Delaware | 1311 | 55-0229830 | ||
(State or other jurisdiction
of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Proposed Maximum |
Proposed Maximum |
|||||||||||||||||||
Title of Each Class of Securities |
Amount to be |
Offering Price |
Aggregate Offering |
Amount of |
||||||||||||||||
to be Registered | Registered | Per Note(1) | Price | Registration Fee | ||||||||||||||||
9.50% Senior Secured Notes due December 15, 2016
|
$ | 1,050,000,000 | 100 | % | $ | 1,050,000,000 | $ | 121,905 | ||||||||||||
Guarantees of 9.50% Senior Secured Notes due
December 15, 2016
|
$ | 1,050,000,000 | (2 | ) | (2 | ) | (2 | ) | ||||||||||||
Total Registration Fee
|
| | | $ | 121,905 | |||||||||||||||
(1) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f) under the Securities Act. | |
(2) | No separate filing fee is required pursuant to Rule 457(n) under the Securities Act. |
State or Other |
Primary Standard |
|||||||||
Jurisdiction of |
Industrial |
I.R.S. Employer |
||||||||
Incorporation or |
Classification Code |
Identification |
||||||||
Exact Name of Registrant Guarantor as Specified in its
Charter(1)
|
Organization | Number | Number | |||||||
GREENBRIER PETROLEUM CORPORATION
|
West Virginia | 1311 | 55-0566559 | |||||||
MCJUNKIN NIGERIA LIMITED
|
Delaware | 1311 | 55-0758030 | |||||||
MCJUNKIN-PUERTO RICO CORPORATION
|
Delaware | 1311 | 27-0094172 | |||||||
MCJUNKIN RED MAN DEVELOPMENT CORPORATION
|
Delaware | 1311 | 55-0825430 | |||||||
MCJUNKIN RED MAN HOLDING CORPORATION
|
Delaware | 1311 | 20-5956993 | |||||||
MCJUNKIN-WEST AFRICA CORPORATION
|
Delaware | 1311 | 20-4303835 | |||||||
MIDWAY-TRISTATE CORPORATION
|
New York | 1311 | 13-3503059 | |||||||
MILTON OIL & GAS COMPANY
|
West Virginia | 1311 | 55-0547779 | |||||||
MRC MANAGEMENT COMPANY
|
Delaware | 1311 | 26-1570465 | |||||||
RUFFNER REALTY COMPANY
|
West Virginia | 1311 | 55-0547777 | |||||||
THE SOUTH TEXAS SUPPLY COMPANY, INC.
|
Texas | 1311 | 74-2804317 | |||||||
(1) | The address for each of the additional registrant guarantors is c/o McJunkin Red Man Corporation, 2 Houston Center, 909 Fannin, Suite 3100, Houston, Texas 77010. |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities or consummate the
exchange offer until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell or exchange these securities and it is
not soliciting an offer to acquire or exchange these securities
in any jurisdiction where the offer, sale or exchange is not
permitted. |
Page | ||||||||
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47 | ||||||||
72 | ||||||||
74 | ||||||||
90 | ||||||||
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128 | ||||||||
137 | ||||||||
225 | ||||||||
233 | ||||||||
234 | ||||||||
235 | ||||||||
235 | ||||||||
F-1 | ||||||||
EX-3.1 | ||||||||
EX-3.2 | ||||||||
EX-3.3 | ||||||||
EX-3.4 | ||||||||
EX-3.5 | ||||||||
EX-3.6 | ||||||||
EX-3.7 | ||||||||
EX-3.8 | ||||||||
EX-3.9 | ||||||||
EX-3.10 | ||||||||
EX-3.11 | ||||||||
EX-3.12 | ||||||||
EX-3.13 | ||||||||
EX-3.14 | ||||||||
EX-3.15 | ||||||||
EX-3.16 | ||||||||
EX-3.17 | ||||||||
EX-3.18 | ||||||||
EX-3.19 | ||||||||
EX-3.20 | ||||||||
EX-3.21 | ||||||||
EX-3.22 | ||||||||
EX-3.23 | ||||||||
EX-3.24 | ||||||||
EX-4.1 | ||||||||
EX-4.3 | ||||||||
EX-4.4 | ||||||||
EX-4.5 | ||||||||
EX-5.1 | ||||||||
EX-5.2 | ||||||||
EX-5.3 | ||||||||
EX-10.1.10 | ||||||||
EX-10.1.11 | ||||||||
EX-10.1.12 | ||||||||
EX-10.2.2 | ||||||||
EX-10.2.3 | ||||||||
EX-10.3.1 | ||||||||
EX-10.3.2 | ||||||||
EX-10.3.3 | ||||||||
EX-10.4 | ||||||||
EX-10.5 | ||||||||
EX-10.6 | ||||||||
EX-10.7.1 | ||||||||
EX-10.8 | ||||||||
EX-10.8.1 | ||||||||
EX-10.9.1 | ||||||||
EX-10.9.2 | ||||||||
EX-10.10.1 | ||||||||
EX-10.10.2 | ||||||||
EX-10.12 | ||||||||
EX-10.13.1 | ||||||||
EX-10.14.1 | ||||||||
EX-10.19 | ||||||||
EX-10.20.1 | ||||||||
EX-10.20.2 | ||||||||
EX-10.21.1 | ||||||||
EX-10.21.2 | ||||||||
EX-10.23.2 | ||||||||
EX-10.23.3 | ||||||||
EX-10.24.1 | ||||||||
EX-10.24.2 | ||||||||
EX-10.25 | ||||||||
EX-10.26.1 | ||||||||
EX-10.26.2 | ||||||||
EX-10.27 | ||||||||
EX-10.28 | ||||||||
EX-10.29 | ||||||||
EX-10.30 | ||||||||
EX-12.1 | ||||||||
EX-21.1 | ||||||||
EX-23.1 | ||||||||
EX-25.1 | ||||||||
EX-99.1 | ||||||||
EX-99.2 | ||||||||
EX-99.3 | ||||||||
EX-99.4 | ||||||||
EX-99.5 |
1
2
3
4
Securities Offered | Up to $1,050,000,000 aggregate principal amount of 9.50% senior secured notes due 2016 registered under the Securities Act, or the exchange notes and, together with the outstanding notes, the notes. | |
