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EXHIBIT 10.26
RESTATED REVOLVING CREDIT AGREEMENT
among
POOL COMPANY,
Borrower,
NATIONSBANK OF TEXAS, N.A.,
Agent,
and
CERTAIN LENDERS,
Lenders
and joined for certain purposes by
CERTAIN OTHER OBLIGORS
$35,000,000 REVOLVING LINE OF CREDIT
November 30, 1995
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TABLE OF CONTENTS
SECTION 1. COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. TERMS OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 7. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 8. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9. CERTAIN RIGHTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 10. CERTAIN DEFINITIONS AND TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 11 AGREEMENT BETWEEN LENDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SCHEDULE 1(a) - Lenders and Commitments
SCHEDULE 5.1 - Corporate Existence and Authority
SCHEDULE 5.2 - Ownership of Subsidiaries/Names
SCHEDULE 5.5 - Noncompliance
SCHEDULE 5.6 - Litigation
SCHEDULE 5.7 - Tax Returns
SCHEDULE 5.11 - Liens/Environmental Matters
SCHEDULE 5.12 - Material Agreements
SCHEDULE 6 - Closing Conditions
SCHEDULE 7.11 - Overdraft Lines/Guarantees/Debt
SCHEDULE 7.16 - Certain Loans and Advances
SCHEDULE 7.19 - Transactions with Affiliates
SCHEDULE 7.20 - Certain Sales
EXHIBIT A - Revolving Credit Note
EXHIBIT B - Request for Advance or LC
EXHIBIT C-1 - Financial - Report Certificate
EXHIBIT C-2 - Borrowing - Base Report
EXHIBIT D - Opinion
EXHIBIT E - Assignment Agreement
EXHIBIT F - Guaranty
EXHIBIT G - Security Agreement
EXHIBIT H - Officers Certificate
EXHIBIT I - Existing Waivers
EXHIBIT J - Conversion Request
(i)
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RESTATED REVOLVING CREDIT AGREEMENT
THIS AGREEMENT is entered into as of November 30, 1995, among POOL
COMPANY, a Texas corporation ("BORROWER"), Lenders (defined below) and
NATIONSBANK OF TEXAS, N.A., a national banking association, as Agent for itself
and the other Lenders ("AGENT"). Borrower, Lenders and Agent agree as follows:
SECTION 10 below contains definitions or references to definitions of
certain terms used in this Agreement.
Borrower, National Bank of Canada and Agent entered into the Restated
Credit Agreement (as amended through the date of this Agreement, the "EXISTING
CREDIT AGREEMENT") dated as of August 15, 1994, which (1) provided credit for
Borrower comprised of revolving advances and letters of credit so long as the
total credit exposure never exceeds $30,000,000, and (2) amended and restated
entirely the Credit Agreement (the "ORIGINAL CREDIT AGREEMENT"), between
Borrower and NationsBank of Texas, N.A. (formerly named NCNB Texas National
Bank, individually "NATIONSBANK"), dated as of April 7, 1990.
Borrower, Lenders and Agent are entering into this Agreement in order
to, among other things (1) add National Bank of Alaska ("NBA") as a Lender
under this Agreement, and revise the Commitment Percentages accordingly, (2)
increase the credit commitment to $35,000,000, and (3) amend and restate
entirely the Existing Credit Agreement as required by that certain Term Loan
Agreement dated as of November 30, 1995 among International Sea Drilling Ltd.
(a Subsidiary of Borrower), Lenders and Agent (the "ISDL AGREEMENT").
Accordingly, for adequate and sufficient consideration, the parties to
this Agreement agree that the Existing Credit Agreement is hereby amended and
entirely restated as follows:
SECTION 1. COMMITMENT.
1.1 Commitment. Subject to the conditions below and only if a
Borrowing Deficiency (for whatever reason) neither exists nor occurs as a
result of the following:
a. On the Closing Date (i) the outstanding amount of
Advances under the Existing Credit Agreement converts to the same
amount of direct Advances by Lenders under this SECTION 1.1, and the
outstanding LCs issued under the Existing Credit Agreement convert to
LC's issued under this SECTION 1.1.
b. Each Lender severally but not jointly agrees to
extend its Commitment Percentage of credit to Borrower, which may be
any combination of Advances or LCs, so long as (i) the Principal Debt
for any Lender never exceeds its Commitment and (ii) the total
Principal Debt never exceeds the total Commitments.
Each LC must expire before the Termination Date. Except under SECTIONS 1.1(A)
and 1.4, each Advance must be a minimum of $200,000 and in an increment of
$100,000.
1.2 Borrowing Base. The Borrowing Base (which may never exceed
the total Commitments, the "BORROWING BASE") shall be determined monthly (or
more frequently at Determining Lenders' request if reasonably possible for
Borrower to do so), and shall equal the sum of the following to the extent the
same are uncontested and undisputed, are subject to first, perfected Lender
Liens, and are not subject to any other Liens except Permitted Liens:
a. 80% of domestic consolidated receivables of the
Material Obligors for inventory sold or services rendered in the
ordinary course of business, payable in cash, and outstanding less
than 121 days after the first invoice date; provided that (i) the
amount, if any, by which the total balance of accounts receivable
(notwithstanding any Charge-Offs) of any customer owing to the
Material Obligors exceeds $150,000 may only be included in the
Borrowing Base if first approved by Determining Lenders in their sole
discretion and in accordance with their respective customary credit
policies and credit procedures, and (ii) receivables owed by any
customer and not paid within 120 days after the first invoice date may
not be included in the calculation of the Borrowing Base, and, if the
current and delinquent receivables owed by that customer (including
Charge-Offs) aggregate:
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(1) $150,000 or more, then the portion of the
receivables owed by that customer which exceeds $150,000,
regardless of aging, must be excluded from the calculation of
the Borrowing Base unless Determining Lenders in their sole
discretion determine that customer to be a reasonably
acceptable credit risk, in which event the receivables owed by
that customer and outstanding less than 121 days after the
first invoice date may be included in the calculation of the
Borrowing Base; or
(2) Less than $150,000, then all receivables owed
by that customer, regardless of aging, shall be excluded from
the calculation of the Borrowing Base unless Borrower's chief
financial officer or treasurer certifies to Lenders the
customer is a reasonably acceptable credit risk, that the
delinquency is not the result of a credit problem, and that
the Material Obligors are continuing to maintain a credit line
(and stipulating that the amount of that credit line equals or
exceeds the amount of that customer's receivables eligible for
inclusion in the calculation of the Borrowing Base) with that
customer, in which event the portion of the receivables owed
by that customer and outstanding less than 121 days after the
first invoice date may be included in the calculation of the
Borrowing Base up to an aggregate amount of receivables for
all such customers equal to the sum of:
(a) $1,250,000 (or such other amount
acceptable to Borrower and Determining Lenders) for
those customers for whom the delinquent (more than
120 days after first invoicing) amount of receivables
(including Charge-Offs) for each such customer equals
less than 10% of that customer's total accounts
receivable obligations to the Material Obligors
(including Charge-Offs); provided, that the maximum
amount for any customer whose delinquent amount of
receivables (including Charge-Offs) represents
between 3% and 10% of that customer's total accounts
receivable obligations to the Material Obligors
(including Charge-Offs) cannot exceed $500,000; plus
(b) $250,000 for those customers for
whom the delinquent (more than 120 days after first
invoicing) amount of receivables (including
Charge-Offs) for each such customer equals 10% or
more of that customer's total accounts receivable
obligations to the Material Obligors (including
Charge-Offs);
b. 60% of charges of the Material Obligors for fully
completed work, which charges have been recorded as revenues but are
not included in the aged trial balance of trade accounts receivable
and which evidence or, when invoiced, will evidence binding
obligations payable in cash; provided that such amounts may not
comprise more than 25% of the aggregate Borrowing Base;
c. 100% of cash accounts of the Material Obligors at
Agent in each case subject to restrictions against withdrawal by the
Material Obligors without Determining Lenders' consent and cash
equivalent instruments (including, without limitation, certificates of
deposit) of the Material Obligors held by Agent (but exclusive of the
cash collateral account under SECTION 4.3); plus
d. Consolidated international trade receivables, for
inventory sold or services rendered in the ordinary course of
business, of the Material Obligors, payable in cash, as Determining
Lenders in their sole discretion approve for inclusion in the
calculation of the Borrowing Base.
e. Accounts receivable attributable to Pool Alaska's
right to payment for goods or services sold by Pool Alaska in the
ordinary course of its business to KUUKPIK/Pool Arctic Alaska, an
Alaska general partnership (the "POOL ALASKA JOINT VENTURE") and
carried on Pool Alaska's books in accordance with generally accepted
accounting principles which meet the criteria of this SECTION 1.2, so
long as (a) the third-party obligations to the Pool Alaska Joint
Venture which give rise to such accounts receivable remain subject to
a first and prior perfected security interest under the Joint Venture
Pledge Agreement dated as of February 28, 1995, from the Pool Alaska
Joint Venture to NationsBank of Texas, N.A., as Agent for the Lenders
and as collection agent for KUUKPIK Corporation (as amended or
modified, the "JV PLEDGE AGREEMENT"), (b) the Consent and
Intercreditor Agreement dated as of February 28, 1995, among KUUKPIK
Corporation, the Lenders, and NationsBank of Texas, N.A., as Agent for
the Lenders and as collection agent for KUUKPIK Corporation (as
amended or modified, the "POOL ALASKA INTERCREDITOR AGREEMENT")
remains in full force and effect; and (c) no default has occurred and
is
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continuing under (i) the KUUKPIK/Pool Arctic Alaska Joint Venture
Agreement dated as of September 24, 1992, (ii) the JV Pledge
Agreement, or (iii) the Pool Alaska Intercreditor Agreement.
1.3 Advance Procedures. No later than 11:00 a.m. on the date
which is three (3) Business Days prior to the date an Advance is requested (if
the Designated Rate for the Advance is a LIBOR Rate), or, otherwise, on the
date an Advance is requested, Borrower shall have faxed or delivered to Agent a
Request for Advance or LC (and Borrower shall deliver an original of such
Request for Advance or LC to Agent no later than the first Business Day
following such Advance). Agent shall promptly notify each Lender of its
receipt of a Request for Advance or LC under SECTION 6.2. Each Lender shall
remit its Commitment Percentage of each requested Advance to Agent's principal
office in Houston, Texas, in funds that are available for immediate use by
Agent by 12:00 Noon on the date the Advance is requested to be made. Subject
to receipt of those funds, Agent shall (unless to its actual knowledge any of
the applicable conditions precedent have not been satisfied by Borrower or
waived by Determining Lenders) make those funds available to Borrower as
directed in the Request for Advance or LC. Absent contrary written notice from
a Lender, Agent may assume that each Lender has made its Commitment Percentage
of the requested Advance available to Agent on the date the Advance is to be
made, and Agent may, in reliance upon that assumption (but is not required to),
make available to Borrower a corresponding amount. If a Lender fails to make
its Commitment Percentage of any requested Advance available to Agent on the
applicable date, Agent may recover the applicable amount on demand (a) from
that Lender, together with interest at the Federal Funds Rate during the period
commencing on the date the amount was made available to Borrower by Agent and
ending on (but excluding) the date Agent recovers the amount from that Lender,
or (b) if that Lender fails to pay its amount upon demand, then from Borrower,
together with interest at an annual interest rate equal to the rate applicable
to the requested Advance during the period commencing on the date the amount
was made available to Borrower by Agent and ending on (but excluding) the date
Agent recovers the amount from Borrower. No Lender is responsible for the
failure of any other Lender to make its Commitment Percentage of any Advance,
but the failure of one Lender to make its Commitment Percentage of an Advance
shall not preclude Borrower from requesting additional Advances from the
remaining Lenders under this SECTION 1.3, so long as the Principal Debt for any
Lender never exceeds its Commitment.
1.4 LC Agreements. Notwithstanding anything to the contrary in
any LC Agreement:
a. The commission and other amounts payable with respect
to each LC are as provided in this Agreement, drafts under any LC are
deemed to be Advances subject to the interest rates and payment terms
of the Notes (and are payable upon demand if Lenders have accelerated
payment of the Obligation), and only the events specified in this
Agreement as Defaults constitute a default thereunder;
b. Issuing Lender shall (i) make payment upon demand
under an LC unless it appears that demand on its face does not comply
with the terms of the LC, regardless of whether any Default has
occurred or whether either contracting party has performed the terms
of any other agreement, and (ii) not be liable for the Company's
obligations under any other agreement, document, or instrument;
c. Neither Agent, Issuing Lender, nor any other Lender
is responsible for (i) the use which may be made of any LC or for any
acts or omissions of any beneficiary, or (ii) any breach of contract
by any beneficiary of any LC; and
d. Although referenced in any LC, terms of any
particular agreement or other obligation to the beneficiary are not in
any manner incorporated herein.
e. Immediately upon Issuing Lender's issuance of an LC,
it is deemed to have sold and transferred to each other Lender -- and
each other Lender is deemed irrevocably and unconditionally to have
purchased and received from Issuing Lender -- without recourse or
warranty, an undivided interest and participation -- to the extent of
each other Lender's Commitment Percentage -- in the LC and all
applicable Rights of Issuing Lender in the LC. Issuing Lender shall
provide a copy of each LC to each other Lender promptly after
issuance.
f. Issuing Lender shall exercise and give the same care
and attention to each LC it issues as it gives to its other letters of
credit it issues. Each Lender and Borrower agree that, in paying any
draft or draw under any LC, Issuing Lender has no responsibility to
obtain any document (other than any documents expressly required by
the respective LC) or to verify the validity of any document or the
authority of any Person delivering it.
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1.5 Reduction or Cancellation. Borrower may, upon five Business
Days prior notice to Agent, effective as of the date specified in that notice
and with no Right of reinstatement, either terminate in whole or reduce in part
the total Commitments. Any partial reduction must be (a) at least $500,000 and
any increment of $100,000 and (b) proportionate for each Lender according to
its Commitment Percentage.
SECTION 2. TERMS OF PAYMENT.
2.1 Notes; Payments. Advances and interest thereon shall be
evidenced by the Notes, one payable to each Lender in the stated principal
amount of its Commitment. Interest accruing at a LIBOR Rate shall be due and
payable on the last day of each Interest Period and, if such Interest Period
exceeds three months, then accrued interest is also due and payable on the date
three months after the commencement of such Interest Period. Interest accruing
at the Floating Rate shall be due and payable on the last Business Day of each
calendar quarter and on the Termination Date. All Principal Debt shall be due
and payable on the Termination Date. Each payment or prepayment of the
Obligation must be paid at Agent's principal office in funds available for
Agent's immediate use by 12:00 Noon on the day due. Borrower may delay any
payment due on a non-Business Day until the next succeeding Business Day, but
interest shall continue to accrue until the payment is made. Agent shall pay
to each Lender any payment or prepayment to which that Lender is entitled on
the same day Agent receives the funds from Borrower if Agent receives the
payment or prepayment before 12:00 Noon, and otherwise before 12:00 Noon on the
following Business Day. If and to the extent that Agent does not make payments
to Lenders when due, unpaid amounts shall accrue interest at the Federal Funds
Rate from the due date until (but not including) the payment date.
2.2 Interest. Advances shall bear interest at an annual rate
equal to the lesser of (a) the Designated Rate, and (b) the Highest Lawful
Rate. The rate shall change, without notice to Borrower, upon the effective
date of each change in the Prime Rate (if a Floating Rate is in effect) or the
Highest Lawful Rate. If at any time the rate is limited to the Highest Lawful
Rate, any subsequent reductions in the Designated Rate shall not reduce the
rate below the Highest Lawful Rate until the total amount of interest paid and
accrued equals the amount of interest which would have accrued if the
Designated Rate had at all times been in effect. In the event that at maturity
(stated or by acceleration), or at final payment of any Note, the total amount
of interest paid and accrued is less than the amount of interest which would
have accrued if the Designated Rate had at all times been in effect, then, at
such time and to the extent permitted by Law, Borrower shall pay to the Lender
holding that Note an amount equal to the difference between (x) the lesser of
either the amount of interest which would have accrued if the Designated Rate
had at all times been in effect or the amount of interest which would have
accrued if the Highest Lawful Rate had at all times been in effect and (y) the
amount of interest actually paid or accrued on that Note. All past-due
principal and accrued interest thereon shall at Determining Lenders' option
bear interest from maturity (stated or by acceleration) until paid at the
Default Rate. Interest calculations may be made ten (or less) days prior to
any due date. If there is an adjustment in the interest rate, in accordance
with the terms hereof during such ten-day period, then Borrower shall, on
demand, pay to Lenders any underpayment or Lenders shall pay to Borrower any
overpayment resulting from any adjustment during such period.
2.3 Mandatory and Voluntary Prepayments. If a Borrowing
Deficiency occurs (a) because of Lenders' exclusion under SECTION 1.2(A)(I) of
any receivables then included in the Borrowing Base, then Borrower shall prepay
such Borrowing Deficiency within 30 days, and (b) for any other reason then
Borrower shall prepay such Borrowing Deficiency on demand. Borrower may
otherwise prepay the Principal Debt from time to time, without penalty, and,
prior to the Termination Date, may reborrow same, subject to the following
conditions:
a. The amount to be re-borrowed, together with the
then-existing Principal Debt, may never exceed the limitations in
SECTION 1.1;
b. Agent must receive Borrower's written payment notice
by 10:00 a.m. on the third Business Day preceding the date of payment
if a LIBOR Rate is in effect with respect to any portion of the amount
to be prepaid, which notice shall specify the payment date and the
amount of the prepayment, and which shall constitute an irrevocable
and binding obligation of Borrower to make such prepayment on the
designated date;
c. each partial prepayment of an Advance bearing
interest at a LIBOR Rate must be in a minimum amount of at least
$500,000 or a greater integral multiple of $500,000;
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d. all accrued interest on an Advance bearing interest
at a LIBOR Rate being prepaid must also be paid in full on the date of
payment; and
e. Borrower shall pay any related Funding Loss upon
demand.
This Agreement shall not be deemed to be terminated or canceled prior to the
Termination Date solely because the Principal Debt may from time to time be
paid in full. Borrower shall immediately prepay all of the Obligation upon the
acquisition by any Person of a beneficial ownership of 50% or more of the
outstanding shares of common stock of PESCO.
2.4 Existing Credit Agreement. On the Closing Date, Borrower
shall pay to Agent -- for the appropriate account of Agent and each Lender --
all accrued and unpaid interest and fees due to Agent or any Lender under or in
connection with the Existing Credit Agreement through the Closing Date. Agent
shall promptly remit to each Lender the amount of those payments due to it.
2.5 Order of Application. Except as otherwise provided in the
Loan Papers, all payments and prepayments of the Obligation -- including,
without limitation, proceeds from the exercise of any Rights under the Loan
Papers or proceeds of any of the Collateral -- shall be applied by Lenders in
such order (a) if no Default or Potential Default has occurred and is
continuing and if Borrower gives written directions regarding application of a
payment or prepayment, then in accordance with such directions, or (b)
otherwise, subject to SECTION 9.1, as Determining Lenders may elect in their
sole discretion.
2.6 Capital Adequacy. If, with respect to any Advance or LC, any
Law, rule, regulation, or treaty now existing or hereafter promulgated
regarding capital adequacy, or any adoption thereof, ruling thereon, change
therein, or interpretation thereof now existing or hereafter made by any
Tribunal or central bank regarding capital adequacy, or compliance by Agent or
any Lender with any request, directive, or requirement now existing or
hereafter imposed by any Tribunal or central bank regarding capital adequacy
(whether or not having the force of Law) shall result in Agent or that Lender
incurring a reduction in the rate of return on its capital as a consequence of
its obligations hereunder to a level below that which it otherwise could have
achieved by an amount deemed by it to be material (and it may, in determining
such amount, utilize such assumptions and allocations of costs and expenses as
it shall deem reasonable and may use any reasonable averaging or attribution
method), then, Agent or that Lender (through Agent) may, from time to time,
notify Borrower and deliver to Borrower a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it for
the reductions incurred, which certificate shall be conclusive absent manifest
error. Borrower shall promptly pay such amount to Agent or that Lender upon
demand. If any subsequent revision or amendment of any such Law, rule,
regulation or treaty (or of any adoption thereof, ruling thereon, change
therein, or interpretation thereof) shall result in a reversal of such
reductions, Agent or such Lender (as applicable) shall refund such amounts to
Borrower (to the extent reversed and realized by it).
2.7 Foreign Lenders. Each Lender that is organized under the Laws
of any jurisdiction other than the U.S. or a state thereof (a) represents to
Agent and Borrower that (i) no Taxes are required to be withheld by Agent or
Borrower with respect to any payment to be made to it in respect of the
Obligation and (ii) it has furnished to Agent and Borrower two duly completed
copies of U.S. Internal Revenue Service Form 4224, Form 1001, Form W-8, or any
other Tax form acceptable to Agent (wherein it claims entitlement to complete
exemption from U.S. federal withholding Tax on all interest payments under the
Loan Papers), and (b) covenants to (i) provide Agent and Borrower a new Tax
form upon the expiration or obsolescence of any previously delivered form
according to Law, duly executed and completed by it, and (ii) comply from time
to time with all Laws with regard to the U.S. withholding Tax exemption. If
any of the foregoing is not true or the applicable forms are not provided, then
Borrower and Agent (without duplication) may deduct and withhold from interest
payments under the Loan Papers United States federal income tax at the full
rate applicable under the IRC.
2.8 Sharing of Payments, Etc.. If any Lender obtains any payment
(whether voluntary, involuntary, or otherwise, including, without limitation,
as a result of exercising its Rights under SECTION 2.9) that exceeds its
Commitment Percentage of the total Commitments, then that Lender shall purchase
from the other Lenders participations that will cause the purchasing Lender to
share the excess payment Pro Rata with each other Lender. If all or any
portion of any excess payment is subsequently recovered from the purchasing
Lender, then the purchase shall be rescinded and the purchase price restored to
the extent of the recovery. Borrower agrees that any Lender purchasing a
participation from another Lender under this section may, to the fullest extent
permitted by Law, exercise all of its Rights of payment (including the Right of
offset)
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with respect to that participation as fully as if that Lender were the direct
creditor of Borrower in the amount of that participation.
2.9 Offset. If a Default exists, each Lender is entitled to
exercise (for the benefit of all Lenders in accordance with SECTION 2.8) the
Rights of offset and banker's Lien against each and every account and other
property, or any interest therein, that any Obligor may now or hereafter have
with, or which is now or hereafter in the possession of, that Lender to the
extent of the full amount of the Obligation owed to it.
2.10 Basis Unavailable or Inadequate for Determining LIBOR Rate.
If, on or before any date when a LIBOR Rate is to be determined, Agent or any
Lender determines that the basis for determining the applicable rate is not
available or that the resulting rate does not accurately reflect the cost to
Lenders of funding at that rate, then Agent shall promptly notify Borrower and
Lenders of that determination (which is conclusive and binding on Borrower
absent manifest error) and the Principal Debt shall bear interest at the
Floating Rate. Until Agent notifies Borrower that those circumstances no
longer exist, Lenders' commitments under this Agreement to fund under a LIBOR
Rate will be suspended.
2.11 Additional Costs. If (i) any Law imposes, modifies, or deems
applicable (or if compliance by any Lender with any requirement of any Tribunal
results in) any requirement that any reserves (including, without limitation,
any marginal, emergency, supplemental or special reserves) be maintained, and
(ii) those reserves reduce any sums receivable by that Lender under this
Agreement with respect to any portion of the Principal Debt bearing interest at
a LIBOR Rate or increase the costs incurred by that Lender in advancing or
maintaining any portion of the Principal Debt bearing interest at a LIBOR Rate,
then (unless the effect is already reflected in the rate of interest then
applicable under this Agreement) that Lender (through Agent) shall deliver to
Borrower a certificate setting forth in reasonable detail the calculation of
the amount necessary to compensate it for its reduction or increase (which
certificate is conclusive and binding absent manifest error), and Borrower
shall promptly pay that amount to that Lender upon demand. The provisions of
and undertakings and indemnification set forth in this paragraph shall survive
the satisfaction and payment of the Obligation and termination of this
Agreement.
2.12 Change in Laws. If any Law makes it unlawful for any Lender
to make or maintain any portion of the Principal Debt bearing interest at a
LIBOR Rate, then that Lender shall promptly notify Borrower and Agent, and such
portion of Principal Debt shall be converted to the Floating Rate as of the
date of notice, and Borrower shall pay any related Funding Loss.
2.13 Funding Loss. BORROWER AGREES TO INDEMNIFY EACH LENDER
AGAINST, AND PAY TO IT UPON DEMAND, ANY FUNDING LOSS OF THAT LENDER. When any
Lender demands that Borrower pay any Funding Loss, that Lender shall deliver to
Borrower and Agent a certificate setting forth in reasonable detail the basis
for imposing Funding Loss and the calculation of the amount, which calculation
is conclusive and binding absent manifest error. The provisions of and
undertakings and indemnification set forth in this paragraph shall survive the
satisfaction and payment of the Obligation and termination of this Agreement.
2.14 Interest Periods. When Borrower requests that any Advance
bear interest at a LIBOR Rate, Borrower may elect the applicable interest
period (each an "INTEREST PERIOD"), which may be, at Borrower's option, one,
two, three or six months, subject to the following conditions: (a) the initial
Interest Period commences on the Closing Date or applicable conversion date,
and each subsequent Interest Period commences on the day when the next
preceding applicable Interest Period expires; (b) if any Interest Period begins
on a day for which there exists no numerically corresponding Business Day in
the calendar month at the end of the Interest Period ("Ending Calendar Month"),
then the Interest Period ends on the next succeeding Business Day of the Ending
Calendar Month, unless there is no succeeding Business Day in the Ending
Calendar Month in which case the Interest Period ends on the next preceding
Business Day of the Ending Calendar Month; (c) no Interest Period for any
Advance may extend beyond the Termination Date; (d) there may not be in effect
at any one time more than two Interest Periods; and (e) each Advance bearing
interest at a LIBOR Rate must be at least $500,000 or an integral multiple of
$100,000 in excess thereof.
2.15 Conversions. Borrower may (a) on the last day of the
applicable Interest Period convert an Advance bearing interest at a LIBOR Rate
to the Floating Rate, (b) at any time convert an Advance bearing interest at
the Floating Rate to a LIBOR Rate, and (c) elect a new Interest Period for any
Advance bearing interest at a LIBOR Rate. Any such conversion is subject to
the dollar limits and denominations of SECTION 2.14(E) and may be accomplished
by delivering a
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Conversion Request, in the form of EXHIBIT J hereto, to Agent no later than
10:00 a.m. (i) on the third Business Day before the conversion date for
conversion to a LIBOR Rate and the last day of the Interest Period, for the
election of a new Interest Period, and (ii) one Business Day before the last
day of the Interest Period for conversion to a Floating Rate. Absent
Borrower's notice of conversion or election of a new Interest Period, any
Advance bearing interest at a LIBOR Rate shall be converted to a Floating Rate
when the applicable Interest Period expires.
SECTION 3. FEES. The following fees represent compensation for services
rendered and to be rendered separate and apart from the extension of credit and
do not constitute compensation for the use, detention, or forbearance of money,
and the obligation of Borrower to pay each fee shall be in addition to, and not
in lieu of, the obligation of Borrower to pay interest. All fees shall be
non-refundable when due and shall, to the fullest extent permitted by Law, bear
interest, if not paid when due, at the Default Rate and shall be secured by all
of the Collateral. All payments of fees shall be calculated on the basis of
actual number of days (including the first day but excluding the last day)
elapsed, but computed as if each calendar year consisted of 360 days.
3.1 Agent Fees. Borrower shall pay to Agent, solely for its own
account, the quarterly agent fee described in the letter agreement between
Borrower and Agent dated as of August 15, 1994.
3.2 LC Fees. Upon, and as a condition precedent to, the issuance
of each LC, Borrower shall immediately and without demand pay to Agent an
issuance fee equal to the greater of 1.0% per annum of the face amount of the
LC or $250.
3.3 Commitment Fees. Borrower shall pay to Agent for the Pro Rata
account of Lenders:
a. a fee equal to 0.5% per annum of the excess of the
lesser of the then-current Borrowing Base or Commitment over the
Principal Debt, such fee to be calculated and paid on the last
Business Day of each calendar quarter, beginning June 30, 1994, and
calculated and paid on the Termination Date; and
b. a fee equal to 0.375% per annum of the excess, if
any, of the Commitment over the then-current Borrowing Base, such fee
to be calculated and paid on the last Business Day of each calendar
quarter, beginning June 30, 1994, and calculated and paid on the
Termination Date.
SECTION 4. SECURITY.
4.1 Guaranties. Each Obligor other than Borrower shall have
executed the Guaranty unconditionally guaranteeing to NationsBank and its
successors and assigns full payment and performance of the Obligation under the
Existing Credit Agreement. Upon Agent's demand, Borrower shall cause each
future Obligor to execute and deliver to Agent for the benefit of Lenders a
guaranty -- that unconditionally guarantees the full payment and performance of
the Obligation -- in substantially the form of EXHIBIT F.
