A.
"Term Loan Lender": each Lender which has a Term Loan Commitment or which
has made a Term Loan.
"Term Loan Maturity Date": June 30, 2004.
"Term Loan Percentage": as to any Term Loan Lender at any time, the
percentage which such Lender's Term Loan Commitment then constitutes of the
aggregate Term Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's Term Loan then
outstanding constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"Term Loans": as defined in Section 2.1.
"Term Note": as defined in Section 2.6(e).
"Transferee": as defined in Section 10.6(g).
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No.500, as the
same may be amended from time to time.
"United States": the United States of America.
"Vehicles": as defined in the Master Guarantee and Collateral Agreement.
"Wholly Owned Subsidiary": as to any Person, any other Person all of the
Capital Stock of which is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
the other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loans. Subject to the terms and conditions hereof, each Term Loan
Lender severally agrees to make a term loan (a "Term Loan") to the Borrower on
the Closing Date in an amount not to exceed the amount of the Term Loan
Commitment of such Lender. The Term Loans may from time to time be (a)
Eurodollar Loans, (b) Base Rate Loans or (c) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.10.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Term Loan Lenders
make Term Loans on the Closing Date and specifying (a) the amount to be borrowed
and (b) the Closing Date. Upon receipt of such notice, the Administrative Agent
shall promptly notify each Term Loan Lender thereof. Not later than 12:00 Noon,
New York City time, on the Closing Date, each Term Loan Lender shall make
available to the Administrative Agent at its office specified in Section 10.2 an
amount in immediately available funds equal to the Term Loan to be made by such
Lender. The Administrative Agent shall on such date by 2:00 P.M., New York City
time, make available to the Borrower, in accordance with the instructions of the
Borrower, in like funds as received by the Administrative Agent, all such
amounts made available to the Administrative Agent by the Term Loan Lenders.
2.3 Revolving Credit Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Credit Lender severally agrees to make revolving credit
loans ("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to such Lender's Revolving Credit Percentage
of the L/C Obligations then outstanding, does not exceed the amount of such
Lender's Revolving Credit Commitment. During the Revolving Credit Commitment
Period, the Borrower may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.4 and 2.10, provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Revolving Credit
Termination Date. (c) The Revolving Credit Commitments shall be reduced (and
each Revolving Credit Lender's Revolving Credit Commitment shall be ratably
reduced) on each anniversary of the Closing Date, commencing with the third such
anniversary, to the amount set forth opposite such anniversary below:
Anniversary Amount
Third $110,000,000
Fourth $ 80,000,000
Fifth $ 0
2.4 Procedure for Revolving Credit Borrowing. The Borrower may borrow under
the Revolving Credit Commitments during the Revolving Credit Commitment Period
on any Business Day, provided that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 12:00 Noon, New York City time, (a) three Business Days prior to
the requested Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be Eurodollar Loans or (b) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, Base Rate Loans, or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Revolving Credit Commitments
shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or
a whole multiple thereof (or, if the then Available Revolving Credit Commitments
are less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Revolving Credit Lender thereof. Each Revolving Credit
Lender will make the amount of its pro rata share of each borrowing available to
the Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in Section 10.2 prior to 11:00 A.M., New York
City time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. The aggregate of the amounts made
available to the Administrative Agent by the Revolving Credit Lenders will then
be made available to the Borrower by the Administrative Agent in accordance with
the instructions of the Borrower in like funds as received by the Administrative
Agent.
2.5 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the rate per annum
set forth under the heading "Commitment Fee Rate" on Annex I on the average
daily amount of the Available Revolving Credit Commitment of such Lender during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the last day of the
Revolving Credit Commitment Period, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Arranger the fees and other
compensation in the amounts and on the dates previously agreed to in writing by
the Borrower and the Arranger.
(c) The Borrower agrees to pay to the Administrative Agent the fees in the
amounts and on the dates agreed to in writing from time to time by the Borrower
and the Administrative Agent.
(d) The Borrower agrees to pay to the Collateral Agent the fees in the
amount and on the dates agreed to in writing from time to time by the Borrower
and the Collateral Agent.
2.6 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Lender (i) the then unpaid principal amount of each Revolving
Credit Loan of such Revolving Credit Lender on the last day of the Revolving
Credit Commitment Period (or such earlier date on which the Revolving Credit
Loans become due and payable pursuant to Section 8) and (ii) the principal
amount of the Term Loans of such Term Loan Lender, in 25 consecutive quarterly
installments, each of which installments for each Lender shall be such Lender's
Term Loan Percentage of the amount for such installment payment date set forth
on the amortization schedule set forth on Schedule 2.6, commencing on June 30,
1998 and on the last day of each March, June, September and December thereafter
(or on such earlier date on which the then unpaid principal amount of the Term
Loans become due and payable pursuant to Section 8). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in Section 2.12.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 10.6(e) and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Revolving Credit Loan and Term
Loan made hereunder, the Type thereof and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.6(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement. (e)
The Borrower agrees that, upon the request to the Administrative Agent by any
Lender, the Borrower will execute and deliver to such Lender (i) a promissory
note of the Borrower evidencing any Revolving Credit Loans of such Lender,
substantially in the form of Exhibit C-1 with appropriate insertions as to date
and principal amount (a "Revolving Credit Note"), and/or (ii) a promissory note
of the Borrower evidencing any Term Loan of such Lender, substantially in the
form of Exhibit C-2 with appropriate insertions as to date and principal amount
(a "Term Note"). A Note and the obligation evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of an obligation evidenced by a Note shall be registered in the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such obligation, accompanied by an Assignment and Acceptance
substantially in the form of Exhibit G duly executed by the Assignor thereof,
and thereupon one or more new Notes shall be issued to the designated Assignee
and the old Note shall be returned by the Administrative Agent to the Borrower
marked "cancelled". No assignment of a Note and the obligation evidenced thereby
shall be effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section 2.6(e).
2.7 Optional Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the sum of the
Aggregate Outstanding Revolving Extensions of Credit of all Revolving Credit
Lenders would exceed the Revolving Credit Commitments then in effect. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Credit Commitments then in
effect.
2.8 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon at
least three Business Days' irrevocable notice to the Administrative Agent by the
Borrower, specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, Base Rate Loans or a combination thereof,
and, if of a combination thereof, the amount allocable to each, provided that if
a Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto the Borrower shall also pay any amounts owing pursuant
to Section 2.19. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with accrued interest to such date on the amount prepaid. Partial
prepayments of the Term Loans shall be applied to the remaining installments in
the direct order of the scheduled payment date thereof. Notwithstanding the
foregoing, so long as any Revolving Credit Loans are outstanding, each Term Loan
Lender shall have the right to refuse all or any portion of any prepayment
pursuant to this Section 2.8 allocable to such Lender's Term Loans, and the
amount so refused shall be applied to prepay the Revolving Credit Loans. Amounts
prepaid on account of the Term Loans may not be reborrowed. Partial prepayments
of Term Loans and Revolving Credit Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof.
2.9 Mandatory Prepayments and Commitment Reductions. (a) If any senior or
subordinated debt securities or instruments of the Borrower or any of its
Subsidiaries shall be issued or sold, or the Borrower or any of its Subsidiaries
shall incur any Indebtedness, after the Closing Date (except any debt securities
or instruments issued or sold or Indebtedness incurred pursuant to Section 7.2),
an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance, sale or incurrence toward the prepayment of the Revolving
Credit Loans and, with respect to Net Cash Proceeds thereof received after the
third anniversary of the Closing Date only, the prepayment of the Loans and the
reduction of the Revolving Credit Commitments as set forth in paragraph (f) of
this Section 2.9. Nothing in this paragraph (a) shall be deemed to permit the
incurrence of Indebtedness not permitted by Section 7.2.
(b) If any Capital Stock of the Borrower or any of its Subsidiaries shall
be issued or sold after the Closing Date (except any Capital Stock issued as a
part of the consideration of and in connection with a Permitted Acquisition), an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or sale toward the prepayment of the Revolving Credit
Loans and, with respect to Net Cash Proceeds thereof received after the third
anniversary of the Closing Date only, the prepayment of the Loans and the
reduction of the Revolving Credit Commitments as set forth in paragraph (f) of
this Section 2.9; provided that, so long as no Default or Event of Default shall
have occurred and be continuing, the Borrower shall not be required to reduce
the Revolving Credit Commitments to less than $80,000,000 as a result of the
application of Net Cash Proceeds pursuant to this paragraph (b).
(c) If the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event after the Closing Date, 100% of
the Net Cash Proceeds thereof shall be applied on the date such Net Cash
Proceeds are received toward the prepayment of the Loans and the reduction of
the Revolving Credit Commitments as set forth in paragraph (f) of this Section
2.9. Notwithstanding the foregoing sentence, (i) no prepayment and reduction of
Revolving Credit Commitments shall be required in respect of the first
$2,000,000 in Net Cash Proceeds received from Asset Sales and Recovery Events in
any fiscal year (excluding any Net Cash Proceeds described in clause (ii) of
this sentence) and (ii) if no Default or Event of Default shall have occurred
and be continuing and a Reinvestment Notice with respect to such Asset Sale or
Recovery Event has been delivered, to the extent that the Net Cash Proceeds from
any Asset Sale or Recovery Event are to be used to restore or replace the assets
in respect of which an Asset Sale or Recovery Event has occurred within six
months from the date of such Asset Sale or Recovery Event, as certified by a
Responsible Officer of the Borrower pursuant to such Reinvestment Notice, such
Net Cash Proceeds shall not be applied toward the prepayment of Loans and the
reduction of the Revolving Credit Commitments except as provided in the next two
succeeding sentences. If the Net Cash Proceeds from any Reinvestment Event
exceed $5,000,000, the Borrower shall deposit such Net Cash Proceeds in a cash
collateral account under the exclusive dominion and control of the
Administrative Agent as security for the Obligations in accordance with terms
and conditions reasonably satisfactory to the Administrative Agent pending the
reinvestment of such Net Cash Proceeds. On each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the
applicable Reinvestment Event shall be applied toward the prepayment of the
Loans and the reduction of the Revolving Credit Commitments as set forth in
paragraph (f) of this Section 2.9.
(d) If, for any fiscal year of the Borrower ending on or after June 30,
2000, there shall be Excess Cash Flow, the Borrower shall, on the relevant
Excess Cash Flow Application Date, apply toward the prepayment of the Loans and
the reduction of the Revolving Credit Commitments as set forth in paragraph (f)
of this Section 2.9 an amount equal to (i) 50% of such Excess Cash Flow if the
Consolidated Leverage Ratio at the end of the relevant fiscal year shall be
greater than or equal to 3.00 to 1.00 or (ii) 25% of such Excess Cash Flow if
the Consolidated Leverage Ratio at the end of the relevant fiscal year shall be
less than 3.00 to 1.00. Each such prepayment and commitment reduction shall be
made on a date (an "Excess Cash Flow Application Date") no later than five
Business Days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a) for the fiscal year
with respect to which such prepayment is made are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.
(e) If any Convertible Subordinated Debentures are outstanding on April 30,
2003, the Borrower shall prepay the Term Loans in full on such date, together
with all accrued interest thereon and all amounts payable pursuant to Section
2.19 in connection with such prepayment.
(f) Amounts to be applied in connection with prepayments of Loans and
Revolving Credit Commitment reductions made pursuant to this Section 2.9 shall
be applied, first, to prepay the Revolving Credit Loans and reduce permanently
the Revolving Credit Commitments, pro rata according to the outstanding amounts
of Revolving Credit Commitments, except for amounts to be applied prior to the
third anniversary of the Closing Date pursuant to paragraphs (a) and (b) of this
Section 2.9 which shall be applied only toward prepayment of the then
outstanding Revolving Credit Loans and not to reduce permanently the Revolving
Credit Commitments, and, second, after the Aggregate Outstanding Revolving
Extensions of Credit and the Revolving Credit Commitments have been reduced to
zero, to prepay the Term Loans pro rata according to the outstanding principal
amounts thereof. Any such reduction of the Revolving Credit Commitments shall be
accompanied by prepayment of the Revolving Credit Loans to the extent, if any,
that the sum of the Aggregate Outstanding Revolving Extensions of Credit of all
Revolving Credit Lenders exceeds the amount of the aggregate Revolving Credit
Commitments as so reduced, provided that if the aggregate principal amount of
Revolving Credit Loans then outstanding is less than the amount of such excess
(because L/C Obligations constitute a portion thereof), the Borrower shall, to
the extent of the balance of such excess, replace outstanding Letters of Credit
and/or deposit an amount in cash in a cash collateral account established with
the Administrative Agent for the benefit of the Lenders on terms and conditions
satisfactory to the Administrative Agent. Amounts on deposit in the cash
collateral account shall be invested as directed by the Borrower subject to the
approval of the Administrative Agent, which approval shall not be unreasonably
withheld. The application of any prepayment pursuant to this Section 2.9 shall
be made first to Base Rate Loans and second to Eurodollar Loans, provided that
at the request of the Borrower the application of any prepayment to any
Eurodollar Loan may be delayed until the end of an Interest Period (or Interest
Periods) so that such application does not result in the incurrence by any
Lender of any loss or expense under Section 2.19, and during such delay, the
Administrative Agent shall hold the amount of such prepayment in a cash
collateral account. Amounts prepaid in respect of the Term Loans shall be
applied to installments thereof pro rata according to the outstanding principal
amounts thereof. Amounts prepaid on account of the Term Loans may not be
reborrowed. Each prepayment of the Loans under this Section 2.9 shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
2.10 Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period therefor. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurodollar Loans and Base Rate Loans may be
converted as provided herein, provided that (i) no Loan may be converted into a
Eurodollar Loan (A) when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such a conversion or (B) having an Interest
Period in excess of one month prior to the date which is 60 days after the
Closing Date and (ii) no Loan may be converted into a Eurodollar Loan after the
date that is one month prior to (y) the Revolving Credit Termination Date, with
respect to Revolving Credit Loans and (z) the Term Loan Maturity Date, with
respect to Term Loans.
(b) Any Eurodollar Loans may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such a
continuation or (ii) after the date that is one month prior to (A) the Revolving
Credit Termination Date, with respect to the Revolving Credit Loans or (B) the
Term Loan Maturity Date, with respect to Term Loans, and provided, further, that
if the Borrower shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate Loans
on the last day of such then expiring Interest Period.