The terms of the exchange notes offered in the exchange offer are substantially identical to those of the outstanding notes, except that the transfer restrictions, registration rights and additional interest provisions relating to the outstanding notes do not apply to the exchange notes. | ||
The Exchange Offer | We are offering exchange notes in exchange for a like principal amount of our outstanding notes. You may tender your outstanding notes for exchange notes by following the procedures described under the heading The Exchange Offer. | |
Tenders; Expiration Date; Withdrawal | The exchange offer will expire at 5:00 p.m., New York City time, on , 2011, unless we extend it. You may withdraw any outstanding notes that you tender for exchange at any time prior to the expiration of this exchange offer. See The Exchange Offer Terms of the Exchange Offer for a more complete description of the tender and withdrawal period. | |
Condition to the Exchange Offer | The exchange offer is not subject to any conditions, other than that the exchange offer does not violate any applicable law or applicable interpretations of the staff of the SEC. | |
The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered in the exchange. | ||
Procedures for Tendering Outstanding Notes | To participate in this exchange offer, you must properly complete and duly execute a letter of transmittal, which accompanies this prospectus, and transmit it, along with all other documents required by such letter of transmittal, to the exchange agent on or before the expiration date at the address provided on the cover page of the letter of transmittal. | |
In the alternative, you can tender your outstanding notes by book-entry delivery following the procedures described in this prospectus, whereby you will agree to be bound by the letter of transmittal and we may enforce the letter of transmittal against you. | ||
If a holder of outstanding notes desires to tender such notes and the holders outstanding notes are not immediately available, or time will not permit the holders outstanding notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected pursuant to the guaranteed delivery procedures described in this prospectus. |
5
See The Exchange Offer How to Tender Outstanding Notes for Exchange. | ||
United States Federal Tax Considerations | The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for United States federal income tax purposes. See Certain Material United States Federal Tax Considerations. | |
Use of Proceeds | We will not receive any cash proceeds from the exchange offer. | |
Exchange Agent | U.S. Bank National Association, the trustee under the indenture governing the notes, is serving as exchange agent in connection with the exchange offer. The address and telephone number of the exchange agent are set forth under the heading The Exchange Offer Exchange Agent. | |
Consequences of Failure to Exchange Your Outstanding Notes | Outstanding notes not exchanged in the exchange offer will continue to be subject to the restrictions on transfer that are described in the legend on the outstanding notes. In general, you may offer or sell your outstanding notes only if they are registered under, or offered or sold under an exemption from, the Securities Act and applicable state securities laws. We do not currently intend to register the outstanding notes under the Securities Act. If your outstanding notes are not tendered and accepted in the exchange offer, it may become more difficult for you to sell or transfer your outstanding notes. | |
Resales of the Exchange Notes | Based on interpretations of the staff of the SEC, we believe that you may offer for sale, resell or otherwise transfer the exchange notes that we issue in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act if: | |
you are not a broker-dealer tendering notes acquired
directly from us;
|
||
you acquire the exchange notes issued in the
exchange offer in the ordinary course of your business;
|
||
you are not participating, do not intend to
participate, and have no arrangement or undertaking with anyone
to participate, in the distribution of the exchange notes issued
to you in the exchange offer; and
|
||
you are not an affiliate of our company,
as that term is defined in Rule 405 of the Securities Act.