4.2 Collateral. NationsBank and each Obligor shall have executed
the Security Agreement creating security interests in favor of NationsBank and
its successors and assigns in, among other things, the present and future items
and types of property described below (whether now or in the future owned by an
Obligor, the "COLLATERAL") to secure full payment and performance of (i) the
Obligation under the Existing Credit Agreement and the Term Loan Agreement, and
(ii) NationsBank's net exposure on all foreign exchange contracts between any
Company and NationsBank. Upon Agent's demand, Borrower shall cause each future
Obligor to execute and deliver to Agent for the benefit of Lenders (x) a
security agreement that creates a security interest in the Collateral to secure
the full payment and performance of the Obligation, in substantially the form
of EXHIBIT G, and (y) all financing statements requested by Agent in connection
with that security agreement. The items and types of property referred to
above include:
a. All present and future accounts of each Obligor,
including, without limitation, all accounts receivable and all other
rights of each Obligor to payment for goods sold or leased or for
services rendered, and all cash and noncash proceeds, increases,
profits, combinations, reclassifications, substitutions, and
replacements of or for all or any part of the foregoing;
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b. All present and future deposit accounts, restricted
and unrestricted cash collateral accounts, and cash equivalent
instruments (including, without limitation, certificates of deposit)
of each Obligor now or hereafter held by or specifically assigned or
granted to Agent or Lenders or Agent on behalf of Lenders (including,
without limitation, the cash collateral account described in SECTION
4.3, together with all present and future funds on deposit therein and
investments therefrom);
c. All present and future Rights, titles, and interests
any Obligor may have or be or become entitled to under or by virtue of
the Contingent Support Agreement and all cash and noncash proceeds,
increases, profits, combinations, reclassifications, substitutions,
and replacements of or for all or any part of the foregoing; and
d. The present and future shares of the capital stock
now or hereafter issued by the following corporations to any Obligor,
up to the percentage set forth below, and the certificates
representing such shares, and all dividends, cash, instruments, and
other property from time to time received, receivable, or otherwise
distributed in respect of or in exchange for any such shares, and
increases, proceeds, combinations, reclassifications, substitutions,
and replacements of or for all or any part of the foregoing:
100% Each Obligor other than PESCO
66% Each consolidated Subsidiary of Borrower
which is not an Obligor.
e. All items or types of property, wherever located,
whether now owned or hereafter acquired by Pool Alaska.
f. Thirteen platform rigs presently operating in the
Gulf of Mexico.
4.3 Cash Collateral Account. Obligors shall maintain a cash
collateral account at NationsBank (which shall not be an operating account of
any Company) and cause all domestic accounts receivable of the Obligors
included in the Borrowing Base to be directly paid to such cash collateral
account. Obligors shall execute such agreements and instructions appropriate
to permit Agent unilaterally to direct all payments on domestic accounts
receivable of the Obligors included in the Borrowing Base to be deposited
directly into such cash collateral account. Obligors hereby grant to Agent, on
behalf of Lenders, a first and prior security interest in such cash collateral
account and all checks, drafts, and other items ever received by NationsBank
for deposit therein. Unless withdrawn as hereinafter permitted, funds
deposited in the cash collateral account in excess of $25,000 will be applied
by Agent as a prepayment of the Obligation. Borrower may withdraw funds from
the cash collateral account, unless either or both of the following shall have
occurred: (a) a Default or Potential Default exists; or (b) Determining Lenders
shall have determined, in their sole judgment, that it is reasonably likely
that a Borrowing Deficiency will occur (in which latter event Obligors may
withdraw from the cash collateral account funds in excess of 125% of the
Borrowing Deficiency Determining Lenders have determined to exist).
Notwithstanding the foregoing, GPC and its Subsidiaries may continue to
maintain bank accounts number 12336-20584 and 14183-50015 with Bank of America,
N.T. and S.A.; provided that all accounts receivable and proceeds therefrom
included in the Borrowing Base are transferred the following Business Day via
an automated clearing house (or other similar transfer method) to the Obligors'
cash collateral account at NationsBank.
4.4 JV Pledge Agreement. The Pool Alaska Joint Venture shall have
executed the JV Pledge Agreement described in SECTION 1.2(E), creating security
interests in favor of the Agent in the "Collateral," as defined in the JV
Pledge Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Agent and Lenders as follows:
5.1 Corporate Existence and Authority.
a. Each Material Obligor and (except where a failure to
do so would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect) each other Company is a
corporation duly organized, validly existing, and in good standing
under the Laws of its jurisdiction of incorporation, as reflected in
SCHEDULE 5.1; and
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▇. ▇▇▇▇▇ and each of its consolidated Subsidiaries (i)
is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction where the nature and extent
of its business and properties require the same (such jurisdictions
being identified on SCHEDULE 5.1), except for the Liquidating
Companies and except where failure to be qualified or in good standing
would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect, (ii) possesses all requisite
authority, power, licenses, permits, and franchises to conduct its
business as now being conducted (except for the Liquidating Companies
[which it is contemplated will be liquidated and dissolved and none of
which now have or will have any material assets or operations] and
except where failure to so possess would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect),
and (iii) possesses all requisite authority, licenses, power, permits,
and to execute, deliver, and comply with the terms of the Loan Papers
to which it is contemplated in this Agreement to be or to become
party, all which have been duly authorized and approved by all
necessary corporate action and for which no approval or consent of any
Person or Tribunal is required which has not been obtained.
5.2 Ownership of Subsidiaries and Names.
a. All of the outstanding shares of capital stock of
PESCO's consolidated Subsidiaries are duly authorized, validly issued,
fully paid and nonassessable, and none thereof was issued in violation
of any preemptive or preferential Rights of any Person.
b. Each stockholder shown on SCHEDULE 5.2 is the true
and lawful owner, of record and beneficially (other than nominee
shares issued by foreign Subsidiaries in nominal amounts to comply
with the Laws of jurisdictions of incorporation of foreign
Subsidiaries), of the shares shown beside such stockholder's name,
free and clear of any Liens, restrictions, claims, or Rights of
another (except any arising under the Loan Papers or disclosed on
SCHEDULE 5.2), and none of such shares is subject to any warrant,
option, or other Right of any Person to acquire the same or subject to
any restriction on transfer thereof except for restrictions imposed by
securities Laws.
c. Except as disclosed on SCHEDULE 5.2, there are no
authorized or outstanding warrants, options, or other Rights to
acquire from any of PESCO's consolidated Subsidiaries or any
stockholder thereof any shares of capital stock or other investment
securities of PESCO's consolidated Subsidiaries or any securities
convertible into or exchangeable for such shares.
d. To the best knowledge of Borrower's executive
officers, except as disclosed on SCHEDULE 5.2, no Obligor has
transacted business under any other corporate or trade name, nor has
been a party to any merger, combination, or consolidation, or acquired
all or substantially all of the stock or accounts receivable of any
Person in the last five years.
5.3 Relationship with Agent and Lenders. To the best knowledge of
Borrower's executive officers, no director, officer, manager, or employee of
PESCO or any of its consolidated Subsidiaries is a director, officer, or
employee of, or has any substantial interest in, Agent or any Lender. No
Person who may be deemed to have "control" of PESCO or any of its consolidated
Subsidiaries is an "executive officer", "director", or "principal shareholder"
of Agent or any Lender. Terms appearing in quotations in this section are used
as defined in Section 215.2 of Regulation O of the Board of Governors of the
Federal Reserve System, as amended.
5.4 Financial Statements. The Current Financials were prepared in
accordance with GAAP and fairly present the consolidated and consolidating (if
applicable) financial conditions and the results of operations of Borrower and
its consolidated Subsidiaries as of, and for the portion of the fiscal year
ending on, the date or dates thereof. There were no material liabilities,
direct or indirect, fixed or contingent, of Borrower or any of its consolidated
Subsidiaries on the date or dates of the Current Financials which are not
reflected therein or in the notes thereto. Except for transactions directly
related to, or specifically contemplated by, the Loan Papers and transactions
heretofore disclosed in writing to Lenders, there have been no material adverse
changes in the consolidated financial condition of Borrower from those shown in
the Current Financials and the notes thereto between such date or dates and the
date hereof, nor has PESCO or any of its consolidated Subsidiaries incurred any
material liability, direct or indirect, fixed or contingent, except as
disclosed on SCHEDULE 5.12.
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5.5 Compliance with Laws and Documents. Except as disclosed on
SCHEDULE 5.5:
a. Neither PESCO nor any of its consolidated
Subsidiaries is, nor will the execution, delivery, and the performance
of and compliance with the terms of the Loan Papers cause any of them
to be, in violation of any Laws (including, without limitation,
Environmental Laws), other than such violations which would not,
individually or in the aggregate, be reasonably likely to cause a
Material Adverse Effect; and
b. Neither any Material Obligor nor (except where the
same would not, individually or in the aggregate, be reasonably likely
to cause a Material Adverse Effect) any other Company is, nor will the
execution, delivery, and the performance of and compliance with the
terms of the Loan Papers cause any of them to be, in violation of
their respective bylaws or charter.
5.6 Litigation. As of the date of this Agreement, except (i) as
set forth on SCHEDULE 5.6, and (ii) claims or outstanding or unpaid judgments
which do not exceed $500,000 individually (and the estimated maximum individual
exposure under which does not exceed $100,000) or $3,000,000 collectively:
a. No Material Obligor is involved in, nor is any
executive officer of any Material Obligor aware of the threat of, any
Litigation; there are no outstanding or unpaid judgments against any
Material Obligor; and none of the Litigation described on SCHEDULE 5.6
would, individually or in the aggregate, be reasonably likely to have
a Material Adverse Effect; and
b. No other Company (i) is involved in, nor is Borrower
or any such other Company aware of the threat of, any Litigation which
would, individually or in the aggregate, be reasonably likely to have
a Material Adverse Effect, or (ii) has any outstanding or unpaid
judgments against it which would, individually or in the aggregate, be
reasonably likely to cause a Material Adverse Effect.
5.7 Taxes. Except as set forth on SCHEDULE 5.7, all Tax returns
of the Material Obligors and (except where the same would not, individually or
in the aggregate, be reasonably likely to have a Material Adverse Effect) (i)
all Tax returns of the other Companies required to be filed have been filed,
and (ii) all Taxes imposed upon PESCO or any of its consolidated Subsidiaries
have been paid, other than Taxes for which the criteria for Permitted Liens
have been satisfied.
5.8 Government Regulation. Neither PESCO nor any of its
consolidated Subsidiaries nor any Affiliate of the foregoing is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 (as any of the preceding acts
have been amended), or any other Law (other than Regulation X of the Board of
Governors of the Federal Reserve System) which regulates the incurrence of
Debt.
5.9 Employee Benefit Plans. No employee benefit plan (as defined
in the IRC and ERISA) of PESCO or any of its consolidated Subsidiaries has
incurred an accumulated funding deficiency in an amount sufficient to be
reasonably likely to have a Material Adverse Effect. No prohibited transaction
or reportable event (as such terms are defined in ERISA) has occurred which
would, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect. Neither PESCO nor any of its consolidated
Subsidiaries (a) has incurred material liability to the PBGC in connection with
any such plan, or (b) has withdrawn in whole or in part from participation in a
multi-employer pension plan (as defined in ERISA).
5.10 Purpose of Credit. The proceeds of Advances and LCs (a) are
not and will not be used directly or indirectly for the purpose of purchasing
or carrying, or for the purpose of extending credit to others for the purpose
of purchasing or carrying, any "margin stock" as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System, as
amended, and (b) will be used (i) subject to the restrictions against certain
transactions with Companies that are not Material Obligors, for other temporary
working capital requirements of Borrower's consolidated operations, (ii) to
enable Material Obligors to issue guarantees and bid and performance bonds on
behalf of themselves or PESCO and its consolidated and unconsolidated
Subsidiaries or Joint Ventures in the ordinary course of business, and (iii)
such other purposes as may be approved by Lenders.
5.11 Properties; Liens. Except as disclosed on SCHEDULE 5.11 and
except for Permitted Liens, there is no Lien on any asset of any Material
Obligor or (except where the same would not, individually or in the aggregate,
reasonably be expected to cause a Material Adverse Effect) any other Company.
Except as disclosed on SCHEDULE 5.5, neither PESCO
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nor any of its consolidated Subsidiaries knows of any condition or
circumstance, such as the presence of asbestos or other Hazardous Substances,
that would, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.
5.12 Material Agreements. Except for the Loan Papers and the
Material Agreements described on SCHEDULE 5.12 (or as hereafter disclosed to
Lenders in writing), there are no other Material Agreements of PESCO or any of
its consolidated Subsidiaries that would, upon a default thereunder, be
reasonably likely, individually or in the aggregate, to cause a Material
Adverse Effect; neither PESCO nor any of its consolidated Subsidiaries is, nor
will the execution, delivery, and performance of and compliance with the terms
of the Loan Papers cause PESCO or any of its consolidated Subsidiaries to be,
in default (nor has any potential default occurred) under any Material
Agreement described on SCHEDULE 5.12 (or as hereafter disclosed to Lenders in
writing), other than such defaults or potential defaults which would not,
individually or in the aggregate, be reasonably likely to cause a Material
Adverse Effect.
5.13 Solvency. After giving effect to the transactions
contemplated hereunder, each Material Obligor will be Solvent. After giving
effect to the transactions contemplated hereunder, PESCO and all of its
consolidated Subsidiaries collectively will be Solvent.
5.14 Foreign Subsidiaries. As to each Company incorporated,
chartered, organized, or otherwise created under foreign Laws, each such
Company is (a) a "Controlled Foreign Corporation" within the meaning of Section
957 of the IRC, and (b) no material portion of the earnings and profits of such
Company is expected by Borrower to be, prior to the Termination Date,
includable for United States federal income tax purposes in the unconsolidated
or consolidated gross income in an aggregate amount for all such Companies
which would be greater than the tax losses (including net operating loss carry
forward(s)) of PESCO or Borrower during such period (i) by reason of the
receipt of actual distributions made by such Company in the ordinary course of
its business, or (ii) provided such Company is not treated for United States
federal income tax purposes under Section 1.956-2(c) of the United States
Income Tax Regulations as holding Borrower's obligations under any Loan Paper,
by reason of the Subpart F rules contained in Sections 951 through 964 of the
IRC and regulations thereunder.
5.15 General. There are no material facts or conditions relating
to the Loan Papers, any of the Property of PESCO or any of its consolidated
Subsidiaries, or the individual or combined financial conditions and businesses
of PESCO or its consolidated Subsidiaries which would, individually or
collectively, be reasonably likely to cause a Material Adverse Effect, and
which have not been related, in writing, to Agent and Lenders; and the Loan
Papers and all Financial Statements of PESCO or any of its consolidated
Subsidiaries and those writings identified as items 1, 2, 3 and 4 on SCHEDULE
6, which were exhibited or delivered to Agent and Lenders, are genuine and in
all material respects what they purport and appear to be.
SECTION 6 CONDITIONS PRECEDENT.
6.1 Initially. The conversion, amendment and restatement of the
Existing Credit Agreement described in this Agreement's recitals and SECTION
1.1 are not effective until -- and no Lender is obligated to make any Advance
or issue any LC until -- Agent has received each document and other item
described on SCHEDULE 6.
6.2 Each Advance and LC. No Lender is obligated to make any
Advance or issue any LC unless (a) no Borrowing Deficiency exists or will exist
as a result thereof, (b) no later than Noon on the date on which the requested
Advance or LC is to be funded or issued, Borrower shall have faxed to Agent a
copy of a properly completed Request for Advance or LC containing true and
correct certifications (and Borrower shall deliver an original of the Request
for Advance or LC to Agent no later than the first Business Day following
funding or issuance of the requested Advance or LC), (c) in the case of an LC,
Borrower and each other Company for whose account the LC is to be issued
delivers to Agent and the Issuing Lender a properly completed LC Agreement, (d)
the making of that Advance or issuance of that LC is permitted by Law, and (e)
if reasonably requested by Agent, PESCO or any of its appropriate consolidated
Subsidiaries have delivered to Agent evidence substantiating any of the matters
contained in this Agreement which are necessary to enable Borrower to qualify
for that Advance or LC.
6.3 Materiality and Waiver. Each condition precedent in this
Agreement is material to the contemplated transactions, and time is of the
essence. Lenders may make any Advance and/or an Issuing Lender may issue any
LC without all conditions precedent being satisfied, but that is not a waiver
of the requirement that each condition precedent be satisfied
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as a prerequisite for any subsequent Advance or LC, unless Determining Lenders
specifically permanently waive the condition precedent in writing.
SECTION 7. COVENANTS. For as long as any Lender is committed under this
Agreement to make Advances or issue LCs and until the Obligation is fully paid
and performed, -- unless Borrower first obtains a written consent to the
contrary from Agent on behalf of Determining Lenders -- PESCO and each of its
consolidated Subsidiaries jointly and severally covenant and agree with Agent
and Lenders as follows:
7.1 Use of Proceeds. LCs and proceeds of Advances shall be used
only as represented in SECTION 5.10.
7.2 Books and Records. PESCO and each of its consolidated
Subsidiaries shall keep proper and complete books, records, and accounts in
accordance with GAAP and shall permit Agent or any Lender, upon reasonable
prior notice, to inspect the same during regular business hours and make and
(at Lenders' expense in respect of costs paid to third parties during each
calendar year in excess of $1,000 in the aggregate) take away copies.
7.3 Items to be Furnished. Borrower shall cause the following to
be furnished to Agent:
a. Within 120 days after the last day of each fiscal
year of PESCO, Financial Statements showing the consolidated and
consolidating (if applicable) financial conditions and results of
operations of PESCO as of, and for the year ended on, such last day,
accompanied by (i) the opinion, without material qualification, of
Deloitte & Touche or another firm of independent certified public
accountants acceptable to Determining Lenders, based on an audit using
generally accepted auditing standards, that the consolidated portions
of such Financial Statements were prepared in accordance with GAAP and
present fairly, in all material respects, the consolidated financial
condition and results of operations of PESCO, and (ii) a Financial
Report Certificate with respect to such Financial Statements.
b. Within 60 days after the last day of each of the
first three fiscal quarters of each fiscal year (i) unaudited
Financial Statements showing the consolidated and consolidating (if
applicable) financial condition and results of operations of PESCO as
of, and for the period from the beginning of the current fiscal year
to, such last day, and (ii) a Financial Report Certificate with
respect to such Financial Statements.
c. On or before the 15th Business Day (or on such other
day of each month to which Borrower and Agent have agreed in writing)
after closing the accounting books for the previous monthly reporting
period, beginning with the monthly accounting period ending in June
1994, a monthly Borrowing-Base Report effective as of the last day of
the immediately preceding receivables reporting period, together with
information used in calculating the Borrowing Base, provided that a
Borrowing-Base Report (if reasonably possible for Borrower to deliver
same) and such other information concerning the Borrowing Base must be
delivered promptly upon Agent's or Determining Lenders' request, which
may be made at any time.
d. On or before the 15th Business Day of each calendar
month a description of all obligations of PESCO or any of its
consolidated Subsidiaries related to surety bonds outstanding as of
the last day of the immediately preceding calendar month.
e. At Agent's or Determining Lenders' request, a weekly
rig hour status report.
f. To the extent not delivered to Agent under CLAUSES
(A) and (B) preceding, promptly after filing or delivery thereof, true
copies of all SEC Reports furnished by or on behalf of PESCO to its
stockholders.
g. Notice, promptly after PESCO or any of its
consolidated Subsidiaries knows or has reason to know of, (i) the
existence and changes in the status of any Litigation which would,
individually or in the aggregate, be reasonably likely to cause a
Material Adverse Effect, (ii) any change in any material fact or
circumstance represented or warranted in any Loan Paper which would,
individually or in the aggregate, be reasonably likely to cause a
Material Adverse Effect, (iii) a Default or Potential Default,
specifying the nature thereof and what action PESCO or any of its
consolidated Subsidiaries has taken, is taking, or proposes to take
with respect thereto, or (iv) the occurrence of a reportable event (as
defined in ERISA) with respect to any employee benefit plan of
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PESCO or any of its consolidated Subsidiaries subject to ERISA, or the
complete or partial withdrawal from participation in a multi-employer
pension plan (as such terms are defined in ERISA) by PESCO or any of
its consolidated Subsidiaries (or the intention of such entity to do
so), or the initiation (or intent to initiate) by the PBGC or PESCO or
any of its consolidated Subsidiaries of proceedings under ERISA to
terminate any such plan, or the occurrence of any event or condition
which might constitute grounds for termination of any such benefit
plan under ERISA.
h. Promptly upon reasonable request by Agent or
Determining Lenders, such information (not otherwise required to be
furnished under the Loan Papers) respecting the business affairs,
assets, and liabilities of PESCO or any of its consolidated
Subsidiaries, and such opinions, certifications, and documents, in
addition to those mentioned in this Agreement.
i. As soon as practicable after the end of each fiscal
year of Borrower:
(i) Unaudited consolidating Financial Statements
showing (by major management operation category) the financial
condition and results of operations of PESCO; and
(ii) Unaudited or audited (to the extent prepared)
Financial Statements showing the financial conditions and
results of operations of the Borrower's unconsolidated
affiliates, including, but not limited to, Pool Arabia, Ltd.,
Antah Drilling Sdn. Bhd, Pool ▇▇▇▇▇▇▇, Limited, and Intairdril
Oman L.L.C.
7.4 Inspection. PESCO and each of its consolidated Subsidiaries
shall allow any Lender (who shall comply with such entities' safety rules
applicable in the ordinary course of business to each specific location) to
inspect any of their properties, to review reports, files, and other records,
to conduct tests or investigations, and to discuss any of their affairs,
conditions, and finances or with any director, officer, or employee of PESCO or
any of its consolidated Subsidiaries, from time to time, during reasonable
business hours.
7.5 Taxes. Each Material Obligor other than PESCO shall, and
(except where failure to do so would not, individually or in the aggregate, be
reasonably likely to cause a Material Adverse Effect) PESCO and each of its
consolidated Subsidiaries shall, promptly pay all Taxes due, except as set
forth on SCHEDULE 5.7 and except Taxes for which the criteria for Permitted
Liens have been satisfied. Neither PESCO nor any of its consolidated
Subsidiaries may, directly or indirectly, use any portion of the proceeds of
any Advance to pay the wages of employees unless a timely payment to or deposit
with the proper authorities of all amounts of Tax required to be deducted and
withheld from such wages is also made.
7.6 Payment of Obligations. The Material Obligors and (except
where failure to do so would not, individually or in the aggregate, be
reasonably likely to cause a Material Adverse Effect) PESCO and each of its
consolidated Subsidiaries shall promptly pay (or renew and extend) all of its
material obligations as the same become due. Neither PESCO nor any of its
consolidated Subsidiaries may, directly or indirectly, (a) at any time when a
Borrowing Deficiency exists, make any voluntary prepayment of the principal of
any Debt other than the Obligation, whether subordinate to the Obligation or
not, or (b) make any repayment of or credits for services rendered under
Section 6 of the Contingent Support Agreement except as provided therein.
7.7 Expenses of Lenders. The Obligors shall promptly pay (a) upon
Agent's request, estimated filing and recording fees and expenses for the Loan
Papers creating the Lender Liens, and (b) all reasonable costs, fees, and
expenses paid or incurred by Agent or any Lender incident to any of the Loan
Papers (including, but not limited to, any additional filing or recording fees
and the reasonable fees and expenses of counsel to Agent and any Lender in
connection with the negotiation, preparation, and execution of the Loan Papers
and any related amendment, waiver, or consent and in connection with any
proposed Advance or LC, whether any Advance or LC is ever made and, if a
Potential Default or Default exists, Lenders' expenses described in SECTION
11.4(D)) or to the enforcement of the obligations of any of the Obligors or the
exercise of any Rights (including, but not limited to, reasonable attorneys'
fees and court costs), all of which shall be a part of the Obligation.
7.8 Maintenance of Corporate Existence, Assets, Business, and
Insurance. PESCO and each of its consolidated Subsidiaries (other than
Liquidating Companies) shall at all times: Maintain their respective corporate
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existences and authorities to transact business and good standing in their
respective jurisdictions of incorporation and all other jurisdictions where the
failure to so maintain would, individually or in the aggregate, be reasonably
likely to cause a Material Adverse Effect; maintain all licenses, permits, and
franchises necessary for their businesses, where the failure to so maintain
would, individually or in the aggregate, be reasonably likely to cause a
Material Adverse Effect; keep all of their assets which are necessary in their
businesses in good working order and condition (ordinary wear and tear
excepted), and make all necessary repairs and replacements thereto; and
maintain, or cause to be maintained, insurance with such insurers, in such
amounts, and covering such risks, as shall be ordinary and customary in the
industry. Each insurance policy covering any Collateral subject to a Lender
Lien shall provide, by way of endorsements, riders or otherwise, that proceeds
in respect of any property constituting Collateral will be payable to Agent, on
behalf of Lenders, and that such policy may only be cancelled after Agent is
given thirty (30) days written notice of such cancellation (ten (10) days in
the case of non-payment of premium). A certificate of the insurer confirming
such terms and coverage for all renewal and substitute policies of insurance
shall be delivered to Agent. If no Default or Potential Default exists, the
Agent shall assign to the insured Person any and all monies that become payable
under any insurance policies required hereunder, and such insured Person shall
apply said monies to the repair, rebuilding and restoration or replacement of
the lost, destroyed or damaged assets; provided that in the event of a Total
Loss such assignment by the Agent shall not be available.
7.9 Maintenance and Evidence of Priority of Lender Liens. The
Obligors shall perform such acts and duly authorize, execute, acknowledge,
deliver, file, and record any additional agreements, documents, instruments,
and certificates as Agent may reasonably deem necessary or appropriate in order
to perfect and maintain the Lender Liens in favor of Agent for the benefit of
Lenders and preserve and protect the Rights of Agent and Lenders in all present
and future Collateral.
7.10 Employee Benefit Plans. Neither PESCO nor any of its
consolidated Subsidiaries may, directly or indirectly, engage in any prohibited
transaction (as defined in ERISA), permit the funding with respect to any
employee benefit plan established or maintained by any such entity to ever be
less than the minimum required by applicable provisions of ERISA or regulations
thereunder, permit any employee benefit plan established or maintained by any
such entity to ever be subject to involuntary termination proceedings, or fully
or partially withdraw from any multi-employer pension plan (as such terms are
defined in ERISA).
7.11 Debt. Neither PESCO nor any of its consolidated Subsidiaries
may, directly or indirectly, create, incur, or suffer to exist any direct,
indirect, fixed, or contingent liability upon itself for any Debt, other than
(a) the Obligation, (b) overdraft lines of PESCO and its consolidated
Subsidiaries and guarantees by PESCO or its consolidated Subsidiaries of
overdraft lines for Borrower's foreign Subsidiaries and their Joint Ventures
collectively not to exceed $7,000,000, in the aggregate at any time (calculated
so as not to include both the overdraft line and any related guaranty),
including, without limitation, those overdraft lines presently existing and
described on SCHEDULE 7.11, (c) customary trade payables in the ordinary course
of business, (d) Pool International, Inc.'s obligations as set forth in Section
9 of the Contingent Support Agreement, (e) Debt of Obligors arising under the
Contingent Support Agreement, (f) foreign exchange contracts, (g) intercompany
Debt otherwise permitted to be incurred under the Original Credit Agreement
before -- or under this Agreement after -- the date of this Agreement, (h) Debt
relating to purchases of assets not exceeding $200,000 in the aggregate
outstanding at any one time for all of PESCO and its consolidated Subsidiaries,
(i) obligations relating to bid and performance guarantees and surety bonds
required in the ordinary course of business, (j) guarantees and other Debt
disclosed on SCHEDULE 7.11 as renewed or extended (but not increased) from time
to time, (k) Debt pre-approved in writing by Determining Lenders, (l) the
"Obligation" as defined in the Term Loan Agreement and the ISDL Agreement, (m)
$11,500,000 of Borrower's 10% Subordinated Notes issued to the Sellers pursuant
to the Payment Agreement, a guaranty by PESCO of such Notes, and a nonrecourse
guaranty by PCESI of such Notes, (n) notes in respect of deferred compensation
obligations of approximately $1,600,000 to certain key employees of GPC during
the period ending three years after the closing under the Stock Purchase
Agreement, (o) guarantees by PCESI of up to $400,000 (in the aggregate
outstanding at any time) with respect to leases by its employees of light
vehicles, and (p) Debt in the principal amount of $545,000 incurred in
connection with the Purchase Agreement between Borrower's Subsidiary, Pool
Company (Texas) Inc. ("POOL TEXAS") and Elder Well Service, Inc., pursuant to
which Pool Texas purchased eight well servicing rigs for $650,000 (including
the transfer to the seller of certain existing Pool Texas assets).
7.12 Lease Obligations. Neither PESCO nor any of its consolidated
Subsidiaries may, directly or indirectly, enter into, assume, or otherwise
obligate itself for the performance of the obligations of the lessee or tenant
under any lease or sublease of property providing for annual payments in the
aggregate for all such leases of more than $10,000,000. This
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section shall not apply to leases which have initial or remaining cancelable
lease terms of one year or less if similar leases are for one year or less in
accordance with the ordinary course of business and customary industry
standards.
7.13 Capital Expenditures. Neither PESCO nor any of its
consolidated Subsidiaries may, directly or indirectly, make Capital
Expenditures, other than
a. such expenditures which are for or related to assets
or leaseholds used or useful in the normal business operations of such
entity and which do not in the aggregate for PESCO and its
consolidated Subsidiaries exceed (i) the sum of 70% of Borrower's
consolidated net income from January 1, 1990, through April 6, 1990,
plus PESCO's consolidated net income from and after April 7, 1990, in
each case after income taxes, plus noncash charges and before changes
in working capital on a cumulative basis from and after January 1,
1990, less (ii) the aggregate amount of investments and advances
outstanding under SECTION 7.16(B),
b. Capital Expenditures made solely from the net
proceeds of the sale of Oiltools Operations,
c. the PAA Acquisition, and
d. the GPC Acquisition plus a $7,200,000 adjustment
(increase) in the Capital Expenditures therefor.