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Loans comprising each Eurodollar Tranche shall
be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof, (b)
no more than eight Eurodollar Tranches in respect of the Revolving Credit Loans
shall be outstanding at any one time and (c) no more than twelve Eurodollar
Tranches in respect of all Loans (including the Revolving Credit Loans) shall be
outstanding at any one time.
2.12 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal to
the Base Rate plus the Applicable Margin.
(c) If all or a portion of any principal of any Loan or Reimbursement
Obligations shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such amounts shall bear interest at 2% above the
rate otherwise applicable thereto from the date of such non-payment until such
overdue principal is paid in full (as well after as before judgment). If all or
a portion of any interest shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such amounts shall bear interest at 2%
above the rate otherwise applicable to the Loans or Reimbursement Obligations on
which such interest accrued from the date of such non-payment until such overdue
principal is paid in full (as well after as before judgment). If all or a
portion of any commitment fee or any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such amounts shall bear interest at a rate which is 2% above the rate applicable
to Base Rate Loans which are Revolving Credit Loans, in each case from the date
of such non-payment until such overdue commitment fee or other amount is paid in
full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section 2.12
shall be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Interest on Loans and
Reimbursement Obligations, commitment fees, letter of credit commissions and
interest on overdue interest, commitment fees and other amounts payable
hereunder shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to Base Rate Loans the rate of interest on
which is calculated on the basis of the Prime Rate, the interest thereon shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the Base
Rate or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error.
2.14 Inability to Determine Interest Rate. If prior to the first day of any
Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrower and the Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans that were to be continued on the first day of such Interest
Period as Eurodollar Loans shall be converted, on the first day of such Interest
Period, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee and any reduction of the Commitments of the Lenders shall be made
pro rata according to the respective Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders. Except as provided in
Section 2.8, each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Term Loans shall be made pro rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Loan Lenders. Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders. Each payment
made at any time when any amount hereunder is due and payable shall be made pro
rata according to the respective amounts then due and payable to the Lenders.
All payments (including prepayments) to be made by the Borrower hereunder and
under the Notes, whether on account of principal, interest, fees or otherwise,
shall be made without setoff or counterclaim and shall be made prior to 12:00
Noon, New York City time, on the due date thereof to the Administrative Agent,
for the account of the Lenders, at the Administrative Agent's office specified
in Section 10.2, in Dollars and in immediately available funds. Payments
received by the Administrative Agent after such time shall be deemed to have
been received on the next Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its share of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this Section 2.15(b) shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrower (together with any
amounts due under Section 2.19, calculated as if such Lender's failure to fund
such amount were a failure of the Borrower to borrow such amount after having
given notice of such borrowing). Nothing herein shall be deemed to limit the
rights of the Borrower against any defaulting Lender.
(c) Unless the Administrative Agent shall have been notified in writing by
the Borrower prior to the date of any payment being made hereunder that the
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.16 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.19.
2.17 Requirements of Law. (a) If after the date hereof the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i shall subject any Lender to any tax of any kind whatsoever with respect
to this Agreement, any Note, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for taxes covered by Section 2.18 and changes
in the rate of tax (whether characterized as income, franchise or other tax) on
the overall net income of such Lender);
(ii shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender on an after-tax basis for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.17, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application 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) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder or under or in respect of any Letter of Credit to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender on an after-tax basis for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts pursuant
to this subsection, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this Section
2.17, together with a calculation thereof in reasonable detail, shall be
submitted by the affected Lender to the Borrower (with a copy to the
Administrative Agent) and such certificate shall be conclusive in the absence of
manifest error. The obligations of the Borrower pursuant to this Section 2.17
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder.
2.18 Taxes. (a) All payments made by the Borrower under this Agreement and
the Notes shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under the Notes,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes, provided, however, that the Borrower shall make
payments net of and after deduction for Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Non-U.S. Lender (as defined
below) that fails to comply with Section 2.18(b). Whenever any Non-Excluded
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any Non-Excluded Taxes, incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure. The agreements in this Section
2.18 shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder.
(b) Each Lender (or Transferee) that is not a corporation or partnership
created or organized in or under the laws of the United States, any estate that
is subject to federal income taxation regardless of the source of its income or
any trust which is subject to the supervision of a court within the United
States and the control of a United States fiduciary as described in section
7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and
the Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) on or before the date
on which it becomes a party to this Agreement (or, in the case of a Participant,
on or before the date on which such Participant purchases the related
participation) either:
(A) (x) two duly completed and signed copies of either Internal Revenue
Service Form 1001 (relating to such Non-U.S. Lender and entitling it to a
complete exemption from withholding of U.S. Taxes on all amounts to be received
by such Non-U.S. Lender pursuant to this Agreement and the other Loan Documents)
or Form 4224 (relating to all amounts to be received by such Non-U.S. Lender
pursuant to this Agreement and the other Loan Documents), or successor and
related applicable forms, as the case may be, and (y) two duly completed and
signed copies of Internal Revenue Service Form W-8 or W-9, or successor and
related applicable forms, as the case may be; or
(B) in the case of a Non-U.S. Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and that does not comply with the
requirements of clause (A) hereof, (x) a statement in the form of Exhibit F (or
such other form of statement as shall be reasonably requested by the Borrower or
the Administrative Agent from time to time) to the effect that such Non-U.S.
Lender is eligible for a complete exemption from withholding of U.S. Taxes under
Code Section 871(h) or 881(c), and (y) two duly completed and signed copies of
Internal Revenue Service Form W-8 or successor and related applicable form.
Further, each Non-U.S. Lender agrees to deliver to the Borrower and the
Administrative Agent, and if applicable, the assigning Lender (or, in the case
of a Participant, to the Lender from which the related participation shall have
been purchased) two further duly completed and signed copies of such Forms 1001,
4224, W-8 or W-9, as the case may be, or successor and related applicable forms,
on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to the Borrower or the Administrative
Agent (or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) in accordance with applicable United
States laws and regulations; unless, in any such case, any change in law or
regulation has occurred subsequent to the date such Lender became a party to
this Agreement (or in the case of a Participant, the date on which such
Participant purchased the related participation) which renders all such forms
inapplicable or which would prevent such Lender (or Participant) from properly
completing and executing any such form with respect to it and such Lender
promptly notifies the Borrower and the Administrative Agent (or, in the case of
a Participant, the Lender from which the related participation shall have been
purchased) if it is no longer able to deliver, or if it is required to withdraw
or cancel, any form or statement previously delivered by it pursuant to this
Section 2.18(b). A Non-U.S. Lender shall not be required to deliver any form or
statement pursuant to the immediately preceding sentences in this Section
2.18(b) that such Non-U.S. Lender is not legally able to deliver (it being
understood and agreed that the Borrower shall withhold or deduct such amounts
from any payments made to such Non-U.S. Lender that the Borrower reasonably
determines are required by law and that payments resulting from a failure to
comply with this paragraph (b) shall not be subject to payment or indemnity by
the Borrower pursuant to Section 2.18(a)).
2.19 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a)default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification shall not exceed the sum of (i) an amount equal to the excess,
if any, of (A) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (B) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market plus (ii) any transaction costs of such Lender in connection
with the related funding or redeployment of funds. A certificate as to any
amounts payable pursuant to this Section 2.19, together with a calculation
thereof in reasonable detail, shall be submitted to the Borrower by any affected
Lender and such certificate shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
2.20 Change of Lending Office. Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.16, 2.17(a) or 2.18 with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no material economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.20 shall
affect or postpone any of the obligations of the Borrower or the rights of any
Lender pursuant to Section 2.16, 2.17(a) or 2.18.
2.21 Use of Proceeds. The Borrower shall use the proceeds of the Loans only
in the manner expressly contemplated by Section 4.16.
2.22 Replacement of Lenders. If no Event of Default then exists, the
Borrower may replace any Lender (the "Replaced Lender") if an event occurs
giving rise to the operation of Section 2.16 or Section 2.17, which results in
the Replaced Lender charging to Borrower increased costs in excess of those
being generally charged by the other Lenders and such Lender is not able to
eliminate the increased costs pursuant to Section 2.20. The Replaced Lender
shall be replaced with one or more banks, financial institutions, or other
entities which are reasonably acceptable to the Administrative Agent (each a
"Replacement Lender") under the terms set out in Section 10.6(c). Upon execution
of the Assignment and Acceptance referred to in Section 10.6(c), payment of
amounts referred to in Section 10.6(c), and delivery to the Replacement Lender
of the appropriate Note or Notes executed by Borrower, the Replacement Lender
shall become a Lender under this Agreement and the Replaced Lender shall no
longer be a Lender under this Agreement, except with respect to indemnification
provisions under this Agreement, which shall survive as to such Replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Prior to the date hereof, Norwest Bank has issued
the Letters of Credit listed on Schedule 3.1 (the "Existing Letters of Credit"),
and subject to the terms and conditions hereof, the Lender designated as Issuing
Lender hereunder, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 3.4(a), agrees to issue letters of credit (together
with the Existing Letters of Credit, "Letters of Credit") for the account of the
Borrower, or for the joint and several account of the Borrower and any
Subsidiary, on any Business Day during the Revolving Credit Commitment Period in
such form as may be requested by the Borrower and approved from time to time by
the Issuing Lender; provided, that such approval may not be unreasonably
withheld, delayed or conditioned; and provided, further, that the Issuing Lender
shall have no obligation to issue any Letter of Credit if, after giving effect
to such issuance, (i) the L/C Obligations would exceed the L/C Commitment or
(ii) the Aggregate Outstanding Revolving Extensions of Credit would exceed the
aggregate Revolving Credit Commitments. Each Letter of Credit shall (i) be
denominated in Dollars, (ii) be either (x) a standby letter of credit issued to
support (I) obligations of the Borrower or any of its Subsidiaries, contingent
or otherwise, which finance the working capital or business needs of the
Borrower or its Subsidiaries or (II) performance obligations of the Borrower and
its Subsidiaries, in each case, incurred in the ordinary course of business (a
"Standby Letter of Credit"), or (y) a commercial letter of credit in respect of
the purchase of goods or services by the Borrower or any of its Subsidiaries in
the ordinary course of business (a "Commercial Letter of Credit"), (iii) expire
no later than five Business Days prior to the Revolving Credit Termination Date
and (iv) expire no later than 365 days after its date of issuance, provided that
any Letter of Credit with a 365-day duration may provide for the renewal thereof
at the election of the Borrower (in accordance with procedures to be established
by the Issuing Lender) for additional 365-day periods (which shall not expire
later than five Business Days prior to the Revolving Credit Termination Date).
(b) Each Letter of Credit issued after the Closing Date shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time
to time request that the Issuing Lender issue a Letter of Credit by delivering
to the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Standby
Letter of Credit (including the amount thereof). On each L/C Fee Payment Date,
the Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the aggregate face
amount of the Commercial Letters of Credit outstanding on such date.
3.3 Fees, Commissions and Other Charges. (a) The Borrower agrees that it
will pay a commission on all outstanding Letters of Credit at a rate per annum
equal to 1/8 of 1% above the Applicable Margin then in effect with respect to
Revolving Credit Loans that are Eurodollar Loans of the face amount of each such
Letter of Credit, of which 1/8 of 1% per annum will be a fronting fee for the
account of the Issuing Lender, and the remainder will be shared ratably among
the Revolving Credit Lenders in accordance with their Revolving Credit
Percentages, payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date.
(b) In addition to the foregoing fees and commissions, the Borrower agrees
that it shall pay or reimburse the Issuing Lender promptly upon demand for such
normal and customary costs and expenses as are incurred or charged by the
Issuing Lender in issuing, negotiating, effecting payment under, or amending any
Letter of Credit.
(c) The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this Section.
3.4 L/C Participation. (a) Effective on the Closing Date in respect of the
Existing Letters of Credit, and effective on the date of issuance thereof in
respect of each Letter of Credit issued hereunder after the Closing Date, the
Issuing Lender in respect of each Letter of Credit irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce such Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from such Issuing Lender,
on the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's Revolving
Credit Percentage in such Issuing Lender's obligations and rights under such
Letter of Credit and the amount of each draft paid by such Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
such Issuing Lender in respect of each Letter of Credit that, if a draft is paid
under any Letter of Credit issued by such Issuing Lender for which such Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such L/C Participant shall pay to such Issuing Lender upon
demand at such Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Revolving Credit Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to Revolving Credit Loans that are Base Rate Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States and in immediately available funds. Interest shall be
payable to the Issuing Lender on any and all amounts drawn under Letters of
Credit from the date of such drawing until the date three Business Days after
receipt by the Borrower from the Issuing Lender of notice of such drawing at the
rate set forth in Section 2.12(b) for Revolving Credit Loans, and thereafter
until payment in full at the rate set forth in Section 2.12(c).
3.6 Obligations Absolute. The Borrower's obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that, subject to Section 3.7, the Issuing Lender shall not be responsible
for, and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be to determine whether the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment are substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arranger, the Administrative Agent, the Collateral Agent and
the Lenders to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Arranger, the Administrative Agent, the Collateral Agent and
each Lender that: 4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower as at December 31, 1996 (including
the notes thereto) (the "Pro Forma Balance Sheet"), copies of which have
heretofore been furnished to each Lender, has been prepared giving effect (as if
such events had occurred on such date) to the borrowings under this Agreement
contemplated to be made on the Closing Date and the use of proceeds thereof and
the payment of estimated fees and expenses in connection therewith. The Pro
Forma Balance Sheet has been prepared based on the best information available to
the Borrower as of the date of delivery thereof and presents fairly in all
material respects on a pro forma basis the estimated consolidated financial
position of the Borrower as of December 31, 1996, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as at June 30,
1996 and June 30, 1995 and the related audited consolidated statements of income
and of cash flows for the fiscal years ended on such dates, reported on by KPMG
Peat Marwick LLP, copies of which have heretofore been furnished to each Lender,
are complete and correct and present fairly in all material respects the
consolidated financial condition of the Borrower as at such dates, and the
consolidated results of operations and consolidated cash flows for the fiscal
years then ended. The unaudited consolidated balance sheet of the Borrower as at
March 31, 1997, and the related unaudited consolidated statements of income and
of cash flows for the nine-month period ended on such date, certified by a
Responsible Officer of the Borrower, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly in all
material respects the consolidated financial condition of the Borrower as at
such date, and the consolidated results of operations and consolidated cash
flows for the nine-month period then ended (subject to normal year-end audit
adjustments).