|
||
If any of these conditions are not satisfied and you transfer any exchange notes issued to you in the exchange offer without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. We will not be responsible for, or indemnify you against, any liability you incur. | ||
Any broker-dealer that acquires exchange notes in the exchange offer for its own account in exchange for outstanding notes which it acquired through market-making or other trading activities must acknowledge that it will deliver this prospectus when it resells or transfers any exchange notes issued in the exchange offer. See Plan of Distribution for a description of the prospectus delivery obligations of broker-dealers. |
6
Issuer | McJunkin Red Man Corporation. | |
Securities Offered | Up to $1,050,000,000 aggregate principal amount of 9.50% senior secured notes due 2016. | |
Maturity Date | The exchange notes will mature on December 15, 2016. | |
Interest Payment Dates | Interest on the exchange notes will be payable in cash on June 15 and December 15 of each year. | |
Guarantees | The exchange notes are unconditionally guaranteed, jointly and severally, by all of our wholly owned domestic subsidiaries (together with any other restricted subsidiaries that may guarantee the notes from time to time, the Subsidiary Guarantors) and by McJunkin Red Man Holding Corporation. McJunkin Red Man Holding Corporation does not have any material assets other than its ownership of 100% of the Issuers capital stock. | |
Under the indenture relating to the exchange notes, any wholly-owned domestic subsidiary (other than immaterial subsidiaries) formed or acquired on or after the date of the indenture and any restricted subsidiary that provides a guarantee with respect to our revolving credit facility or any other indebtedness of the Issuer or any Subsidiary Guarantor will also be required to guarantee the notes. See Description of Exchange Notes Certain Covenants Guarantees. | ||
Collateral | The exchange notes and the guarantees by the Subsidiary Guarantors are secured on a senior basis (subject to permitted prior liens), together with any other Priority Lien Obligations (as such term is defined in Description of Exchange Notes Certain Definitions), equally and ratably by security interests granted to the collateral trustee in all Notes Priority Collateral (as such term is defined in Description of Exchange Notes Certain Definitions) from time to time owned by the Issuer or the Subsidiary Guarantors. The guarantee of McJunkin Red Man Holding Corporation is not secured. | |
The Notes Priority Collateral generally comprises substantially all of the Issuers and the Subsidiary Guarantors tangible and intangible assets, other than specified excluded assets. The collateral trustee holds the senior liens on the Notes Priority Collateral in trust for the benefit of the holders of the exchange notes and the holders of any other Priority Lien Obligations. See Description of Exchange Notes Security Collateral. | ||
The exchange notes and the guarantees by the Subsidiary Guarantors are also secured on a junior basis (subject to the lien which secures our revolving credit facility and other permitted prior liens) together with the Existing Notes by security interests granted to the collateral trustee in all ABL Priority Collateral (as such term is defined in Description of Exchange Notes Certain Definitions) from time to time owned by the Issuer or the Subsidiary Guarantors. |
7
The ABL Priority Collateral generally comprises substantially all of the Issuers and the Subsidiary Guarantors accounts receivable, inventory, general intangibles and other assets relating to the foregoing, deposit and securities accounts (other than the Net Available Cash Account, as such term is defined in the intercreditor agreement), and proceeds and products of the foregoing, other than specified excluded assets. See Description of Exchange Notes Security Collateral. The collateral trustee holds the junior liens on the ABL Priority Collateral in trust for the benefit of the holders of the exchange notes and the holders of any other Priority Lien Obligations. | ||
Assets owned by our non-guarantor subsidiaries and by McJunkin Red Man Holding Corporation are not part of the collateral securing the exchange notes or our revolving credit facility. See Description of Exchange Notes Security and Risk Factors Risks Related to the Collateral and the Guarantees. | ||
Ranking | The exchange notes and the related guarantees are the Issuers and the Subsidiary Guarantors senior secured obligations and McJunkin Red Man Holding Corporations senior unsecured obligation. The indebtedness evidenced by the exchange notes and subsidiary guarantees ranks: | |
senior to any debt of the Issuer and the Subsidiary
Guarantors to the extent of the collateral which secures the
exchange notes and guarantees on a senior basis;
|
||
equal with all of the Issuers and the
Subsidiary Guarantors existing and future senior
indebtedness (before giving effect to security interests);
|
||
senior to all of the Issuers and the
Subsidiary Guarantors existing and future subordinated
indebtedness;
|
||
junior in priority to our revolving credit facility
(to the extent of the collateral that secures our revolving
credit facility) and to any other debt incurred after the issue
date that has a priority security interest relative to the
exchange notes in the collateral that secures the revolving
credit facility;
|
||
equal in priority to any other indebtedness incurred
before or after the issue date which is secured on an equal
basis with the exchange notes and guarantees, including the
outstanding notes; and
|
||
junior in priority to the existing and future claims
of creditors and holders of preferred stock of our subsidiaries
that do not guarantee the exchange notes.