7.14 Liens. Neither PESCO nor any of its consolidated Subsidiaries
may, directly or indirectly, (a) create, incur, or suffer or permit to be
created or incurred or to exist any Lien upon any of its assets, except
Permitted Liens, or (b) enter into or permit to exist any arrangement or
agreement (other than existing arrangements or agreements, the Loan Papers, the
ISDL Agreement, the Term Loan Agreement, the negative pledge agreement in
Section 3.3 of the Payment Agreement regarding the assets of GPC and PCESI,
including Borrower's California assets that were transferred to PCESI at or
after the closing under the Stock Purchase Agreement and the negative pledge
contained in the Security Agreement between Pool Texas and Elder Well Service,
Inc., related to the purchase by Pool Texas of eight well servicing rigs dated
August 15, 1994) which directly or indirectly prohibits PESCO or any of its
consolidated Subsidiaries from creating or incurring any Lien on any of its
assets.
7.15 Acquisitions, Mergers, and Dissolutions. Neither PESCO nor
any of its consolidated Subsidiaries may, directly or indirectly, acquire all
or any substantial portion of the stock issued by, or interest in, any Person
(including, but not limited to, the formation or acquisition of any new
Subsidiary), dissolve, or merge or consolidate with any Person other than (a)
repurchases of its own securities if permitted under SECTION 7.18, (b) any
merger or consolidation of one Company into another Company or an acquisition
of one Company by another Company so long as (i) Borrower is the surviving
corporation if it is involved, (ii) another Material Obligor is the survivor if
any one or more Material Obligors other than Borrower are involved, and (iii)
the surviving Company's net worth has not decreased as a result of such merger
or consolidation, (c) dissolution of the Liquidating Companies, (d) use of the
net proceeds of the sale of the Oiltools Operations for acquisitions that would
otherwise violate this SECTION 7.15, (e) the PAA Acquisition, and (f) the
acquisition of 100% of the stock of GPC pursuant to the Stock Purchase
Agreement, (g) the merger of GPC with and into PCESI, and (h) the dissolution
of the following PCESI Subsidiaries: Arrow Petroleum Services, Inc., ▇▇▇▇ Well
Services, Inc., Snowburst Corporation, and Westex Production Service, Inc.
7.16 Loans, Advances, and Investments. Neither PESCO nor any of
its consolidated Subsidiaries may, directly or indirectly, make any loan,
advance, extension of credit, or capital contribution to, make any investment
in, or purchase or commit to purchase any stock or other securities or
evidences of Debt of, or interests in, any other Person, other than (a)
advances to or investments in any of PESCO's consolidated Subsidiaries,
provided that such advances and investments made after July 1, 1993, by the
Material Obligors to or in Companies that are not Material Obligors may not in
the aggregate for all such Companies at any time outstanding exceed $5,000,000;
(b) advances or investments by Material Obligors to or in PESCO's
unconsolidated Subsidiaries and its or their Joint Ventures which are not
Companies which do not in the aggregate at any time outstanding exceed
$5,000,000, provided that such advances and investments shall for purposes of
this clause be deemed to be capital expenditures and may not in the aggregate
for all such entities exceed 40% of the amount of capital expenditures
permitted under SECTION 7.13; (c) expense accounts for and other advances to
directors, officers, and employees of PESCO or any of its consolidated
Subsidiaries in the ordinary course of business not to exceed $25,000 in the
aggregate outstanding at any time for any one director, officer, or employee;
(d) investments in obligations of the U.S. and agencies
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thereof and obligations guaranteed by the U.S. maturing within one year from
the date of acquisition; (e) certificates of deposit issued by commercial banks
organized under the Laws of the U.S. or any state thereof and having combined
capital, surplus, and undivided profits of not less than $100,000,000, and
which (i) shall have a rating from ▇▇▇▇▇'▇ or S&P of at least P-1 and A-1,
respectively, or (ii) are insured by the Federal Deposit Insurance Corporation;
(f) commercial paper which shall have a rating from ▇▇▇▇▇'▇ or S&P of at least
P-1 and A-1, respectively; (g) eurodollar investments with financial
institutions (i) having combined capital, surplus, and undivided profits of not
less than U.S. $100,000,000, and (ii) with commercial paper rated at least P-1
or A-1 by ▇▇▇▇▇'▇ or S&P, respectively, or, if any institution does not have a
commercial paper rating, a comparable bond rating of at least A or BAA-1 by
▇▇▇▇▇'▇ or S&P, respectively; (h) extensions of credit in connection with trade
receivables and overpayments of trade payables, in each case resulting from
transactions in the ordinary course of business; (i) extensions of credit not
exceeding $3,500,000 at any one time in connection with settlement of claims
resulting from transactions in the ordinary course of business; (j) loans or
advances disclosed on SCHEDULE 7.16, excluding any increases thereof and
excluding extensions of credit described in CLAUSE (H) above; (k) other loans,
advances, and investments which never exceed $200,000 in the aggregate at any
time; (l) advances and investments otherwise permitted under the Existing
Credit Agreement before the date of this Agreement; (m) the PAA Acquisition,
(n) the acquisition of 100% of the stock of GPC pursuant to the Stock Purchase
Agreement, (o) the investment by GPC and its Subsidiaries of approximately
$2,700,000 in the aggregate in Horizon Prime Fund during the period ending 30
days after the closing under the Stock Purchase Agreement, (p) the acquisition
by PCESI of the real estate in Ventura, California, previously leased to PCESI
by Plymouth Investment Partnership in return for the forgiveness by PCESI of
its loan to Plymouth Investment Partnership of approximately $200,000, and (q)
the continuation by PCESI of its existing long-term advances associated with
split-dollar life insurance plans for former PCESI employees ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇
See in the aggregate amount of approximately $345,000.
7.17 Distributions. PESCO may not, directly or indirectly,
declare, make, or pay any Distributions, other than (a) Distributions wholly in
the form of capital stock and (b) advances, investments, and loans otherwise
permitted by this Agreement.
7.18 Issuance of Securities. Neither PESCO Subsidiary nor any of
the Companies, directly or indirectly, may issue, sell, or otherwise dispose of
any of its shares of capital stock or other investment securities of any class,
any securities convertible into or exchangeable for any such shares, or any
carrying Rights, warrants, options, or other Rights to subscribe for or
purchase such shares, other than capital stock of any Company issued to its
corporate parent and subject to Lender Liens and no other Liens except
Permitted Liens.
7.19 Transactions with Affiliates. Except as provided in SCHEDULE
7.19, neither PESCO nor any of its consolidated Subsidiaries may, directly or
indirectly, enter into any material transaction (including, but not limited to,
the sale or exchange of property or the rendering of service but not including
a capital contribution to a Subsidiary otherwise permitted hereunder) with any
Affiliate, other than in the ordinary course of business and upon fair and
reasonable terms not materially less favorable than such entity could obtain or
could become entitled to in an arm's-length transaction with a Person which was
not an Affiliate.
7.20 Sale of Assets. Neither PESCO nor any of its consolidated
Subsidiaries may, directly or indirectly sell, lease, or otherwise dispose of
all or any substantial part of its assets other than (a) sales or leases by a
Material Obligor to another Material Obligor, (b) sales of inventory in the
ordinary course of business, (c) sales or leases of equipment and other assets
to any other Companies, Joint Ventures, or third parties, in each case for a
fair and adequate consideration (provided that if any equipment is sold, and a
replacement is necessary for the proper operation of the seller's business, the
seller will replace the sold equipment with adequate equipment), and (d) sales
or leases disclosed on SCHEDULE 7.20.
7.21 Compliance with Laws and Documents. Neither PESCO nor any of
its consolidated Subsidiaries may, directly or indirectly, violate the
provisions of any Laws (including, without limitation, Environmental Laws), its
charter or bylaws, or any Material Agreement of any such entity if such
violation alone, or when aggregated with all other such violations, would be
reasonably likely to cause a Material Adverse Effect.
7.22 New Businesses. Neither PESCO nor any of its consolidated
Subsidiaries may, directly or indirectly, engage in any business other than the
businesses in which it is presently engaged or businesses related thereto.
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7.23 Assignment. Neither PESCO nor any of its consolidated
Subsidiaries may, directly or indirectly, assign or transfer any of its Rights,
duties, or obligations under any of the Loan Papers.
7.24 Fiscal Year and Accounting Methods. Subject to SECTION 10.1,
neither PESCO nor any of its consolidated Subsidiaries may change its fiscal
year or method of accounting (other than immaterial changes in methods) unless
required to do so by Law.
7.25 Minimum Net Worth. During any fiscal year, PESCO's
consolidated shareholders' equity may not be less than the sum of (a)
$116,593,000, (b) 50% of PESCO's consolidated net income for each of the fiscal
years subsequent to 1994, and (c) 50% of the proceeds of any issuances of
securities by PESCO.
7.26 Inventory. PESCO's consolidated inventory for sale and
consumption (inventory, less shrinkage and obsolescence as reflected on PESCO's
consolidated balance sheet) available for sale may never exceed 35% of its
consolidated current assets.
7.27 Consolidated Working Capital. PESCO's consolidated current
assets (less prepaid expenses, other than insurance) shall exceed its
consolidated current liabilities by at least $10,000,000.
Consolidated current liabilities shall include the Principal Debt other than
(a) 95% of the LC Exposure supporting bid, performance, and retention bonds,
(b) LC Exposure supporting other current liabilities already included in the
calculation of consolidated working capital, and (c) the fair value of services
to be performed during the applicable period to which portions of ENSERCH's
$4,000,000 cash advance are subject to credit as described in the Contingent
Support Agreement.
7.28 Borrowing Deficiency. To preclude any occurrence of a
Borrowing Deficiency, Borrower shall manage the consolidated receivables of the
Material Obligors, the proceeds thereof, and the amount of Principal Debt by
periodically reducing outstanding Principal Debt with proceeds of receivables,
or replacing receivables that are paid or otherwise become ineligible for
inclusion in calculating the Borrowing Base with other receivables that are
eligible for inclusion in calculating the Borrowing Base.
7.29 Subsidiaries.
a. If PESCO or its consolidated Subsidiaries are
permitted by Agent and Determining Lenders under SECTIONS 7.15 or 7.16
to form or acquire new consolidated Subsidiaries, PESCO and Borrower
shall cause (i) each such Subsidiary not subject to SECTION 5.14 to
execute and deliver to Agent a guaranty, security agreement and
financing statements (as described in Section 4), and (ii) the parent
corporation of such new consolidated Subsidiary to grant Lender Liens
on and to deliver to Agent on behalf of Lenders 100% of the parent
corporation's interest (or 66% if such new consolidated Subsidiary is
subject to SECTION 5.14) in the capital stock of such new consolidated
Subsidiary, together with stock powers executed in form satisfactory
to Agent.
b. Each consolidated Subsidiary of PESCO which is
subject to SECTION 5.14 shall remain subject thereto.
SECTION 8. DEFAULT. "DEFAULT" means the occurrence of one or more of the
following events (including the passage of time, if any, specified therefor):
8.1 Payment of Obligation. The failure or refusal of Borrower to
pay any portion of the Obligation, as the same becomes due in accordance with
the terms of the Loan Papers, and such failure or refusal continues for a
period of three days after the due date of an interest payment (with no grace
period for failure or refusal to make a principal payment).
8.2 Covenants.
a. The failure or refusal of PESCO or any of its
consolidated Subsidiaries to punctually and properly perform, observe,
and comply with any covenant, agreement, or condition contained in
SECTIONS 7.1 and 7.10 through 7.24.
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b. The failure or refusal of PESCO or any of its
consolidated Subsidiaries to punctually and properly perform, observe,
and comply with any covenant, agreement, or condition contained in
SECTIONS 7.25 through 7.29, and such failure or refusal continues for
a period of 30 days after PESCO or any of its consolidated
Subsidiaries has notice thereof.
c. The failure or refusal of PESCO or any of its
consolidated Subsidiaries to punctually and properly perform, observe,
and comply with any covenant, agreement, or condition contained in any
of the Loan Papers, other than covenants to pay the Obligation and the
covenants listed in clauses (a) and (b) preceding, and such failure or
refusal continues for a period of ten days after PESCO or any of its
consolidated Subsidiaries has notice thereof.
8.3 Debtor Relief. (a) Any Material Obligor is not Solvent, (b)
PESCO and its consolidated Subsidiaries are not Solvent on a consolidated
basis, or (c) PESCO or any of its consolidated Subsidiaries (other than Pool
Alaska, Inc.) (i) fails to pay its debts generally as they become due, (ii)
voluntarily seeks, consents to, or acquiesces in the benefit or benefits of any
Debtor Relief Law, or (iii) becomes a party to (or be made the subject of) any
proceeding provided for by any Debtor Relief Law, other than as a creditor or
claimant, that could suspend or otherwise adversely affect the Rights of Agent
or any Lender granted in the Loan Papers (unless, in the event such proceeding
is involuntary, the petition instituting same is dismissed within 60 days after
its filing).
8.4 Attachment. The failure of any Material Obligor or (where
such failure would, individually or in the aggregate, be reasonably likely to
cause a Material Adverse Effect) any other Company (other than Pool Alaska,
Inc.) to have discharged within a period of 30 days after the commencement any
attachment, sequestration, or similar proceeding against its assets having a
value (individually or in the aggregate) of $250,000 or more.
8.5 Payment of Judgments. Any Material Obligor or (where such
failure would, individually or in the aggregate, be reasonably likely to cause
a Material Adverse Effect) any other Company (other than Pool Alaska, Inc.)
fails to pay any judgment or order for the payment of money in excess of
$250,000 rendered against it or any of its assets and either (a) any
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order, or (b) a stay of enforcement of such judgment or order, by
reason of pending appeal or otherwise, shall not be in effect for any period of
ten or more consecutive days.
8.6 Default on Other Debt or Security.
a. Any Material Obligor or (where such failure would,
individually or in the aggregate, be reasonably likely to cause a
Material Adverse Effect) any other Company (other than Pool Alaska,
Inc.) fails or refuses to make any payment due on any Debt or security
or any event shall occur or any condition shall exist in respect of
any of its Debt or securities or under any agreement securing or
relating to such Debt or securities, the effect of which is (i) to
cause any holder of such Debt or securities or a trustee to cause any
of such Debt or securities to become due prior to the stated maturity
or prior to the regularly scheduled dates of payment, or (ii) to
permit a trustee or the holder of any securities (other than common
stock) to elect (whether or not such trustee or holder does elect) a
majority of the directors on the board of directors of such entity.
"Security" has the meaning given such term in the Securities Act of
1933, as amended.
b. ENSERCH pays amounts under its Pool Arabia Guaranty
as described in Section 9(a) of the Contingent Support Agreement.
c. Borrower fails to pay when due its obligations
arising under the sublease dated as of March 15, 1983, between
Borrower and Sanan Leasing Corp., and such failure continues for ten
days.
d. A "Default" as defined in the Term Loan Agreement or
the ISDL Agreement.
8.7 Material Agreements. The occurrence and continuance of a
default under any Material Agreement of any Material Obligor or (where such
default would, individually or in the aggregate, be reasonably likely to cause
a Material Adverse Effect) any other Company (other than Pool Alaska, Inc.).
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8.8 ENSERCH Agreements. Either (a) an event of default is
declared by ENSERCH under the Contingent Support Agreement or (b) the exercise
of rights or remedies, including, without limitation, rights of acceleration
payments, by ENSERCH under the Continent Support Agreement or any note or
security agreement executed in connection therewith.
8.9 Material Adverse Effect. Agent or any Lender discovers (i)
any event or circumstance that would, individually or in the aggregate with all
other events or circumstances, be reasonably likely to cause a Material Adverse
Effect, (ii) any other information that the prospect of payment or performance
of the Obligation is materially impaired, or (iii) that the value of the
Collateral has or will be materially decreased and the situation giving rise
thereto is not corrected to Agent or Determining Lenders' satisfaction within
20 days after Agent gives notice to Borrower.
8.10 Misrepresentation. Agent or any Lender discovers that any
material statement, representation, or warranty in the Loan Papers or in any
Financial Statement of PESCO or any of its consolidated Subsidiaries or any
writing delivered to Agent or any Lender pursuant to the Loan Papers is false,
misleading, or erroneous when made or delivered in any material respect.
SECTION 9. CERTAIN RIGHTS AND REMEDIES.
9.1 Remedies Upon Default. Upon the occurrence and continuance of
a Default, Agent may (with the consent of, and must, upon the request of
Determining Lenders) do any one or more of the following: (a) Declare all or
part of the unpaid balance of the Obligation then or thereafter outstanding
immediately due and payable, whereupon it shall be due and payable (provided
that, upon the occurrence of a Default under SECTION 8.3, the entire Obligation
shall automatically become due and payable without notice or other action of
any kind whatsoever); (b) terminate the commitments of Lenders to extend credit
under this Agreement; (c) reduce any claim to judgment; (d) in order to
continue to secure the full and complete payment and performance of the
Obligation arising in connection with the LC Exposure, do one or both of the
following: (i) segregate such Collateral or accounts and other property
described in clause (e) following as Agent may in its sole discretion select,
and (ii) retain and deposit into the cash collateral account described in
SECTION 4.3 any proceeds received by Agent from the foreclosure of Collateral,
exercise of Rights of offset or banker's Lien, or exercise of other Rights; (e)
exercise (or request each Lender to, and each Lender is entitled to exercise)
the Rights of offset or banker's Lien against the interest of each Obligor in
and to every account and other property of such entities which are in the
possession of Agent or any Lender to the extent of the full amount of the
Obligation (each Company being deemed directly obligated to Agent and each
Lender in the full amount of the Obligation for such purposes); (f) foreclose
any or all Lender Liens or otherwise realize upon any and all of the Rights
Agent or Lenders may have in and to the Collateral; and (g) exercise any and
all other legal or equitable Rights afforded by the Loan Papers, the Laws of
the State of Texas or any other jurisdiction as Agent or Lenders shall deem
appropriate, or otherwise, including, but not limited to, the Right to bring
suit or other proceedings before any Tribunal either for specific performance
of any covenant or condition contained in any of the Loan Papers or in aid of
the exercise of any Right granted to Agent or Lenders in any of the Loan
Papers.
9.2 WAIVERS BY BORROWER AND OTHERS. BORROWER AND EACH SURETY,
ENDORSER, GUARANTOR, AND OTHER PARTY EVER LIABLE FOR PAYMENT OF ANY OF THE
OBLIGATION JOINTLY AND SEVERALLY WAIVE PRESENTMENT AND DEMAND FOR PAYMENT,
PROTEST, NOTICE OF INTENTION TO ACCELERATE, NOTICE OF ACCELERATION, AND NOTICE
OF PROTEST AND NONPAYMENT, AND AGREE THAT THEIR LIABILITY WITH RESPECT TO THE
OBLIGATION, OR ANY PART THEREOF, SHALL NOT BE AFFECTED BY ANY RENEWAL OR
EXTENSION IN THE TIME OF PAYMENT OF THE OBLIGATION, BY ANY INDULGENCE, OR BY
ANY RELEASE OR CHANGE IN ANY SECURITY FOR THE PAYMENT OF THE OBLIGATION, AND
HEREBY CONSENT TO ANY AND ALL RENEWALS, EXTENSIONS, INDULGENCES, RELEASES, OR
CHANGES, REGARDLESS OF THE NUMBER THEREOF.
9.3 Performance by Agent. If any covenant, duty, or agreement of
PESCO or any of its consolidated Subsidiaries is not performed in accordance
with the terms of the Loan Papers, Agent may, at its option (but subject to the
approval of the Determining Lenders), perform, or attempt to perform, such
covenant, duty, or agreement on behalf of such entity. Any amount reasonably
expended by Agent in such performance or attempted performance shall be payable
by Borrower to Agent on demand, shall become part of the Obligation, and shall
bear interest at the Default Rate from the date of such expenditure by Agent
until paid. Notwithstanding the foregoing, it is expressly understood that
Agent does not assume and shall never have, except by its express written
consent, any liability or responsibility for the performance of such covenant,
duty, or agreement.
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9.4 Delegation of Duties and Rights. Agent and Lenders may
exercise any of their respective duties or exercise any of their respective
Rights under the Loan Papers by or through their respective officers,
directors, employees, attorneys, agents, or other representatives.
9.5 Not in Control. None of the covenants or other provisions
contained in this Agreement shall, or shall be deemed to, give Agent or Lenders
the Right or power to exercise control over the affairs or management of PESCO
or any of its consolidated Subsidiaries, the power of Agent and Lenders being
limited to the Right to exercise the remedies provided in this SECTION 9.
Agent and Lenders have no fiduciary obligation toward PESCO or any of its
consolidated Subsidiaries with respect to any Loan Paper and transactions
contemplated thereby. The relationship pursuant to the Loan Papers between
PESCO and its consolidated Subsidiaries, and Agent and Lenders, is and shall be
that of debtor and creditor, respectively, and no partnership or joint venture
is created by any Loan Paper.
9.6 Waivers by Agent and Lenders. The acceptance by Agent or any
Lender at any time and from time to time of partial payment on the Obligation
shall not be deemed to be a waiver of any Default then existing. No waiver by
Agent or any Lender of any Default shall be deemed to be a waiver of any other
then-existing or subsequent Default. No delay or omission by Agent or any
Lender in exercising any Right under the Loan Papers shall impair such Right or
be construed as a waiver or acquiescence, nor shall any single or partial
exercise of any such Right preclude other or further exercise thereof, or the
exercise of such or any other Right.
9.7 Cumulative Rights. All Rights available to Agent, Determining
Lenders and Lenders under the Loan Papers are cumulative of and in addition to
all other Rights granted to Agent, Determining Lenders and Lenders at law or
in equity, whether or not the Obligation is due and payable and whether or not
Agent, Determining Lenders, or Lenders have instituted any suit for collection
or other action in connection with the Loan Papers.
9.8 Expenditures by Lenders. All court costs, reasonable
attorneys' fees, other costs of collection, and other out-of-pocket sums spent
by Agent or any Lender pursuant to the exercise of any Right (including,
without limitation, any effort to collect or enforce any Note) provided herein
shall be payable to Agent or such Lender on demand, shall become part of the
Obligation, and shall bear interest at the Default Rate from the date spent
until the date repaid by Borrower.
9.9 Diminution in Value of Collateral. Neither Agent nor any
Lender shall have any liability or responsibility whatsoever for any diminution
in or loss of value of any Collateral.
9.10 INDEMNIFICATION. PESCO AND EACH OF ITS CONSOLIDATED
SUBSIDIARIES SHALL INDEMNIFY AGENT AND LENDERS AND HOLD AGENT AND LENDERS
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES, AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY, OR ASSERTED AGAINST AGENT OR ANY LENDER, IN ANY WAY RELATING TO OR
ARISING OUT OF THE LOAN PAPERS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN
(INCLUDING, WITHOUT LIMITATION, ANY OF THE FOREGOING IMPOSED ON, INCURRED BY,
OR ASSERTED AGAINST AGENT OR ANY LENDER BY VIRTUE OF OWNERSHIP OR OPERATION OF
ANY COLLATERAL), TO THE EXTENT THAT ANY SUCH INDEMNIFIED LIABILITIES RESULT,
DIRECTLY OR INDIRECTLY, FROM ANY CLAIMS MADE OR ACTIONS, SUITS, OR PROCEEDINGS
COMMENCED BY OR ON BEHALF OF ANY PERSON OTHER THAN AGENT AND ANY LENDER;
PROVIDED THAT AGENT OR ANY LENDER SHALL NOT HAVE THE RIGHT TO BE INDEMNIFIED
HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE FOREGOING
AGREEMENT CONSTITUTES A PART OF THE OBLIGATION, AND SHALL SURVIVE THE EXERCISE
OF ANY RIGHTS OF AGENT OR ANY LENDER WITH RESPECT TO ALL OR ANY PART OF THE
COLLATERAL.
SECTION 10. CERTAIN DEFINITIONS AND TERMS.
10.1 Accounting Terms; Changes in GAAP. As used herein, "GAAP"
means generally accepted accounting principles, applied on a consistent basis,
(a) as set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants ("AICPA") and in statements of the
Financial Accounting Standards Board which are applicable in the circumstances
as of the date in question, and (b) where not inconsistent with such opinions
and statements, as set forth in other AICPA publications and guidelines or
which otherwise arise by custom for the particular industry; and the requisite
that such principles be applied on a consistent basis means that the accounting
principles in a current period are comparable in all material respects to those
applied in a preceding period. All accounting and financial terms used in any
of the Loan Papers and the compliance with each covenant contained in the Loan
Papers which relates to financial matters shall be determined in accordance
with GAAP, except to the extent that a deviation is expressly stated in
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such Loan Papers. If a change in GAAP requires a change in any method of
accounting or if any voluntary change in the accounting methods be permitted
pursuant to SECTION 7, then such change shall not result in a Default if, at
the time of such change, such Default had not occurred and was not then
continuing, based upon the former methods of accounting used by or on behalf of
PESCO and its consolidated Subsidiaries; provided that, after any such change
in accounting methods, only the next set of Financial Statements required to be
delivered to Agent shall be prepared in comparative form, in compliance with
the former methods of accounting used prior to such change, as well as with the
new method or methods of accounting.
10.2 Number and Gender of Words. Whenever in any Loan Paper the
singular number is used, the same shall include the plural where appropriate,
and vice versa.
10.3 Other Definitions. The following terms have the meanings
indicated:
ADVANCE means any amount disbursed (a) by one or more Lenders to or on
behalf of Borrower under the Loan Papers, either as an original disbursement of
funds, the continuation of an amount outstanding, or payment under an LC or (b)
by any Lender in accordance with, and to satisfy the obligations of any Company
under, any Loan Paper.
AFFILIATE means any Person who (a) would be an "affiliate" of PESCO or
any of its consolidated Subsidiaries within the meaning of the regulations
promulgated under the Securities Act of 1933, as such regulations and act are
amended and in effect on the date in question, if such Person were subject to
such act and regulations, or (b) who is a director or officer of PESCO or any
of its Subsidiaries.
AGENT means NationsBank of Texas, N.A., a U.S. national banking
association, and its successor or successors as agent for Lenders under this
Agreement.
AGREEMENT means this Restated Revolving Credit Agreement, including
the Schedules and Exhibits attached hereto, and any and all future renewals and
extensions or restatements of, or amendments or supplements to, all or any part
of the foregoing.
BIG 10 means Big 10 Fishing Tool Company, Inc., a California
corporation and a wholly-owned subsidiary of PCESI.
BORROWER is defined in this Agreement's introductory paragraph.
BORROWING BASE has the meaning set forth in SECTION 1.2.
BORROWING-BASE REPORT means a report substantially in the form of
EXHIBIT C-2, executed by the president, chief financial officer, or treasurer
of Borrower.
BORROWING DEFICIENCY means, at any time, an excess of (a) the total
Principal Debt over (b) the lesser of either the total Commitments or the
Borrowing Base.
BUSINESS DAY means any day on which Agent is open for banking business
in Texas.
CAPITAL EXPENDITURES means expenditures for the acquisition,
construction, improvement, or replacement of land, buildings, equipment, or
other fixed or capital assets or leaseholds (including, without limitation,
expenditures for the acquisition of interests in any Affiliate or any Person
which, as a result of such acquisition, becomes an Affiliate) excluding,
however, (i) expenditures financed by Project Financing, (ii) expenditures to
the extent made with PESCO stock, and (iii) expenditures for working capital
(cash accounts receivable, less accounts payable and current liabilities)
obtained as part of an acquisition, but only if no restrictions exist on the
transfer of Distributions or advances from such acquired Affiliate to Borrower.
CHARGE-OFFS means accounts receivable which have been written off
because they have been determined uncollectible (other than adjustments in the
ordinary course of business) for reasons unrelated to the credit worthiness of
the obligors thereon.
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CLOSING DATE means the date -- which must be a Business Day not later
than 30 days after the date on which all parties have executed this Agreement
-- on which Borrower, Agent, and Lenders agree that the conversions, renewals,
and extensions under SECTION 1.1(A) occur.
COLLATERAL has the meaning set forth in SECTION 4.2.
COMMITMENT means, for any Lender and at any time, the amount -- which
is subject to reduction and termination in accordance with this Agreement --
stated beside that Lender's name on the attached SCHEDULE 1(A), as most
recently amended in accordance with this Agreement.
COMMITMENT PERCENTAGE means, for any Lender and at any time, the
proportion -- stated as a percentage -- that its Commitment bears to the total
Commitments.
COMPANIES means Borrower and its consolidated Subsidiaries.
CONTINGENT SUPPORT AGREEMENT means the Contingent Support Agreement
dated April 7, 1990, between PESCO and ENSERCH, as renewed, extended, amended,
and supplemented from time to time, subject to Paragraph 5(h) of the Security
Agreement.
CURRENT FINANCIALS means PESCO's Financial Statements included in the
SEC Report on Form 10-K for the year ended December 31, 1994, and Form 10-Q for
the quarter ended September 30, 1995.
DEBT of any Person includes all obligations (contingent or otherwise)
for borrowed money or for the purchase of assets which, in accordance with
GAAP, should be classified upon such Person's balance sheet as liabilities, but
in any event including liabilities secured by any Lien existing on property
owned or acquired by such Person or a Subsidiary thereof (whether or not the
liability secured thereby shall have been assumed), obligations which have been
or under GAAP should be capitalized for financial reporting purposes, and all
guaranties, endorsements, and other contingent obligations with respect to Debt
of others, including, but not limited to, any obligations to acquire any of
such Debt, to purchase, sell, or furnish property or services primarily for the
purpose of enabling such other Person to make payment of any of such Debt, or
to otherwise assure the owner of any of such Debt against loss with respect
thereto, and any obligations of PESCO or any of its consolidated Subsidiaries
arising in connection with such entity's unconsolidated Subsidiaries or joint
venture or partnership interests.
DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar debtor relief Laws from time to time in effect
affecting the Rights of creditors generally.
DEFAULT is defined in SECTION 8.
DEFAULT RATE means an annual interest rate equal to the lesser of
either (a) the sum of the Designated Rate plus 4% or (b) the Highest Lawful
Rate.
DESIGNATED RATE means either the Floating Rate or a LIBOR Rate as
designated by Borrower pursuant to SECTION 1.3, 2.14, OR 2.15.
DETERMINING LENDERS means, at any time, any combination of Lenders
holding at least 66.7% of the total Commitments and 66.7% of the total
Principal Debt.
DISTRIBUTION by any Person means (a) the retirement, redemption,
purchase, or other acquisition for value of any capital stock or other equity
securities issued by such Person, (b) the declaration or payment of any
dividend on or with respect to any such securities, (c) any loan or advance by
such Person to, or other investment by such Person in, the holder of any of
such securities, and (d) any other payment (other than salaries of employees or
advances made in the ordinary course of business to employees for travel and
other expenses incurred in the ordinary course of business) by such Person with
respect to such securities.
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ENSERCH means ENSERCH Corporation, a Texas corporation.
ENVIRONMENTAL LAW means each Law that relates (a) to the condition of
air, water, land, or other parts of the environment or (b) to the release,
discharge, emission, removal, remediation, clean-up, generation, production,
manufacturing, processing, distribution, use, treatment, storage, disposal,
transportation, or other handling or control of pollutants, contaminants,
wastes, or toxic or other Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations, promulgations, and rulings issued thereunder.
EXHIBIT means an exhibit attached to this Agreement unless otherwise
specified.
EXISTING CREDIT AGREEMENT is defined in this Agreement's recitals.
FEDERAL FUNDS RATE means, for any day, the annual rate (rounded
upwards, if necessary, to the nearest 0.01%) determined (which determination is
conclusive and binding, absent manifest error) by Agent to be equal to the
weighted average of the rates on overnight federal funds transactions with
member banks of the Federal Reserve System arranged by federal funds brokers on
that day, as published by the Federal Reserve Bank of New York on the next
Business Day, or, if those rates are not published for any day, the average of
the quotations at approximately 10:00 a.m. received by Agent from three federal
funds brokers of recognized standing selected by Agent in its sole discretion.
FINANCIAL REPORT CERTIFICATE means a certificate, executed by the
president, chief financial officer, or controller of Borrower, substantially in
the form of EXHIBIT C-1 but containing such other certifications, statements,
calculations, explanations, and conclusions as any Lender may reasonably
request with respect to compliance with any or all of the covenants and
conditions contained in the Loan Papers.
FINANCIAL STATEMENTS includes, but is not limited to, balance sheets,
profit and loss statements, reconciliations of capital and surplus, and
statements of cash flows (i) prepared in comparative form with respect to the
corresponding period of the preceding fiscal year, all of the foregoing
prepared in accordance with GAAP, or (ii) included in any SEC Report.
FLOATING RATE means an annual rate equal to the sum of (a) 0.25%, plus
the Prime Rate.
FUNDING LOSS, means, all reasonable costs and reasonable losses
incurred by Lender when (i) Borrower fails or refuses (for any reason other
than such Lender's failure to comply with this Agreement) to borrow on the date
designated by Borrower in its Request for Advance or LC with respect to an
Advance which is to bear interest at a LIBOR Rate, or (ii) Borrower prepays or
converts all or any portion of the Principal Debt bearing interest at a LIBOR
Rate on a day other than the last day of an Interest Period for such portion.
GAAP is defined in SECTION 10.1.
GPC means Golden Pacific Corp., a California corporation.
GPC ACQUISITION means the acquisition by the Borrower of 100% of the
stock of GPC.
GUARANTY means collectively (as renewed, extended, amended and
replaced) (a) the Guaranty Agreement dated as of April 25, 1990; (b) the
amendment contained in the Existing Credit Agreement; (c) the Guaranty
Agreement dated as of April 21, 1995; (d) the Guaranty Agreement dated as of
June 13, 1995; and (e) the Guaranty Agreement dated as of July 13, 1995, each
of which was executed and delivered under this Agreement by, among others, all
Obligors (other than Borrower).
HAZARDOUS SUBSTANCE means (a) any substance that now or hereafter
constitutes a hazardous substance within the meaning of 42 U.S.C. Section
9601(14), as amended, or (b) any other substance identified as a hazardous or
toxic waste, pollutant, contaminant, or substance under any other Environmental
Law.
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HIGHEST LAWFUL RATE means, with respect to each Lender, the maximum
rate of interest (or, if the context so requires, an amount calculated at such
rate) which such Lender is allowed to contract for, charge, take, reserve, or
receive under applicable federal or state (whichever is higher) Law from time
to time in effect after taking into account, to the extent required by
applicable federal or state (whichever is higher) Law from time to time in
effect, any and all relevant payments or charges under the Loan Papers.
INTERCREDITOR AGREEMENT means the Restated Intercreditor Agreement
dated as of November 30, 1995 by NationsBank of Texas, N.A., and consented and
agreed to by National Bank of Canada, National Bank of Alaska and Borrower.
INTEREST PERIOD is defined in SECTION 2.14.
IRC means the Internal Revenue Code of 1986, as amended, and the
regulations, promulgations, and rulings issued thereunder.
ISDL AGREEMENT is defined in the preamble to this Agreement.
ISSUING LENDER means, for any LC, the Lender that issues it under this
Agreement.
JOINT VENTURE means any Person in which less than a majority interest
is owned or controlled by PESCO or any of its consolidated Subsidiaries.
JV PLEDGE AGREEMENT is defined in SECTION 1.2(E).
LAWS means all applicable statutes, laws, ordinances, regulations,
orders, writs, injunctions, or decrees of any state, commonwealth, province,
nation, territory, possession, county, township, parish, municipality, or
Tribunal.
LC means a standby letter of credit issued by Agent under this
Agreement for the account of one or more Companies.
LC AGREEMENT means, for an Issuing Lender, the standby letter of
credit application and agreement then in general use by Issuing Lender for its
customers, which for Agent is, on the date of this Agreement, its Form No.
00-04- 0823 (10/93).
LC EXPOSURE means the aggregate face amount of all undrawn and
uncancelled LCs issued under this Agreement.
LENDER LIENS means Liens in favor of Agent for the benefit of Lenders
securing all or any of the Obligation, including, but not limited to, Rights in
any Collateral created in favor of Lenders whether by mortgage, pledge,
hypothecation, assignment, transfer, or other granting or creation of Liens.
LENDERS means the financial institutions named on the attached
SCHEDULE 1(A) or on the most recently amended SCHEDULE 1(A), if any, delivered
by Agent under this Agreement, and, subject to this Agreement, their respective
successors and assigns (but not any Participant who is not otherwise a party to
this Agreement).
LIBOR means the quotient obtained by dividing (i) the rate that
deposits in United States dollars are offered by Agent to other major banks in
the London interbank market at approximately 11:00 a.m. (London time) two
Business Days before the commencement of the relevant Interest Period in an
amount comparable to the principal amount of the Advance then outstanding and
having a maturity approximately equal to such Interest Period; by (ii) one
minus the Reserve Percentage (expressed as a decimal) applicable to such
Interest Period.
LIBOR RATE means an annual interest rate (rounded upward, if
necessary, to the nearest 0.01%) equal to the sum of 2.625% plus LIBOR .
LIEN means any lien, mortgage, security interest, pledge, charge, or
encumbrance of any kind, including, without limitation, the Rights of a vendor,
lessor, or similar party under any conditional sales agreement (or other title
retention agreement or lease substantially equivalent thereto), other than
those under which PESCO or one of its consolidated
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Subsidiaries is the vendor or lessor, any production payment, and any other
Right of or arrangement with any creditor to have his claim satisfied out of
any property or assets of PESCO or any of its consolidated Subsidiaries, or the
proceeds therefrom, prior to the general creditors of the owner thereof.
LIQUIDATING COMPANIES means Pool Horizontal Drilling Services Co.,
Westex Production Service, Inc. and The International Air Drilling Company.
LITIGATION means any proceeding, claim, lawsuit, or investigation (a)
conducted by or before any Tribunal, or (b) pending before any public or
private arbitration board or panel.
LOAN PAPERS means (a) this Agreement, certificates delivered pursuant
to this Agreement, and Schedules, (b) any and all notes, mortgages, deeds of
trust, security agreements, guaranties, assignments, and other agreements in
favor of Agent or Lenders (or Agent on behalf of Lenders) or between any Lender
and PESCO or any of its consolidated Subsidiaries ever delivered pursuant to
this Agreement, the Existing Credit Agreement, or the Original Credit
Agreement, as any of the same may hereafter be amended, supplemented, or
restated, and (c) any and all future renewals and extensions or restatements
of, or amendments or supplements to, all or any part of the foregoing, provided
that "Loan Papers" shall not include term sheets, commitment letters,
correspondence, and similar documents used in the negotiation of this Agreement
except to the extent the same are specifically referred to in SECTION 5.15.
MATERIAL ADVERSE EFFECT means any material and adverse effect on (a)
the assets, liabilities, financial condition, business, or operations of any
Material Obligor, individually, or of PESCO and its consolidated Subsidiaries,
collectively, or (b) the ability of the Material Obligors, individually, or of
PESCO and its consolidated Subsidiaries, collectively, to carry out their
businesses in effect on the date hereof or as proposed on such date or to
satisfy their payment and performance obligations under any Loan Paper on a
timely basis.
MATERIAL AGREEMENT of any Person means any material written or oral
agreement, contract, commitment, or understanding to which such Person is a
party, by which such Person is directly or indirectly bound, or to which any
assets of such Person may be subject, which is not cancelable by such Person
upon 60 days or less notice without liability for further payment other than
nominal penalty.
MATERIAL OBLIGORS means PESCO, PESCO Subsidiary, Borrower, Pool
Alaska, Pool Texas, Pool Company (Houston) Inc., Associated Petroleum Services,
Inc., Pool Production Services, Inc., PCESI and Big 10.
MOODY'S means ▇▇▇▇▇'▇ Investors Service, Inc.
NATIONSBANK is defined in this Agreement's recitals.
NBA is defined in this Agreement's recitals.
NOTES means the promissory notes, each substantially in the form of
EXHIBIT A.
OBLIGATION means all present and future indebtedness, obligations, and
liabilities, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to Agent or any Lender by any Company, arising from, by
virtue of, or pursuant to any Loan Paper, including but not limited to the LC
Exposure, together with all interest accruing thereon and costs, expenses, and
attorneys' fees incurred in the enforcement or collection thereof, whether such
indebtedness, obligations, and liabilities are direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several.
OBLIGORS means PESCO, PESCO Subsidiary, Borrower, and Borrower's
present and future consolidated Subsidiaries which are incorporated within the
United States of America.
OFFICERS CERTIFICATE means a certificate substantially in the form of
EXHIBIT H.
OILTOOLS OPERATIONS means, collectively, (1) all of the capital stock
of Associated Oiltools, Inc., a Texas corporation, (2) all of the capital stock
of Oiltools Offshore Services Limited, a United Kingdom corporation, and (3)
certain
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other assets covered by the Sale and Purchase Agreement dated as of September
19, 1990 between Borrower and Antah Risjad, Ltd.
ORIGINAL CREDIT AGREEMENT is defined in this Agreement's recitals.
PAA ACQUISITION means an acquisition by Pool Alaska, Inc., of all of
the partnership interest in Pool Arctic Alaska owned by Arctic Alaska Drilling
Company, Inc.
PARTICIPANT is defined in SECTION 12.14(B).
PAYMENT AGREEMENT means the Agreement Regarding Deferred Payment of
Purchase Price dated June 13, 1995, among the Sellers and Borrower.
PBGC means the Pension Benefit Guaranty Corporation, or any successor,
established pursuant to ERISA.
PCESI means Pool California Energy Services, Inc., a California
corporation, formerly named California Production Service, Inc. and a
wholly-owned Subsidiary of Borrower.
PERMITTED LIENS means (a) the Lender Liens, (b) Liens in favor of
ENSERCH on the capital stock of Pool International, Inc., which are superior to
the Lender Liens thereon, (c) Liens in favor of PESCO or any of its
consolidated Subsidiaries if such Lien is a second Lien subordinated to Lender
Liens in a manner satisfactory to Lenders in its sole discretion, (d) the Liens
described in SCHEDULE 5.11 and renewals thereof (provided that upon any such
renewal, such Liens shall not secure any additional Debt), (e) involuntary
Liens on assets of Companies which are not Obligors if such Liens or the
enforcement thereof would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect, (f) pledges or deposits made to
secure payment of workers' compensation, or to participate in any fund in
connection with workers' compensation, unemployment insurance, pensions, or
other social security programs, (g) good-faith pledges or deposits made to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money), or leases, or to secure statutory obligations, surety or
appeal bonds, or indemnity, performance, or other similar bonds in each case in
the ordinary course of business, (h) encumbrances consisting of zoning
restrictions, easements, or other restrictions on the use of real property,
none of which, in respect of any Material Obligor or (where the same would,
individually or in the aggregate, be reasonably likely to cause a Material
Adverse Effect) any other Company, materially impair the use of such real
property by the Person in question in the operation of its business, and none
of which is violated by existing or proposed structures or land use, (i) Liens
securing any purchase money obligation if such obligation is permitted Debt
hereunder and if such Liens do not encumber any Property other than the
Property for which such purchase money obligation was incurred, (j) rights
resulting from joint venture or lease arrangements whereby a Person other than
PESCO or any of its consolidated Subsidiaries has rights to receive a portion
of cash flows generated by PESCO or any of its consolidated Subsidiaries
reasonably proportionate to such joint venturer's or lessor's interest, (k) the
following to the extent no Lien has been filed in any jurisdiction or agreed
to: Liens for Taxes not yet due and payable; mechanic's Liens and
materialman's Liens for services or materials for which payment is not yet due;
and landlord's Liens for rental not yet due and payable and which, to the
extent the same encumbers any of the Collateral, is subordinate to the Lender
Liens, (l) the following, if the validity or amount thereof is being contested
in good faith and by appropriate and lawful proceedings and so long as levy and
execution thereon have been stayed and continue to be stayed, and they do not
in the aggregate materially detract from the value of the property of the
Person in question, or materially impair the use thereof in the operation of
its business: Claims and Liens for Taxes due and payable; claims and Liens
upon, and defects of title to, real or personal property (other than any of the
Collateral), including any attachment of personal or real property or other
legal process prior to adjudication of a dispute on the merits; claims and
Liens of mechanics, materialmen, warehousemen, carriers, landlords, operators
and non-operators arising by virtue of operating or joint operating agreements,
or other like Liens; and adverse judgments on appeal, (m) Liens pre-approved in
writing by Determining Lenders, (n) Liens securing the "Obligation" as defined
in the Term Loan Agreement, (o) Liens in favor of the Sellers on the rigs and
equipment described in the PCESI Nonrecourse Guaranty and Security Agreement
attached as Exhibit D to the Payment Agreement and the real property described
in the three PCESI Deeds of Trust attached as Exhibit E to the Payment
Agreement, in each case securing Borrower's obligations under its 10%
Subordinated Notes issued to the Sellers, (p) Liens on the real property of
PCESI securing notes in respect of the deferred compensation obligations
described in SECTION 7.11(N), (q) the installation from time to time of
equipment such as engines, transmissions, handling tools, etc., on rigs subject
to the Liens in favor of the Sellers described in clause (o) above, so long as
the net diminution in value (if any) of the aggregate equipment of the Obligors
subject to this Agreement's restriction on
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Liens is not material in amount, (r) the Lien provided for in the Security
Agreement between Pool Texas and Elder Well Service, Inc. dated August 15,
1994, and (s) Liens securing the "Obligation" as defined in the ISDL Agreement.
PERSON means any individual, firm, corporation, association,
partnership, joint venture, Tribunal, or other entity.
PESCO means Pool Energy Services Co., a Texas corporation which is
PESCO Subsidiary's parent.
PESCO SUBSIDIARY means Pool Energy Holding, Inc., a Delaware
corporation which is Borrower's parent.
POOL ALASKA means Pool Alaska, Inc., a Texas corporation and a
wholly-owned subsidiary of Borrower.
POOL ALASKA INTERCREDITOR AGREEMENT is defined in SECTION 1.2(E).
POOL ALASKA JOINT VENTURE is defined in SECTION 1.2(E).
POOL TEXAS is defined in SECTION 7.11.
POTENTIAL DEFAULT means the occurrence of any event which, with notice
or lapse of time or both, would become a Default.
PRIME RATE means the prime interest rate charged by Agent, as
announced or published by Agent from time to time, and may not necessarily be
the lowest interest rate charged by Agent.
PRINCIPAL DEBT means, at any time, the sum of (a) the total unpaid
principal balance of all Advances plus (b) the total LC Exposure.
PROJECT FINANCING means any financing of an individual project with
repayment of the financing from dedicated funds generated solely from that
project and if such financing is pre-approved in writing by Determining
Lenders.
PROPERTY means any interest in any kind of property or asset, whether
real, personal, tangible, intangible, or mixed.
PRO RATA and PRO RATA PART means, when determined for any Lender, the
proportion (stated as a percentage) that the Principal Debt owed to it bears to
the total Principal Debt owed to all Lenders.
PURCHASER is defined in SECTION 12.14(C).
REQUEST FOR ADVANCE OR LC means a notice of advance substantially in
the form of EXHIBIT B, to be executed by Borrower's chief financial officer or
treasurer.
RESERVE PERCENTAGE means the weighted average of the Reserve
Requirements incurred by each Lender on its Pro Rata Part of the Principal
Debt.
RESERVE REQUIREMENT means the maximum aggregate reserve requirements
(including all basic, supplemental, emergency, special, marginal and other
reserves required by applicable Law) applicable to a member bank of the Federal
Reserve System for eurocurrency fundings or liabilities.
RIGHTS means rights, remedies, powers, privileges, and benefits.
SCHEDULE means a schedule attached to this Agreement unless specified
otherwise.
S&P means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.
SEC REPORTS means reports filed with the Securities and Exchange
Commission pursuant to Sections 13 and 15(d) of the Securities Exchange Act of
1934, as amended, and rules and regulations promulgated thereunder, and all
annual reports, proxy statements, and other proxy solicitation materials.
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SECTION means a section or subsection of this Agreement unless
specified otherwise.
SECURITY AGREEMENT means collectively (as renewed, extended, amended,
and replaced) (a) the Security Agreement dated as of April 25, 1990; (b) the
amendment contained in the Existing Credit Agreement; (c) the Amendment to
Security Agreement dated as of April 21, 1995; (d) the Security Agreement dated
as of June 13, 1995; and (e) the Security Agreement dated as of July 13, 1995,
each of which was executed and delivered under this Agreement by, among others,
NationsBank and all Obligors.
SELLERS means the persons from whom Borrower acquired ownership of all
of the issued and outstanding stock of GPC at the time of the closing under the
Stock Purchase Agreement: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
SOLVENT means, with respect to any Person, that at the time of
determination: (a) The fair value of its assets exceeds the total amount of
its liabilities (including, without limitation, its contingent liabilities
under the Loan Papers); (b) it is currently able, and expects in the future to
be able, to pay its debts as they mature; and (c) it has capital sufficient to
carry on its business as conducted and as proposed to be conducted. Contingent
liabilities shall be computed at the amount which, in light of all existing
facts and circumstances, represent the amount which can reasonably be expected
to become an actual or matured liability.
STOCK PURCHASE AGREEMENT means the Stock Purchase Agreement dated as
of June 13, 1995, among the Sellers, GPC, Borrower, and PESCO.
SUBORDINATION AGREEMENT means the Subordination Agreement dated as of
June 13, 1995, among Borrower, the Sellers, the Lenders, and Agent.
SUBSIDIARY means any Person of which an aggregate of more than 50% of
the stock of any class or classes (or equivalent interests) is owned of record
or beneficially, directly or indirectly, by another Person or any of its
Subsidiaries, if the holders of the stock of such class or classes (or
equivalent interests) (a) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or
individuals performing similar functions) of such Person, even though the Right
so to vote has been suspended by the happening of such a contingency, or (b)
are entitled, as such holders, to vote for the election of a majority of the
directors (or individuals performing similar functions) of such Person, whether
or not the Right so to vote exists by reason of the happening of a contingency,
but specifically excluding Associated Oiltools, Inc. (a Texas corporation),
Oiltools Offshore Services Limited (a United Kingdom corporation), and any
subsidiary companies of either of them.
TAXES means all taxes, assessments, fees, levies, imposts, duties,
deductions, withholdings, or other charges of any nature whatsoever from time
to time or at any time imposed by any Law or Tribunal on PESCO or any of its
consolidated Subsidiaries.
TERM LOAN AGREEMENT means that certain Restated Term Loan Agreement
(as renewed, extended, amended, and modified from time to time) dated as of
November 30, 1995 among Pool Company, as Borrower, the Lenders named therein,
and NationsBank of Texas, N.A., as Agent.
TERMINATION DATE means 12:00 Noon on the earlier of either (a) April
7, 1997, or (b) the date Lender's Commitments are terminated in accordance with
this Agreement.
TRIBUNAL means any court or governmental department, commission,
board, bureau, agency, or instrumentality of the U.S. or of any state,
commonwealth, nation, territory, possession, county, parish, or municipality,
whether now or hereafter constituted or existing.
U.S. means the United States of America.
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SECTION 11 AGREEMENT BETWEEN LENDERS.
11.1 Agent.
a. Each Lender appoints Agent (and Agent accepts
appointment) as its nominee and agent, in its name and on its behalf:
(i) to act as its nominee and on its behalf in and under all Loan
Papers; (ii) to arrange the means whereby its funds are to be made
available to Borrower under the Loan Papers; (iii) to take any action
that it properly requests under the Loan Papers (subject to the
concurrence of other Lenders as may be required under the Loan
Papers); (iv) to receive all documents and items to be furnished to it
under the Loan Papers; (v) to be the secured party, mortgagee,
beneficiary, recipient, and similar party in respect of any collateral
for the benefit of Lenders; (vi) to promptly distribute to it all
material information, requests, documents, and items received from
Borrower under the Loan Papers; (vii) to promptly distribute to it its
ratable part of each payment or prepayment (whether voluntary, as
proceeds of collateral upon or after foreclosure, as proceeds of
insurance thereon, or otherwise) in accordance with the terms of the
Loan Papers; and (viii) to deliver to the appropriate Persons
requests, demands, approvals, and consents received from it. However,
Agent may not be required to take any action that exposes it to
personal liability or that is contrary to any Loan Paper or applicable
Law.
b. If the initial or any successor Agent ever ceases to
be a party to this Agreement or if the initial or any successor Agent
ever resigns (whether voluntarily or at the request of Determining
Lenders), then Determining Lenders shall appoint the successor Agent
from among the Lenders (other than the resigning Agent). If
Determining Lenders fail to appoint a successor Agent within 30 days
after the resigning Agent has given notice of resignation or
Determining Lenders have removed the resigning Agent, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent,
which must be a commercial bank having a combined capital and surplus
of at least $1,000,000,000 (as shown on its most recently published
statement of condition). Upon its acceptance of appointment as
successor Agent, the successor Agent succeeds to and becomes vested
with all of the Rights of the prior Agent, and the prior Agent is
discharged from its duties and obligations of Agent under the Loan
Papers, and each Lender shall execute the documents as any Lender, the
resigning or removed Agent, or the successor Agent reasonably request
to reflect the change. After any Agent's resignation or removal as
Agent under the Loan Papers, the provisions of this SECTION 11 inure
to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under the Loan Papers.
c. Agent, in its capacity as a Lender, has the same
Rights under the Loan Papers as any other Lender and may exercise
those Rights as if it were not acting as Agent; the term "Lender"
shall, unless the context otherwise indicates, include Agent; and
Agent's resignation or removal shall not impair or otherwise affect
any Rights that it has or may have in its capacity as an individual
Lender. Each Lender and Borrower agree that Agent is not a fiduciary
for Lenders or for Borrower but simply is acting in the capacity
described in this Agreement to alleviate administrative burdens for
Borrower and Lenders, that Agent has no duties or responsibilities to
Lenders or Borrower except those expressly set forth in the Loan
Papers, and that Agent in its capacity as a Lender has all Rights of
any other Lender.
d. Agent may now or hereafter be engaged in one or more
loan, letter of credit, leasing, or other financing transactions with
Borrower, act as trustee or depositary for Borrower, or otherwise be
engaged in other transactions with Borrower (collectively, the "other
activities") not the subject of the Loan Papers. Without limiting the
Rights of Lenders specifically set forth in the Loan Papers, Agent is
not responsible to account to Lenders for those other activities, and
no Lender shall have any interest in any other activities, any present
or future guaranties by or for the account of Borrower that are not
contemplated or included in the Loan Papers, any present or future
offset exercised by Agent in respect of those other activities, any
present or future property taken as security for any of those other
activities, or any property now or hereafter in Agent's possession or
control that may be or become security for the obligations of Borrower
arising under the Loan Papers by reason of the general description of
indebtedness secured or of property contained in any other agreements,
documents, or instruments related to any of those other activities
(but, if any payments in respect of those guaranties or that property
or the proceeds thereof is applied by Agent to reduce the Obligation,
then each Lender is entitled to share ratably in the application as
provided in the Loan Papers).
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11.2 Expenses. Each Lender shall pay its Commitment Percentage of
any reasonable expenses (including, without limitation, court costs, reasonable
attorneys' fees and other costs of collection) incurred by Agent (while acting
in such capacity) in connection with any of the Loan Papers if Agent is not
reimbursed from other sources within 30 days after incurrence. Each Lender is
entitled to receive its Commitment Percentage of any reimbursement that it
makes to Agent if Agent is subsequently reimbursed from other sources.
11.3 Proportionate Absorption of Losses. Except as otherwise
provided in the Loan Papers, nothing in the Loan Papers gives any Lender any
advantage over any other Lender insofar as the Obligation is concerned or to
relieve any Lender from ratably absorbing any losses sustained with respect to
the Obligation (except to the extent unilateral actions or inactions by any
Lender result in Borrower or any other obligor on the Obligation having any
credit, allowance, setoff, defense, or counterclaim solely with respect to all
or any part of that Lender's Pro Rata Part of the Obligation).
11.4 Delegation of Duties; Reliance. Lenders may perform any of
their duties or exercise any of their Rights under the Loan Papers by or
through Agent, and Lenders and Agent may perform any of their duties or
exercise any of their Rights under the Loan Papers by or through their
respective representatives. Agent, Lenders, and their respective
representatives (a) are entitled to rely upon (and shall be protected in
relying upon) any written statement believed by it or them to be genuine and
correct and to have been signed or made by the proper Person and, with respect
to legal matters, upon opinion of counsel selected by Agent or that Lender (but
nothing in this clause (a) permits Agent to rely on any other writing if a
specific writing is required by this Agreement), (b) are entitled to deem and
treat each Lender as the owner and holder of its part of the Principal Debt for
all purposes until, subject to SECTION 12.14, written notice of the assignment
or transfer is given to and received by Agent (and any request, authorization,
consent, or approval of any Lender is conclusive and binding on each subsequent
holder, assignee, or transferee of or Participant in that Lender's part of the
Principal Debt until that notice is given and received), (c) are not deemed to
have notice of the occurrence of a Default unless a responsible officer of
Agent, who handles matters associated with the Loan Papers and transactions
thereunder, has actual knowledge or Agent has been notified by a Lender or
Borrower, and (d) are entitled to consult with legal counsel (including counsel
for Borrower), independent accountants, and other experts selected by Agent and
are not liable for any action taken or omitted to be taken in good faith by it
in accordance with the advice of counsel, accountants, or experts.
11.5 Limitation of Agent's Liability.
a. Neither Agent nor any of its representatives will be
liable for any action taken or omitted to be taken by it or them under
the Loan Papers in good faith and believed by it or them to be within
the discretion or power conferred upon it or them by the Loan Papers
or be responsible for the consequences of any error of judgment
(except for fraud, gross negligence, or willful misconduct), and
neither Agent nor any of its representatives has a fiduciary
relationship with any Lender by virtue of the Loan Papers (but nothing
in this Agreement negates the obligation of Agent to account for funds
received by it for the account of any Lender).
b. Unless indemnified to its satisfaction against loss,
cost, liability, and expense, Agent may not be compelled to do any act
under the Loan Papers or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend
any suit in respect of the Loan Papers. If Agent requests instructions
from Lenders, or Determining Lenders, as the case may be, with respect
to any act or action in connection with any Loan Paper, Agent is
entitled to refrain (without incurring any liability to any Person by
so refraining) from that act or action unless and until it has
received instructions. In no event, however, may Agent or any of its
representatives be required to take any action that it or they
determine could incur for it or them criminal or onerous civil
liability. Without limiting the generality of the foregoing, no
Lender has any right of action against Agent as a result of Agent
acting or refraining from acting under this Agreement in accordance
with instructions of Determining Lenders.
c. Agent is not responsible to any Lender or any
Participant for, and each Lender represents and warrants that it has
not relied upon Agent in respect of, (i) the creditworthiness of any
Company and the risks involved to that Lender, (ii) the effectiveness,
enforceability, genuineness, validity, or the due execution of any
Loan Paper (other than by Agent), (iii) any representation, warranty,
document, certificate, report, or statement made therein (other than
by Agent) or furnished thereunder or in connection therewith, (iv) the
adequacy of any collateral now or hereafter securing the Obligation or
the existence, priority, or perfection of any Lien now or hereafter
granted or purported to be granted on the collateral under any Loan
Paper, or (v) observation of or compliance with
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any of the terms, covenants, or conditions of any Loan Paper on the
part of any Company. EACH LENDER AGREES TO INDEMNIFY AGENT AND ITS
REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST (BUT LIMITED
TO SUCH LENDER'S COMMITMENT PERCENTAGES OF) ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, REASONABLE EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND
OR NATURE WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST, OR
INCURRED BY THEM IN ANY WAY RELATING TO OR ARISING OUT OF THE LOAN
PAPERS OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THE LOAN PAPERS IF
AGENT AND ITS REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY
ANY COMPANY. ALTHOUGH AGENT AND ITS REPRESENTATIVES HAVE THE RIGHT TO
BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN ORDINARY
NEGLIGENCE, AGENT AND ITS REPRESENTATIVES DO NOT HAVE THE RIGHT TO BE
INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN FRAUD, GROSS
NEGLIGENCE, OR WILLFUL MISCONDUCT.