All such financial statements described in this Section 4.1(b), including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants and as disclosed therein). Except for contingent obligations
incurred in the ordinary course of business, the Borrower had at the date of the
most recent audited balance sheet referred to above no material undisclosed
liabilities, Guarantee Obligations, contingent liability or liability for taxes,
nor any material long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in such balance sheet or in the
notes thereto. During the period from June 30, 1996 to and including the date
hereof there has been no sale, transfer or other disposition by the Borrower or
any of its Consolidated Subsidiaries of any material part of their business or
property.
4.2 No Change. (a) Since June 30, 1996, there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect, and (b) during the period from June 30, 1996 to and including the date
hereof no dividends or other distributions have been declared, paid or made upon
the Capital Stock of the Borrower nor has any of the Capital Stock of the
Borrower been redeemed, retired, purchased or otherwise acquired for value by
the Borrower.
4.3 Corporate Existence; Compliance with Law. Each Loan Party (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, except (in the case of any Subsidiary) where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, (b) has the power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, (c) is duly
qualified and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform each Loan Document to which it is a party and, in the case of the
Borrower, to borrow hereunder. Each Loan Party has taken all necessary action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement and the Notes. No material consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
transactions contemplated hereby, the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except for those obtained on or before the date of
this Agreement and listed in Schedule 4.4, and except the filings referred to in
Section 4.19. Each Loan Document has been duly executed and delivered on behalf
of each Loan Party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this Agreement
and the other Loan Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or Contractual Obligation of any Loan Party and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation (other than the Liens created by the Security Documents).
4.6 No Material Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby or (b) which could reasonably be expected to have
a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its Domestic
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 7.3. The Borrower and its Subsidiaries (other than
Servicios) have no fee interests in any material real property other than the
Mortgaged Property, the Oil and Gas Properties and, as of the date hereof, the
real property described on Schedule 4.8.
4.9 Intellectual Property. The Borrower and each of its Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted, except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (collectively, the
"Intellectual Property"). No material claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. To the Borrower's
knowledge, the use of Intellectual Property by the Borrower and its Subsidiaries
does not infringe on the rights of any Person where such infringement could
reasonably be expected to have a Material Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
4.11 Taxes. Each of the Borrower and its Domestic Subsidiaries, and to the
knowledge of the Borrower, Servicios has filed or caused to be filed all
material Federal, state and other tax returns which are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower); no
material tax Lien has been filed; and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any material tax, fee or other charge.
4.12 Federal Regulations. Except as otherwise provided by Sections 4.16 and
7.7, no part of the proceeds of any Loans will be used for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation G or Regulation U of the Board as now and from
time to time hereafter in effect. No part of the proceeds of any Loans will be
used for any purpose which violates the provisions of the Regulations of the
Board. If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G-3 or FR Form U-1
referred to in said Regulation G or Regulation U, as the case may be.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five- year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. To the knowledge of the
Borrower and the Commonly Controlled Entities, no such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of $1,000,000.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. No Loan Party is subject to regulation under any Federal or State
statute or regulation (other than Regulation X of the Board) which limits its
ability to incur Indebtedness.
4.15 Subsidiaries. As of the date hereof, the Subsidiaries listed on
Schedule 4.15 constitute all the direct or indirect Subsidiaries of the
Borrower, and Schedule 4.15 shows, as to each such Subsidiary, its jurisdiction
of its incorporation, its authorized capitalization and the ownership of Capital
Stock of such Subsidiary.
4.16 Purpose of Loans; Limitations on Use. The proceeds of the Loans shall
be used to refinance indebtedness of the Loan Parties under the existing credit
facilities described on Schedule 4.16 (the "Existing Credit Facilities") and to
pay related fees and expenses, to finance Permitted Acquisitions and capital
expenditures, to finance the repurchase from time to time the outstanding
Capital Stock of the Borrower to the extent permitted by subsection 7.7 and for
general corporate purposes of the Borrower and its Subsidiaries (including
Excluded Subsidiaries) in the ordinary course of business; provided, that the
amount of proceeds of the Loans which may be used for Permitted Acquisitions of
oil and gas properties shall be limited to an amount equal to the lesser of
(a) $25,000,000 and (b) 65% of the value of the oil and gas properties of Odessa
Exploration Incorporated (after giving effect to any such Permitted
Acquisition), which value shall be calculated as the present value discounted at
10% of future net revenue relating to all proved developed producing reserves
and proved undeveloped reserves from such properties. In addition, if at least
90% of the original outstanding principal amount of the Convertible Subordinated
Debentures shall have been converted into common stock of the Borrower, the
Borrower may use proceeds of the Loans to repurchase or redeem the remaining
outstanding Convertible Subordinated Debentures as permitted by Section 7.10.
4.17 Environmental Matters. Other than exceptions to any of the following
that could not, individually or in the aggregate, reasonably be expected to give
rise to a Material Adverse Effect:
(a) the Borrower and each of its Subsidiaries: (i) are, and to the
knowledge of the executive management of the Borrower within the period of all
applicable statutes of limitation have been, in compliance with all applicable
Environmental Laws; (ii) hold all Environmental Permits (each of which is in
full force and effect) required for any of their current operations or for any
property owned, leased, or otherwise operated by any of them; (iii) are, and to
the knowledge of the executive management of the Borrower within the period of
all applicable statutes of limitation have been, in compliance with all of their
Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits required for their continued operations will be timely
renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is reasonably expected by the Borrower's executive
management to become applicable to any of them will be timely attained and
maintained, without material expense.
(b) To the knowledge of the executive management of the Borrower, Materials
of Environmental Concern are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by the Borrower or any of its
Subsidiaries or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in costs
to the Borrower or any of its Subsidiaries, or (ii) interfere with the continued
operations of the Borrower or any of its Subsidiaries, or (iii) impair the fair
saleable value of any real property owned or leased by the Borrower or any of
its Subsidiaries.
(c) There is no judicial, administrative, or arbitral proceeding (including
any notice of violation or alleged violation) under or relating to any
Environmental Law to which the Borrower or any of its Subsidiaries is, or to the
knowledge of the executive management of the Borrower will be, named as a party
that is pending or, to the knowledge of the executive management of the
Borrower, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has received any
written request for information, or been notified that it is a potentially
responsible party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act or any similar Environmental Law.
(e) Neither the Borrower nor any of its Subsidiaries has entered into or
agreed to any consent decree, order, or settlement or other agreement, nor is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law.
(f) To the knowledge of the executive management of the Borrower, neither
the Borrower nor any of its Subsidiaries has assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known or
unknown, under or relating to any Environmental Law.
For purposes of Section 8, each of the foregoing representations and
warranties contained in this Section 4.17 that is qualified by the knowledge of
the executive management of the Borrower shall be deemed not to be so qualified.
4.18 Accuracy of Information. No statement or information contained in this
Agreement, any other Loan Document, the Confidential Information Memorandum or
any other document, certificate or statement furnished to the Arranger, the
Administrative Agent or the Lenders, by or on behalf of any Loan Party for use
in connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished any untrue statement of a material fact or, with
all such statements and information being taken as a whole, omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. It is understood that no representation or warranty is
made concerning the forecasts, estimates, pro forma information, projections and
statements as to anticipated future performance or conditions, and the
assumptions on which they were based contained in any such information, reports,
financial statements, exhibits or schedules, except that as of the date such
forecasts, estimates, pro forma information, projections and statements were
generated, such forecasts, estimates, pro forma information, projections and
statements were based upon good faith estimates and assumptions believed by
management of the Borrower and its Subsidiaries to be reasonable at such time.
There is no fact known to the executive management of the Borrower that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, or in such other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
4.19 Security Documents. (a) The Master Guarantee and Collateral Agreement
is effective to create in favor of the Collateral Agent, for the benefit of the
Lenders, a security interest which has attached (as that term is used in Section
9-203 of the New York UCC) in the Pledged Securities and other instruments,
negotiable documents, chattel paper and money described therein, to the extent
that the Loan Parties to the Master Guaranty and Collateral Agreement have
rights in such Collateral, and proceeds thereof and, when the Pledged Notes and
the stock certificates representing the Pledged Stock described therein and
other instruments, negotiable documents, chattel paper and money described
therein are delivered to the Collateral Agent, the Master Guarantee and
Collateral Agreement shall constitute a perfected first priority Lien on, and
security interest in, all right, title and interest of the relevant pledgor in
such Pledged Securities and other instruments, negotiable documents, chattel
paper and money and the proceeds thereof, as security for the Obligations (as
defined in the Master Guarantee and Collateral Agreement), in each case prior
and superior in right to any other Person, except for inchoate tax liens for
obligations to be paid in the ordinary course of business.
(b) The Master Guarantee and Collateral Agreement is effective to create in
favor of the Collateral Agent, for the benefit of the Lenders, a security
interest which has attached (as that term is used in Section 9-203 of the New
York UCC) in the Collateral described therein (other than the Collateral
described in Section 4.19(a)), to the extent that the Loan Parties to the Master
Guarantee and Collateral Agreement have rights in such Collateral, and proceeds
thereof, and when financing statements in appropriate form are properly filed
(with all required filing fees being paid) in the offices specified on
Schedule 4.19(b) and, with respect to vehicles included in the Collateral and
covered by certificates of title issued by any State, when the security interest
of the Collateral Agent has been noted on such certificate of title in
accordance with the certificate of title laws of such State, the Master
Guarantee and Collateral Agreement shall constitute a perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in
substantially all of such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Master Guarantee and Collateral Agreement),
in each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 7.3.
(c) Each Mortgage, when executed and delivered by the relevant Loan Party,
and properly filed and recorded (with all required filing and recording fees
being paid) in the office(s) specified on Schedule 4.19(c), shall constitute a
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Mortgaged Property properly described therein, as security for
the Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person, other than with respect to Liens
expressly permitted by Section 7.3.
(d) Each Oil and Gas Mortgage, when executed and delivered by the relevant
Loan Party, and properly filed and recorded (with all required filing and
recording fees being paid) in the office(s) specified on Schedule 4.19(d), shall
constitute a perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Oil and Gas Property properly described
therein, as security for the Obligations (as defined in the relevant Oil and Gas
Mortgage), in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by Section 7.3. 4.20 Solvency.
The Borrower and its Subsidiaries, taken as a whole, are, and after giving
effect to the incurrence of all Indebtedness and obligations being incurred in
connection herewith will be, Solvent.
4.21 Labor Matters. There are no strikes pending or, to the knowledge of
the Borrower, threatened against the Borrower or any of its Subsidiaries which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The hours worked and payments made to employees of the
Borrower and each of its Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable Requirement of Law, except to the
extent such violations could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect. All material payments due
from the Borrower or any of its Subsidiaries on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary.
4.22 Indenture. All Indebtedness of the Borrower hereunder constitutes
"Senior Indebtedness" within the meaning of the Indenture.
4.23 Excluded Subsidiaries. As of the Closing Date the Borrower is in the
process of dissolving all Excluded Subsidiaries listed in clause (a) of the
definition of Excluded Subsidiaries in Section 1.1; and the Borrower expects to
dissolve the Excluded Subsidiaries listed in clause (c) of the definition of
Excluded Subsidiaries in Section 1.1 in the ordinary of business when the assets
of such corporations are disposed of.
4.24 Oil and Gas Properties. The Oil and Gas Properties described in
Schedule 1.1C constitute 80% of the value of the proved developed producing and
proved undeveloped reserves of Odessa Exploration Incorporated on the Closing
Date. For purposes of this Section, the value of such reserves shall be
calculated as the present value discounted at 10% of future revenue relating to
such reserves.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each Lender
to make the initial extension of credit requested to be made by it is subject to
the satisfaction, prior to or concurrently with the making of such extension of
credit on the Closing Date (which Closing Date shall occur on or before June 15,
1997), of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
with a counterpart or a conformed copy for each Lender and (ii) for the account
of any Lender requesting Notes in accordance with Section 2.6(e), Notes
conforming to the requirements hereof and executed and delivered by a duly
authorized officer of the Borrower. The Collateral Agent shall have received the
Master Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of each party thereto, with a counterpart or a conformed copy
for each Lender. (b) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Arranger), with a copy for
each Lender, true and correct copies, certified as to authenticity by the
Borrower, of the Insurance Policies (or certificates evidencing the
effectiveness of such Insurance Policies and the material terms thereof) and
such other documents or instruments as may be reasonably requested by the
Arranger, including, without limitation, a copy of the Indenture and any other
debt instrument, security agreement or other material contract to which the Loan
Parties may be a party.
(c) Termination of Existing Credit Facilities. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent and the
Arranger that the Existing Credit Facilities shall be simultaneously terminated,
all amounts thereunder shall be simultaneously paid in full and arrangements
satisfactory to the Arranger and the Administrative Agent shall have been made
for the termination of Liens and security interests granted in connection
therewith.
(d) Fees. The Lenders, Arranger and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which invoices have
been presented, on or before the Closing Date.
(e) Approvals. All governmental and third party approvals necessary or, in
the reasonable discretion of the Arranger, advisable in connection with the
financings contemplated hereby and the continuing operations of the Borrower and
its Domestic Subsidiaries shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the continuing operations of
the Borrower.
(f) Financial Statements. The Lenders shall have received satisfactory
unaudited interim consolidated financial statements of the Borrower for the
fiscal quarterly period ended March 31, 1997 and such interim financial
statements shall not reflect any material adverse change in the consolidated
financial condition of the Borrower as reflected in the financial statements
previously delivered to the Lenders.
(g) Pro Forma Balance Sheet. The Lenders shall have received the Pro Forma
Balance Sheet, which Pro Forma Balance Sheet shall be in form and substance
reasonably satisfactory to the Lenders.