|
||
As of December 31, 2010: | ||
we and the Subsidiary Guarantors had
$286 million outstanding under our revolving credit
facility and outstanding letters of credit of approximately
$5 million (with $360 million of available borrowings
under our revolving credit facility), all of which would rank
senior to the exchange notes to the extent of the collateral
securing the revolving credit facility on a senior basis;
|
8
our non-guarantor subsidiaries had indebtedness of
$46 million and borrowing availability of an additional
$115 million, all of which would rank senior to the
exchange notes;
|
||
we and the guarantors had $1.05 billion of
outstanding notes outstanding plus certain outstanding interest
rate swap agreements, all of which would rank pari passu with
the exchange notes;
|
||
we and the guarantors had no subordinated
indebtedness; and
|
||
our parent guarantor had no indebtedness other than
its guarantee of the outstanding notes.
|
||
See Description of Exchange Notes Brief Description of the Notes and the Note Guarantees. | ||
Intercreditor Agreement | The collateral trustee has entered into an intercreditor agreement with the Issuer, the Subsidiary Guarantors and The CIT Group/Business Credit Inc. and Bank of America, N.A., as co-collateral agents under our revolving credit facility, which governs the relationship of noteholders and the lenders under our revolving credit facility with respect to collateral and certain other matters. See Description of Exchange Notes The Intercreditor Agreement. | |
Collateral Trust Agreement | The Issuer and the Subsidiary Guarantors have entered into a collateral trust agreement with the collateral trustee and the trustee under the indenture governing the notes. The collateral trust agreement sets forth the terms on which the collateral trustee will receive, hold, administer, maintain, enforce and distribute the proceeds of all liens upon the collateral which it holds in trust. See Description of Exchange Notes The Collateral Trust Agreement. | |
Sharing of Liens and Collateral | The liens securing the exchange notes secure the outstanding notes on an equal and ratable basis with the exchange notes. The Issuer and the Subsidiary Guarantors may issue additional senior secured indebtedness under the indenture governing the notes. The liens securing the notes may also secure, together on an equal and ratable basis with the notes, other Priority Lien Debt (as such term is defined in Description of Exchange Notes Certain Definitions) permitted to be incurred by the Issuer under the indenture governing the notes, including additional notes of the same class under the indenture governing the notes. The Issuer and the Subsidiary Guarantors may also grant additional liens on the collateral securing the notes on a junior basis to secure Subordinated Lien Debt (as such term is defined in Description of Exchange Notes Certain Definitions) permitted to be incurred under the indenture governing the notes. | |
Optional Redemption | We may redeem the exchange notes, in whole or in part, at any time on or after December 15, 2012 at the redemption prices set forth in this prospectus. In addition, at any time prior to December 15, 2012, we may redeem some or all of the exchange notes at a price equal to 100% of the principal amount of the exchange notes plus a make-whole premium and accrued and unpaid interest to the redemption date, in each case, as described in this prospectus under Description of Exchange Notes Optional Redemption. |
9
We may also, at any time prior to December 15, 2012, redeem up to 35% of the aggregate principal amount of the notes issued under the indenture governing the notes with the net proceeds of certain equity offerings at the redemption price set forth in this prospectus. See Description of Exchange Notes Optional Redemption. | ||
Offers to Purchase | If we sell certain assets without applying the proceeds in a specified manner, or experience certain change of control events, each holder of exchange notes may require us to purchase all or a portion of its notes at the purchase prices set forth in this prospectus, plus accrued and unpaid interest and special interest, if any, to the purchase date. See Description of Exchange Notes Repurchase at the Option of Holders. Our revolving credit facility or other agreements may restrict us from repurchasing any of the exchange notes, including any purchase we may be required to make as a result of a change of control or certain asset sales. See Risk Factors Risks Related to the Exchange Notes We May Not Have the Ability to Raise the Funds Necessary to Finance the Change of Control Offer or the Asset Sale Offer Required by the Indenture Governing the Notes. | |
Covenants | The indenture governing the exchange notes contains covenants that impose significant restrictions on our business. The restrictions that these covenants place on us and our restricted subsidiaries include limitations on our ability and the ability of our restricted subsidiaries to, among other things: | |
incur additional indebtedness;
|
||
issue certain preferred stock or disqualified
capital stock;
|
||
create liens;
|
||
pay dividends or make other restricted payments;
|
||
make certain payments on debt that is subordinated
or secured on a basis junior to the exchange notes;
|
||
make investments;
|
||
sell assets;
|
||
create restrictions on the payment of dividends or
other amounts to us from restricted subsidiaries;
|
||
consolidate, merge, sell or otherwise dispose of all
or substantially all of our assets;
|
||
enter into transactions with our affiliates; and
|
||
designate our subsidiaries as unrestricted
subsidiaries.