11.6 Default; Collateral. While a Default exists, Lenders agree to
promptly confer in order that Determining Lenders or Lenders, as the case may
be, may agree upon a course of action for the enforcement of the Rights of
Lenders; and Agent is entitled to refrain from taking any action (without
incurring any liability to any Person for so refraining) unless and until it
has received instructions from Determining Lenders. In actions with respect to
any property of Borrower, Agent is acting for the ratable benefit of each
Lender. Agent shall hold, for the ratable benefit of all Lenders, any security
it receives for the Obligation or any guaranty of the Obligation it receives
upon or in lieu of foreclosure.
11.7 Limitation of Liability. No Lender or any Participant will
incur any liability to any other Lender or Participant except for acts or
omissions in bad faith, and neither Agent nor any Lender or Participant will
incur any liability to any other Person for any act or omission of any other
Lender or any Participant.
11.8 Relationship of Lenders. The Loan Papers do not create a
partnership or joint venture among Agent and Lenders or among Lenders.
11.9 Collateral Matters.
a. Each Lender authorizes and directs Agent to enter
into the Loan Papers for the ratable benefit of Lenders. Each Lender
agrees that any action taken by Agent concerning any Collateral with
the consent of, or at the request of, Determining Lenders in
accordance with the provisions of this Agreement, the Security
Agreement, or the other Loan Papers, and the exercise by Agent (with
the consent of, or at the request of, Determining Lenders) of powers
concerning the Collateral set forth in any Loan Paper, together with
other reasonably incidental powers, shall be authorized and binding
upon all Lenders.
b. Agent is authorized on behalf of all Lenders, without
the necessity of any notice to or further consent from any Lender,
from time to time before a Default or Potential Default, to take any
action with respect to any Collateral or Loan Paper that may be
necessary to perfect and maintain perfected the Lender Liens upon the
Collateral granted by the Loan Papers.
c. Except to use the customary standard of care that it
exercises in respect of collateral for its own account, Agent has no
obligation whatsoever to any Lender or to any other Person to assure
that the Collateral exists or is owned by any Company or is cared for,
protected, or insured or has been encumbered or that the Liens granted
to Agent for the benefit of Lenders under the Loan Papers have been
properly or sufficiently or lawfully created, perfected, protected, or
enforced, or are entitled to any particular priority.
d. Agent shall exercise the same care and prudent
judgment with respect to the Collateral and the Loan Papers as it
normally and customarily exercises in respect of similar collateral
and security documents.
e. Lenders irrevocably authorize Agent, at its option
and in its discretion, to release any Lender Lien upon any Collateral
(i) upon full payment of the Obligation; (ii) constituting property
being sold or disposed of as permitted under SECTION 7.20, if Agent
determines that the property being sold or disposed is being sold or
disposed in accordance with the requirements and limitations of
SECTION 7.20 and Agent concurrently receives all mandatory prepayments
with respect thereto, if any, in accordance with SECTION 7.20; (iii)
constituting property in which no Company owned any interest at the
time the Lender Lien was granted or at any time thereafter; (iv)
constituting property leased to any Company under a lease that has
expired or been terminated in a transaction
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permitted under this Agreement or is about to expire and that has not
been, and is not intended by that Company to be, renewed; (v)
consisting of an instrument evidencing Debt pledged to Agent (for the
benefit of Lenders), if the Debt evidenced thereby has been paid in
full. Lenders further irrevocably authorize Agent to release any
Lender Lien upon any Collateral, if approved, authorized, or ratified
in writing by Determining Lenders. Upon request by Agent at any time,
Lenders will confirm in writing Agent's authority to release
particular types or items of Collateral under this SECTION 11.9(E).
11.10 Benefits of Agreement. None of the provisions of this SECTION
11 inure to the benefit of any Company or any other Person other than Agent and
Lenders; consequently, no Company or any other Person is entitled to rely upon,
or to raise as a defense, in any manner whatsoever, the failure of Agent or any
Lender to comply with these provisions.
SECTION 12. MISCELLANEOUS.
12.1 Headings and Exhibits. Headings and captions may not be
construed in interpreting provisions in any Loan Paper. Any incomplete Exhibit
must be completed correctly and in accordance with the terms and provisions of
this Agreement before or at the time of its execution and delivery.
12.2 Time and Non-Business Days. Time is of the essence in the
Loan Papers. All time references (e.g., 10:00 a.m.) are to time in Houston,
Texas. Any action that is due on a non-Business Day may be delayed until the
next- succeeding Business Day, but interest accrues on any payment until it is
made.
12.3 Communications. Unless otherwise specifically provided,
whenever any Loan Paper requires or permits any consent, approval, notice,
request, or demand from one party to another, such communication must be in
writing (which may be by facsimile transmission) to be effective and shall be
deemed to have been given on the day actually delivered or, if mailed, on the
fifth Business Day after it is enclosed in an envelope, addressed to the party
to be notified at the address stated below, properly stamped, sealed, and
deposited in the appropriate official postal service. Until changed by notice,
the address and facsimile or FAX number for each party is as appears on the
signature page(s) hereto.
12.4 Form and Number of Documents. Each agreement, document,
instrument, or other writing to be furnished to Lenders under any provision of
this Agreement must be in form and substance and in such number of counterparts
as may be satisfactory to Agent and its counsel.
12.5 Exceptions to Covenants. Neither PESCO nor any of its
consolidated Subsidiaries shall take or fail to take any action permitted under
any Loan Paper if such action or omission would result in the breach of any
covenant contained in any Loan Paper.
12.6 Survival. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Papers shall survive
all closings under the Loan Papers. Further, Borrower's obligations and
Agent's and each Lender's Rights under the Loan Papers shall continue in full
force and effect until the Obligation is paid and performed in full.
12.7 Governing Law. The Loan Papers are being executed and
delivered, and are intended to be performed, in the State of Texas, and the
Laws (other than conflict of laws provisions thereof) of such State and of the
United States of America shall govern the Rights and duties of the parties and
the validity, construction, enforcement, and interpretation of the Loan Papers,
except to the extent otherwise specified in any of the Loan Papers.
12.8 Venue; Service of Process. Each Obligor, for itself and its
successors and assigns, hereby (a) irrevocably submits to the nonexclusive
jurisdiction of the state and federal courts of the State of Texas and agrees
and consents that service of process may be made upon it in any legal
proceeding arising out of or in connection with the Loan Papers and the
Obligation by service of process as provided by Texas Law, (b) irrevocably
waives, to the fullest extent permitted by Law, any objection which it may now
or hereafter have to the laying of venue of any Litigation arising out of or in
connection with the Loan Papers and the Obligation brought in district courts
of ▇▇▇▇▇▇ County, Texas, or in the U.S. District Court for the Southern
District of Texas, Houston Division, (c) irrevocably waives any claims that any
Litigation brought in any such court has been brought in an inconvenient forum,
(d) agrees to designate PESCO as its agent for service of process in Houston,
Texas, in connection with any such Litigation and to deliver to Agent evidence
thereof, (e) irrevocably consents to the service of process out of any of the
aforementioned courts in any such Litigation by the mailing of copies thereof
by certified mail,
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return receipt requested, postage prepaid, to such Obligor at its address set
forth herein, and (f) irrevocably agrees that any legal proceeding against
Agent or any Lender arising out of or in connection with the Loan Papers on the
Obligation shall be brought in the district courts of ▇▇▇▇▇▇ County, Texas, or
in the U.S. District Court for the Southern District of Texas, Houston
Division. Nothing herein shall affect the Right of Agent or any Lender to
commence legal proceedings or otherwise proceed against Borrower in any
jurisdiction or to serve process in any manner permitted by applicable Law.
12.9 Maximum Interest Rate. Regardless of any provision contained
in any of the Loan Papers, no Lender is entitled to contract for, charge, take,
reserve, receive, or apply, as interest on the Obligation, or any part thereof,
any amount in excess of the Highest Lawful Rate, and, in the event Lenders ever
contract for, charge, take, reserve, receive, or apply as interest any such
excess, it shall be deemed a partial prepayment of principal and treated
hereunder as such; and, if the Principal Debt is paid in full, any remaining
excess shall forthwith be paid to Borrower. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Highest
Lawful Rate, Borrower and Lenders shall, to the maximum extent permitted under
applicable Law, (a) treat all Advances as but a single extension of credit (and
Lenders and Borrower agree that such is the case and that provision herein for
multiple Advances is for convenience only), (b) characterize any nonprincipal
payment as an expense, fee, or premium rather than as interest, (c) exclude
voluntary prepayments and the effects thereof, and (d) "spread" the total
amount of interest throughout the entire contemplated term of the Obligation;
provided that, if the Obligation is paid and performed in full prior to the end
of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Highest Lawful Rate, Lenders
shall refund such excess, and, in such event, Lenders shall not be subject to
any penalties provided by any Laws for contracting for, charging, taking,
reserving, or receiving interest in excess of the Highest Lawful Rate. To the
extent the Laws of the State of Texas are applicable for purposes of
determining the "Highest Lawful Rate", such term shall mean the "indicated rate
ceiling" from time to time in effect under Article 1.04, Title 79, Revised
Civil Statutes of Texas, as amended, or, if permitted by applicable Law and
effective upon the giving of the notices required by such Article 1.04 (or
effective upon any other date otherwise specified by applicable Law), the
"monthly ceiling", the "quarterly ceiling", or "annualized ceiling" from time
to time in effect under such Article 1.04, whichever Lenders shall elect to
substitute for the "indicated rate ceiling", and vice versa, each such
substitution to have the effect provided in such Article 1.04; and Lenders
shall be entitled to make such election from time to time and one or more times
and, without notice to Borrower, to leave any such substitute rate in effect
for subsequent periods in accordance with subsection (h)(1) of such Article
1.04. Pursuant to Article 15.10(b) of Chapter 15, Subtitle 79, Revised Civil
Statutes of Texas, 1925, as amended (which regulates certain revolving credit
loan accounts and revolving triparty accounts), Borrower agrees that such
Chapter 15 shall not govern or in any manner apply to the Obligation.
12.10 Invalid Provisions. If any provision of any Loan Paper is
held to be illegal, invalid, or unenforceable, such provision shall be fully
severable; the appropriate Loan Paper shall be construed and enforced as if
such provision had never comprised a part thereof; and the remaining provisions
shall remain in full force and effect and shall not be affected by such
provision or by its severance therefrom. Furthermore, in lieu of such
provision there shall be added automatically as a part of such Loan Paper a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable.
12.11 Entirety. THIS AGREEMENT AND THE OTHER LOAN PAPERS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12.12 Amendments, Consents, Conflicts, and Waivers.
a. Unless otherwise specifically provided (i) this
Agreement may be amended only by an instrument in writing executed by
Borrower, Agent, and Determining Lenders and supplemented only by
documents delivered or to be delivered in accordance with the express
terms of this Agreement, and (ii) the other Loan Papers may only be
the subject of an amendment, modification, or waiver that has been
approved by Determining Lenders and Borrower.
b. Any amendment to or consent or waiver under this
Agreement or any Loan Paper that purports to accomplish any of the
following must be by an instrument in writing executed by Borrower and
Agent and
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executed (or approved, as the case may be) by each Lender: (i) Extends
the due date or decreases the amount of any scheduled payment of the
Obligation beyond the date specified in the Loan Papers; (ii)
decreases any rate or amount of interest, fees, or other sums payable
to Agent -- except fees payable only to Agent to which it may agree
with Borrower without joinder by any Lender -- or Lenders under this
Agreement (except such reductions as are contemplated by this
Agreement); (iii) changes the definition of "COMMITMENTS",
"DETERMINING LENDERS", or "TERMINATION DATE"; (iv) increases any one
or more Lenders' Commitments; (v) waives compliance with, amends, or
releases (in whole or in part) any guaranty or any Collateral unless
the release is contemplated in any Loan Paper; or (vi) changes this
CLAUSE (B) or any other matter specifically requiring the consent of
all Lenders under this Agreement.
c. ANY CONFLICT OR AMBIGUITY BETWEEN THE TERMS AND
PROVISIONS OF THIS AGREEMENT AND TERMS AND PROVISIONS IN ANY OTHER
LOAN PAPER IS CONTROLLED BY THE TERMS AND PROVISIONS OF THIS AGREEMENT
FOR ALL PURPOSES.
d. No course of dealing or any failure or delay by
Agent, any Lender, or any of their respective representatives with
respect to exercising any Right of Agent or any Lender under this
Agreement operates as a waiver thereof. A waiver must be in writing
and signed by Agent and Lenders (or Determining Lenders, if permitted
under this Agreement) to be effective, and a waiver will be effective
only in the specific instance and for the specific purpose for which
it is given.
e. As stated in the Recitals to this Agreement, Waivers
granted and interpretations issued by NationsBank with respect to the
Original Credit Agreement, copies of which are attached hereto as
EXHIBIT I, shall apply to this Agreement to the same extent as if
granted or issued by Agent and Lenders with reference specifically to
this Agreement.
12.13 Multiple Counterparts. This Agreement has been executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. Each Lender need not execute the same
counterpart of this Agreement so long as identical counterparts are executed by
Borrower, each Lender, and Agent. This Agreement shall become effective when
counterparts of this Agreement have been executed and delivered to Agent by
each Lender, Agent, and Borrower, or, in the case only of Lenders, when Agent
has received telecopied, telexed, or other evidence satisfactory to it that
each Lender has executed and is delivering to Agent a counterpart of this
Agreement.
12.14 Successors and Assigns; Participations.
a. Each Loan Paper binds and inures to the benefit of
the parties thereto, any intended beneficiary thereof, and each of
their respective successors and permitted assigns. No Lender may
transfer, pledge, assign, sell any participation in, or otherwise
encumber its portion of the Obligation except as permitted by this
SECTION 12.14.
b. Subject to the provisions of this section and in
accordance with applicable Law, any Lender may, in the ordinary course
of its commercial banking business, at any time sell to one or more
Persons (each a "PARTICIPANT") participating interests in its portion
of the Obligation. The selling Lender shall remain a "LENDER" under
this Agreement (and the Participant shall not constitute a "LENDER"
under this Agreement) and its obligations under this Agreement shall
remain unchanged. The selling Lender shall remain solely responsible
for the performance of its obligations under the Loan Papers and shall
remain the holder of its share of the Principal Debt for all purposes
under this Agreement. Borrower and Agent shall continue to deal
solely and directly with the selling Lender in connection with that
Lender's Rights and obligations under the Loan Papers. Participants
have no Rights under the Loan Papers, other than certain voting Rights
as provided below. Subject to the following, each Lender may obtain
(on behalf of its Participants) the benefits of SECTION 2 with respect
to all participations in its part of the Obligation outstanding from
time to time so long as Borrower is not obligated to pay any amount in
excess of the amount that would be due to that Lender under SECTION 2
calculated as though no participations have been made. No Lender may
sell any participating interest under which the Participant has any
Rights to approve any amendment, modification, or waiver of any Loan
Paper, except to the extent the amendment, modification, or waiver
extends the due date for payment of any principal, interest, or fees
due under the Loan
34
37
Papers, increases that Lender's Commitment, reduces the interest rate
or the amount of principal or fees applicable to the Obligation
(except reductions contemplated by this Agreement), or releases any
guaranty or Collateral unless the release is contemplated in any Loan
Paper. However, if a Participant is entitled to the benefits of
SECTION 2 or a Lender grants Rights to its Participants to approve
amendments to or waivers of the Loan Papers respecting the matters
described in the previous sentence, then that Lender must include a
voting mechanism in the relevant participation agreement whereby a
majority of its portion of the Obligation (whether held by it or
participated) shall control the vote for all of that Lender's portion
of the Obligation. Except in the case of the sale of a participating
interest to another Lender, the relevant participation agreement shall
prohibit the Participant from transferring, pledging, assigning,
selling participations in, or otherwise encumbering its portion of the
Obligation.
c. Subject to the provisions of this section, any Lender
may at any time, in the ordinary course of its commercial banking
business, (i) without the consent of Borrower or Agent, assign all or
any part of its Rights and obligations under the Loan Papers to any of
its Affiliates (each a "PURCHASER") and (ii) if no Default exists,
upon the prior written consent of Borrower (which will not be
unreasonably withheld) and Agent, assign to any other Person that is
not a business competitor of any Company (each of which is also a
"PURCHASER") a proportionate part -- not less than $5,000,000 of that
Lender's Commitment and, if less than all, then the selling Lender
must retain at least $5,000,000 of its Commitment -- under the Loan
Papers, it must retain at least $5,000,000 of all or any part of its
Rights and obligations under the Loan Papers. In each case, the
Purchaser shall assume those Rights and obligations under an
assignment agreement substantially in the form of the attached EXHIBIT
E. Each assignment under this SECTION 12.14(C) shall include a
ratable interest in the assigning Lender's Rights and obligations
under this Agreement. Upon (i) delivery of an executed copy of the
assignment agreement to Borrower and Agent and (ii) payment of a fee
of $2,500.00 from the transferor to Agent, from and after the
assignment's effective date (which shall be after the date of
delivery), the Purchaser shall for all purposes be a Lender party to
this Agreement and shall have all the Rights and obligations of a
Lender under this Agreement to the same extent as if it were an
original party to this Agreement with commitments as set forth in the
assignment agreement, and the transferor Lender shall be released from
its obligations under this Agreement to a corresponding extent, and,
except as provided in the remainder of this clause (c), no further
consent or action by Borrower, Lenders, or Agent shall be required.
Upon the consummation of any transfer to a Purchaser under this clause
(c), the then-existing SCHEDULE 1(B) shall automatically be deemed to
reflect the name, address, and Commitment of such Purchaser, Agent
shall deliver to Borrower and Lenders an amended SCHEDULE 1(B)
reflecting those changes, Borrower shall execute and deliver to each
of the transferor Lender and the Purchaser a Note in the face amount
of its respective Commitment following transfer, and, upon receipt of
its new Note, the transferor Lender shall return to Borrower the Note
previously delivered to it under this Agreement. A Purchaser is
subject to all the provisions in this section as if it were a Lender
signatory to this Agreement as of the date of this Agreement.
d. Any Lender may at any time, without the consent of
Borrower or Agent, assign all or any part of its Rights under the Loan
Papers to a Federal Reserve Bank without releasing the transferor
Lender from its obligations thereunder.
e. Notwithstanding any contrary provision in this
Agreement, a Lender may not sell or participate any of its interests
for a purchase price that, directly or indirectly, reflects a discount
from face value, without first offering the sale or participation to
the other Lenders on a Pro Rata basis (which must be accepted or
rejected within five Business Days after the offer).
12.15 Confidentiality. Agent or any Lender may, without limitation,
(a) disclose any information concerning PESCO or any of its consolidated
Subsidiaries to any Tribunal, or to any prospective or actual Participant or
(subject to SECTION 12.14) any other actual or prospective transferee of any of
Agent's or any Lender's Rights and duties, or to the respective affiliates,
directors, officers, employees, attorneys, and agents of any prospective or
actual Participant or such other transferee of an interest, provided that such
prospective or actual Participant or such other transferee agrees to treat the
information as confidential, and (b) use any information concerning PESCO and
any of its consolidated Subsidiaries (i) to the extent pertinent to an
evaluation of the Obligation, (ii) to enforce compliance with the terms and
conditions of the Loan Papers, or (iii) to take any action when it is entitled
to do so under the Loan Papers which Lenders deem necessary to protect its
interests if a Default has occurred and is continuing.
35
38
12.16 Parties Bound; Assignments. This Agreement is binding upon,
and inures to the benefit of Agent, Determining Lenders, Lenders, each Obligor,
and their respective successors and assigns, provided that no Obligor may,
without the prior written consent of Determining Lenders, assign any Rights,
duties, or obligations hereunder, and any purported assignment in violation of
the foregoing shall be void and ineffective.
[Remainder of page intentionally blank; signature page follows.]
36
39
EXECUTED as of the date first stated above.
Pool Company POOL COMPANY, as Borrower
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇▇▇▇▇, Treasurer
FAX (▇▇▇) ▇▇▇-▇▇▇▇ By /S/ ▇. ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇, Senior Vice President,
Finance
By /S/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇▇, Treasurer
NationsBank of Texas, N.A. NATIONSBANK OF TEXAS, N.A., as Agent, a Lender,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ and NationsBank
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
FAX (▇▇▇) ▇▇▇-▇▇▇▇
By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
National Bank of Canada NATIONAL BANK OF CANADA, as a Lender
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Group Vice President
FAX (▇▇▇) ▇▇▇-▇▇▇▇ By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Group Vice President
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
National Bank of Alaska NATIONAL BANK OF ALASKA, as a Lender
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Benz, Vice President
FAX: (▇▇▇) ▇▇▇-▇▇▇▇ By /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BENZ
-------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Benz, Vice President
37
40
The Obligors named below are joining this Agreement for the purpose of
(a) ratifying, confirming, and agreeing to each of the matters and undertakings
stated in SECTION 4.4 and (b) agreeing to each of the covenants applicable to
it under SECTION 7.
Pool Energy Services Co. POOL ENERGY SERVICES CO.,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ POOL ENERGY HOLDING, INC.,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ POOL COMPANY,
Attn: ▇. ▇. ▇▇▇▇▇▇▇▇▇, POOL COMPANY (HOUSTON) INC.,
Treasurer POOL COMPANY (TEXAS) INC.,
FAX (▇▇▇) ▇▇▇-▇▇▇▇ ASSOCIATED PETROLEUM SERVICES, INC.,
POOL PRODUCTION SERVICES, INC.,
POOL ALASKA, INC.,
POOL AMERICAS, INC.,
POOL INTERNATIONAL, INC.,
POOL-AUSTRALIA, INC.,
THE INTERNATIONAL AIR DRILLING COMPANY,
POOL HORIZONTAL DRILLING SERVICES CO.,
POOL CALIFORNIA ENERGY SERVICES, INC.,
BIG 10 FISHING TOOL COMPANY, INC.
WESTEX PRODUCTION SERVICE, INC.,
as all of those Companies are Obligors
By /S/ ▇. ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇, Senior Vice President, Finance of each of
the above Obligors
By /S/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇▇, Treasurer of each of the above Obligors
38
41
EXHIBIT A
REVOLVING CREDIT NOTE
$______________ Houston, Texas __________, 1995
FOR VALUE RECEIVED, POOL COMPANY, a Texas corporation ("MAKER"),
hereby promises to pay to the order of ______, ("PAYEE"), the principal amount
of $_______________ or so much thereof as may be disbursed and outstanding
hereunder, together with interest, as hereinafter described.
This promissory note has been executed and delivered under, and is
subject to the terms of, the $35,000,000 Restated Revolving Credit Agreement
(as amended, the "CREDIT AGREEMENT") dated as of November 30, 1995, among
Maker, NationsBank of Texas, N.A., as Agent, and Payee and the other Lenders
referred to therein, and is a "Note" referred to therein. Unless defined
herein or the context otherwise requires, capitalized terms used herein have
the meaning given to such terms in the Credit Agreement. Reference is made to
the Credit Agreement for provisions affecting this promissory note regarding
the place of payment, applicable interest rates, principal and interest payment
dates, final maturity, voluntary and mandatory prepayments, acceleration of
maturity, exercise of Rights, payment of attorneys' fees, court costs, and
other costs of collection, certain waivers by Maker and others now or hereafter
obligated for payment of any sums due hereunder, and security for the payment
hereof.
This promissory note and the similar promissory notes of Maker dated
of even date herewith have been issued under the Credit Agreement in
replacement for, but not as a novation of, those certainpromissory notes of
Maker dated August 15, 1994, which were issued under the Existing Credit
Agreement (as defined in the Credit Agreement).
This promissory note is being executed and delivered, and is intended
to be performed, in the State of Texas, and the Laws of such State and of the
United States of America shall govern the rights and duties of the parties and
the validity, construction, enforcement, and interpretation hereof.
THIS PROMISSORY NOTE, TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENT
THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY (I)
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES, OR (II) ANY COMMITMENT LETTER AMONG THE PARTIES (ALL THE TERMS AND
CONDITIONS OF WHICH ARE SUPERSEDED BY LOAN PAPERS). THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
POOL COMPANY
By
-------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Finance
By
-------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇
Treasurer
[corporate seal]
42
EXHIBIT B
REQUEST FOR ADVANCE OR LC
AGENT: NationsBank of Texas, N.A.
BORROWER: Pool Company
RE: $35,000,000 Restated Revolving Credit Agreement
DATE: ___________________, 19__
This Request for Advance or LC is delivered pursuant to the
$35,000,000 Restated Revolving Credit Agreement (as amended, the "CREDIT
AGREEMENT") dated as of November 30, 1995, among Borrower, the Lenders named
therein ("LENDERS") and NationsBank of Texas, N.A., as agent for itself and the
other Lenders ("AGENT"), all the defined terms of which have the same meaning
when used herein.
During normal banking hours on ______________, 199_ (which must be at
least one Business Day after the date hereof):
_____ Borrower shall borrow from Lenders the principal sum of
$__________ (the "Requested Advance," which must be in the
minimum amount of $200,000 and any increment of $100,000
thereof); or
_____ Borrower requests that Issuing Lender issue a standby letter
of credit on the account of ______________ for the benefit of
_________________ in the amount of $_______________ (the
"Requested LC").
A Borrowing Deficiency will not exist if Issuing Lender honors the
above request.
On, and as of, the date hereof, and at the time the above request is
honored, the representations and warranties (unless such representations and
warranties speak to a specific date, or the facts upon which such
representations and warranties are based have been changed by the transactions
contemplated in the Credit Agreement) in the Credit Agreement are and will be
true and correct in all material respects and no material adverse change has or
will have occurred in (a) the consolidated financial condition of PESCO, or (b)
the individual financial condition of any Material Obligor. No Default or
Potential Default has occurred and is continuing on the date hereof.
POOL COMPANY
By ____________________________________
Name __________________________________
Title _________________________________
43
EXHIBIT C-1
FINANCIAL REPORT CERTIFICATE
FOR _________________ ENDED ______________, 19___
AGENT: NationsBank of Texas, N.A.
BORROWER: Pool Company
RE: $35,000,000 Restated Revolving Credit Agreement
DATE: ___________________, 19__
This certificate is delivered pursuant to the $35,000,000 Restated
Revolving Credit Agreement (as amended, the "CREDIT AGREEMENT") dated as of
November 30, 1995, among Borrower, the Lenders named therein ("LENDERS"), and
NationsBank of Texas, N.A., as agent for itself and the other Lenders
("AGENT"), all defined terms of which have the same meaning when used herein.
I certify to Lenders that I am the _____________________ (president,
chief financial officer, or controller) of PESCO on the date hereof and that:
1. The Financial Statements attached hereto were prepared in
accordance with GAAP, and present fairly the consolidated and consolidating
financial condition and results of operations of PESCO and its Subsidiaries as
of, and for the fiscal [quarter or year] ending on _______________, 19___ (the
"SUBJECT PERIOD").
2. A review of the activities of PESCO, PESCO Subsidiary, and the
Companies during the Subject Period has been made under my supervision with a
view to determining whether, during the Subject Period, each such entity has
kept, observed, performed, and fulfilled all of its obligations under the Loan
Papers, and during the Subject Period, each such entity kept, observed,
performed, and fulfilled each and every covenant and condition of the Loan
Papers (except for any deviations set forth on the attached schedule).
3. During the Subject Period, no Default (nor any Potential
Default) has occurred which has not been cured or waived (except for any
Defaults or Potential Defaults set forth on the attached schedule).
4. The status of compliance by PESCO with Sections 7.25 through
7.27 of the Credit Agreement at the end of the Subject Period is set forth on
the attached schedule.
5. This certificate is being delivered on behalf of PESCO. No
person or entity other than Lenders and the law firm of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
(the "SUBJECT RECIPIENTS"), shall be entitled to receive or rely upon this
certificate for any purpose. The Subject Recipients agree by their acceptance
hereof that (a) they shall look solely to PESCO for any loss, cost, damage,
expense, claim, demand, suit, or cause of action arising out of or relating in
any way to this certificate or its preparation and delivery, and (b) the
undersigned shall not under any circumstances have any personal liability
whatsoever for the preparation or execution of this certificate.
_________________________________
Name ____________________________
Title ___________________________
44
EXHIBIT C-2
BORROWING BASE REPORT
FOR MONTH ENDED ________________, 19__
AGENT: NationsBank of Texas, N.A.