(h) Business Plan. The Lenders shall have received a satisfactory business
plan for fiscal years 1997-2004 and a satisfactory written analysis of the
business and prospects of the Borrower and its Subsidiaries for the period from
the Closing Date through the Revolving Credit Termination Date.
(i) Lien Searches. The Collateral Agent shall have received the results of
a recent lien search by a Person satisfactory to the Arranger, of the Uniform
Commercial Code, judgment and tax lien filings in each of the relevant
jurisdictions where assets of the Loan Parties are located, and such search
shall reveal no Liens on any of such assets except for Liens permitted by
Section 7.3 or Liens to be discharged as described in Section 5.1(c) pursuant to
documentation reasonably satisfactory to the Arranger.
(j) Solvency Analysis. The Lenders shall have received a reasonably
satisfactory solvency analysis certified by the chief financial officer of the
Borrower which shall document the solvency of the Borrower and its Subsidiaries
considered as a whole after giving effect to the transactions contemplated
hereby.
(k) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, (i) the executed legal opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇., Esq., general counsel to the Loan Parties, substantially in the form of
Exhibit E-1 and (ii) the executed legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
counsel to the Loan Parties, substantially in the form of Exhibit E-2. Each such
legal opinion shall be in form and substance reasonably satisfactory to the
Lenders and shall cover such matters incident to the transactions contemplated
by this Agreement as the Arranger may reasonably require.
(l) Closing Certificate. The Administrative Agent shall have received, with
a counterpart for each Lender, a certificate of each Loan Party, dated the
Closing Date, substantially in the form of Exhibit D, with appropriate
insertions and attachments, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of such Loan Party.
(m) Corporate Proceedings of Loan Parties. The Administrative Agent shall
have received, with a counterpart for each Lender, a copy of the resolutions of
the Board of Directors of each Loan Party authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party
(including, but not limited to, the granting of any Liens provided for therein),
and (ii) in the case of the Borrower, the borrowings contemplated hereunder.
(n) Pledged Securities; Stock Powers. The Collateral Agent shall have
received the Pledged Notes (duly indorsed to bearer) and the Pledged Stock
pledged pursuant to the Master Guarantee and Collateral Agreement (including,
without limitation, all of the shares of Odessa Exploration Incorporated),
together with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof.
(o) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)required by
the Security Documents or under law or reasonably requested by the Arranger to
be delivered to the Collateral Agent or to be filed, registered or recorded in
order to create in favor of the Collateral Agent, for the benefit of the
Lenders, a perfected Lien on substantially all of the Collateral described
therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 7.3), shall be in proper form
for filing, registration or recordation in each jurisdiction in which the
filing, registration or recordation thereof is so required or requested, other
than those documents required to be filed, registered or recorded after the
Closing Date pursuant to Section 6.11.
(p) Forms U-1, G-3. To each Lender which has requested such form prior to
the Closing Date, a Form U-1 or G-3 confirming that none of the proceeds of the
Term Loans shall be used to purchase or carry margin stock.
5.2 Conditions to Each Extension of Credit. The agreement of each Lender to
make any extension of credit requested to be made by it on any date (including,
without limitation, its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Except to the extent that they are made
as of a specific date, each of the representations and warranties made by any
Loan Party in or pursuant to the Loan Documents shall be true and correct in all
material respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.
(c) Additional Matters. All proceedings, and all documents, instruments and
other legal matters in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall be reasonably satisfactory in form
and substance to the Administrative Agent, and the Administrative Agent shall
have received such other documents and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
(d) Borrowing Notice. The Borrower shall have delivered to the
Administrative Agent the applicable borrowing notice in accordance with the
relevant subsection of Section 2.
Each borrowing by and issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note or Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Lender, the Arranger or the Administrative Agent
hereunder, the Borrower shall and, if applicable, shall cause each of its
Subsidiaries (and with respect to Section 6.8, each of the Excluded
Subsidiaries) to:
6.1 Financial Statements. Furnish to the Administrative Agent for
distribution to each Lender: (a) as soon as available, but in any event within
95 days after the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by KPMG Peat Marwick LLP or other
independent certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 50 days after the
end of each of the first three quarterly periods of each fiscal year of the
Borrower, the unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of the Borrower and its Consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 40 days after the
end of each month occurring during each fiscal year of the Borrower (other than
the third, sixth, ninth and twelfth such month), the unaudited consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as at the end of
such month and the related unaudited consolidated statement of income of the
Borrower and its Consolidated Subsidiaries for such month and the portion of the
fiscal year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, certified by a Responsible
Officer of the Borrower as being fairly stated in all material respects (subject
to normal year-end audit adjustments);
all such financial statements referred to in this Section 6.1(b) shall be
complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods, subject to normal year-end
adjustments.
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.1(a), (i) a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate and (ii) copies of all
reports or written communications providing advice, recommendations or analysis
to the management of the Borrower from such independent certified public
accountants with regard to their audit of the financial statements referred to
in Section 6.1(a) or the internal financial controls and systems of the
Borrower;
12
(b) concurrently with the delivery of any financial statement pursuant to
Section 6.1, (x) a certificate of a Responsible Officer of the Borrower stating
that, to the best of each such Responsible Officer's knowledge, during such
period (i) no Subsidiary has been formed or acquired (or, if any such Subsidiary
has been formed or acquired, the Loan Parties have complied with the
requirements of Section 6.10 with respect thereto), (ii) neither the Borrower
nor any of its Subsidiaries has changed its name, its principal place of
business, its chief executive office, its principal place of business, the
location where records concerning the Collateral are kept or the location of any
material item of tangible Collateral without complying with the requirements of
this Agreement and the Security Documents with respect thereto and (iii) each
Loan Party has observed or performed all of its covenants and other agreements,
and satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (y) in the case of
quarterly or annual financial statements, a certificate containing all
information reasonably necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement (including but not
limited to Sections 2.9 and 7.1) as of the last day of such fiscal quarter or
fiscal year of the Borrower;
(c) as soon as available, and in any event no later than the end of each
fiscal year of the Borrower, a projected consolidated balance sheet of the
Borrower as of the end of the following fiscal year, and the related
consolidated statements of projected cash flow, projected retained earnings and
projected income for the following fiscal year, together with an operating
budget with respect to the following fiscal year, and, as soon as available,
significant revisions, if any, of such projections with respect to such fiscal
year (collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer of the Borrower stating
that such Projections are based on estimates, information and assumptions
believed by such Responsible Officer to be reasonable and that such Responsible
Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;
(d) within 50 days after the end of each fiscal quarter of each fiscal year
of the Borrower, a narrative discussion and analysis of the consolidated
financial condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning of
the then current fiscal year to the end of such fiscal quarter, as compared to
the portion of the Projections, as applicable, covering such periods and to the
comparable periods of the previous year;
(e) within five days after the same are filed, copies of all financial
statements and reports which the Borrower or any of its Subsidiaries may make
to, or file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority of the United States; and
(f) promptly, such additional financial and other information as any Lender
may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent or (in the case of trade
payables and obligations other than for borrowed money) within 150 days after
the due date, as the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc. (a) Continue to
engage in business of the same general type as now conducted by it, (b)
preserve, renew and keep in full force and effect its existence and (c) take all
commercially reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case in clauses (a), (b) and (c) above, as otherwise permitted pursuant to
Section 7.5 and except, in the case of clause (c) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (d) comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all material property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted; (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event general
liability) as are usually insured against in the same general area by companies
engaged in the same or a similar business; and (c) furnish to each Lender, upon
written request, full information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP or, in the case of Foreign Subsidiaries, in conformity with
generally accepted accounting principles in effect in the jurisdiction where
such Foreign Subsidiary is located at such time and, in the case of the Borrower
and its Domestic Subsidiaries, all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and upon
reasonable notice permit representatives of any Lender to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with senior officers of the Borrower and
its Subsidiaries and with its independent certified public accountants.
6.7 Notices. Promptly give notice to the Administrative Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation of
the Borrower or any of its Subsidiaries or (ii) litigation, investigation or
proceeding which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, which in either case, if not cured
or if adversely determined, as the case may be, could reasonably be expected to
have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event within 30
days after the Borrower or any of its Subsidiaries knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution in a material
amount to a Plan, the creation of any Lien in a material amount in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan;
(d) (i) any release or discharge by the Borrower or any Subsidiary of any
Materials of Environmental Concern required to be reported under Environmental
Laws to any Governmental Authority which could reasonably be expected to result
in the assessment or payment of a Material Environmental Amount; (ii) any
condition, circumstance, occurrence or event that could reasonably be expected
to result in the assessment or payment of a Material Environmental Amount, or
could result in the imposition of any Lien or other restriction on the title,
ownership or transferability of any Mortgaged Property; and (iii) any action to
be taken by the Borrower or any Subsidiary that could reasonably be expected to
subject the Borrower or any Subsidiary to the assessment or payment of a
Material Environmental Amount; and
(e) any development or event which could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower or the
applicable Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws.
(a)(i) Comply with all Environmental Laws applicable to it, and obtain,
comply with and maintain any and all Environmental Permits necessary for its
operations as conducted and as planned; and (ii) take all reasonable efforts to
ensure that all of its tenants, subtenants, contractors, subcontractors, and
invitees comply with all applicable Environmental Laws, and obtain, comply with
and maintain any and all Environmental Permits, applicable to any of them
insofar as any failure to so comply, obtain or maintain reasonably could be
expected to adversely affect the Borrower or any of its Subsidiaries. For
purposes of this 6.8(a), noncompliance by the Borrower with any applicable
Environmental Law or Environmental Permit shall be deemed not to constitute a
breach of this covenant provided that, upon learning of any actual or suspected
noncompliance, the Borrower shall undertake reasonable efforts to achieve
compliance, and provided further that, in any case, such non-
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
compliance, and any other noncompliance with applicable Environmental Law,
individually or in the aggregate, could not reasonably be expected to give rise
to a Material Adverse Effect.
(b) Promptly comply in all material respects with all orders and directives
of all Governmental Authorities directed to the Borrower or any of its Domestic
Subsidiaries regarding Environmental Laws, other than such orders and directives
or parts thereof as are being contested in good faith and by appropriate
proceedings.
(c) Within six months after the Closing Date, complete the development of a
program to promote compliance with and to minimize prudently any liabilities or
potential liabilities under any Environmental Law that may affect Borrower or
any of its Domestic Subsidiaries (the "Environmental Program") and implement the
Environmental Program upon a reasonable schedule thereafter. The Environmental
Program shall be developed with the assistance of a reputable independent
environmental consulting firm reasonably acceptable to the Administrative Agent
(an "Environmental Consultant") or a qualified employee of the Borrower. Upon
the Administrative Agent's request, a reasonably detailed written description of
the Environmental Program shall be provided to the Administrative Agent, after
which, upon the Administrative Agent's request, Borrower shall confer with the
Administrative Agent concerning any questions the Administrative Agent may have
about the Environmental Program.
(d) Prior to acquiring any ownership or leasehold interest in real
property, or other interest in any real property which in the Borrower's
reasonable judgment could give rise to significant liability under any
Environmental Law, obtain a written environmental assessment report regarding
the environmental condition of such real property by a reputable independent
environmental consulting firm. Upon the request of the Administrative Agent, a
copy of each such environmental assessment report shall be delivered to the
Administrative Agent by the end of the calendar quarter in which the acquisition
closed, together with a list of all acquisitions of interests in real property
by the Borrower and the Subsidiaries in such quarter. Pursuant to this Section
6.8(d), the Administrative Agent shall have the right, but shall not have any
duty, to obtain, review or discuss any such report.
(e) Promptly upon the Administrative Agent's request if there has been an
Event of Default which has not been fully and timely cured, permit an
Environmental Consultant whom the Administrative Agent in its discretion
designates to perform an environmental assessment (including, without
limitation: reviewing documents; interviewing knowledgeable persons; and
sampling and analyzing soil, air, surface water, groundwater, and/or other media
in or about property owned or leased by the Borrower, or on which operations of
the Borrower otherwise take place). Such environmental assessment shall be in
form, scope, and substance reasonably satisfactory to the Administrative Agent.
The Borrower shall cooperate fully in the conduct of such environmental
assessment, and shall pay the costs of such environmental assessment immediately
upon written demand by the Administrative Agent. Pursuant to this section
6.8(e), the Administrative Agent shall have the right, but shall not have any
duty, to request and/or obtain such environmental assessment.
6.9 Further Assurances. Promptly perform or cause to be performed any and
all acts and execute or cause to be executed any and all documents (including,
without limitation, financing statements and continuation statements) for filing
under the provisions of the Uniform Commercial Code or any other Requirement of
Law which are necessary or advisable in the reasonable judgment of the
Collateral Agent to maintain in favor of the Collateral Agent, for the benefit
of the Lenders, Liens on the Collateral that are duly perfected in accordance
with all applicable Requirements of Law.
6.10 Additional Collateral. (a) With respect to any assets acquired after
the Closing Date by the Borrower or any of its Domestic Subsidiaries that are
intended to be subject to the Lien created by any of the Security Documents but
which are not so subject (other than any assets described in paragraph (b), (c),
(d) or (e) of this Section 6.10), promptly (and in any event within 30 days
after the acquisition or creation thereof): (i) execute and deliver to the
Collateral Agent such amendments to the Master Guarantee and Collateral
Agreement or such other documents as the Collateral Agent shall reasonably deem
necessary or advisable to grant to the Collateral Agent, for the benefit of the
Lenders, a Lien on such assets, (ii) take all actions reasonably necessary or
advisable to cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
reasonably requested by the Collateral Agent, and (iii) if requested by the
Collateral Agent, deliver to the Collateral Agent legal opinions relating to the
matters described in clauses (i) and (ii) immediately preceding, which opinions
shall be in form and substance and from counsel reasonably satisfactory to the
Collateral Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Domestic Subsidiary of the Borrower (including, without limitation,
any Person which had previously been an Excluded Subsidiary), promptly: (i)
execute and deliver to the Collateral Agent, for the benefit of the Lenders,
such amendments to the Master Guarantee and Collateral Agreement as the
Collateral Agent shall deem reasonably necessary or advisable to grant to the
Collateral Agent, for the benefit of the Lenders, a Lien on the Capital Stock of
such Subsidiary which is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers duly executed and delivered in blank,
(iii) cause such new Domestic Subsidiary (A)to become a party to the Master
Guarantee and Collateral Agreement, pursuant to documentation which is in form
and substance reasonably satisfactory to the Collateral Agent, and (B) to take
all actions necessary or advisable to cause the Lien created by such security
agreement to be duly perfected in accordance with all applicable Requirements of
Law, including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be reasonably requested by the
Collateral Agent, and (iv) if requested by the Collateral Agent, deliver to the
Collateral Agent legal opinions relating to the matters described in clauses
(i), (ii) and (iii) immediately preceding, which opinions shall be in form and
substance and from counsel reasonably satisfactory to the Collateral Agent.