|
||
These covenants are subject to a number of important exceptions and qualifications, which are described under Description of Exchange Notes. | ||
Original Issue Discount | The outstanding notes were issued with original issue discount for United States federal income tax purposes, and the exchange notes will be treated as issued with the same amount of original issue discount as the outstanding notes exchanged therefor. For United States federal income tax purposes, U.S. Holders will be required |
10
to include the original issue discount in gross income (as ordinary income) as it accrues on a constant yield basis in advance of the receipt of the cash payment to which such income is attributable (regardless of whether such U.S. Holders use the cash or accrual method of tax accounting). See Certain Material United States Federal Tax Considerations Stated Interest and Original Issue Discount. | ||
No Assurance of Active Trading Market | The exchange notes will not be listed on any securities exchange or on any automated dealer quotation system. We cannot assure you that an active or liquid trading market for the exchange notes will exist or be maintained. If an active or liquid trading market for the exchange notes is not maintained, the market price and liquidity of the exchange notes may be adversely affected. See Risk Factors Risks Related to the Exchange Notes There is no Prior Public Market for the Exchange Notes. If an Actual Trading Market does Not Exist or is Not Maintained for the Exchange Notes, You May Not Be Able To Resell Them Quickly, for the Price That You Paid or at All. |
11
12
Predecessor | Successor | ||||||||||||||||||||||||
Year |
One Month |
Eleven Months |
Year |
Year |
Year |
||||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
Ended |
Ended |
||||||||||||||||||||
December 31, |
January 30, |
December 31, |
December 31, |
December 31, |
December 31, |
||||||||||||||||||||
2006 | 2007 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||||||
(In millions, except per share and share data) | |||||||||||||||||||||||||
Statement of Operations Data:
|
|||||||||||||||||||||||||
Sales
|
$ | 1,713.7 | $ | 142.5 | $ | 2,124.9 | $ | 5,255.2 | $ | 3,661.9 | $ | 3,845.5 | |||||||||||||
Cost of sales(1)
|
1,394.3 | 114.6 | 1,734.6 | 4,217.4 | 3,006.3 | 3,256.6 | |||||||||||||||||||
Inventory write-down
|
| | | | 46.5 | 0.4 | |||||||||||||||||||
Gross Margin
|
319.4 | 27.9 | 390.3 | 1,037.8 | 609.1 | 588.5 | |||||||||||||||||||
Selling, general and administrative expenses
|
189.5 | 15.9 | 218.5 | 482.1 | 408.6 | 447.7 | |||||||||||||||||||
Depreciation and amortization
|
3.9 | 0.3 | 5.4 | 11.3 | 14.5 | 16.6 | |||||||||||||||||||
Amortization of intangibles
|
0.3 | | 21.9 | 44.4 | 46.6 | 53.9 | |||||||||||||||||||
Goodwill impairment charge
|
| | | | 309.9 | | |||||||||||||||||||
193.7 | 16.2 | 245.8 | 537.8 | 779.6 | 518.2 | ||||||||||||||||||||
Total operating expenses
|
|||||||||||||||||||||||||
Operating income (loss)
|
125.7 | 11.7 | 144.5 | 500.0 | (170.5 | ) | 70.3 | ||||||||||||||||||
Other (expense) income
|
|||||||||||||||||||||||||
Interest expense
|
(2.8 | ) | (0.1 | ) | (61.7 | ) | (84.5 | ) | (116.5 | ) | (139.6 | ) | |||||||||||||
Net gain on early extinguishment of debt
|
| | | | 1.3 | | |||||||||||||||||||
Change in fair value of derivative instruments
|
| | | (6.2 | ) | 8.9 | (4.9 | ) | |||||||||||||||||
Other, net
|
(5.0 | ) | (0.4 | ) | (0.8 | ) | (2.6 | ) | (1.8 | ) | (1.0 | ) | |||||||||||||
Total other (expense) income
|
(7.8 | ) | (0.5 | ) | (62.5 | ) | (93.3 | ) | (108.1 | ) | (145.5 | ) | |||||||||||||
Income (loss) before income taxes
|
117.9 | 11.2 | 82.0 | 406.7 | (278.6 | ) | (75.2 | ) | |||||||||||||||||
Income taxes
|
48.3 | 4.6 | 32.1 | 153.2 | 13.1 | (23.4 | ) | ||||||||||||||||||
Net income (loss)
|
$ | 69.6 | $ | 6.6 | $ | 49.9 | $ | 253.5 | $ | (291.7 | ) | $ | (51.8 | ) | |||||||||||
Other Financial Data:
|
|||||||||||||||||||||||||
Net cash provided by (used in) operations
|
18.4 | 6.6 | 110.2 | (137.4 | ) | 505.5 | 112.5 | ||||||||||||||||||
Net cash provided by (used in) investing activities
|
(3.3 | ) | (0.2 | ) | (1,788.9 | ) | (314.2 | ) | (66.9 | ) | (16.2 | ) | |||||||||||||
Net cash provided by (used in) financing activities
|
(17.2 | ) | (8.3 | ) | 1,687.2 | 452.0 | (393.9 | ) | (97.9 | ) | |||||||||||||||
Adjusted EBITDA(2)
|