BORROWER: Pool Company
RE: $35,000,000 Restated Revolving Credit Agreement
DATE: _______________, 19__
This certificate is delivered pursuant to the $35,000,000 Restated
Revolving Credit Agreement (as amended, the "CREDIT AGREEMENT") dated as of
November 30, 1995, among Borrower, the Lenders named therein ("LENDERS") and
NationsBank of Texas, N.A., as agent for itself and the other Lenders
("AGENT"). Unless defined herein, capitalized terms have the meanings ascribed
to such terms in the Credit Agreement. Section references in the Borrowing
Base calculation below refer to Sections in the Credit Agreement.
As used herein, the following terms have the meanings indicated:
"CURRENT ACCOUNTS RECEIVABLE" means those domestic consolidated
receivables of the Companies, for inventory sold or services rendered in the
ordinary course of business, payable in cash and the customer's full balance is
outstanding less than 121 days after the first invoice date.
"CURRENT/DELINQUENT ACCOUNTS RECEIVABLE" means those domestic
consolidated receivables of the Companies, for inventory sold or services
rendered in the ordinary course of business, payable in cash and part or all of
the customer's full balance is outstanding 121 days or more after the first
invoice date.
"CURRENT PORTION" means that portion of Current/Delinquent Accounts
Receivable which are outstanding less than 121 days after the first invoice
date.
I certify to Lenders that (a) I am the ____________________ (chief
financial officer or treasurer) of Pool Company on the date hereof, and (b)
based on the aged trial balance of trade accounts receivables of the Material
Obligors for the accounting month set forth on the schedules attached hereto,
the following is a true and correct calculation of the Borrowing Base as
defined in the Credit Agreement:
(1) Current Accounts Receivable $________
(2) Customer balances of Current Accounts
Receivable aggregating at least $100,000,
which Lender has not approved for
inclusion in calculating the Borrowing Base $________
(3) Line 1 minus Line 2 $________
(4) Current Portion of customer balances of
Current/Delinquent Accounts Receivable of
at least $100,000 which Lender has
approved for inclusion in calculating the
Borrowing Base (Section 1.2(a)(ii)(A)) $________
(5) Current Portion of Current/Delinquent
Accounts Receivable which meet the
C-2-1
45
certification requirements and dollar and
percentage limits of Section 1.2(a)(ii)(B)(1) $________
(6) Current Portion of Current/Delinquent
Accounts Receivable which meet the
certification requirements and dollar and
percentage limits of Section 1.2(a)(ii)(B)(2) $________
(7) Line 3 plus Line 4 plus Line 5 plus Line 6 $________
(8) Line 7 x 80% $________
(9) Amount satisfying requirements of Section 1.2(b) $________
(10) Line 9 x 60% (cannot exceed 25% of Line 13) $________
(11) Amount satisfying requirements of Section 1.2(c) $________
(12) Amounts satisfying requirements of Section 1.2(d)
which Determining Lenders have approved for
inclusion in calculating the Borrowing Base $________
(13) Borrowing Base (Line 8 plus Line 10
plus Line 11 plus Line 12) $________
(14) Commitment $________
(15) Principal Debt $________
(16) Maximum permissible additional borrowings,
if any (the lesser of Line (13) minus
Line (15) or Line (14) minus Line (15)) $________
(17) Borrowing Deficiency, if any
(Line (15) minus the lesser of
Line (13) or Line (14)) $________
The attached schedule of information (such as account obligor, amount,
and date of invoice or billing) is true and correct in all material respects.
This report is being delivered on behalf of Borrower. No person or
entity other than Lenders and the law firm of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P. (the
"SUBJECT RECIPIENTS"), shall be entitled to receive or rely upon this report
for any purpose. The Subject Recipients agree by their acceptance hereof that
(a) they shall look solely to Borrower for any loss, cost, damage, expense,
claim, demand, suit, or cause of action arising out of or relating in any way
to this report or its preparation and delivery, and (b) the undersigned shall
not under any circumstances have any personal liability whatsoever for the
preparation or execution of this certificate.
______________________________________
Name _________________________________
Title ________________________________
C-2-2
46
EXHIBIT D
OPINION OF COUNSEL TO BORROWER
*
_____________________, 1995
NationsBank of Texas, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Re: $30,000,000 Restated Revolving Credit Agreement
The undersigned has acted as counsel to Pool Energy Services Co., a
Texas corporation ("PESCO"), Pool Energy Holding, Inc., a Delaware corporation
("PESCO Subsidiary" ), Pool Company, a Texas corporation ("Borrower"), and
Borrower's consolidated subsidiaries in connection with the negotiation,
preparation, and execution of the $35,000,000 Restated Revolving Credit
Agreement (the "Credit Agreement") dated as of November 30, 1995 among
Borrower, the Lenders named therein ("Lenders") and NationsBank of Texas, N.A.,
as agent for itself and the other Lenders ("Agent"). This opinion is delivered
pursuant to Section 6.1 and Schedule 6 of the Credit Agreement. Unless
otherwise defined herein or the context otherwise requires, each capitalized
term has the meaning ascribed to such term in the Credit Agreement.
In reaching the conclusions expressed in this opinion, I have examined
such certificates of public officials and officers of the Obligors as I deemed
necessary or appropriate, and originals or copies of the Credit Agreement,
Note, Guaranty and Security Agreement. I have otherwise made no special
inquiry or investigation but render this opinion on the basis of my knowledge
as General Counsel of the Obligors and an employee of one of the Obligors.
Based upon the foregoing and subject to the limitations,
qualifications and exceptions set forth below, the undersigned is of the
following opinion:
1. The Obligors are corporations duly organized, legally existing
and in good standing under the laws of their respective states of
incorporation.
2. The Obligors have the full corporate power and authority to
enter into the Loan Papers. All corporate action on the part of the Obligors,
requisite for the due execution, delivery, and performance of the Loan Papers
has been duly and effectively taken.
3. Upon the due execution and delivery of the Loan Papers by the
Obligors, I know of no reason why such Loan Papers will not constitute legal,
valid, and binding obligations of the Obligors enforceable against Obligors in
accordance with their terms.
4. The execution and delivery of the Loan Papers do not violate
any provisions of the Articles of Incorporation or Bylaws of Obligors. The
Loan Papers may be performed by Obligors in a manner that does not violate any
provisions of their respective Articles of Incorporation and Bylaws.
5. Neither any Obligor nor any Affiliate (excluding ENSERCH, if
an Affiliate) of any Obligor is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, or the Investment Company
Act of 1940 (as any of the preceding acts have been amended).
D-1
47
This opinion is subject to and qualified in all respects by the
following:
(a) The enforceability of the Loan Papers may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, and similar laws from time
to time in effect and affecting creditors' rights or the collection of debtors'
obligations generally (including, without limitation, laws generally defining
and restricting fraudulent conveyances), (ii) principles of equity, (iii)
principles of public policy, and (iv) requirements of commercial reasonableness
and good faith.
(b) No opinion is given as to the availability or enforceability
of certain provisions or remedies set forth in the Loan Papers, including
without limitation, (i) provisions which purport to provide access to or
restrict legal or equitable remedies such as specific performance and the
appointment of a receiver, (ii) provisions that purport to establish
evidentiary standards, (iii) provisions relating to waivers or to delays or
omissions of enforcement of remedies or severance, (iv) provisions that attempt
to appoint Agent or others as any Person's attorney-in-fact, (v) indemnity
provisions, (vi) provisions attempting to prohibit or restrict the transfer,
alienation, mortgaging, encumbering, or hypothecation of the properties covered
by or described in the Loan Papers, (vii) subrogation provisions, and (viii)
provisions attempting to establish proper venue for the filing and maintenance
of any claim, suit, or action with respect to the Loan Papers; provided,
however, that limitations on the availability of remedies under the Loan Papers
or the legality, validity, binding effect or enforceability of the Loan Papers
will not, in the undersigned's opinion, prevent you from recovering for damages
and enforcing any Liens in your favor or substantially interfere with the
practical realization of the benefits express in the Loan Papers except for the
economic consequences of any procedural delay which may result from such laws.
(c) The enforceability of certain provisions of the Loan Papers
may be limited by requirements of due process under the United States
Constitution and other laws generally limiting the rights of creditors to
repossess, foreclose or otherwise realize upon the property of a debtor without
appropriate notice and/or hearing.
(d) No opinion is expressed with respect to usury, nor with
respect to the perfection or priority of any of the liens or security interests
intended to be granted to Agent.
(e) No opinion is expressed as to whether the contemplated loan
transactions comply with any statutory, regulatory or other loan limits
applicable to the Lenders or comply with any other statutes, laws, rules or
regulations which prescribe permissible and lawful investments for the Lenders
(either as to type, amount, percentage of total investments or otherwise).
(f) The knowledge of the undersigned as to any factual matter in
connection with this opinion is limited to the current consciousness of the
undersigned and does not include constructive inquiry or imputed knowledge.
This opinion is limited to United States federal law and laws of the
State of Texas, all as now in effect. No opinion is expressed as to any matter
that may be governed by the laws of any other jurisdiction.
This opinion is solely for the benefit of and may be relied upon only
by Agent and the Lenders, and their respective counsel, and may not be
delivered or disclosed in whole or in part, to any other Person.
Very truly yours,
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EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Restated Revolving Credit Agreement dated as
of November 30, 1995 (as renewed, extended, amended or replaced, the "CREDIT
AGREEMENT"), among Pool Company (the "BORROWER"), NationsBank of Texas, N.A.,
as agent (the "AGENT"), and the other financial institutions party thereto from
time to time (collectively, the "LENDERS"). Capitalized terms used herein and
not otherwise defined shall have the meanings given to such terms in the Credit
Agreement.
__________________________ (the "ASSIGNOR"), and ______________________
(the "ASSIGNEE") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee (without
recourse to the Assignor) a __________/__________ interest (the "ASSIGNED
INTEREST") in and to all of the rights of Assignor under the Credit Agreement
and the other Loan Papers (including, without limitation, the Note presently
held by the Assignor and the Guaranty), and the Assignee hereby purchases and
accepts from the Assignor such Assigned Interest and assumes all of the
obligations of the Assignor under the Credit Agreement and the other Loan
Papers (including, without limitation, the Note presently held by the Assignor
and the Guaranty) to the extent of the Assigned Interest, including, without
limitation, (a) all Advances funded by the Assignor and outstanding on the
Effective Date (as defined below), together with interest accruing thereon on
and after the Effective Date, and (b) the commitment fee (as described in
Section 4 of the Credit Agreement) that is earned by Lenders from and after the
Effective Date and paid by Borrower after the Effective Date. From and after
the Effective Date, (x) the Assignee shall be a party to the Credit Agreement
and, to the extent of the Assigned Interest, have the rights and obligations of
a Lender thereunder and under the other Loan Papers and (y) the Assignor shall,
to the extent of the Assigned Interest, relinquish its rights and be released
from its obligations under the Credit Agreement and the other Loan Papers.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties, or
representations made by any Company in or in connection with the Credit
Agreement or any other Loan Paper or the execution, legality, validity,
enforceability, genuineness, sufficiency, collectibility, or value of the
Credit Agreement or any other Loan Paper, other than that it is the sole legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any claim, encumbrance, or participation;
(b) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Company or the performance or
observance by any Company of any of its respective obligations under the Credit
Agreement or any other Loan Paper; (c) represents and warrants that (i) it
possesses all requisite authority and power to execute, deliver, and comply
with the terms of the Loan Papers (including, without limitation, this
Assignment and Acceptance), (ii) the Credit Agreement and the instruments
contemplated therein constitute the entire agreement between Borrower, Agent,
and Lenders, (iii) the Credit Agreement has not been amended, (iv) to its
knowledge, no Default or Potential Default has occurred pursuant to the Loan
Papers, and (v) all of the conditions of Section 6.1 of the Credit Agreement
have been satisfied as of the Effective Date; and (d) attaches the Note held by
it and requests that Agent exchange such Note for new Notes executed by
Borrower and payable to the Assignee in a principal amount equal to $__________
and payable to the Assignor in a principal amount equal to $__________ (less
the principal amount of any other new Note(s) to any other assignee(s) of
Assignor pursuant to other Assignment and Acceptance agreements effective as of
the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon Agent, the Assignor, 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 decisions in taking or not taking
action under the Credit Agreement; (d) appoints and authorizes Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to Agent by the terms thereof, together with such
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powers as are reasonably incidental thereto; (e) agrees that it will perform in
accordance with their terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; (f) agrees
that it will comply with the confidentiality requirements of Section 12.15 of
the Credit Agreement; (g) represents and warrants that it does not consider any
amount paid by it to the Assignor hereunder a loan by it to the Assignor; and
(h) (i) represents and warrants to the Assignor that under applicable laws and
treaties no taxes will be required to be withheld by Agent, Borrower, or the
Assignor with respect to any payments to be made to the Assignor in respect of
the Obligation, (ii) attaches hereto two duly completed copies of U.S. Internal
Revenue Service Form 4224, Form 1001, Form W-8, or any other tax form
acceptable to Agent (wherein the Assignee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments made on
the Obligation), and (iii) agrees to provide to the Assignor, Agent, and
Borrower a new tax form upon the obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by the Assignee, and to
comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
4. The effective date for this Assignment and Acceptance shall be
________________ (the "EFFECTIVE DATE").
5. From and after the Effective Date, Agent shall make all
payments in respect of the interest assigned hereby (including payments of
principal, interest, fees, and other amounts) to the Assignee. The Assignor
and the Assignee shall make all appropriate adjustments in payments for periods
prior to the Effective Date by Agent or with respect to the making of this
assignment directly between themselves.
6. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of Texas.
7. This Assignment and Acceptance (a) embodies the entire
agreement between the parties, supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof, and may be
amended only by an instrument in writing executed jointly by an authorized
officer of each party hereto, (b) is not intended to evidence a "purchase" or
"sale" of a "security" within the meaning of any Law, and (c) may be executed
in a number of identical counterparts, each of which shall be deemed an
original for all purposes and all of which shall constitute, collectively, one
agreement; but, in making proof of this Assignment and Acceptance, it shall not
be necessary to reproduce or account for more than one such counterpart.
8. Any amounts due hereunder from the Assignor to the Assignee
shall be wire transferred by the Assignor to Assignee's account at
_________________________________________, ABA #_________, for credit to
________________ account #_____________, Attention: ______________, Reference:
___________. Any amounts due hereunder from the Assignee to the Assignor shall
be wire transferred by the Assignee to the Assignor's account at
___________________________, ABA #_________, Attention: _____________________
(Ref. ______). For purposes of amending Schedule 1(a) to the Credit Agreement,
the Assignee's address, contact person, telephone and facsimile number are as
follows:
___________________________________________
___________________________________________
___________________________________________
Attention: ________________________________
Telephone: ________________________________
FAX: ______________________________________
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EXECUTED as of __________, 199_, with an "Effective Date" of _________,
199_.
ASSIGNOR ASSIGNEE
_______________________________________ ______________________________________
By ____________________________________ By ________________________________
Name: Name:
Title: Title:
CONSENTED TO:
NATIONSBANK OF TEXAS, N.A.
as Agent
By ____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
POOL COMPANY
By ____________________________________
▇.▇. ▇▇▇▇▇▇▇▇,
Senior Vice President, Finance
By ____________________________________
▇.▇. ▇▇▇▇▇▇▇▇▇,
Treasurer
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇
THIS GUARANTY is executed as of ________________, 199__, by
________________________ ("GUARANTOR") for the benefit of NATIONSBANK OF TEXAS,
N.A. ("AGENT"), and the Lenders (the "LENDERS") named in the Credit Agreement
and the Term Loan Agreement (as hereinafter defined).
WHEREAS, POOL COMPANY ("BORROWER"), Agent and Lenders have executed
(a) a Restated Revolving Credit Agreement dated as of _____________________,
1995 (as amended, supplemented, or restated, the "CREDIT AGREEMENT"), together
with certain other Loan Papers, and (b) a Restated Term Loan Agreement dated as
of November 30, 1995 (as amended, supplemented or restated, the "TERM LOAN
AGREEMENT", together with certain other Loan Papers; and
WHEREAS, Guarantor is a direct or indirect consolidated Subsidiary of
Borrower incorporated in the United States; and
WHEREAS, it is expressly understood among Borrower, Guarantor, Agent
and each Lender that the execution and delivery of this Guaranty is an integral
part of the transactions contemplated by the Credit Agreement, the Term Loan
Agreement, and the Loan Papers and a condition precedent to Agent's and
Lenders' obligations under the Credit Agreement and the Term Loan Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Guarantor hereby guarantees to Agent and
Lenders the prompt payment at maturity (by acceleration or otherwise), and at
all times thereafter, of the Guaranteed Indebtedness (hereinafter defined),
this Guaranty being upon the following terms and conditions:
1. Unless otherwise defined herein, all capitalized terms have
the meanings given to such terms in the Credit Agreement and the Term Loan
Agreement.
2. The term "BORROWER" shall include, without limitation,
Borrower, Borrower as a debtor-in-possession, and any receiver, trustee,
liquidator, conservator, custodian, or similar party hereafter appointed for
Borrower or all or substantially all of its assets pursuant to any liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar Debtor Relief Law from time to time in
effect affecting the rights of creditors generally.
3. The term "GUARANTEED INDEBTEDNESS" means the Obligation as
defined in the Credit Agreement and the Term Loan Agreement, together with any
and all costs, attorneys' fees, and expenses reasonably incurred by Agent and
Lenders by reason of Borrower's or Guarantor's default in payment of any of the
foregoing indebtedness.
4. This instrument shall be an absolute and continuing guaranty,
and the circumstance that at any time or from time to time the Guaranteed
Indebtedness may be paid in full shall not affect the obligation of Guarantor
with respect to the Guaranteed Indebtedness of Borrower to Agent and Lenders
thereafter incurred; provided that Guarantor may give written notice to Agent
and Lenders that Guarantor will not be liable hereunder for any indebtedness of
Borrower incurred after the giving of such notice (which notice shall not be
deemed to have been given until actually received by Agent and Lenders), and in
such event Guarantor shall remain liable for its obligations hereunder until
the payment in full of (a) the Guaranteed Indebtedness as it exists at the date
of the giving of such notice, and (b) loans made after such notice or pursuant
to any obligation of Agent and Lenders under any other commitment or agreement
made to or with Borrower prior to the giving of such notice.
5. Notwithstanding any contrary provision herein, Guarantor's
aggregate payments in respect of the Guaranteed Indebtedness shall never exceed
the greater of (a) 90% of its net worth (the amount by which the present fair
saleable
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value of its assets exceeds its liabilities on such date, without giving effect
to this Guaranty) or (b) the aggregate value of direct and indirect benefits
received under the Loan Papers.
6. If Guarantor becomes liable for any indebtedness owing by
Borrower to Agent or Lenders, by endorsement or otherwise, other than under
this Guaranty, such liability shall not be in any manner impaired or affected
hereby, and the rights of Agent and Lenders hereunder shall be cumulative of
any and all other rights that Agent and Lenders may ever have against
Guarantor. The exercise by Agent and Lenders of any right or remedy hereunder
or under any other agreement, document, or instrument, or at law or in equity,
shall not preclude the concurrent or subsequent exercise of any other right or
remedy. Guarantor covenants and agrees that it will not assert any rights
arising from payment or other performance hereunder until all of Guarantor's
liability shall have been discharged in full and all of the Guaranteed
Indebtedness existing at the time of discharge shall have been paid and
performed in full.
7. Upon the occurrence and continuance of a Default, Guarantor
shall, on demand and without further notice of dishonor, without any notice
having been given to Guarantor previous to such demand of the acceptance by
Agent and Lenders of this Guaranty, and without any notice having been given to
Guarantor previous to such demand of the creating or incurring of such
indebtedness, pay the amount of the Guaranteed Indebtedness then due and
payable to Agent and Lenders, and it shall not be necessary for Agent and
Lenders, in order to enforce such payment by Guarantor, first or
contemporaneously to institute suit or exhaust remedies against Borrower or
others liable on such indebtedness, or to enforce rights against any security
ever given to secure such indebtedness.
8. All principal of and interest on all indebtedness,
liabilities, and obligations of Borrower to Guarantor (the "SUBORDINATED
DEBT"), whether direct, indirect, fixed, contingent, liquidated, unliquidated,
joint, several, or joint and several, now or hereafter existing, due or to
become due to Guarantor, or held or to be held by Guarantor, whether created
directly or acquired by assignment or otherwise, and whether evidenced by
written instrument or not, shall be expressly subordinated to the final payment
in full of the Guaranteed Indebtedness. Guarantor agrees not to receive or
accept any payment from Borrower with respect to the Subordinated Debt at any
time a Default has occurred and is continuing; and, in the event Guarantor
receives any payment on the Subordinated Debt in violation of the foregoing,
Guarantor will hold any such payment in trust for Agent and Lenders and
forthwith turn it over to Agent and Lenders, in the form received (with any
necessary endorsements), to be applied to the Guaranteed Indebtedness.
9. Guarantor shall not assert, enforce, or otherwise exercise (a)
any right of subrogation to any of the rights or liens of Agent and Lenders or
any other beneficiary against Borrower or any other obligor on the Guaranteed
Indebtedness or any collateral or other security, or (b) any right of recourse,
reimbursement, contribution, indemnification, or similar right against Borrower
or any other obligor on all or any part of the Guaranteed Indebtedness or any
guarantor thereof, and Guarantor hereby irrevocably waives any and all of the
foregoing rights. Guarantor irrevocably waives the benefit of, and any right
to participate in, any collateral or other security given to Agent and Lenders
or any other beneficiary to secure payment of the Guaranteed Indebtedness.
10. Guarantor hereby agrees that its obligations under the terms
of this Guaranty shall not be released, diminished, impaired, reduced, or
affected by the occurrence of any one or more of the following events: (a)
Agent's or any Lender's taking or accepting of any other security or guaranty
for any or all of the Guaranteed Indebtedness; (b) any release, surrender,
exchange, subordination, or loss of any security at any time existing in
connection with any or all of the Guaranteed Indebtedness; (c) any partial
release of the liability of Guarantor (or if there is more than one person or
entity signing this Guaranty, the release of any one or more of them) or the
release of any other obligor on the Obligation; (d) the insolvency, bankruptcy,
or lack of corporate power of Borrower, the undersigned, or any party at any
time liable for the payment of any or all of the Guaranteed Indebtedness,
whether now existing or hereafter occurring; (e) any renewal, extension, or
rearrangement of the payment of any or all of the Guaranteed Indebtedness,
either with or without notice to or consent of Guarantor, or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by Agent or
Lenders to Borrower, Guarantor, or any other obligor on the Obligation; (f) any
neglect, delay, omission, failure, or refusal of Agent or any Lender to take or
prosecute any action for the collection of any or all of the Guaranteed
Indebtedness or to foreclose or take or prosecute any action in connection with
any instrument or agreement evidencing or securing any or all of the Guaranteed
Indebtedness; (g) any failure of Agent or any Lender to notify Guarantor of any
renewal, extension, or
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53
assignment of any or all of the Guaranteed Indebtedness, or the release of any
security or of any other action taken or refrained from being taken by Agent or
any Lender against Borrower or any new agreement between Agent or any Lender
and Borrower, it being understood that Agent and Lenders shall not be required
to give Guarantor any notice of any kind under any circumstances whatsoever
with respect to or in connection with the Guaranteed Indebtedness, other than
any notice required to be given to Borrower or Guarantor elsewhere herein; (h)
the unenforceability of any part of the Guaranteed Indebtedness against
Borrower by reason of the fact that the Guaranteed Indebtedness exceeds the
amount permitted by law, the act of creating the Guaranteed Indebtedness, or
any part thereof, is ultra ▇▇▇▇▇, or the officers creating same exceeded their
authority or violated their fiduciary duties in connection therewith; or (i)
any payment by Borrower to Agent or Lenders is held to constitute a preference
under the bankruptcy laws or if for any other reason Agent or any Lender is
required to refund such payment or make payment to someone else.
11. Guarantor hereby waives all rights by which it might be
entitled to require suit on an accrued right of action in respect of any of the
Guaranteed Indebtedness or require suit against Borrower or others, whether
arising pursuant to Section 34.02 of the Texas Business and Commerce Code, as
amended (regarding Guarantor's right to require Agent or Lenders to ▇▇▇
Borrower on accrued right of action following Guarantor's written notice to
Agent or Lenders), Section 17.001 of the Texas Civil Practice and Remedies
Code, as amended (allowing suit against Guarantor without suit against
Borrower, but precluding entry of judgment against Guarantor prior to entry of
judgment against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as
amended (requiring Agent and Lenders to join Borrower in any suit against
Guarantor unless judgment has been previously entered against Borrower), or
otherwise.
12. Guarantor acknowledges that certain representations and
warranties set forth in Sections 5.1 through 5.15 of the Credit Agreement and
the Term Loan Agreement are applicable to Guarantor, and Guarantor reaffirms
that each such representation and warranty is true and correct. Furthermore,
Guarantor represents and warrants to Agent and Lenders that the value of the
consideration received and to be received by Guarantor is reasonably worth at
least as much as the liability and obligation of Guarantor hereunder, and such
liability and obligation may reasonably be expected to benefit Guarantor
directly or indirectly.
13. Guarantor acknowledges that certain covenants set forth in
Sections 7.1, 7.2, 7.4 through 7.29 of the Credit Agreement and the Term Loan
Agreement are applicable to the Guarantor or shall be imposed upon the
Guarantor, and Guarantor covenants and agrees to promptly and properly perform,
observe, and comply with each such covenant.
14. Guarantor expressly assumes all responsibilities to remain
informed of the financial condition of Borrower and any circumstances affecting
(a) Borrower's ability to perform under the Credit Agreement, the Term Loan
Agreement and the other Loan Papers to which it is a party or (b) collateral
securing all or any part of the Guaranteed Indebtedness.
15. The Guaranteed Indebtedness shall not be reduced, discharged,
or released because or by reason of any existing or future offset, claim, or
defense (except for the defense of payment) of Borrower or any other party
against Agent or any Lender or against payment of the Guaranteed Indebtedness,
whether such offset, claim, or defense arises in connection with the Guaranteed
Indebtedness or otherwise. Such claims and defenses include, without
limitation, failure of consideration, breach of warranty, fraud, statute of
frauds, bankruptcy, infancy, statute of limitations, lender liability, accord
and satisfaction, and usury.
16. This Guaranty is for the benefit of Agent and Lenders and
their respective successors and assigns. Guarantor acknowledges that in the
event of an assignment of the Guaranteed Indebtedness, or any part thereof, the
rights and benefits hereunder, to the extent applicable to the indebtedness so
assigned, may be transferred with such indebtedness. This Guaranty is binding
on Guarantor and its successors and assigns.
17. This Guaranty is a Loan Paper and, therefore, this Guaranty is
subject to the applicable provisions of Section 12 of the Credit Agreement and
the Term Loan Agreement, all of which applicable provisions are incorporated
herein by reference the same as if set forth herein verbatim.
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54
This Guaranty is executed as of the first date set forth herein.
_______________________________________
By ____________________________________
Name: ______________________________
Title: _____________________________
[corporate seal]
By ____________________________________
Name: ______________________________
Title: _____________________________
Address
__________________________________
__________________________________
__________________________________
Attn: ____________________________
Fax No.: _________________________
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EXHIBIT G
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is executed as of _________________, 199___,
by __________________ ("DEBTOR") for the benefit of (i) NationsBank of Texas,
N.A., as Agent ("REVOLVING CREDIT AGENT") and the Lenders ("REVOLVING CREDIT
LENDERS") named in the Revolving Credit Agreement (as hereinafter defined),
(ii) NationsBank of Texas, N.A., as Agent ("TERM LOAN AGENT") and the Lenders
("TERM LOAN LENDERS") named in the Term Loan Agreement (as hereinafter
defined), and (iii) for the benefit of NationsBank of Texas, N.A.
("NATIONSBANK") for its own account with respect to its net exposure on foreign
exchange contracts between it and any Company (as defined in the Revolving
Credit Agreement). NationsBank, Revolving Credit Agent, Revolving Credit
Lenders, Term Loan Agent and Term Loan Lenders are each a SECURED PARTY, and
are collectively referred to herein as "SECURED PARTIES".
WHEREAS, Pool Company, a Texas Corporation ("BORROWER"), and Secured
Parties have entered into (i) a Restated Revolving Credit Agreement dated as of
November 30, 1995 (as renewed, extended or amended from time to time, the
"REVOLVING CREDIT AGREEMENT"), and (ii) a Restated Term Loan Agreement dated as
of November 30, 1995 (as renewed, extended or amended from time to time, the
"TERM LOAN AGREEMENT," and collectively with the Revolving Credit Agreement,
the "CREDIT AGREEMENT"); and
WHEREAS, Debtor is a direct or indirect consolidated Subsidiary of
Borrower incorporated in the United States; and
WHEREAS, in Debtor's judgment, (a) the value of consideration received
and to be received by Debtor in connection with the transaction described above
is reasonably worth at least as much as the liability and obligation of Debtor
hereunder, and (b) such liability and obligation may reasonably be expected to
directly or indirectly benefit Debtor; and
WHEREAS, it is expressly understood among Secured Parties and Debtor
that the contemplated execution and delivery of this agreement is an integral
part of the transactions contemplated by the Loan Papers and a condition
precedent to Secured Parties' obligations to extend credit under the Credit
Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Debtor hereby covenant and agree with Secured
Parties as follows:
1. Certain Definitions. Unless otherwise defined herein, or the
context hereof otherwise requires, (a) capitalized terms have the meaning
ascribed to such terms in the Revolving Credit Agreement, and (b) each term
defined in the UCC is used in this agreement with the same meaning; provided
that if any definition given a term in Chapter 9 of the UCC conflicts with the
definition given that term in any other chapter of the UCC, the Chapter 9
definition shall prevail. As used herein, the following terms have the meanings
indicated:
Collateral has the meaning set forth in Paragraph 3.