(c) With respect to any fee interest in any real property acquired after
the Closing Date by the Borrower or any of its Domestic Subsidiaries having a
purchase price (or, if acquired through a merger or stock acquisition, a fair
market value) in excess of $1,000,000, promptly (i) execute and deliver a first
priority mortgage or deed of trust, as the case may be (subordinate only to such
mortgages or deeds of trust as are necessary to permit the Borrower or such
Domestic Subsidiary to purchase such real property but subject to such
easements, rights of way, restrictions and other similar encumbrances as such
property may be subject at the time of acquisition), in favor of the Collateral
Agent, for the benefit of the Lenders, covering such real property, in form and
substance reasonably satisfactory to the Collateral Agent, (ii) if requested by
the Collateral Agent, provide the Lenders with any consents or estoppels deemed
necessary or advisable by the Collateral Agent in connection with such mortgage
or deed of trust, each of the foregoing in form and substance reasonably
satisfactory to the Collateral Agent and (iii) if requested by the Collateral
Agent, deliver to the Collateral Agent legal opinions relating to the matters
described in the preceding clauses (i) and (ii), which opinions shall be in form
and substance and from counsel reasonably satisfactory to the Collateral Agent.
Notwithstanding the foregoing, compliance shall not be required with the
foregoing provision of this paragraph (c) in respect of any interest in real
property which, at the time of acquisition thereof by the Borrower or its
Subsidiary, is subject to a legal or contractual restriction that would prohibit
the granting of a mortgage thereon to the Collateral Agent; provided, that the
aggregate book value of real property owned by the Borrower and its Subsidiaries
so subject may not exceed $5,000,000 at any time.
(d) With respect to any Foreign Subsidiary created or acquired after the
Closing Date by the Borrower or any of its Domestic Subsidiaries, promptly (i)
execute and deliver to the Collateral Agent such amendments to the Master
Guarantee and Collateral Agreement (or comparable documentation) as the
Collateral Agent deems reasonably necessary or advisable in order to grant to
the Collateral Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Capital Stock (except for Liens permitted under Section
7.3) of such new Foreign Subsidiary which is owned by the Borrower or any of its
Domestic Subsidiaries (provided that in no event shall more than 65% of the
Capital Stock of any such new Subsidiary be required to be so pledged), (ii)
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Subsidiary, as the case may be,
and (iii) if requested by the Collateral Agent, deliver to the Collateral Agent
legal opinions relating to the matters described in the preceding clauses (i)
and (ii), which opinions shall be in form and substance and from counsel
reasonably satisfactory to the Collateral Agent.
(e) With respect to any oil and gas property acquired after the Closing
Date by the Borrower or any of its Domestic Subsidiaries having a purchase price
(or, if acquired through a merger or stock acquisition, a fair market value) in
excess of $1,000,000 and which, after giving effect to such acquisition and
assuming that a perfected first priority Lien thereon were not granted to the
Collateral Agent would result in the Collateral Agent having a perfected first
priority Lien on less than 80% in value (calculated as provided in Section 4.24)
of the reserves contained in all of the oil and gas properties of the Borrower
and its Domestic Subsidiaries, promptly (i) execute and deliver a first priority
oil and gas mortgage (subordinate only to such oil and gas mortgages as are
necessary to permit the Borrower or such Domestic Subsidiary to purchase such
property but subject to such restrictions and other similar encumbrances as such
property may be subject at the time of acquisition), in favor of the Collateral
Agent, for the benefit of the Lenders, covering such property, in form and
substance reasonably satisfactory to the Collateral Agent, and (ii) if requested
by the Collateral Agent, deliver to the Collateral Agent title opinions relating
to the matters described in the preceding clause reasonably satisfactory to the
Collateral Agent.
6.11 Post-Closing Matters.
(a) Mortgages and Oil and Gas Mortgages. Within 90 days after the Closing
Date, deliver to the Collateral Agent each Mortgage and each Oil and Gas
Mortgage, executed and delivered by a duly authorized officer of each party
thereto, with a copy for each Lender.
(b) Legal Opinions. Deliver to the Collateral Agent within 90 days after
the Closing Date, such legal opinions from local counsel in respect of the
Mortgages and the recording thereof as may be reasonably requested by the
Collateral Agent, with a counterpart for each Lender. Deliver to the Collateral
Agent as promptly as practicable, but in any event within 180 days after the
Closing Date, such title opinions in respect of the Oil and Gas Properties as
may be reasonably requested by the Collateral Agent. Such legal opinions shall
be in form and substance reasonably satisfactory to the Collateral Agent and
shall cover such matters incident to the transactions contemplated by this
Agreement as the Collateral Agent may reasonably require.
(c) Flood Insurance. Within 90 days after the Closing Date, deliver to the
Collateral Agent if requested by the Collateral Agent, (i) a policy of flood
insurance with respect to each parcel of real property subject to a Mortgage on
which there are improvements located in the 100-year flood plain, which (A) is
written in an amount not less than the outstanding principal amount of the
indebtedness secured by such Mortgage which is reasonably allocable to such real
property or the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act of 1968,
whichever is less and (B) has a term ending not earlier than the maturity of the
indebtedness secured by such Mortgage and (ii) confirmation that the Borrower
has received from the Collateral Agent the notice required pursuant to Section
208(e)(3) of Regulation H of the Board.
(d) Vehicles. Within 90 days after the Closing Date, deliver to the
Collateral Agent each document (including, without limitation, any certificates
of title) required by the Security Documents or under law or reasonably
requested by the Collateral Agent to be delivered to the Collateral Agent or to
be filed, registered or recorded in order to create in favor of the Collateral
Agent, for the benefit of the Lenders, a perfected Lien on all of the Vehicles
covered by a certificate of title, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 7.3),
which documents shall be in proper form for filing, registration or recordation
in each jurisdiction in which the filing, registration or recordation thereof is
so required or requested.
(e) Environmental. Prior to or concurrently with the execution and delivery
of the Mortgages, deliver to the Collateral Agent and the Arranger environmental
reports in respect of each Mortgaged Property listed in Schedule 6.11(e), which
reports shall be reasonably satisfactory to the Collateral Agent. At any time
upon the request of the Required Lenders, deliver to the Collateral Agent and
the Arranger environmental reports in respect of the Mortgaged Properties not
covered by an environmental report delivered pursuant to the preceding sentence,
which reports shall be reasonably satisfactory to the Collateral Agent.
6.12 Interest Rate Protection Agreements. Within 120 days after the Closing
Date, enter into Interest Rate Protection Agreements in respect of at least
$50,000,000 of the Term Loans, providing interest rate protection for such
period of time, and under such terms and conditions, as shall be reasonably
acceptable to the Arranger.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note or Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Lender, the Arranger, the Collateral Agent or the
Administrative Agent hereunder, the Borrower shall not, and, if applicable,
shall not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as
of any date set forth below to exceed the ratio set forth below opposite such
date:
Consolidated
Date Leverage Ratio
June 30, 1997 4.00 to 1.00
September 30, 1997 4.00 to 1.00
December 31, 1997 4.00 to 1.00
March 31, 1998 4.00 to 1.00
June 30, 1998 3.50 to 1.00
September 30, 1998 3.50 to 1.00
December 31, 1998 3.25 to 1.00
March 31, 1999 3.25 to 1.00
June 30, 1999 3.00 to 1.00
September 30, 1999 3.00 to 1.00
December 31, 1999 2.75 to 1.00
March 31, 2000 2.75 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 2.50 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.50 to 1.00
March 31, 2002 2.50 to 1.00
June 30, 2002 2.50 to 1.00
September 30, 2002 2.50 to 1.00
December 31, 2002 2.50 to 1.00
March 31, 2003 2.50 to 1.00
June 30, 2003 2.50 to 1.00
September 30, 2003 2.50 to 1.00
December 31, 2003 2.50 to 1.00
March 31, 2004 2.50 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending as of any date set forth below to be less than the ratio set
forth below opposite such date:
Consolidated
Interest
Date Coverage Ratio
June 30, 1997 2.50 to 1.00
September 30, 1997 2.50 to 1.00
December 31, 1997 2.50 to 1.00
March 31, 1998 2.50 to 1.00
June 30, 1998 2.75 to 1.00
September 30, 1998 2.75 to 1.00
December 31, 1998 3.00 to 1.00
March 31, 1999 3.00 to 1.00
June 30, 1999 3.25 to 1.00
September 30, 1999 3.25 to 1.00
December 31, 1999 3.50 to 1.00
March 31, 2000 3.50 to 1.00
June 30, 2000 3.50 to 1.00
September 30, 2000 3.50 to 1.00
December 31, 2000 3.50 to 1.00
March 31, 2001 3.50 to 1.00
June 30, 2001 3.50 to 1.00
September 30, 2001 3.50 to 1.00
December 31, 2001 3.50 to 1.00
March 31, 2002 3.50 to 1.00
June 30, 2002 3.50 to 1.00
September 30, 2002 3.50 to 1.00
December 31, 2002 3.50 to 1.00
March 31, 2003 3.50 to 1.00
June 30, 2003 3.50 to 1.00
September 30, 2003 3.50 to 1.00
December 31, 2003 3.50 to 1.00
March 31, 2004 3.50 to 1.00
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending as of any date set forth below to be less than the ratio set
forth below opposite such date:
Consolidated
Fixed Charge
Date Coverage Ratio
June 30, 1997 1.05 to 1.00
September 30, 1997 1.05 to 1.00
December 31, 1997 1.05 to 1.00
March 31, 1998 1.05 to 1.00
June 30, 1998 1.05 to 1.00
September 30, 1998 1.05 to 1.00
December 31, 1998 1.05 to 1.00
March 31, 1999 1.10 to 1.00
June 30, 1999 1.10 to 1.00
September 30, 1999 1.10 to 1.00
December 31, 1999 1.10 to 1.00
March 31, 2000 1.10 to 1.00
June 30, 2000 1.10 to 1.00
September 30, 2000 1.10 to 1.00
December 31, 2000 1.10 to 1.00
March 31, 2001 1.10 to 1.00
June 30, 2001 1.10 to 1.00
September 30, 2001 1.10 to 1.00
December 31, 2001 1.10 to 1.00
March 31, 2002 1.10 to 1.00
June 30, 2002 1.10 to 1.00
September 30, 2002 1.10 to 1.00
December 31, 2002 1.10 to 1.00
March 31, 2003 1.10 to 1.00
June 30, 2003 1.10 to 1.00
September 30, 2003 1.10 to 1.00
December 31, 2003 1.10 to 1.00
March 31, 2004 1.10 to 1.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of the Borrower under the Loan Documents;
(b) Indebtedness (i) of the Borrower to a Wholly Owned Subsidiary, (ii) of
a Domestic Wholly Owned Subsidiary to the Borrower or any other Subsidiary,
(iii) of Servicios to the Borrower or any Subsidiary in an aggregate principal
amount at any time outstanding not to exceed $5,000,000 in excess of the amount
of such Indebtedness outstanding on the date of this Agreement and (iv) of any
Foreign Subsidiary (other than Servicios) to the Borrower or any Subsidiary in
an aggregate principal amount at any time outstanding (with respect to all such
Foreign Subsidiaries of the Borrower) not to exceed $1,000,000, provided that
such Indebtedness referred to in clauses (iii) and (iv) hereof, if to the
Borrower or any Domestic Subsidiary, is evidenced by a promissory note or
promissory notes which has or have been pledged to the Collateral Agent on terms
and conditions reasonably satisfactory to the Administrative Agent;
(c) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition or construction of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrower and its Subsidiaries (i) $15,000,000 at any time
outstanding minus (ii) the amount of Indebtedness outstanding under clauses (f)
and (i) of this Section 7.2 and the amount of indebtedness attributable to sale
and leaseback transactions permitted pursuant to Section 7.12;
(d) Indebtedness of the Borrower and its Subsidiaries under the Convertible
Subordinated Debentures;
(e) Indebtedness outstanding on the date hereof, or incurred hereafter
pursuant to existing commitments or agreements, and, in each case, listed on
Schedule 7.2 and any refinancings, refundings, renewals or extensions thereof
not increasing the principal amount thereof;
(f) Indebtedness of a Person which becomes a Subsidiary after the date
hereof in an aggregate principal amount at any time outstanding not exceeding
(i) $15,000,000, minus (ii) the sum of (A) the amount of Indebtedness
outstanding under clauses (c) and (i) of this Section 7.2 and (B) the amount of
indebtedness attributable to sale and leaseback transactions permitted pursuant
to Section 7.12, provided that (x) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof and
(y) immediately after giving effect to the acquisition of such corporation by
the Borrower no Default or Event of Default shall have occurred and be
continuing, and any refinancings, refundings, renewals or extensions thereof not
increasing the principal amount thereof.