129.5 | 26.0 | 334.6 | 618.2 | 334.1 | 149.6 |
13
Predecessor | Successor | |||||||||||||||||||
Year |
Year |
Year |
Year |
Year |
||||||||||||||||
Ended |
Ended |
Ended |
Ended |
Ended |
||||||||||||||||
December 31, |
December 31, |
December 31, |
December 31, |
December 31, |
||||||||||||||||
2006 | 2007 | 2008 | 2009(1) | 2010 | ||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 3.7 | $ | 10.1 | $ | 12.1 | $ | 56.2 | $ | 56.2 | ||||||||||
Working capital(3)
|
212.3 | 674.1 | 1,208.0 | 930.2 | 842.6 | |||||||||||||||
Total assets
|
481.0 | 3,083.8 | 3,919.7 | 3,159.4 | 3,067.4 | |||||||||||||||
Total debt(4) portion
|
13.0 | 868.4 | 1,748.6 | 1,452.6 | 1,360.2 | |||||||||||||||
Stockholders equity
|
258.2 | 1,262.7 | 987.2 | 792.0 | 737.9 |
(1) | Cost of sales is exclusive of depreciation and amortization, which is shown separately. | |
(2) | We define Adjusted EBITDA as net income plus interest, income taxes, depreciation and amortization, amortization of intangibles and other non-recurring and non-cash charges (such as gains/losses on the early extinguishment of debt, changes in the fair value of derivative instruments, goodwill impairment and equity based compensation). Our revolving credit facility uses a measure substantially similar to Adjusted EBITDA. We present Adjusted EBITDA because it is an important factor in determining the interest rate and commitment fee we pay under our revolving credit facility. In addition, we believe it is a useful factor indicator of our operating performance. We believe this for the following reasons: |
| our management uses Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections, as well as for determining a significant portion of the compensation of our executive officers; | |
| Adjusted EBITDA is widely used by investors to measure a companys operating performance without regard to items, such as interest expense, income tax expense and depreciation and amortization, that can vary substantially from company to company depending upon their financing and accounting methods, the book value of their assets, their capital structures and the method by which their assets were acquired; and | |
| securities analysts use Adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies. |
Particularly, we believe that Adjusted EBITDA is a useful indicator of our operating performance because Adjusted EBITDA measures our companys operating performance without regard to certain non-recurring, non-cash and/or transaction-related expenses. | ||
Adjusted EBITDA, however, does not represent and should not be considered as an alternative to net income, cash flow from operations, or any other measure of financial performance calculated and presented in accordance with GAAP. Our Adjusted EBITDA may not be comparable to similar measures reported by other companies because other companies may not calculate Adjusted EBITDA in the same manner as we do. Although we use Adjusted EBITDA as a measure to assess the operating performance of our business, Adjusted EBITDA has significant limitations as an analytical tool because it excludes certain material costs. For example, it does not include interest expense, which has been a necessary element of our costs. Because we use capital assets, depreciation expense is a necessary element of our costs and our ability to generate revenue. In addition, the omission of the amortization expense associated with out intangible assets further limits the usefulness of this measure. Adjusted EBITDA also does not include the payment of certain taxes, which is also a necessary element of our operations. Furthermore, Adjusted EBITDA does not account for LIFO expense, and therefore, to the extent that recently purchased inventory accounts for a relatively large portion of our sales, Adjusted EBITDA may overstate our operating performance. Because Adjusted EBITDA does not account for certain expenses, its utility as a measure of our operating performance has material limitation. Because of these limitations, management does not view Adjusted EBITDA in isolation or as a primary performance measure and also uses other measures, such as net income and sales, to measure operating performance. |
14
The following table reconciles Adjusted EBITDA with our net income (loss), as derived from our financial statements (in millions): |
Predecessor | Successor | |||||||||||||||||||||||