Default has the meaning set forth in Paragraph 6.
Equipment means any and all furnishings, machinery, furniture,
fixtures and equipment, wherever located, whether now owned or hereafter
acquired including without limitation, all manufacturing, distribution,
selling, data processing and office equipment and all appliances and trade
fixtures, together with all increases, parts, fittings, accessories, equipment,
and special tools now or hereafter affixed to any part thereof and thereto,
together with all substitutes and replacements thereof, all accessions and
attachments thereto, and all tools, parts and equipment now or hereafter added
to or used in connection with the foregoing.
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Inventory means any and all inventory, including without
limitation any and all goods held for sale or lease or being processed for sale
or lease and all returned, reclaimed, refused or repossessed goods, whether now
owned or hereinafter acquired, including all materials, goods and work in
process, finished goods, and other tangible property held for sale or lease or
furnished or to be furnished under contracts of service or used or consumed in
the owner's business, along with all documents (including documents of title)
covering inventory, all cash and non-cash proceeds from the sale of inventory
including proceeds from insurance and including such property the sale or other
disposition of which has given rise to accounts and which has not been returned
to or repossessed or stopped in transit "Inventory" includes each of the
foregoing items whether they are in the owner's possession or some other person
for sale, storage, transit, processing, use or otherwise.
Obligation means (a) the "Obligation" as defined in the
Restated Agreement and the Term Loan Agreement, (b) NationsBank's net exposure
on all foreign exchange contracts between Debtor and NationsBank, (c) all
indebtedness, liabilities, and obligations of Debtor arising under this
agreement, (d) interest accruing on, and attorneys' fees, court costs, and
other costs of collection reasonably incurred in the collection or enforcement
of, any of the indebtedness, liabilities, or obligations described in clause
(a) above, and (e) any and all renewals and extensions of, or amendments to,
any of the indebtedness, liabilities, and obligations described in clauses (a)
through (d) above. The foregoing includes future advances, it being the
intention and contemplation of Debtor and Secured Parties that future advances
will be made to Borrower under the Credit Agreement for a variety of purposes,
and that payment and repayment of all of the foregoing are intended to and
shall be part of the Obligation secured hereby.
Obligor means any person or entity obligated with respect to
any of the Collateral, whether as an account debtor, obligor on an instrument,
issuer of securities, or otherwise.
Pledged Shares means all shares of capital stock now or
hereafter issued to Pool Alaska, Inc. by any Person and the certificate(s)
representing the Pledged Shares and all dividends, cash, instruments and other
property from time-to-time received, receivable or otherwise distributed in
respect of or in exchange of any Pledged Shares.
Related Papers means (a) this agreement, (b) all present and
future agreements, documents, and instruments now or hereafter evidencing any
of the Obligation, or assuring or securing payment thereof, (c) all agreements,
documents, and instruments now or hereafter executed in connection herewith,
including, without limitation, the Loan Papers, and (d) any and all future
renewals and extensions or restatements of, or amendments or supplements to,
all or any part of the foregoing.
Security Interest means the security interest granted and the
pledge and assignment made under Paragraph 2.
Trademarks means, individually and collectively, all
trademarks, trade names and service marks registrations, applications, rights
to use and common law rights therein now or hereafter owned, controlled or
acquired, including, without limitation, all unregistered trademarks,
trademarks and service marks, all trademarks, trade names, service marks
applications, and registrations, and all rights to use listed on Schedule II to
this Agreement and all rights in and to (a) all trade names, service marks and
trademarks in which it has rights, and (b) all renewals thereof, (c) all
income, payments, royalties, damages and payments now and hereafter due or
payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (d) the right to
▇▇▇ for or bring injunctive proceedings with respect to past, present and
future infringements thereof, (e) goodwill connected with, symbolized by, or in
any way related to any of the Trademarks, (f) all licenses, agreements, and
general intangibles relating to any of the foregoing and (g) all books,
records, computer tapes or disks, instructions, flow diagrams, specification
sheets, source codes, object codes, and any other physical manifestations of or
documentation relating to any of the foregoing.
UCC means the Uniform Commercial Code as enacted in the State
of Texas or other applicable jurisdiction, as amended at the time in question.
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2. Security Interest. In order to secure the full and complete
payment and performance of (a) the Obligation when due, and (b) NationsBank's
net exposure on all foreign exchange contracts between any Company and
NationsBank when due, Debtor hereby grants to Secured Parties a security
interest in the Collateral and pledges and assigns the Collateral to Secured
Parties, all upon and subject to the terms and conditions of this agreement.
Such Security Interest is granted and such pledge and assignment are made as
security only and shall not subject Secured Parties to, or transfer or in any
way affect or modify, any obligation of Debtor with respect to any of the
Collateral or any transaction involving or giving rise thereto. For purposes
of clarification, "net exposure on all foreign exchange contracts" refers to
the amount, if any, by which the purchase or sales prices stipulated in any
foreign exchange contracts on which a Company is in default are (i) less, in
the case of contracts to purchase currencies, or (ii) greater, in the case of
contracts to sell currencies, respectively, than the market prices for such
currencies (as determined on the agreed value date specified in each such
contract).
3. Collateral. As used herein, COLLATERAL includes all of the
following items and types of property now owned or hereafter acquired
(collectively, the "COLLATERAL"):
(a) All present and future accounts of Debtor, including,
without limitation, all accounts receivable and all other rights of Debtor to
payment for goods sold or leased or for services rendered, and all cash and
noncash proceeds, increases, profits, combinations, reclassifications,
substitutions, and replacements of or for all or any part of the foregoing;
(b) All present and future deposit accounts, restricted
and unrestricted cash collateral accounts, and cash equivalent instruments
(including, without limitation, certificates of deposit) of Debtor now or
hereafter held by or specifically assigned or granted to Secured Parties
(including, without limitation, the cash collateral account described in
Section 4.3 of the Revolving Credit Agreement, together with all present and
future funds on deposit therein and investments therefrom);
(c) All present and future Rights, titles, and interests
Debtor may have or be or become entitled to under or by virtue of the
Contingent Support Agreement and all cash and noncash proceeds, increases,
profits, combinations, reclassifications, substitutions, and replacements of or
for all or any part of the foregoing; and
(d) The present and future shares of the capital stock
now or hereafter issued by the following corporations to Debtor, up to the
percentage set forth below, and the certificates representing such shares, and
all dividends, cash, instruments, and other property from time to time
received, receivable, or otherwise distributed in respect of or in exchange for
any such shares, and increases, proceeds, combinations, reclassifications,
substitutions, and replacements of or for all or any part of the foregoing:
100% PESCO Subsidiary, Borrower, and Borrower's
present and future consolidated Subsidiaries
which are incorporated within the United
States of America
66% All present and future consolidated
Subsidiaries of Borrower which are not
incorporated within the United States of
America
(e) All items or types of property, wherever located,
whether now owned or hereafter acquired by Pool Alaska, Inc., including,
without limitation, in addition to the property described in (a) through (d)
above, all Inventory, Equipment, Pledged Shares, Trademarks, and Patents.
The description of Collateral contained in this Paragraph 3 includes after
acquired Collateral and proceeds of the Collateral.
4. Representations and Warranties. Debtor acknowledges that
certain representations and warranties set forth in the Credit Agreement are
applicable to Debtor, and Debtor reaffirms that each such representation and
warranty is true and correct. In addition, Debtor represents and warrants to
Secured Parties that:
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(a) Debtor's chief executive office is where Debtor is
entitled to receive notices hereunder, and the present and foreseeable location
of Debtor's books and records concerning any Collateral that is accounts is as
set forth on Schedule 1 attached hereto.
(b) All Collateral that is securities is duly authorized,
validly issued, fully paid, and non-assessable, and its transfer is not subject
to any restrictions other than restrictions imposed by applicable securities
and corporate Laws.
(c) All Collateral that is accounts included in
calculating the Borrowing Base is free from any claim for credit, deduction, or
allowance of an Obligor (except for credits, deductions, or allowances granted
in the ordinary course of business), and free from any defense, dispute,
setoff, or counterclaim, and there is no extension or indulgence with respect
thereto.
(d) The Contingent Support Agreement is in full force and
effect; there have been no renewals or extensions of, or amendments,
modifications, or supplements to, any thereof about which Secured Parties have
not been advised in writing; and no default or potential default has occurred
and is continuing thereunder.
(e) Debtor owns all presently existing Collateral, and
will keep said Collateral and all hereafter-acquired Collateral, free and clear
of all Liens except Permitted Liens.
The delivery at any time by Debtor to any Secured Party of Collateral or of
additional specific descriptions of certain Collateral shall constitute a
representation and warranty by Debtor to Secured Parties that the
representations and warranties of this Paragraph 4 are true and correct in all
material respects with respect to each item of such Collateral.
(f) To the best of Pool Alaska, Inc.'s knowledge,
Schedule II, constitutes a true and complete list of all Trademarks owned by
Pool Alaska, Inc. To the best of Pool Alaska, Inc.'s knowledge, Pool Alaska,
Inc. has properly completed all required filings, payments, renewals and
obligations in the United States Trademark Offices or the appropriate Foreign
Filing Offices, as the case may be, to maintain Trademarks as fully valid and
enforceable. Pool Alaska, Inc. is the sole and exclusive owner of the right,
title and interest in and to the Trademarks free and clear of any Liens,
registered user agreements, covenants by Pool Alaska, Inc. not to ▇▇▇ third
Persons or, to the best of Pool Alaska, Inc.'s knowledge, licenses, except for
the licenses listed on Schedule III and for Permitted Liens and Pool Alaska,
Inc. has full right to use the Trademarks. To the best of Pool Alaska, Inc.'s
knowledge, all Trademarks owned, controlled or acquired by Pool Alaska, Inc.,
or which Pool Alaska, Inc. has a right to use, (i) are subsisting and have not
been adjudged or claimed to be invalid or unenforceable (either in whole or in
part) and Pool Alaska, Inc. is not aware of any basis for such a claim, (ii)
are valid and enforceable, (iii) are in the name of Pool Alaska, Inc., (iv) are
properly recorded and/or filed in the U.S. Patent and Trademark Office and (v)
Pool Alaska, Inc. has taken all necessary steps to properly record or file
ownership in the name of Pool Alaska, Inc. in the proper foreign filing offices
(the "FOREIGN FILING OFFICES") with respect to foreign Trademarks, as
appropriate.
(g) To Pool Alaska, Inc.'s knowledge, no claim has been
made that the ownership or use of any of the Trademarks, or the manufacture,
use or sale of any product made in accordance therewith or service rendered
thereunder, does or may violate the rights of any third Person, and Pool
Alaska, Inc. has no knowledge of any third party rights which may be infringed
or otherwise violated by the use of any of the Trademarks. To Pool Alaska,
Inc.'s knowledge, Pool Alaska, Inc. does not own any rights in any patents or
patent applications.
5. Certain Covenants. Debtor acknowledges that certain covenants
set forth in the Credit Agreement are applicable to Debtor or shall be imposed
upon Debtor, and Debtor covenants and agrees to promptly and properly perform,
observe, and comply with each such covenant. In addition, Debtor further
covenants and agrees with Secured Parties that Debtor will:
(a) Maintain at one or more of the addresses set forth on
Schedule 1 a current record of where all Collateral is located, permit
representatives of any Secured Party (at such Secured Party's expense to the
extent so provided in the Credit Agreement) at any time during normal business
hours to inspect and make abstracts from such records, and
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furnish to such Secured Party, at such intervals as such Secured Party may
request, such documents, lists, descriptions, certificates, and other
information as may be necessary or proper to keep such Secured Party informed
with respect to the identity, location, status, condition, and value of the
Collateral including, without limitation, (i) amendments to SCHEDULE I, (ii)
the execution and filing of such financing statements as the Secured Party may
reasonably require, and (iii) the execution and the filing of such assignments
and agreements as the Secured Party may require in the United States Patent and
Trademark Office and the Foreign Filing Offices.
(b) Perform in accordance with normal business practices
all of Debtor's duties under and in connection with each transaction to which
any Collateral relates.
(c) Promptly notify Secured Parties of any claim, action,
or proceeding affecting title to all or any of the Collateral or the Security
Interest and, at the request of any Secured Party, appear in and defend, at
Debtor's expense, any such action or proceeding.
(d) From time to time promptly execute and deliver to
Agent all such other assignments, certificates, supplemental documents, and
financing statements, and do all other acts or things as Secured Parties may
reasonably request in order to more fully create, evidence, perfect, continue,
and preserve the priority of the Security Interest.
(e) Not sell, lease, or otherwise dispose of, or permit
the sale, lease, or disposition of, any Collateral except for sales, leases,
and other dispositions permitted by the terms of the Credit Agreement.
(f) Not create, incur, or suffer or permit to be created
or incurred or to exist any Lien upon or against any of the Collateral, except
for Permitted Liens.
(g) Not use, or permit the use of, any of the Collateral
for any unlawful purpose or in any manner inconsistent with the provisions or
requirements of any applicable insurance policy.
(h) Not amend, modify, surrender, cancel, terminate, or
replace, nor permit any such amendment, modification, surrender, cancellation,
termination, or replacement of, (i) the Contingent Support Agreement, without
each Secured Party's written consent, or (ii) other than in the ordinary course
of business, any other material contract to which any of the Collateral
relates.
(i) Not relocate Debtor's principal place of business,
chief executive office, or place where Debtor's books and records related to
accounts are kept, or otherwise relocate any of the other Collateral, to an
address in a Louisiana parish or other state other than to those Louisiana
parishes or other states in which addresses set forth on Schedule 1 are
located, or change Debtor's name or address to which it is entitled to receive
notices hereunder, unless prior thereto Debtor (i) gives Secured Parties 30
days prior written notice of such proposed relocation or change (such notice to
include, without limitation, the name of the Louisiana parish or other state
into which the Collateral is being relocated, and the new name and address of
Debtor) and (ii) (unless the Collateral is being relocated to a jurisdiction in
which existing financing statements or other required filings have previously
been made to perfect the Security Interest in such Collateral) executes and
delivers all such additional documents and performs all additional acts as
Secured Parties in their sole discretion may request in order to continue or
maintain the existence and priority of the Security Interest in such
Collateral.
(j) To the extent necessary for Pool Alaska, Inc. to
conduct its business as then being conducted, (i) prosecute diligently any
trademark or service ▇▇▇▇ application of the Trademarks now or hereafter
pending, (ii) make federal application on registrable but unregistered
trademarks or service marks, as appropriate, (iii) file and prosecute
opposition and cancellation proceedings with respect to the Trademarks, (iv)
preserve and maintain all of Pool Alaska, Inc.'s rights in trademark or service
▇▇▇▇ applications, service marks, trademarks and trademark or service ▇▇▇▇
registrations of the Trademarks, (v) with respect to the Trademarks, shall not
abandon any right to file a patent application or trademark or service ▇▇▇▇
application, or any pending trademark or service ▇▇▇▇ application, service ▇▇▇▇
or trademark, (vi) make timely application and pay fees for the Trademarks, and
complete the filing of any documents and pay in a timely manner all
maintenance, extension, renewal, incontestable or other fees with respect to
such Trademarks, (vii) do all other things
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necessary to enforce, preserve, renew and maintain the Trademarks and (viii)
appear in and defend any action relating in any manner to any of the
Trademarks. Any expenses incurred in connection with any of the foregoing
shall be born by Pool Alaska, Inc.
(k) Maintain the quality of any and all products or
services on or in connection with which the Trademarks are used, consistent
with the quality of the products or services as of the date of this Agreement.
(l) Pool Alaska, Inc. shall notify Secured Party
immediately if Pool Alaska, Inc. knows that any Trademark may become abandoned
or dedicated, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Trademark Office or any
court or in any of the Foreign Filing Offices) regarding Pool Alaska, Inc.'s
ownership of any such Trademark, its right to register the same, or its right
to keep and maintain the same.
(m) Except for Permitted Liens, not create or permit the
creation of or allow the existence of, any Lien upon or against any of the
Collateral or enter into any licensing agreement prohibited by the Credit
Agreement.
(n) After a Default occurs, take all actions Secured
Party requests to obtain any Tribunal's consent to or approval of Secured
Party's Rights under this Agreement, including, without limitation, the Right
to sell all or any part of the Collateral upon a Default without the Tribunal's
further consent or approval. Debtor agrees that Secured Party's remedies at
law for Debtor's failure to comply with this provision would be inadequate and
that the harm to Secured Party would not be adequately compensable in damages.
Debtor agrees that this provision may be specifically enforced.
(o) Perform all of its obligations under or in connection
with the Collateral in accordance with customary business practices.
6. Default. The term "Default," as used herein, means the
occurrence of any one or more of the events described in Section 8 of the
Credit Agreement.
7. Remedies. Upon the occurrence and continuance of a Default,
Secured Parties may exercise any and all rights and remedies available to a
secured party under the UCC, in addition to any and all other rights and
remedies afforded by the Related Papers, at law, in equity, or otherwise,
including, without limitation, the rights and remedies described in Section 9
of the Credit Agreement. In addition, Secured Party may require requiring Pool
Alaska, Inc. to execute and deliver to Secured Party an assignment,
substantially in the form of Exhibit "A" to this Agreement, of all of its
right, title and interest in and to the Trademarks and require Pool Alaska,
Inc. to take such other action as Secured Party requests to grant, perfect and
protect the assignment of such Trademarks and to exercise Secured Party's
rights and remedies with respect to such assigned Trademarks.
(a) Notice. Reasonable notification of the time and
place of any public sale of the Collateral, or reasonable notification of the
time after which any private sale or other intended disposition of the
Collateral is to be made, shall be sent to the Debtor and to any other Person
entitled to notice under the UCC; provided that if any of the Collateral
threatens to decline speedily in value or is of the type customarily sold on a
recognized market, Secured Parties may sell or otherwise dispose of the
Collateral without notification, advertisement, or other notice of any kind.
It is agreed that (i) notice sent or given not less than five Business Days
prior to the taking of the action to which the notice relates is reasonable
notification and notice for the purposes of this subparagraph, and (ii) any
sale of the Collateral may be conducted with reserve.
(b) Sales of Securities. In connection with the sale of
any Collateral that is securities, Secured Parties are authorized, but not
obligated, to limit prospective purchasers to the extent deemed necessary or
desirable by Secured Parties to render such sale exempt from the registration
requirements of the Securities Exchange Act of 1934 (as amended, the EXCHANGE
ACT) and any applicable state securities Laws, and no sale so made in good
faith by Secured Parties shall be deemed not to be "commercially reasonable"
because so made.
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(c) Application of Proceeds. Secured Parties shall apply
the proceeds or any sale or other disposition of the Collateral under this
Paragraph 7 in the following order: First, to the payment of all its expenses
incurred in retaking, holding, and preparing any of the Collateral for sale(s)
or other disposition, in arranging for such sale(s) or other disposition, and
in actually selling or disposing of the same (all of which are part of the
Obligation); second, toward repayment of amounts expended by Secured Parties
under Paragraph 8; third, subject to Section 9.1 of the Credit Agreement,
toward payment of the balance of the Obligation and NationsBank's net exposure
then existing under all foreign exchange contracts between any Company and
NationsBank in such order and manner as Secured Parties, in their discretion,
may deem advisable. Any surplus remaining shall be delivered to the Debtor or
Borrower or as a court of competent jurisdiction may direct. If the proceeds
are insufficient to pay the Obligation in full, Borrower shall remain liable
for any deficiency.
(d) Pool Alaska, Inc.'s Agent. Secured Party shall be
deemed to be irrevocably appointed as Pool Alaska, Inc.'s agent and
attorney-in-fact with all right and power to enforce all of Pool Alaska, Inc.'s
rights and remedies under or in connection with the Collateral. All reasonable
costs, expenses and liabilities incurred and all payments made by Secured Party
as Pool Alaska, Inc.'s agent and attorney-in-fact, including, without
limitation, reasonable attorney's fees and expenses, shall be considered a loan
by Secured Party to Pool Alaska, Inc. which shall be repayable on demand and
shall accrue interest at the Default Rate and shall be part of the Obligation.
Pool Alaska, Inc. hereby gives Secured Party the power and right on its behalf
and in its own name to do any of the following, without notice to or the
consent of Pool Alaska, Inc.:
(i) endorse Pool Alaska, Inc.'s name on all applications,
assignments (including assignments to Secured Party), licenses,
documents, papers, and instruments necessary or desirable for Pool
Alaska, Inc. in its use of the Trademarks;
(ii) take any other action with respect to the Trademarks
as Secured Party deems in its best interest or in the best interest of
Lenders, including requiring Pool Alaska, Inc. to join in any lawsuit
or other action concerning the Collateral;
(iii) grant or issue any exclusive or non-exclusive license
under the Trademarks; and
(iv) assign, pledge, convey, or otherwise transfer title
in or dispose of any of the Trademarks to anyone.
This power of attorney is a power coupled with an interest and
shall be irrevocable until the Obligation is paid in full. The Secured Party
shall be under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges, and options expressly or implicitly granted to it
in this Agreement, and shall not be liable for any failure to do so or any
delay in doing so. This power of attorney is conferred on Secured Party solely
to protect, preserve, maintain, and realize upon its Security Interest in the
Collateral. Neither Secured Party nor any of the Lenders shall be responsible
for any decline or diminution in the value of any of the Collateral, and
neither Secured Party nor any of the Lenders shall be required to take any
steps to protect or preserve any of the Collateral or any rights against prior
parties or to protect, preserve, or maintain any security interest or Lien
given to secure the Collateral.
8. Other Rights of Secured Parties.
(a) Performance. If any covenant, duty, or agreement of
Debtor is not performed in accordance with its material terms, Secured Parties
may, at their option, perform, or attempt to perform, such covenant, duty, or
agreement on behalf of Debtor. Any amount reasonably expended by Secured
Parties in such performance or attempted performance shall be payable by Debtor
to Secured Parties on demand, shall become part of the Obligation, and shall
bear interest at the Default Rate from the date of such expenditure by Secured
Parties until paid. Notwithstanding the foregoing, it is expressly understood
that no Secured Party shall assume or have, except by express written consent
of such Secured Party, any liability or responsibility for the performance of
any covenant, duty, or agreement of Debtor.
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(b) Collection. Upon notice from any Secured Party, each
Obligor with respect to any payments on any of the Collateral (including,
without limitation, dividends and other distributions with respect to
securities and insurance proceeds payable by reason of loss or damage to any of
the Collateral) is hereby authorized and directed by Debtor to make payment
directly to such Secured Party, regardless of whether Debtor was previously
making collections thereon. Subject to Paragraph 8(e), until such notice is
given, Debtor is authorized to retain and expend all payments made on
Collateral. Each Secured Party shall have the right in its own name or in the
name of Debtor to compromise or extend time of payment with respect to all or
any portion of the Collateral for such amounts and upon such terms as such
Secured Party may determine; to demand, collect, receive, receipt for, ▇▇▇ for,
compound, and give acquittances for any and all amounts due or to become due
with respect to Collateral; to take control of cash and other proceeds of any
Collateral; to endorse the name of Debtor on any notes, acceptances, checks,
drafts, money orders, or other evidences of payment on Collateral that may come
into the possession of such Secured Party; to sign the name of Debtor on any
invoice or ▇▇▇▇ of lading relating to any Collateral, on any drafts against
Obligors or other persons or entities making payment with respect to
Collateral, on assignments and verifications of accounts or other Collateral
and on notices to Obligors making payment with respect to Collateral; to send
requests for verification of obligations to any Obligor; and to do all other
acts and things necessary to carry out the intent of this agreement. If any
Obligor fails or refuses to make payment on any Collateral when due, each
Secured Party is authorized, in its sole discretion, either in its own name or
in the name of Debtor, to take such action as such Secured Party shall deem
appropriate for the collection of any amounts owed with respect to Collateral
or upon which a delinquency exists. Regardless of any other provision hereof,
however, a Secured Party shall never be liable for its failure to collect, or
for its failure to exercise diligence in the collection of, any amounts owed
with respect to Collateral, nor shall it be under any duty whatever to anyone
except Debtor to account for funds that it shall actually receive hereunder.
Without limiting the generality of the foregoing, no Secured Party shall have
responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders, or similar matters relating to any Collateral, or for
informing Debtor with respect to any of such matters (irrespective of whether
such Secured Party actually has, or may be deemed to have, knowledge thereof).
The release of any Secured Party to any Obligor shall be a full and complete
release, discharge, and acquittance to such Obligor, to the extent of any
amount so paid to such Secured Party. The rights granted Secured Parties under
this subparagraph may be exercised only upon the occurrence and continuance of
a Default.
(c) Record Ownership of Securities. Upon the occurrence
and continuance of a Default, Secured Parties may have any Collateral that is
securities and that is in the possession of a Secured Party, or its nominee or
nominees, registered in its name, or in the name of its nominee or nominees, as
pledgee; and, as to any securities so registered, Debtor shall execute and
deliver (or cause to be executed and delivered) to such Secured Party all such
proxies, powers of attorney, dividend coupons or orders, and other documents as
such Secured Party may reasonably request for the purpose of enabling such
Secured Party to exercise the voting rights and powers which it is entitled to
exercise under this agreement or to receive the dividends and other payments in
respect of securities which it is authorized to receive and retain under this
agreement.
(d) Voting of Securities. As long as a Default has not
occurred and is not continuing, Debtor shall be entitled to exercise all voting
rights pertaining to any Collateral that is securities. After the occurrence
and during the continuance of a Default, the right to vote any Collateral that
is securities shall be vested exclusively in Secured Parties. To this end,
Debtor hereby irrevocably constitutes and appoints Agent, on behalf of Secured
Parties, the proxy and attorney-in-fact of Debtor, with full power of
substitution, to vote, and to act with respect to, any and all Collateral that
is securities standing in the name of Debtor or with respect to which Debtor is
entitled to vote and act, subject to the understanding that such proxy may not
be exercised unless a Default has occurred and is continuing. The proxy herein
granted is coupled with an interest, is irrevocable, and shall continue until
the Obligation has been paid and performed in full.
(e) Certain Proceeds. Notwithstanding any contrary
provision herein, any and all stock dividends or other non-cash distributions
made on or in respect of any Collateral that is securities, and any proceeds of
any Collateral that is securities, whether such dividends, distributions, or
proceeds result from a subdivision, combination, or reclassification of the
outstanding capital stock of any issuer thereof or as a result of any merger,
consolidation, acquisition, or other exchange of assets to which any issuer may
be a party, or otherwise, shall be part of the Collateral hereunder, shall, if
received by Debtor, be held in trust for the benefit of Secured Parties, and
shall be delivered promptly to Secured Parties or to Agent, on behalf of
Secured Parties, (accompanied by proper instruments of assignment and/or stock
and/or bond
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powers executed by Debtor in accordance with Secured Parties' instructions) to
be held subject to the terms of this agreement. Any cash proceeds of
Collateral which come into the possession of any Secured Party (including,
without limitation, insurance proceeds) may, at such Secured Party's option, be
applied in whole or in part to the Obligation (to the extent then due) and to
NationsBank's net exposure then existing under all foreign exchange contracts
between any Company and NationsBank, be released in whole or in part to or on
the written instructions of Debtor for any general or specific purpose, or be
retained in whole or in part by such Secured Party as additional Collateral.
Any cash Collateral in the possession of any Secured Party may be invested by
such Secured Party in (a) obligations of the United States of America and
agencies thereof and obligations guaranteed by the United States of America
maturing within one year from the date of acquisition, and (b) certificates of
deposit issued by commercial banks organized under the Laws of the United
States of America or any state thereof and having combined capital, surplus,
and undivided profits of not less than $100,000,000, which have a rating from
▇▇▇▇▇'▇ Investors Service, Inc., and Standard & Poors Corporation of at least
P-1 and A-1, respectively, or are insured by the Federal Deposit Insurance
Corporation. Secured Parties shall never be obligated to make any such
investment and shall never have any liability to Debtor for any loss which may
result therefrom. All interest and other amounts earned from any investment of
Collateral may be dealt with by Secured Parties in the same manner as other
cash Collateral. The provisions of this subparagraph shall be applicable only
upon the occurrence and continuance of a Default.
(f) Use and Operation of Collateral. Debtor covenants to
promptly reimburse and pay to any Secured Party, at such Secured Party's
request, the amount of all expenses reasonably incurred by such Secured Party
in connection with its custody and preservation of Collateral, and all such
expenses shall bear interest until repaid (i) at the lesser of the Designated
Rate or the Highest Lawful Rate, if no Default has occurred and is continuing,
and (ii) at the lesser of the Default Rate or the Highest Lawful Rate, upon the
occurrence and continuance of a Default. Such expenses, together with such
interest, shall be payable by Debtor to any Secured Party upon demand and shall
become part of the Obligation. However, the risk of accidental loss or damage
to, or diminution in value of, Collateral is on Debtor. With respect to
Collateral that is in the possession of a Secured Party, such Secured Party
shall have no duty to fix or preserve rights against prior parties to such
Collateral and shall never be liable for any failure to use diligence to
collect any amount payable in respect of such Collateral, but shall be liable
only to account to Debtor for what it may actually collect or receive thereon.
The provisions of this subparagraph shall be applicable whether or not a
Default has occurred and is continuing.