(g) Indebtedness constituting deposits to secure the performance of bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds and performance bonds and other obligations of a like
nature that are incurred in the ordinary course of business, not to exceed
$5,000,000 in the aggregate at any time outstanding;
(h) Indebtedness under Interest Rate Protection Agreements and Hedge
Agreements entered into the ordinary course of business for hedging purposes and
not for speculative purposes;
(i) Seller Indebtedness in an aggregate principal amount at any time
outstanding not exceeding (i) $15,000,000 minus (ii) the sum of (A) the amount
of Indebtedness outstanding under clauses (c) and (f) of this Section 7.2, and
any refinancings, refundings, renewals or extensions thereof not increasing the
principal amount thereof and (B) the amount of indebtedness attributable to sale
and leaseback transactions permitted pursuant to Section 7.12;
(j) Indebtedness in the form of Guarantee Obligations permitted by Section
7.4; and
(k) Indebtedness not otherwise permitted by the foregoing clauses (a)
through (j) in an aggregate principal amount at any time outstanding of not to
exceed $5,000,000.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 180 days or which are being contested
in good faith by appropriate proceedings and which, in any case, do not encumber
a material amount of the assets of the Borrower and its Subsidiaries;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any Subsidiary;
(f) Liens securing Indebtedness of the Borrower or any Subsidiary incurred
to finance the acquisition or construction of fixed or capital assets, provided
that (i) such Liens shall be created within 180 days after the acquisition or
construction of such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness and
the proceeds and products thereof, (iii) the principal amount of Indebtedness
secured thereby is not increased and (iv) the proceeds of the Indebtedness
secured by any such Lien shall at no time exceed 100% of the original purchase
price of such property;
(g) Liens created pursuant to the Security Documents;
(h) Liens in existence on the date hereof listed on Schedule 7.3 (i)
securing Indebtedness permitted by Section 7.2(e) provided that no such Lien is
spread to cover any additional property after the Closing Date and that the
principal amount of Indebtedness secured thereby is not increased or (ii)
securing Indebtedness which is being repaid on the Closing Date, provided that
such Liens shall be released promptly following the Closing Date;
(i) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by Section
7.2(f), provided that (i) such Liens existed at the time such corporation became
a Subsidiary and were not created in anticipation thereof, (ii) any such Lien is
not spread to cover any property or assets of such corporation after the time
such corporation becomes a Subsidiary, and (iii) the principal amount of
Indebtedness secured thereby is not increased;
(j) Liens on assets acquired in a Permitted Acquisition securing Seller
Indebtedness incurred in connection with such Permitted Acquisition; and
(k) the Permitted Exceptions (as defined in the Mortgages).
7.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to
exist any Guarantee Obligation except:
(a) Guarantee Obligations made in the ordinary course of its business by
the Borrower or any Subsidiary in respect of Indebtedness and other obligations
of any of the Borrower or any of its Subsidiaries which Indebtedness or other
obligations are otherwise not prohibited under this Agreement;
(b) the Guarantee Obligations of the Loan Parties pursuant to the Master
Guarantee and Collateral Agreement;
(c) the Guarantee Obligations of the Subsidiaries of the Borrower under the
Indenture; and
(d) Guarantee Obligations (in respect of obligations not constituting
Indebtedness) arising under agreements entered into by the Borrower or any
Subsidiary in the ordinary course of business.
7.5 Limitation on Fundamental Changes. Enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or combined with or into
the Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any one or more Subsidiaries of the Borrower
provided that in the case of any such transaction involving a Wholly Owned
Subsidiary, such Wholly Owned Subsidiary shall be the continuing or surviving
corporation;
(b) any Subsidiary may be dissolved, liquidated or wound up or may sell,
lease, assign, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to Borrower or any Domestic Wholly Owned
Subsidiary of the Borrower, and the Borrower may sell, lease, assign, transfer
or otherwise dispose of any or all of its assets to any wholly owned Subsidiary
of the Borrower which is a party to the Master Guarantee and Collateral
Agreement; and
(c) any Subsidiary may sell, lease, transfer or otherwise dispose of any or
all of its assets so long as (i) such transaction does not violate Section 7.6
and (ii) the Borrower complies with the provisions of Section 2.9(c) with
respect to such transaction.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary of the Borrower, issue or sell any
shares of such Subsidiary's Capital Stock to any Person other than the Borrower
or any Domestic Wholly Owned Subsidiary of the Borrower, except:
(a) the sale or other disposition of obsolete or worn out property in the
ordinary course of business having a fair market value not to exceed, in the
aggregate, $1,000,000 in any period of twelve consecutive months; (b) the sale
or other disposition of any property in the ordinary course of business,
including obsolete or worn out property not permitted to be disposed of pursuant
to clause (a) of this Section 7.6, provided that (other than inventory and light
vehicles) the aggregate book value of all assets so sold or disposed of in any
period of twelve consecutive months shall not exceed $5,000,000;
(c) the sale of inventory and light vehicles in the ordinary course of
business;
(d) as permitted by Section 7.5(b); and
(e) the sale of Servicios for consideration of which not less than 80% is
comprised of cash or assets located in the United States.
To the extent the Required Lenders waive the provisions of this Section 7.6
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 7.6, such Collateral in each case shall be sold free
and clear of the Liens in favor of the Collateral Agent created by the Security
Documents, and the Collateral Agent shall take such actions as it deems
appropriate in connection therewith or may be reasonably requested by the
Borrower to evidence such Lien release, in each case at the Borrower's expense.
7.7 Limitation on Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock
(including but not limited to in respect of any preferred Capital Stock
outstanding or dividends accumulated thereon on the Closing Date) of the
Borrower or any of its Subsidiaries or any warrants or options to purchase any
such Capital Stock or any of the Convertible Subordinated Debentures, whether
now or hereafter outstanding, or make any other distribution in respect thereof
or purchase any thereof, either directly or indirectly, whether in cash or
property or in obligations of the Borrower or any Subsidiary, except that the
Borrower (a) may make open market purchases of its outstanding common stock in
an aggregate amount during the term of this Agreement not to exceed (i)
$10,000,000, while the Consolidated Leverage Ratio is less than 3.75 to 1.0 but
greater than or equal to 2.50 to 1.0 and (ii) $25,000,000 (including any amounts
expended pursuant to clause (i)), while the Consolidated Leverage Ratio is less
than 2.50 to 1.0, (b) may (i) make scheduled payments of principal and interest
in respect of the Convertible Subordinated Debentures, and (ii) if permitted by
Section 7.10, redeem the Convertible Subordinated Debentures after at least 90%
of the Convertible Subordinated Debentures have been converted and (c) may make
cash payments required pursuant to Section 11.1 of the Indenture in connection
with conversions of the Convertible Subordinated Debentures. Notwithstanding the
foregoing, any Subsidiary of the Borrower may pay dividends and other
distributions to the Borrower and Servicios may pay dividends to its
shareholders.
7.8 Limitation on Capital Expenditures. Make or commit to make any Capital
Expenditure except for expenditures in the ordinary course of business not
exceeding, in the aggregate for the Borrower and its Subsidiaries during any of
the fiscal years of the Borrower set forth below, an amount equal to the sum of
(i) the amount set forth below opposite such fiscal year plus (ii) an additional
amount for any Person or business unit acquired by the Borrower in a Permitted
Acquisition since the Closing Date, such amount being calculated as 10% of the
net revenues, calculated in accordance with GAAP, of such Person or business
unit during such fiscal year (or, if such Person or business unit was acquired
after the beginning of such fiscal year, such revenues for the portion of such
fiscal year during which such Person or business unit was owned by the
Borrower):
Fiscal Year Ending Amount
1998 $30,000,000
1999 $31,500,000
2000 $33,075,000
2001 $34,728,750
2002 $36,465,188
2003 $38,288,447
2004 $40,202,869
Any amount permitted by the foregoing provision to be expended as Capital
Expenditures in any fiscal year and not so expended may be carried over for
expenditure in the immediately succeeding fiscal year.
7.9 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Permitted Acquisitions;
(d) loans by the Borrower or any Subsidiary to Servicios in an aggregate
principal amount at any time outstanding not to exceed the amount thereof
outstanding on the date of this Agreement plus $5,000,000;
(e) as permitted by subsection 7.2(b)(iv);
(f) investments by the Borrower in a Domestic Wholly Owned Subsidiary and
investments by any Subsidiary in the Borrower and in one or more Domestic Wholly
Owned Subsidiaries;
(g) expense accounts for, and other expense advances to, its directors,
officers and employees in the ordinary course of business;
(h) loans and advances to its officers and employees in an aggregate amount
not to exceed $1,000,000 at any time outstanding; (i) the Borrower's purchase or
redemption of its own Capital Stock to the extent permitted by Section 7.7;
(j) current trade and customer accounts receivable that are for goods
furnished or services rendered in the ordinary course of business and that are
payable in accordance with Borrower's or any Subsidiary's customary trade terms;
(k) Interest Rate Protection Agreements to the extent permitted under this
Agreement, and Hedge Agreements entered into in the ordinary course of business
for hedging purposes and not for speculative purposes;
(l) the Borrower may repurchase its capital stock and/or options to
purchase such stock held by directors, officers and employees of the Borrower or
any Subsidiary upon the death, disability, retirement or termination of such
directors, officers or employees or the exercise of such options, or from the
shareholders of Borrower so long as the purpose is to acquire stock for
reissuance to new employees of Borrower and its Subsidiaries; provided, that the
amount expended for such purposes shall not exceed $1,000,000 in any fiscal year
or $2,500,000 while this Agreement is in effect;
(m) the Borrower and its Subsidiaries may acquire and own investments
(including Indebtedness and other 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;
(n) investments acquired by the Borrower and its Subsidiaries in connection
with Permitted Acquisitions; and
(o) the Borrower's current investment in the Argent Classic Convertible
Arbitrage Fund L.P., provided that such investment must be converted into cash
or a Cash Equivalent within 90 days after the Closing Date.
7.10 Limitation on Optional Payments and Modifications of Debt Instruments
and Organizational Documentation, etc. (a) Make any optional payment or
prepayment on or redemption or purchase of any material Indebtedness (other than
the Loans) or preferred Capital Stock including, without limitation, the
Convertible Subordinated Debentures, (b) amend, modify or change, or consent or
agree to any amendment, modification or change to any of the terms of any such
Indebtedness or preferred Capital Stock which would be materially adverse to
Lenders or (c) amend, modify or change in any material respect, or consent or
agree to any amendment, modification, or change in any material respect to the
terms of any of its capitalization or organizational documents (including but
not limited to in respect of any preferred Capital Stock of any Loan Party) or a
material contract, to the extent such amendment, modification or change could
reasonably be expected to have a Material Adverse Effect, except that, after 90%
of the original outstanding principal amount of Convertible Subordinated
Debentures have been converted into common stock of the Borrower, the Borrower
may, at any time when no Default or Event of Default has occurred and is
continuing, repurchase or redeem the remaining outstanding Convertible
Subordinated Debentures; provided that the Borrower may not repurchase or redeem
such Convertible Subordinated Debentures at any time when the Consolidated
Leverage Ratio is or, after giving effect to such repurchase or redemption,
would be, greater than 3.75.
7.11 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (other
than the Borrower) unless such transaction (a) is otherwise permitted under this
Agreement, and (b) is upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate;
provided, that any such transaction involving more than $5,000,000 must be
approved by a majority of the disinterested members of the Borrower's Board of
Directors.
7.12 Limitation on Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by the Borrower or any of its Subsidiaries
of real or personal property which has been or is to be sold or transferred by
the Borrower or such Subsidiary to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower or such Subsidiary, if, after
giving effect thereto, the amount of all indebtedness attributable to
transactions consummated pursuant to this Section 7.12, plus the amount of
Indebtedness outstanding pursuant to clause (c), (f) and (i) of Section 7.2,
would exceed $15,000,000.
7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of the
Borrower to end on a day other than June 30.
7.14 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement, other than (a) this Agreement and the other Loan Documents and (b)
any industrial revenue bonds, purchase money Liens or Financing Leases permitted
by this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby) which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired.
7.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are directly related thereto including any business in the oil and gas well
service industry.
7.16 Limitation on Consolidated Lease Expense. Permit Consolidated Lease
Expense for any fiscal year of the Borrower and its Subsidiaries to exceed
$20,000,000.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
three days after any such interest or other amount becomes due in accordance
with the terms hereof; or
(b) Any representation or warranty made or deemed made by the Borrower or
any other Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the observance or
performance of any agreement contained in Section 7; or
(d) The Borrower or any other Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section
8), and such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in making any
payment of any principal of any Indebtedness (including, without limitation, any
Guarantee Obligation) or Interest Rate Protection Agreement Obligation on the
scheduled or original due date with respect thereto; or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness or
Interest Rate Protection Agreement Obligation was created; or (iii) default in
the observance or performance of any other agreement or condition relating to
any such Indebtedness or Interest Rate Protection Agreement Obligation 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
beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder
or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of any
such Indebtedness constituting a Guarantee Obligation or Interest Rate
Protection Agreement Obligation) to become payable; provided that a default,
event or condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default under this Agreement
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness and/or Guarantee
Obligations and/or Interest Rate Protection Agreement Obligations of the
Borrower and its Subsidiaries the outstanding principal amount of which exceeds
in the aggregate $1,000,000; or
(f) (i) The Borrower or any of its Subsidiaries (other than Servicios)
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries (other than Servicios) shall
make a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Borrower or any of its Subsidiaries (other than
Servicios) any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against the
Borrower or any of its Subsidiaries (other than Servicios) any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of its Subsidiaries (other than
Servicios) shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries (other than
Servicios) shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of any Loan Party or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v)any
Loan Party or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or (h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries (other than Servicios) involving in the
aggregate a liability (not paid or fully covered by insurance) of $2,000,000 or
more, and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any material Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported to
be created thereby; or
(j) Any Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes each Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Agents nor any of their officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or 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 any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by any Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of any Loan
Party a party thereto to perform its obligations hereunder or thereunder. No
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
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation 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 Borrower), independent accountants and other experts selected by such
Agent. The Agents may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. Each Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all
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,
provided that in no event shall the Lenders be obligated to indemnify the Agents
for any amounts described in the proviso to Section 9.7. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless such Agent
has received written notice from a Lender or the Borrower 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 Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent and the Collateral Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent or the
Collateral Agent shall have received such directions, the Administrative Agent
or the Collateral 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 it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agents hereafter taken, including any
review of the affairs of a Loan Party or any Affiliate of a Loan Party, shall be
deemed to constitute any representation or warranty by any Agent to any Lender.
Each Lender represents to each Agent that it has, independently and without
reliance upon any Agent 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, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their Affiliates 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 any
Agent 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
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their Affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, no Agent shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of
a Loan Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against any Agent in any way relating to or arising out
of, the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
which are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section 9.7 shall survive the payment of the
Notes and all other amounts payable hereunder.