Year |
One Month |
Eleven Months |
Year |
Year |
Year |
|||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||
December 31, |
January 30, |
December 31, |
December 31, |
December 31, |
December 31, |
|||||||||||||||||||
2006 | 2007 | 2007 | 2008 | 2009 | 2010 | |||||||||||||||||||
Net income (loss)
|
$ | 69.6 | $ | 6.6 | $ | 49.9 | $ | 253.5 | $ | (291.7 | ) | $ | (51.8 | ) | ||||||||||
Income taxes
|
48.3 | 4.6 | 32.1 | 153.2 | 13.1 | (23.4 | ) | |||||||||||||||||
Interest expense
|
2.8 | 0.1 | 61.7 | 84.5 | 116.5 | 139.6 | ||||||||||||||||||
Depreciation and amortization
|
3.9 | 0.3 | 5.4 | 11.3 | 14.5 | 16.6 | ||||||||||||||||||
Amortization of intangibles
|
0.3 | | 21.9 | 44.4 | 46.6 | 53.9 | ||||||||||||||||||
Goodwill impairment charge
|
| | | | 309.9 | | ||||||||||||||||||
Gain on early extinguishment of debt
|
| | | | (1.3 | ) | | |||||||||||||||||
Change in fair value of derivative instruments
|
| | | 6.2 | (8.9 | ) | 4.9 | |||||||||||||||||
Inventory write-down
|
| | | | 46.5 | 0.4 | ||||||||||||||||||
Red Man Pipe & Supply Co. pre-acquisition contribution
|
| 13.1 | 142.2 | | | | ||||||||||||||||||
Midway-Tristate pre-acquisition contribution
|
| 1.0 | 2.8 | | | | ||||||||||||||||||
Transmark Fcx pre-acquisition contribution
|
| | | | 38.5 | | ||||||||||||||||||
Other non-recurring and non-cash expenses(a)
|
4.6 | 0.3 | 18.6 | 65.1 | 50.4 | 9.4 | ||||||||||||||||||
Adjusted EBITDA
|
$ | 129.5 | $ | 26.0 | $ | 334.6 | $ | 618.2 | $ | 334.1 | $ | 149.6 | ||||||||||||
(a) | Other includes transaction-related expenses, equity based compensation and other items added back to net income pursuant to our debt agreements. |
(3) | Working capital is defined as current assets less current liabilities. | |
(4) | Includes current portion. |
15
| it may be more difficult for us to satisfy our obligations with respect to the exchange notes; | |
| our ability to obtain additional financing for working capital, debt service requirements, general corporate purposes or other purposes may be impaired; | |
| we must use a substantial portion of our cash flow to pay interest and principal on the exchange notes and our other indebtedness, which will reduce the funds available to us for other purposes; | |
| we may be subject to restrictive financial and operating covenants in the agreements governing our and our subsidiaries long term indebtedness; | |
| we may be exposed to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our subsidiaries debt instruments that could have a material adverse effect on our business, results of operations and financial condition; | |
| we may be vulnerable to economic downturns and adverse industry conditions, including a downturn in pricing of the products we distribute; | |
| our ability to capitalize on business opportunities and to react to pressures and changing market conditions in our industry and in our customers industries as compared to our competitors may be compromised due to our high level of indebtedness; | |
| our ability to compete with other companies who are not as highly leveraged may be limited; and | |
| our ability to refinance our indebtedness, including the exchange notes, may be limited. |
16
| incur additional indebtedness or guarantee obligations; | |
| issue certain preferred stock or disqualified capital stock; | |
| pay dividends or make certain other restricted payments; | |
| make certain payments on debt that is subordinated or secured on a basis junior to the exchange notes; | |
| make investments or acquisitions; | |
| create liens or other encumbrances; | |
| transfer or sell certain assets or merge or consolidate with another entity; | |
| create restrictions on the payment of dividends or other amounts to us from restricted subsidiaries; | |
| engage in transactions with affiliates; and | |
| engage in certain business activities. |
17
18
19
20
| prevailing interest rates; | |
| our operating performance and financial condition; | |
| the interest of securities dealers in making a market; and | |
| the market for similar securities. |
21
22
23
24
| the applicable guarantor was insolvent or was rendered insolvent as a result of such transaction; | |
| the applicable guarantor was engaged in a business or transaction, or was about to engage in a business or transaction, for which its remaining assets constituted unreasonably small capital to carry on its business; or | |