(g) INDEMNIFICATION. DEBTOR HEREBY ASSUMES ALL LIABILITY
FOR THE COLLATERAL, FOR THE SECURITY INTEREST, AND FOR ANY USE, POSSESSION,
MAINTENANCE, AND MANAGEMENT OF, ALL OR ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY TAXES ARISING AS A RESULT OF, OR IN CONNECTION WITH,
THE TRANSACTIONS CONTEMPLATED HEREIN, AND AGREES TO ASSUME LIABILITY FOR, AND
TO INDEMNIFY AND HOLD SECURED PARTIES HARMLESS FROM AND AGAINST, ANY AND ALL
CLAIMS, CAUSES OF ACTION, OR LIABILITY, FOR INJURIES TO OR DEATHS OF PERSONS
AND DAMAGE TO PROPERTY, HOWSOEVER ARISING FROM OR INCIDENT TO SUCH USE,
POSSESSION, MAINTENANCE, AND MANAGEMENT, WHETHER SUCH PERSONS BE AGENTS OR
EMPLOYEES OF DEBTOR OR OF THIRD PARTIES, OR SUCH DAMAGE TO PROPERTY OF DEBTOR
OR OF OTHERS. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, DEBTOR AGREES TO
INDEMNIFY, SAVE, AND HOLD SECURED PARTIES HARMLESS FROM AND AGAINST, AND
COVENANTS TO DEFEND SECURED PARTIES AGAINST, ANY AND ALL LOSSES, DAMAGES,
CLAIMS, COSTS, PENALTIES, LIABILITIES, AND EXPENSES, INCLUDING, WITHOUT
LIMITATION, COURT COSTS AND ATTORNEYS' FEES, HOWSOEVER ARISING OR INCURRED
BECAUSE OF, INCIDENT TO, OR WITH RESPECT TO COLLATERAL OR ANY USE, POSSESSION,
MAINTENANCE, OR MANAGEMENT THEREOF, PROVIDED THAT DEBTOR SHALL NOT BE LIABLE
FOR LOSSES, DAMAGES, CLAIMS, COSTS, PENALTIES, LIABILITIES, AND EXPENSES
RESULTING FROM ANY SECURED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
9. Miscellaneous.
(a) Reference to Miscellaneous Provisions. This
agreement is a Loan Paper, and, therefore, this agreement is subject to the
applicable provisions of Section 12 of the Credit Agreement, all of which
applicable provisions are incorporated herein by reference the same as if set
forth herein verbatim. Until changed by notice, the address and facsimile
number for each party hereto for purposes of communications are as appear on
the signature page(s) of this agreement.
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(b) Term. This agreement shall terminate upon full and
final payment and performance of (a) the Obligation, and (b) all foreign
exchange contracts between each Company and NationsBank. No Obligor, if any,
on any of the Collateral shall ever be obligated to make inquiry as to the
termination of this agreement, but shall be fully protected in making payment
directly to Agent, on behalf of Secured Parties.
(c) Actions Not Releases. The Security Interest and
Debtor's obligations and Secured Parties' rights hereunder shall not be
released, diminished, impaired, or adversely affected by the occurrence of any
one or more of the following events: (i) The taking or accepting of any other
security or assurance for any or all of the Obligation; (ii) any release,
surrender, exchange, subordination, or loss of any security or assurance at any
time existing in connection with any or all of the Obligation; (iii) the
modification of, amendment to, or waiver of compliance with any terms of any of
its or any other Related Paper without the notification or consent of Debtor,
except as required therein (the right to such notification and consent being
specifically waived by Debtor); (iv) the insolvency, bankruptcy, or lack of
corporate or trust power of any party at any time liable for the payment of any
or all of the Obligation, whether now existing or hereafter occurring; (v) any
renewal, extension, or rearrangement of the payment of any or all of the
Obligation, either with or without notice to or consent of Debtor, or any
adjustment, indulgence, forbearance, or compromise that may be granted or given
by Secured Parties to Debtor; (vi) any neglect, delay, omission, failure, or
refusal of any Secured Party to take or prosecute any action in connection with
any other agreement, document, guaranty, or instrument evidencing, securing, or
assuring the payment of all or any of the Obligation; (vii) any failure of any
Secured Party to notify Debtor of any renewal, extension, or assignment of the
Obligation or any part thereof, or the release of any security, or of any other
action taken or refrained from being taken by any Secured Party against Debtor
or any new agreement between any Secured Party and Debtor, it being understood
that no Secured Party shall be required to give Debtor (other than Borrower)
any notice of any kind under any circumstances whatsoever with respect to or in
connection with the Obligation, including, without limitation, notice of
acceptance of this security agreement or any Collateral ever delivered to or
for the account of such Secured Party hereunder; (viii) the illegality,
invalidity, or unenforceability of all or any part of the Obligation against
any party obligated with respect thereto by reason of the fact that the
Obligation, or the interest paid or payable with respect thereto, exceeds the
amount permitted by Law, the act of creating the Obligation, or any part
thereof, is ultra ▇▇▇▇▇, or the officers, partners, or trustees creating same
acted in excess of their authority, or for any other reason; or (ix) if any
payment by any party obligated with respect thereto is held to constitute a
preference under applicable Laws or for any other reason any Secured Party is
required to refund such payment or pay the amount thereof to someone else.
(d) Waivers. Unless otherwise expressly provided herein
or in any other Related Paper, Debtor waives (i) any right to require Secured
Parties to proceed against any other Person, to exhaust its rights in
Collateral, or to pursue any other right which Secured Parties may have; (ii)
with respect to the Obligation, presentment and demand for payment, protest,
notice of protest and nonpayment, and notice of the intention to accelerate;
and (iii) all rights of marshaling in respect of any and all of the Collateral.
(e) Financing Statement. Secured Parties may file this
agreement or a carbon, photographic, or other reproduction of this agreement,
as a financing statement, but the failure of Secured Parties to do so shall not
impair the validity or enforceability of this agreement.
(f) Information. Except as otherwise provided by Law,
the charge of Secured Parties for furnishing each statement of account or each
list of Collateral shall be $10.00.
(g) Multiple Counterparts. This agreement has been
executed in a number of identical counterparts, each of which shall be deemed
an original for all purposes and all of which constitute, collectively, one
agreement; but, in making proof of this agreement, it shall not be necessary to
produce or account for more than one such counterpart.
(h) Parties Bound; Assignment. This agreement shall be
binding on and inure to the benefit of Debtor, Secured Parties, and their
respective successors and assigns. Debtor's obligations and agreements
hereunder are joint and several and shall be binding upon their respective
successors and assigns, and delivery or other accounting of Collateral to any
one or more of them shall discharge Secured Parties of all liability therefor.
Debtor may not, without the prior written consent of Secured Parties, assign
any rights, duties, or obligations hereunder. In the event of an assignment
G-10
65
of all or part of the Obligation, the Security Interest and other rights and
benefits hereunder, to the extent applicable to the part of the Obligation so
assigned, may be transferred therewith.
EXECUTED as of the day and year first herein set forth.
NATIONSBANK OF TEXAS, N.A. NATIONSBANK OF TEXAS, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, By ______________________________________
Vice President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇ Vice President
The address and fax no. for
each of the undersigned is:
_________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ By ______________________________________
Attn: ▇. ▇. ▇▇▇▇▇▇▇▇▇,
Treasurer
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇ Title ___________________________________
By ______________________________________
[corporate seal] Title ___________________________________
G-11
66
SCHEDULE 1
Present and foreseeable location of
Debtor's books and records
concerning any Collateral that is accounts
G-12
67
SCHEDULE II
TRADEMARKS
G-13
68
SCHEDULE III
TRADEMARKS LICENSED FOR USE BY OTHERS
G-14
69
EXHIBIT "A"
TO
SECURITY AGREEMENT
FORM OF ASSIGNMENT
ASSIGNMENT OF TRADEMARKS
THIS ASSIGNMENT OF TRADEMARKS (this "ASSIGNMENT") is made as of *,
199__, by POOL ALASKA, INC., a Texas corporation whose address is ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("ASSIGNOR") in favor of NationsBank of
Texas, N.A., as Agent for itself and the other Lenders (as defined in the
Security Agreement [as hereinafter defined]) ("ASSIGNEE").
W I T N E S S E T H
A. Assignee is the beneficiary, for the ratable benefit of
Lenders, of that certain Security Agreement dated as of April 25, 1990 executed
by Assignor (the "SECURITY AGREEMENT"), which Security Agreement provides that
under certain conditions specified therein Assignor shall execute this
Assignment; and
B. The aforementioned conditions have been fulfilled;
NOW THEREFORE, Assignor hereby agrees as follows:
1. Assignment of Trademark. Assignor hereby grants, assigns and
conveys to Assignee, for the ratable benefit of Lenders, its entire right,
title and interest in and to the Trademarks (as each term is defined in the
Security Agreement) including without limitation the trademark and patent
registrations and applications listed in SCHEDULES II AND III to the Security
Agreement and hereto, including, without limitation, all renewals thereof, all
proceeds thereof (including, but not limited to, all license royalties and
proceeds of infringement suits), the right to ▇▇▇ for past, present and future
infringements and the goodwill of the businesses associated with and symbolized
by the Trademarks.
2. Representations and Warranties. Assignor represents and
warrants that it has the full right and power to make the assignment of the
Trademarks made hereby and that it has made no previous assignment, transfer,
agreement in conflict herewith or constituting a present or future assignment
of or encumbrance on any of the Trademarks except the Security Agreement.
3. Modification. This Assignment cannot be altered, amended or
modified in any way, except by a writing signed by Assignor and Assignee.
4. Binding Effect; Governing Law. This Assignment shall be
binding upon Assignor and its respective successors and permitted assigns, and
shall inure to the benefit of Assignee and its successors and assigns. This
Assignment shall, except to the extent that the laws of another state apply to
the Trademarks or any part thereof, be governed by and construed in accordance
with the laws of the State of Texas and the applicable laws of the United
States of America. By receiving this Assignment, Assignee is entitled to
receive all of the benefits and none of the obligations and liabilities which
may arise from the Trademarks.
IN WITNESS WHEREOF, this Assignment has been executed as of the day
and year first written above.
POOL ALASKA, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
G-15
70
STATE OF __________ )
)
COUNTY OF __________ )
On this ___ day of _________, 199___, before me personally appeared
____________________________, known to me and being duly sworn, deposes and
says that he is the _____________________________________ of POOL ALASKA, INC.,
a Texas corporation (the "COMPANY"); that he knows the seal of Company that the
seal so affixed to the foregoing instrument is such corporate seal; that he
signed the foregoing instrument and affixed the seal of Company as such officer
pursuant to the authority vested in him by law; and that the foregoing
instrument is the voluntary act of Company and he desires the same to be
recorded as such.
_______________________________________
NOTARY PUBLIC IN AND FOR THE
STATE OF ___________________
[SEAL]
My Commission Expires: ________________
G-16
71
EXHIBIT H
OFFICER'S CERTIFICATE
This certificate is delivered under the Restated Revolving Credit
Agreement dated as of November 30, 1995, among Pool Company, a Texas
corporation ("BORROWER"), NationsBank of Texas, N.A., as Agent ("AGENT") and
the Lenders ("LENDERS") named therein. I, the undersigned officer of the
companies listed and attached as Annex A, hereby certify to Agent and the
Lenders that the following are true and correct:
1. Resolutions. Attached as Annex B is a true and correct copy
of resolutions relating to matters described therein, which have been duly and
unanimously adopted at a meeting of, or by the unanimous written consent of,
the board of directors of each such company listed and attached as Annex A.
None of such resolutions have been amended, modified or repealed in any
respect, and all of such resolutions are in full force and effect on the date
hereof.
2. Incumbency. The following individuals are the duly qualified
and acting officers in the position beside their names, of the companies listed
and attached as Annex A. The signatures beside their names are their true
signatures.
----------------------------------------------------------------------------------
NAME TITLE SPECIMEN SIGNATURES
----------------------------------------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇▇▇ President
----------------------------------------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇ Senior Vice President,
Finance
----------------------------------------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇▇ Treasurer
----------------------------------------------------------------------------------
3. Charter. There have been no changes to the Articles or
Certificate of Incorporation of any such company, and there have been no
additional amendments authorized with respect thereto, since April 21, 1995.
4. Bylaws. There have been no changes to the Bylaws of any such
company, and there have been no additional amendments authorized with respect
thereto since April 21, 1995.
EXECUTED as of _______, 1995.
_______________________________________
G. G. Arms
Corporate Secretary
H-1
72
ANNEX A
POOL COMPANY
POOL ENERGY SERVICES CO.
POOL ENERGY HOLDING, INC.
POOL COMPANY (HOUSTON) INC.
POOL COMPANY (TEXAS) INC.
ASSOCIATED PETROLEUM SERVICES, INC.
POOL PRODUCTION SERVICES, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL INTERNATIONAL, INC.
POOL-AUSTRALIA, INC.
THE INTERNATIONAL AIR DRILLING COMPANY
ASSOCIATED OILTOOLS, INC.
POOL HORIZONTAL DRILLING SERVICES CO.
POOL CALIFORNIA ENERGY SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
WESTEX PRODUCTION SERVICE, INC.
H-2
73
EXHIBIT J
CONVERSION REQUEST
______________, 19__
NationsBank of Texas, N.A., as Agent
Energy Banking Group
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is made to the Restated Revolving Credit Agreement dated as
of November 30, 1995 (as amended, supplemented or restated, the "CREDIT
AGREEMENT"), among the undersigned, the Lenders named therein, and NationsBank
of Texas, N.A., as Agent. Unless otherwise defined herein, all capitalized
terms have the meanings given to such terms in the Credit Agreement.
The undersigned hereby gives you notice pursuant to SECTION 2.15 of
the Credit Agreement that it elects to convert the interest rate applicable to
an Advance under the Credit Agreement or elects a new Interest Period for an
Advance bearing interest at a LIBOR Rate on the following terms:
(A) Date of conversion or last day of
applicable Interest Period (a Business Day) __________________________
(B) Existing Interest Rate** and Principal Amount*
being converted __________________________
(C) New Interest Rate selected** __________________________
(D) For conversion to a LIBOR Rate, the
Interest Period selected and the last
day thereof*** __________________________
(E) For continuation of a LIBOR Rate, the Interest
Period selected and the last day thereof*** __________________________
Very truly yours,
POOL COMPANY
By: ___________________________________
Name: _________________________________
Title: ________________________________
__________________________________
* Not less than $500,000 or a greater integral multiple of $100,000 (if
a LIBOR Rate is selected).
** LIBOR Rate (1, 2, 3 or 6 months), or Floating Rate.
*** 1, 2, 3 or 6 months. The Interest Period may not end after the
Termination Date.
J-1
74
REVOLVING CREDIT NOTE
$7,000,000 Houston, Texas December 29, 1995
FOR VALUE RECEIVED, POOL COMPANY, a Texas corporation ("MAKER"),
hereby promises to pay to the order of NATIONAL BANK OF ALASKA ("PAYEE"), the
principal amount of $7,000,000 or so much thereof as may be disbursed and
outstanding hereunder, together with interest, as hereinafter described.
This promissory note has been executed and delivered under, and is
subject to the terms of, the $35,000,000 Restated Revolving Credit Agreement
(as amended, the "CREDIT AGREEMENT") dated as of November 30, 1995, among
Maker, NationsBank of Texas, N.A., as Agent, and Payee and the other Lenders
referred to therein, and is a "Note" referred to therein. Unless defined
herein or the context otherwise requires, capitalized terms used herein have
the meaning given to such terms in the Credit Agreement. Reference is made to
the Credit Agreement for provisions affecting this promissory note regarding
the place of payment, applicable interest rates, principal and interest payment
dates, final maturity, voluntary and mandatory prepayments, acceleration of
maturity, exercise of Rights, payment of attorneys' fees, court costs, and
other costs of collection, certain waivers by Maker and others now or hereafter
obligated for payment of any sums due hereunder, and security for the payment
hereof.
This promissory note and the similar promissory notes of Maker dated
of even date herewith have been issued under the Credit Agreement in
replacement for, but not as a novation of, those certainpromissory notes of
Maker dated August 15, 1994, which were issued under the Existing Credit
Agreement (as defined in the Credit Agreement).
This promissory note is being executed and delivered, and is intended
to be performed, in the State of Texas, and the Laws of such State and of the
United States of America shall govern the rights and duties of the parties and
the validity, construction, enforcement, and interpretation hereof.
THIS PROMISSORY NOTE, TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENT
THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY (I)
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES, OR (II) ANY COMMITMENT LETTER AMONG THE PARTIES (ALL THE TERMS AND
CONDITIONS OF WHICH ARE SUPERSEDED BY LOAN PAPERS). THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
POOL COMPANY
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
___________________________________
▇. ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Finance
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
___________________________________
▇. ▇. ▇▇▇▇▇▇▇▇▇
Treasurer
[corporate seal]
75
REVOLVING CREDIT NOTE
$13,125,000 Houston, Texas December 29, 1995
FOR VALUE RECEIVED, POOL COMPANY, a Texas corporation ("MAKER"),
hereby promises to pay to the order of NATIONAL BANK OF CANADA, a Canadian bank
("PAYEE"), the principal amount of $13,125,000 or so much thereof as may be
disbursed and outstanding hereunder, together with interest, as hereinafter
described.
This promissory note has been executed and delivered under, and is
subject to the terms of, the $35,000,000 Restated Revolving Credit Agreement
(as amended, the "CREDIT AGREEMENT") dated as of November 30, 1995, among
Maker, NationsBank of Texas, N.A., as Agent, and Payee and the other Lenders
referred to therein, and is a "Note" referred to therein. Unless defined
herein or the context otherwise requires, capitalized terms used herein have
the meaning given to such terms in the Credit Agreement. Reference is made to
the Credit Agreement for provisions affecting this promissory note regarding
the place of payment, applicable interest rates, principal and interest payment
dates, final maturity, voluntary and mandatory prepayments, acceleration of
maturity, exercise of Rights, payment of attorneys' fees, court costs, and
other costs of collection, certain waivers by Maker and others now or hereafter
obligated for payment of any sums due hereunder, and security for the payment
hereof.
This promissory note and the similar promissory notes of Maker dated
of even date herewith have been issued under the Credit Agreement in
replacement for, but not as a novation of, those certainpromissory notes of
Maker dated August 15, 1994, which were issued under the Existing Credit
Agreement (as defined in the Credit Agreement).
This promissory note is being executed and delivered, and is intended
to be performed, in the State of Texas, and the Laws of such State and of the
United States of America shall govern the rights and duties of the parties and
the validity, construction, enforcement, and interpretation hereof.
THIS PROMISSORY NOTE, TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENT
THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY (I)
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES, OR (II) ANY COMMITMENT LETTER AMONG THE PARTIES (ALL THE TERMS AND
CONDITIONS OF WHICH ARE SUPERSEDED BY LOAN PAPERS). THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
POOL COMPANY
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
___________________________________
▇. ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Finance
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
___________________________________
▇. ▇. ▇▇▇▇▇▇▇▇▇
Treasurer
[corporate seal]
76
REVOLVING CREDIT NOTE
$14,875,000 Houston, Texas December 29, 1995
FOR VALUE RECEIVED, POOL COMPANY, a Texas corporation ("MAKER"),
hereby promises to pay to the order of NATIONSBANK OF TEXAS, N.A., a national
banking association ("PAYEE"), the principal amount of $14,875,000 or so much
thereof as may be disbursed and outstanding hereunder, together with interest,
as hereinafter described.
This promissory note has been executed and delivered under, and is
subject to the terms of, the $35,000,000 Restated Revolving Credit Agreement
(as amended, the "CREDIT AGREEMENT") dated as of November 30, 1995, among
Maker, NationsBank of Texas, N.A., as Agent, and Payee and the other Lenders
referred to therein, and is a "Note" referred to therein. Unless defined
herein or the context otherwise requires, capitalized terms used herein have
the meaning given to such terms in the Credit Agreement. Reference is made to
the Credit Agreement for provisions affecting this promissory note regarding
the place of payment, applicable interest rates, principal and interest payment
dates, final maturity, voluntary and mandatory prepayments, acceleration of
maturity, exercise of Rights, payment of attorneys' fees, court costs, and
other costs of collection, certain waivers by Maker and others now or hereafter
obligated for payment of any sums due hereunder, and security for the payment
hereof.
This promissory note and the similar promissory notes of Maker dated
of even date herewith have been issued under the Credit Agreement in
replacement for, but not as a novation of, those certainpromissory notes of
Maker dated August 15, 1994, which were issued under the Existing Credit
Agreement (as defined in the Credit Agreement).
This promissory note is being executed and delivered, and is intended
to be performed, in the State of Texas, and the Laws of such State and of the
United States of America shall govern the rights and duties of the parties and
the validity, construction, enforcement, and interpretation hereof.
THIS PROMISSORY NOTE, TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENT
THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY (I)
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES, OR (II) ANY COMMITMENT LETTER AMONG THE PARTIES (ALL THE TERMS AND
CONDITIONS OF WHICH ARE SUPERSEDED BY LOAN PAPERS). THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
POOL COMPANY
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
____________________________________
▇. ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Finance
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
____________________________________
▇. ▇. ▇▇▇▇▇▇▇▇▇
Treasurer
[corporate seal]
77
RESTATED INTERCREDITOR AGREEMENT
THIS RESTATED INTERCREDITOR AGREEMENT is entered into as of November
30, 1995 by NATIONSBANK OF TEXAS, N.A., a national banking association
("NATIONSBANK"), and consented and agreed to by National Bank of Canada,
National Bank of Alaska, and Pool Company, a Texas corporation ("BORROWER").
RECITALS:
A. NationsBank entered into that certain Intercreditor Agreement
dated as of April 21, 1995 (the "EXISTING INTERCREDITOR AGREEMENT"), which was
consented and agreed to by National Bank of Canada and Borrower.
B. Borrower, certain Lenders ("REVOLVING CREDIT LENDERS"), and
NationsBank, as Agent for itself and the other Revolving Credit Lenders, are
entering into a Restated Credit Agreement (as renewed, extended, increased,
reduced, amended, or restated, the "REVOLVING CREDIT AGREEMENT") dated as of
November 30, 1995, providing for secured loans to Borrower on a revolving
basis.
C. Borrower, certain Lenders ("TERM LOAN LENDERS"), and
NationsBank, as Agent for itself and the other Term Loan Lenders, are entering
into a Term Loan Agreement (as renewed, extended, increased, reduced, amended,
or restated, the "TERM LOAN AGREEMENT"), dated as of November 30, 1995,
providing for a secured loan to Borrower on a term basis.
D. NationsBank, in its capacity as Agent for itself and the
Revolving Credit Lenders under the Revolving Credit Agreement ("REVOLVING
CREDIT AGENT"), for its own account with respect to its net exposure on foreign
exchange contracts between any Company and NationsBank, and in its capacity as
Agent for itself and the Term Loan Lenders under the Term Loan Agreement ("TERM
LOAN AGENT"), is entering into this agreement to (i) provide for certain mutual
rights between (a) the Term Loan Agent and Term Loan Lenders, (b) the Revolving
Credit Agent and Revolving Credit Lenders, and (c) NationsBank, individually,
(ii) add National Bank of Alaska's consent and agreement, as a new Term Loan
Lender and Revolving Credit Lender, and (iii) amend and restate entirely the
Existing Intercreditor Agreement.
AGREEMENTS:
Therefore, for valuable and adequate consideration, the Term Loan
Agent (on behalf of Term Loan Lenders), the Revolving Credit Agent (on behalf
of Revolving Credit Lenders), and NationsBank, individually, agree as follows:
1. Definitions. As used in this agreement:
"AGENTS" means, collectively, the Revolving Credit Agent and
the Term Loan Agent.
"COLLATERAL" means the collateral pledged by Borrower to
Secured Parties under the Lender Agreements.
"DEFAULT" means any "Default" under a Lender Agreement that
entitles the applicable Secured Party to accelerate the obligations of
Borrower under a Lender Agreement and to take Enforcement Actions.
"ENFORCEMENT ACTION" means any exercise by any Secured Party
or its custodian of rights -- other than giving notice of default and
acceleration -- to foreclose or otherwise realize upon any Collateral.
"LENDER AGREEMENTS" means, collectively, the Revolving Credit
Agreement, the Term Loan Agreement, and all foreign exchange contracts
between any Company and NationsBank.
"SECURED PARTIES" means Agents and NationsBank, for its own
account with respect to its net exposure on foreign exchange contracts
between any Company and NationsBank.
1
78
2. Notices of Default, Acceleration, and Enforcement Action.
Each Secured Party shall (a) promptly notify the other Secured Parties upon
becoming aware of a Default and (b) use its best efforts to notify the other
Secured Parties before (i) accelerating the obligations of Borrower under the
applicable Lender Agreement or (ii) taking -- or authorizing its custodian to
take -- Enforcement Actions.
3. Sharing of Collateral. Each Secured Party acknowledges that
(i) certain liens or security interests have been granted in the same
Collateral to the other Secured Parties to secure obligations of Borrower; (ii)
such liens or security interests in the Collateral shall be on the same level
of priority with respect to each Secured Party; (iii) the amount of Collateral
attributable to a Secured Party shall be the proportion that the respective
indebtedness owing to such Secured Party by Borrower bears to the aggregate
indebtedness owed by Borrower to all Secured Parties ("PRO RATA SHARE"); (iv)
the Secured Parties shall share in the proceeds of the Collateral according to
their Pro Rata Share; and (v) each Secured Party shall pay its Pro Rata Share
of any expenses (including, without limitation, court costs, attorney's fees
and other costs of collection) incurred in connection with the Collateral.
4. Amendments to Agreements. Any Secured Party and the Lenders
under any Lender Agreement may enter into renewals and extensions of,
amendments to, and waivers under its respective Lender Agreement without the
consent of the other Secured Parties or the Lenders under the other Lender
Agreements, SO LONG AS that renewal, extension, amendment, or waiver does not
diminish the rights granted to the other Secured Parties and the other Lenders
under this agreement.
5. Default; Collateral. Upon the occurrence and continuance of a
Default, Secured Parties agree to promptly confer in order that Secured Parties
may agree upon a course of action for the enforcement of the rights of Secured
Parties; provided that any Secured Party shall be entitled (but not obligated)
to proceed to take any actions necessary in its reasonable judgment to preserve
rights, pending agreement by Secured Parties on the course of action to be
taken. Any and all agreements to subordinate (whether made heretofore or
hereafter) other indebtedness or obligations of Borrower to the indebtedness
under the Lender Agreements shall be construed as being for the benefit of each
Secured Party to the extent of its respective Pro Rata Share. If one Secured
Party acquires any security for the indebtedness under its respective Lender
Agreement upon or in lieu of foreclosure, the same shall be held for the
benefit of all Secured Parties in proportion to their respective Pro Rata
Share.
6. Liability Between Agents. No Secured Party shall incur any
(a) implied duty to the others under this agreement or (b) liability to the
others for its failure to give notice under Paragraph 2 above.
7. Headings. The headings, captions, and arrangements used in
this agreement are for convenience only and shall neither limit, amplify, or
modify the terms of this agreement nor affect the meanings thereof.
8. Notices. All notices, requests, and other communications
required or permitted to be given or made hereunder shall, except as otherwise
expressly provided hereunder, be in writing and shall be delivered in person or
telegraphed or telecopied or mailed, first class, return receipt requested,
postage prepaid, addressed to the respective parties hereto at their respective
addresses hereinafter set forth or, as to any such party, at such other address
as may be designated by it in a notice to the other given in the manner
provided herein. All notices shall be conclusively deemed to have been
properly given or made when duly delivered, in person, or if mailed on the
third business day after being deposited in the mails, or if telegraphed when
delivered to the telegraph company, or if telecopied when transmitted addressed
to the intended recipient at the address specified beside its name on the
signature pages hereof.
9. Waivers and Amendments. This agreement may be amended,
terminated or extended, and the terms and conditions hereof may be waived, but
only in a written instrument signed by each Secured Party or, in the case of a
waiver, by the party waiving compliance. No failure, delay or forbearance on
the part of any party in exercising any right, power or privilege granted
hereunder shall operate as a waiver thereof.
10. Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Texas and the applicable
laws of the United States of America.
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11. Severability. Any provision in this agreement held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
12. Successors and Assigns. This agreement shall be binding upon
and shall inure to the benefit of the respective successors and assigns of each
of the Secured Parties, but does not otherwise create, and shall not be
construed as creating, any rights or defenses enforceable by Borrower or by any
other person or entity not a party to this agreement.
13. Survival. The provisions contained in Paragraph 6 above shall
survive the termination of this agreement for all purposes.
14. Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which together
shall constitute one and the same instrument and agreement; but in making proof
of this agreement, it shall not be necessary to produce or account for a copy
of any counterpart other than the counterpart signed by the party against whom
this agreement is to be enforced.
EXECUTED as of the date first stated in this agreement.
Address for Notice: NATIONSBANK OF TEXAS, N.A., as
Revolving Credit Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: 713/▇▇▇-▇▇▇▇
Telephone No.: 713/▇▇▇-▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
NATIONSBANK OF TEXAS, N.A., as Term
Loan Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
NATIONSBANK OF TEXAS, N.A.,
individually
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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Consented and Agreed to:
NATIONAL BANK OF CANADA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Group Vice President
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NATIONAL BANK OF ALASKA
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BENZ
________________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Benz, Vice President
Borrower consents to this agreement and agrees that (a) the execution
and performance of the terms and conditions of this agreement shall not
constitute a violation of either of the Lender Agreements with Borrower, (b) it
shall not pledge Collateral to any Secured Party if such Collateral has not
already been or is simultaneously being pledged to the other Secured Party, and
(c) it shall promptly pay all reasonable costs and expenses incurred by Secured
Parties in preparing and transmitting copies of documents and instruments.
POOL COMPANY
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
_________________________________________
▇. ▇. ▇▇▇▇▇▇▇▇, Senior Vice President
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
_________________________________________
▇. ▇. ▇▇▇▇▇▇▇▇▇, Treasurer
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