9.8 Agents in Their Individual Capacities. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent hereunder
and under the other Loan Documents. With respect to its Loans made or renewed by
it and any Note issued to it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, respectively, and the terms "Lender" and
"Lenders" shall include each Agent in their individual capacities.
9.9 Successor Agents. The Administrative Agent or the Collateral Agent may
resign as Administrative Agent or Collateral Agent, as the case may be, upon 10
days' notice to the Lenders. If the Administrative Agent or the Collateral Agent
shall resign as Administrative Agent or Collateral Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent in such capacity, which successor agent, so long
as no Default or Event of Default shall have occurred and be continuing, shall
have been approved by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent or the Collateral Agent,
as the case may be, hereunder. Effective upon such appointment and approval, the
terms "Administrative Agent" and "Collateral Agent" shall mean such successor
agent, and the former Administrative Agent's or Collateral Agent's rights,
powers and duties as such shall be terminated, without any other or further act
or deed on the part of such former Administrative Agent or Collateral Agent or
any of the parties to this Agreement or any holders of the Notes. After any
retiring Agent's resignation as Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party which is party to the relevant Loan
Documents may, or, with the written consent of the Required Lenders, the
Administrative Agent, the Arranger and each Loan Party which is a party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
the Required Lenders or the Administrative Agent and the Arranger, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount of any Loan or any L/C
Obligation, or extend the final scheduled date of maturity of any Loan, or
reduce the stated rate of any interest, fee or letter of credit commission
payable hereunder or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any Lender's Revolving
Credit Commitment, or waive any mandatory prepayment or make any change in the
application of any prepayment of the Loans specified in the first sentence of
Section 2.9(f) or in Section 2.15(a), or the right to refuse prepayments set
forth in the penultimate sentence of Section 2.8, in each case without the
consent of each Lender directly affected thereby, (ii) extend the scheduled date
or reduce the amount of any amortization payment in respect of the Term Loans
referred to in Section 2.6 without the consent of each Term Loan Lender directly
affected thereby, (iii) extend the scheduled date or reduce the amount of any
reduction of the Revolving Credit Commitments referred to in Section 2.3(c)
without the consent of each Revolving Credit Lender directly affected thereby,
(iv) amend, modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by any Loan Party of any of its rights and obligations
under this Agreement and the other Loan Documents or release all or a
substantial portion of the Collateral (other than in connection with any sale or
other disposition of assets permitted by Section 7.6) or any guarantee of the
Obligations, in each case, without the written consent of all the Lenders, (v)
amend, modify or waive any provision of Section 9 without the written consent of
the Agents, or (vi) amend, modify or waive any provision of Section 3 without
the written consent of the Issuing Lender. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Loan Parties, the Lenders, the Agents and all
future holders of the Notes. In the case of any waiver, the Loan Parties, the
Lenders and the Agents shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three Business Days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower, the Administrative Agent, the
Collateral Agent and the Arranger, and as set forth in Schedule 1.1A in the case
of the Lenders, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
The Borrower: Key Energy Group, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative
Agent: PNC Bank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Collateral
Agent: Norwest Bank Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Arranger: ▇▇▇▇▇▇ Commercial Paper Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders pursuant to Section 2.2, 2.4, 2.7, 2.8 or 2.10 shall not be
effective until received. Any notice or delivery to or from or consent required
of the Borrower hereunder or pursuant to any other Loan Document may be made to
or by the Borrower.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.4 Survival. All representations and warranties made hereunder, in the
other Loan Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel (including any local counsel) to the Agents, (b) to pay
or reimburse each Lender and each of the Agents for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and counsel
to the Agents, (c) to pay, indemnify, and hold each Lender and each Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and each Agent and their respective officers, directors, trustees,
employees, affiliates, agents and controlling persons (each, an "indemnitee")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
Borrower, any of its Subsidiaries, any of its Excluded Subsidiaries or any of
the Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided that the Borrower shall have no obligation
hereunder to any indemnitee with respect to indemnified liabilities to the
extent such indemnified liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert, and hereby waives, and to cause each of its Subsidiaries not to
assert and to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. The agreements in this Section 10.5 shall
survive repayment of the Notes and all other amounts payable hereunder and the
termination of the Commitments and, in the case of any Lender that may assign
any interest in its Commitments, Loans or Letter of Credit interest hereunder,
shall survive the making of such assignment, notwithstanding that such assigning
Lender may cease to be a "Lender" hereunder.
10.6 Successors and Assigns; Participation and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agents, all future holders of the Notes and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Notes or any fees payable hereunder, postpone the date of
the final maturity of the Notes, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or a substantial portion of the Collateral (other
than in connection with any sale or other disposition of assets permitted by
Section 7.6) or any guarantee of the Obligations, in each case to the extent
subject to such participation. The Borrower agrees that if amounts outstanding
under this Agreement and the Notes are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any Note, provided that, in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as
if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.17, 2.18 and 2.19 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.18, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to any
Lender or any affiliate thereof or any Person under common management with any
such Lender or, with the consent of the Borrower, the Administrative Agent, the
Arranger and, in the case of an assignment of Revolving Credit Commitments, the
Issuing Lender (which, in each case, shall not be unreasonably withheld, delayed
or conditioned) (provided that no such consent need be obtained by the Arranger
for a period of 120 days following the Closing Date), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement, the Letters of Credit and the Notes
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
G, executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof or a Person under
common management with such Lender, by the Borrower, the Administrative Agent,
the Arranger and, in the case of an assignment of Revolving Credit Commitments,
the Issuing Lender) and delivered to the Administrative Agent for its acceptance
and recording in the Register with a copy to the Arranger; provided that (except
with the consent of the Borrower, the Administrative Agent and the Arranger) (i)
no such assignment to an Assignee (other than any Lender or any affiliate
thereof or any Person under common management with such Lender) shall be in an
aggregate principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement and the Notes)
and (ii) subsequent to any such assignment the assigning Lender shall not retain
an aggregate principal amount of less than $5,000,000 in Commitments and Loans.
Such assignment need not be ratable as among any Term Loan Commitments and/or
Term Loans and Revolving Credit Commitments and/or Revolving Credit Loans of the
assigning Lender. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this Section 10.6, the
consent of the Borrower shall not be required for any assignment which occurs at
any time when any Event of Default shall have occurred and be continuing.
(d) A Note and the Obligation(s) evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the Obligation(s) evidenced thereby on
the Register (and each Note shall expressly so provide). Any assignment or
transfer of all or part of such Obligation(s) and the Note(s) evidencing the
same shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note(s) evidencing such Obligation(s), accompanied
by an Assignment and Acceptance duly executed by the holder of such Note(s), and
thereupon one or more new Note(s) in the same aggregate principal amount shall
be issued to the designated Assignee(s) and the old Notes(s) shall be returned
by the Administrative Agent to the Borrower marked "cancelled." No assignment of
a Note and the Obligation(s) evidenced thereby shall be effective unless it has
been recorded in the Register as provided in this Section 10.6(d).
(e) The Administrative Agent shall maintain at its address referred to in
Section 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time and the registered owners of the Obligation(s)
evidenced by the Note(s). The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Loan or the Obligation evidenced by a Note recorded therein for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof or a Person under common management with
such Lender, by the Borrower, the Administrative Agent, the Arranger and the
Issuing Lender) together with payment to the Administrative Agent of a
registration and processing fee of $2,000 (except that no such registration and
processing fee shall be payable (y) in connection with an assignment by ▇▇▇▇▇▇
or (z) in the case of an Assignee which is already a Lender or is an affiliate
of a Lender or a Person under common management with a Lender), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower. On or prior to such effective
date, the Borrower, at its own expense, upon request, shall execute and deliver
to the Administrative Agent (in exchange for the Revolving Credit Note and/or
Term Note, as the case may be, of the assigning Lender) a new Revolving Credit
Note and/or Term Note, as the case may be, to the order of such Assignee in an
amount equal to the Revolving Credit Commitment and/or Term Loan, as the case
may be, assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Revolving Credit Commitment and/or Term Loan, as
the case may be, upon request, a new Revolving Credit Note and/or Term Note, as
the case may be, to the order of the assigning Lender in an amount equal to the
Revolving Credit Commitment and/or Term Loan, as the case may be, retained by it
hereunder. Such new Notes shall be dated the Closing Date and shall otherwise be
in the form of the Note replaced thereby.
(g) The Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a "Transferee") and any prospective Transferee any and all
financial information in such Lender's possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement. (h) Nothing herein shall prohibit or restrict any Lender from (i)
pledging or assigning any Note to any Federal Reserve Bank in accordance with
applicable law or (ii) with the prior consent of the Administrative Agent and
the Borrower (which, in each case, shall not be unreasonably withheld or delayed
or conditioned), pledging its rights in connection with any Loan or Note to any
other Person.
10.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral in
respect thereof then due and owing to such Lender (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans or the Reimbursement Obligations then due and owing
to such other Lender, or interest thereon, such Benefitted Lender shall purchase
for cash from the other Lenders a participating (or, at the option of such
Lender, a direct) interest in such portion of each such other Lender's Loan
and/or of the Reimbursement Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided that if all or any portion of such excess payment
or benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder or under the Notes (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. 10.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent, the
Arranger and the Lenders with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent, the Arranger or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to ▇▇▇ in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section 10.12 any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither any Agent nor any Lender has any fiduciary relationship with or
duty to the Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Agents and
Lenders, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Agents and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the Agents or any
Lender from disclosing any such information (a) to the Agents any other Lender
or any affiliate or investment advisor of any Lender, (b) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
Section 10.15, (c) to the employees, directors, agents, attorneys, accountants
and other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over such
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) which has been publicly disclosed other
than in breach of this Section 10.15 or (h) in connection with the exercise of
any remedy hereunder or under any other Loan Document.
10.16 Enforceability; Usury. In no event shall any provision of this
Agreement, the Notes, or any other instrument evidencing or securing the
indebtedness of the Borrower hereunder ever obligate the Borrower to pay or
allow any Lender to collect interest on the Notes or any other indebtedness of
the Borrower hereunder at a rate greater than the maximum non-usurious rate
permitted by applicable law (herein referred to as the "Highest Lawful Rate"),
or obligate the Borrower to pay any taxes, assessments, charges, insurance
premiums or other amounts to the extent that such payments, when added to the
interest payable on the Notes, would be held to constitute the payment by the
Borrower of interest at a rate greater than the Highest Lawful Rate; and this
provision shall control over any provision to the contrary.
Without limiting the generality of the foregoing, in the event the maturity
of all or any part of the principal amount of the indebtedness of the Borrower
hereunder shall be accelerated for any reason, then such principal amount so
accelerated shall be credited with any interest theretofore paid thereon in
advance and remaining unearned at the time of such acceleration. If, pursuant to
the terms of this Agreement or the Notes, any funds are applied to the payment
of any part of the principal amount of the indebtedness of the Borrower
hereunder prior to the maturity thereof, then (a) any interest which would
otherwise thereafter accrue on the principal amount so paid by such application
shall be canceled, and (b) the indebtedness of the Borrower hereunder remaining
unpaid after such application shall be credited with the amount of all interest,
if any, theretofore collected on the principal amount so paid by such
application and remaining unearned at the date of said application; and if the
funds so applied shall be sufficient to pay in full all the indebtedness of the
Borrower hereunder, then the Lenders shall refund to the Borrower all interest
theretofore paid thereon in advance and remaining unearned at the time of such
acceleration. Regardless of any other provision in this Agreement, or in any of
the written evidences of the indebtedness of the Borrower hereunder, the
Borrower shall never be required to pay any unearned interest on such
indebtedness or any portion thereof, and shall never be required to pay interest
thereon at a rate in excess of the Highest Lawful Rate construed by courts
having competent jurisdiction thereof. 13
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
KEY ENERGY GROUP, INC..
By: _____________________________________
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Arranger and as a Lender
By: _____________________________________
Name:
Title:
PNC BANK, N.A.
as Administrative Agent and as a Lender
By: _____________________________________
Name:
Title:
NORWEST BANK TEXAS, N.A.
as Collateral Agent and as a Lender
By: _____________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By: ____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Title: Vice President
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
16
BHF-BANK AKTIENGESELLSCHAFT
By: ____________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
17
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
By: _____________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
18
CREDIT LYONNAIS, New York Branch
By: _____________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
19
PRIME INCOME TRUST
By: __________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:Vice President - Portfolio Manager
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
20
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
By: ______________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
1
21
HIBERNIA NATIONAL BANK
By: _______________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
2
22
SENIOR HIGH INCOME PORTFOLIO, INC.
By: _________________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
3
23
DEBT STRATEGIES FUND, INC.
By: _________________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
4
24
ORIX USA CORPORATION
By: ________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
5
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRIME RATE TRUST
By: ________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
6
26
ROYALTON COMPANY BY PACIFIC INVESTMENT MANAGEMENT COMPANY, as its
Investment Advisor
By: _________________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
7
27
SKANDINAVISKA ENSKILDA BANKEN CORPORATION
By: _________________________________________
Name: Sverker Johansson
Title:
By: _________________________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
8
28
CRESCENT/MACH I PARTNERS, L.P. BY: TCW ASSET MANAGEMENT COMPANY Its
Investment Manager
By: _________________________________________
Name:
Title:
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
9
29 29
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE INCOME TRUST
By: _________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and Director
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
10
1
Annex I
Pricing Grid
Applicable Margin Applicable Margin
for Revolving Credit for Revolving Credit
Consolidated Loans which are Loans which are Commitment
verage Ratio Eurodollar Loans Base Rate Loans Fee Rate
=3.5 to 1.0 but 2.50% 1.25% .375%
less than 4.0 to 1.0
=3.0 to 1.0 but 2.25% 1.00% .375%
less than 3.5 to 1.0
=2.50 to 1.0 but 1.75% .50% .25%
less than 3.0 to 1.0
2.50 to 1.0 1.50% .25 .25%
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
11
1
Schedule 1.1A
Commitments; Lending Offices and Addresses
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
12
1
Schedule 1.1B
Mortgaged Property
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
13
1
Schedule 1.1C
Oil and Gas Properties to be Mortgaged
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
14
1
Schedule 1.1D
Rigs
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
15
1
Schedule 1.1E
Vehicles
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
16
1
Schedule 2.6
TERM LOAN AMORTIZATION
Date
Principal Amount
June 30, 1998 $ 500,000
September 30, 1998
$ 125,000
December 31, 1998
$ 125,000
March 31, 1999
$ 125,000
June 30, 1999
$ 125,000
September 30, 1999
$ 125,000
December 31, 1999
$ 125,000
March 31, 2000
$ 125,000
June 30, 2000
$ 125,000
September 30, 2000
$ 125,000
December 31, 2000
$ 125,000
March 31, 2001
$ 125,000
June 30, 2001
$ 125,000
September 30, 2001
$ 125,000
December 31, 2001
$ 125,000
March 31, 2002
$ 125,000
June 30, 2002
$ 125,000
September 30, 2002
$ 8,750,000
December 31, 2002
$ 8,750,000
March 31, 2003
$ 8,750,000
June 30, 2003
$ 8,750,000
September 30, 2003
$ 20,625,000
December 31, 2003
$ 20,625,000
March 31, 2004
$ 20,625,000
June 30, 2004
$ 20,625,000
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
17
1
Schedule 3.1
Existing Letters of Credit
Account Party Issuer Amount Number Beneficiary
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
18
2
Schedule 4.4
Consents
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
19
3
Schedule 4.8
Other Real Property Interests
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
20
1
Schedule 4.15
Subsidiaries
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
21
1
Schedule 4.16
Existing Credit Facilities
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
22
1
Schedule 4.19(b)
UCC Filing Jurisdictions
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
23
1
Schedule 4.19(c)
Mortgage Filing Jurisdictions
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
24
1
Schedule 4.19(d)
Oil and Gas Mortgage Filing Jurisdictions
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
25
1
Schedule 6.11(e)
Mortgaged Properties to be Covered by Environmental Reports
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
26
1
Schedule 7.2
Existing Indebtedness
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
27
1
Schedule 7.3
Existing Liens
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
28
EXECUTION COPY
$255,000,000
CREDIT AGREEMENT
among
KEY ENERGY GROUP, INC.
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
PNC BANK, N.A.,
as Administrative Agent
NORWEST BANK TEXAS, N.A.,
as Collateral Agent
and
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Advisor, Arranger and Syndication Agent
Dated as of June 6, 1997
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
29
Page
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms................................................. 1
1.2 Other Definitional Provisions................................. 20
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................. 21
2.1 Term Loans.................................................... 21
2.2 Procedure for Term Loan Borrowing............................. 21
2.3 Revolving Credit Commitments.................................. 21
2.4 Procedure for Revolving Credit Borrowing...................... 22
2.5 Commitment Fees, etc. ........................................ 22
2.6 Repayment of Loans; Evidence of Debt.......................... 23
2.7 Optional Termination or Reduction of Revolving Credit Commit.. 24
2.8 Optional Prepayments.......................................... 24
2.9 Mandatory Prepayments and Commitment Reductions............... 25
2.10 Conversion and Continuation Options.......................... 27
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches.... 27
2.12 Interest Rates and Payment Dates............................. 28
2.13 Computation of Interest and Fees............................. 28
2.14 Inability to Determine Interest Rate......................... 29
2.15 Pro Rata Treatment and Payments.............................. 29
2.16 Illegality................................................... 30
2.17 Requirements of Law.......................................... 31
2.18 Taxes........................................................ 32
2.19 Indemnity.................................................... 34
2.20 Change of Lending Office..................................... 34
2.21 Use of Proceeds.............................................. 35
2.22 Replacement of Lenders....................................... 35
SECTION 3. LETTERS OF CREDIT............................................... 35
3.1 L/C Commitment................................................ 35
3.2 Procedure for Issuance of Letter of Credit.................... 36
3.3 Fees, Commissions and Other Charges........................... 36
3.4 L/C Participation............................................. 36
3.5 Reimbursement Obligation of the Borrower...................... 37
3.6 Obligations Absolute.......................................... 38
3.7 Letter of Credit Payments..................................... 38
3.8 Applications.................................................. 38
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................. 38
4.1 Financial Condition........................................... 39
4.2 No Change................................................. ... 39
4.3 Corporate Existence; Compliance with Law...................... 40
4.4 Corporate Power; Authorization; Enforceable Obligations....... 40
4.5 No Legal Bar.................................................. 40
4.6 No Material Litigation........................................ 40
4.7 No Default.................................................... 41
4.8 Ownership of Property; Liens............................... .. 41
4.9 Intellectual Property......................................... 41
4.10 No Burdensome Restrictions................................... 41
4.11 Taxes........................................................ 41
4.12 Federal Regulations.......................................... 41
4.13 ERISA........................................................ 42
4.14 Investment Company Act; Other Regulations.................... 42
4.15 Subsidiaries................................................. 42
4.16 Purpose of Loans; Limitations on Use......................... 42
4.17 Environmental Matters........................................ 43
4.18 Accuracy of Information...................................... 44
4.19 Security Documents........................................... 45
4.20 Solvency..................................................... 46
4.21 Labor Matters................................................ 46
4.22 Indenture.................................................... 46
4.23 Excluded Subsidiaries........................................ 46
4.24 Oil and Gas Properties....................................... 46
SECTION 5. CONDITIONS PRECEDENT............................................ 46
5.1 Conditions to Initial Extension of Credit..................... 46
5.2 Conditions to Each Extension of Credit........................ 49
SECTION 6. AFFIRMATIVE COVENANTS........................................... 49
6.1 Financial Statements.......................................... 49
6.2 Certificates; Other Information............................... 50
6.3 Payment of Obligations........................................ 52
6.4 Conduct of Business and Maintenance of Existence, etc. ...... 52
6.5 Maintenance of Property; Insurance............................ 52
6.6 Inspection of Property; Books and Records; Discussions........ 52
6.7 Notices....................................................... 52
6.8 Environmental Laws............................................ 53
6.9 Further Assurances............................................ 55
6.10 Additional Collateral........................................ 55
6.11 Post-Closing Matters........................................ 57
6.12 Interest Rate Protection Agreements.......................... 58
SECTION 7. NEGATIVE COVENANTS.............................................. 58
7.1 Financial Condition Covenants................................. 58
7.2 Limitation on Indebtedness.................................... 61
7.3 Limitation on Liens........................................... 62
7.4 Limitation on Guarantee Obligations........................... 63
7.5 Limitation on Fundamental Changes............................. 64
7.6 Limitation on Sale of Assets.................................. 64
7.7 Limitation on Restricted Payments............................. 65
7.8 Limitation on Capital Expenditures............................ 65
7.9 Limitation on Investments, Loans and Advances................. 66
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments and Organizational Documentation, etc. .... 67
7.11 Limitation on Transactions with Affiliates................... 68
7.12 Limitation on Sales and Leasebacks........................... 68
7.13 Limitation on Changes in Fiscal Year......................... 68
7.14 Limitation on Negative Pledge Clauses........................ 68
7.15 Limitation on Lines of Business.............................. 68
7.16 Limitation on Consolidated Lease Expense..................... 68
SECTION 8. EVENTS OF DEFAULT............................................... 69
SECTION 9. THE AGENTS...................................................... 72
9.1 Appointment................................................... 72
9.2 Delegation of Duties.......................................... 72
9.3 Exculpatory Provisions........................................ 72
9.4 Reliance by Agents............................................ 72
9.5 Notice of Default............................................. 73
9.6 Non-Reliance on Agents and Other Lenders...................... 73
9.7 Indemnification............................................... 74
9.8 Agents in Their Individual Capacities......................... 74
9.9 Successor Agents.............................................. 74
SECTION 10. MISCELLANEOUS.................................................. 75
10.1 Amendments and Waivers....................................... 75
10.2 Notices...................................................... 75
10.3 No Waiver; Cumulative Remedies............................... 76
10.4 Survival.....................................................77
10.5 Payment of Expenses and Taxes................................ 77
10.6 Successors and Assigns; Participation and Assignments........ 78
10.7 Adjustments; Set-off..........................................81
10.8 Counterparts................................................. 81
10.9 Severability................................................. 81
10.10 Integration..................................................82
10.11 GOVERNING LAW................................................82
10.12 Submission To Jurisdiction; Waivers..........................82
10.13 Acknowledgements............................................ 82
10.14 WAIVERS OF JURY TRIAL....................................... 83
10.15 Confidentiality............................................. 83
10.16 Enforceability; Usury....................................... 83
-i-
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
30
ANNEXES:
I Pricing Grid
SCHEDULES:
1.1A Commitments; Lending Offices and Addresses
1.1B Real Property to be Mortgaged (Non-Oil and Gas Properties)
1.1C Oil and Gas Properties to be Mortgaged
2.6 Term Loan Amortization
3.1 Existing Letters of Credit
4.4 Consents
4.8 Other Real Property Interests
4.15 Subsidiaries
4.16 Existing Credit Facilities
4.19(b) UCC Filing Jurisdictions
4.19(c) Mortgage Filing Jurisdictions
4.19(d) Oil and Gas Mortgage Filing Jurisdictions
6.11(e) Mortgaged Properties to be Covered by Environmental Reports
7.2 Existing Indebtedness
7.3 Existing Liens
EXHIBITS:
A Form of Master Guarantee and Collateral Agreement
B Form of Mortgage
C-1 Form of Revolving Credit Note
C-2 Form of Term Note
D Form of Closing Certificate
E-1 Legal Opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
E-2 Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
F Form of Exemption Certificate
G Form of Assignment and Acceptance
-ii-
053113\0942\01675\9744AU7K.CRA 08/26/97 11:51am
31
1
EXHIBIT C-1
FORM OF REVOLVING CREDIT NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT
REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$____________ New York, New York
June 6, 1997
FOR VALUE RECEIVED, the undersigned, Key Energy Group, Inc., a Maryland
corporation (the "Borrower"), hereby unconditionally promises to pay to (the
"Lender") or its registered assigns at the office of PNC Bank, N.A. located at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in lawful money of the
United States and in immediately available funds, on the Revolving Credit
Termination Date the principal amount of (a) DOLLARS ($ ), or, if less, (b) the
aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender to the Borrower pursuant to Section 2.3 of the Credit Agreement, as
hereinafter defined. The Borrower further agrees to pay interest in like money
at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in Section 2.12 of such
Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
or any error in any such endorsement shall not affect the obligations of the
Borrower in respect of any Revolving Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of June 6, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions or entities from time to time
parties thereto, PNC Bank, N.A., as Administrative Agent, Norwest Bank Texas,
N.A., as Collateral Agent, and ▇▇▇▇▇▇ Commercial Paper Inc., as Advisor,
Arranger and Syndication Agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
053113\0942\01675\974GG3VX.NOT
32
2
Upon the occurrence of any one or more of the Events of Default, all
principal and all accrued interest then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
KEY ENERGY GROUP, INC.
By: _______________________________
Name:
Title:
053113\0942\01675\974GG3VX.NOT
33
1
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOAN
Amount Amount of Base Rate Amount of Base Rate Converted to Amount of
Principal of Loans Converted to Unpaid Principal Balance Date Loans Base Rate
Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Notation Made
By
================ ========================== ==========================
========================== ========================== ==========================
===================
053113\0942\01675\974GG3VX.NOT
34
1
Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Interest Period and Amount of Principal of Amount of Eurodollar Unpaid
Principal Amount of Amount Converted Eurodollar Rate with Eurodollar Loans Loans
Converted to Balance of Eurodollar Notation Date Eurodollar Loans to Eurodollar
Loans Respect Thereto Repaid Base Rate Loans Loans Made By
============== ===================== =====================
======================= ======================= =======================
======================= ====================
053113\0942\01675\974GG3VX.NOT
35
1
EXHIBIT C-2
FORM OF TERM NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT
REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY
MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT
TO THE TERMS OF SUCH CREDIT AGREEMENT.
$____________ New York, New York
June 6, 1997
FOR VALUE RECEIVED, the undersigned, Key Energy Group, Inc., a Maryland
corporation (the "Borrower"), hereby unconditionally promises to pay to (the
"Lender") or its registered assigns at the office of PNC Bank, N.A. located at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in lawful money of the
United States and in immediately available funds, the principal amount of (a)
DOLLARS ($ ), or, if less, (b) the unpaid principal amount of the Term Loan made
by the Lender pursuant to Section 2.1 of the Credit Agreement, as hereinafter
defined. The principal amount shall be paid in the amounts and on the dates
specified in Section 2.6 of the Credit Agreement. The Borrower further agrees to
pay interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates and on the dates specified in Section
2.12 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Term
Loan and the date and amount of each payment or prepayment of principal with
respect thereto, each conversion of all or a portion thereof to another Type,
each continuation of all or a portion thereof as the same Type and, in the case
of Eurodollar Loans, the length of each Interest Period with respect thereto.
Each such endorsement shall constitute prima facie evidence of the accuracy of
the information endorsed. The failure to make any such endorsement or any error
in any such endorsement shall not affect the obligations of the Borrower in
respect of the Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit Agreement
dated as of June 6, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, the Lender, the other
banks and financial institutions or entities from time to time parties thereto,
PNC Bank, N.A., as Administrative Agent, Norwest Bank Texas, N.A., as Collateral
Agent, and ▇▇▇▇▇▇ Commercial Paper Inc., as Advisor, Arranger and Syndication
Agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a description
of the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
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Upon the occurrence of any one or more of the Events of Default, all
principal and all accrued interest then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
KEY ENERGY GROUP, INC.
By: _______________________________
Name:
Title:
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Schedule A
to Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
Amount Amount of Base Rate Amount of Base Rate Converted to Amount of
Principal of Loans Converted to Unpaid Principal Balance Date Loans Base Rate
Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Notation Made
By
================ ========================== ==========================
========================== ========================== ==========================
===================
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Schedule B
to Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Interest Period and Amount of Principal of Amount of Eurodollar Unpaid
Principal Amount of Amount Converted Eurodollar Rate with Eurodollar Loans Loans
Converted to Balance of Eurodollar Notation Date Eurodollar Loans to Eurodollar
Loans Respect Thereto Repaid Base Rate Loans Loans Made By
============== ===================== =====================
======================= ======================= =======================
======================= ====================
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