| the applicable guarantor intended to incur, or believed that it would incur, debt beyond its ability to pay such debt as it matured. |
| the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets; | |
| if the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or | |
| it could not pay its debts as they become due. |
25
26
27
| the level of domestic and worldwide oil and natural gas production and inventories; | |
| the level of drilling activity and the availability of attractive oil and natural gas field prospects, which may be affected by governmental actions, such as regulatory actions or legislation, or other restrictions on drilling, including those related to environmental concerns; | |
| the discovery rate of new oil and natural gas reserves and the expected cost of developing new reserves; | |
| the actual cost of finding and producing oil and natural gas; | |
| depletion rates; | |
| domestic and worldwide refinery overcapacity or undercapacity and utilization rates; | |
| the availability of transportation infrastructure and refining capacity; | |
| increases in the cost of the products that we provide to the oil and natural gas industry, which may result from increases in the cost of raw materials such as steel; | |
| shifts in end-customer preferences toward fuel efficiency and the use of natural gas; | |
| the economic and/or political attractiveness of alternative fuels, such as coal, hydrocarbon, wind, solar energy and biomass-based fuels; | |
| increases in oil and natural gas prices and/or historically high oil and natural gas prices, which could lower demand for oil and natural gas products; | |
| worldwide economic activity including growth in countries that are not members of the Organisation for Economic Co-operation and Development (non-OECD countries), including China and India; | |
| interest rates and the cost of capital; | |
| national government policies, including government policies which could nationalize or expropriate oil and natural gas exploration, production, refining or transportation assets; |
28
| the ability of the Organization of Petroleum Exporting Countries (OPEC) to set and maintain production levels and prices for oil; | |
| the impact of armed hostilities, or the threat or perception of armed hostilities; | |
| pricing and other actions taken by competitors that impact the market; | |
| environmental regulation; | |
| technological advances; | |
| global weather conditions and natural disasters; | |
| an increase in the value of the U.S. dollar relative to foreign currencies; and | |
| tax policies. |
29
30
31
| operating a significantly larger combined company with operations in more geographic areas and with more business lines; | |
| integrating personnel with diverse backgrounds and organizational cultures; | |
| coordinating sales and marketing functions; | |
| retaining key employees, customers or suppliers; | |
| integrating the information systems; | |
| preserving the collaboration, distribution, marketing, promotion and other important relationships; and | |
| consolidating other corporate and administrative functions. |
| failure to achieve cost savings or other financial or operating objectives with respect to an acquisition; | |
| strain on the operational and managerial controls and procedures of our business, and the need to modify systems or to add management resources; | |
| difficulties in the integration and retention of customers or personnel and the integration and effective deployment of operations or technologies; | |
| amortization of acquired assets, which would reduce future reported earnings; | |
| possible adverse short-term effects on our cash flows or operating results; | |
| diversion of managements attention from the ongoing operations of our business; | |
| failure to obtain and retain key personnel of an acquired business; and | |
| assumption of known or unknown material liabilities or regulatory non-compliance issues. |
32
33
34
35
| fund our operations; | |
| finance investments in equipment and infrastructure needed to maintain and expand our distribution capabilities; | |
| enhance and expand the range of products we offer; and | |
| respond to potential strategic opportunities, such as investments, acquisitions and international expansion. |
36
37
38
39
40
Predecessor | Successor | |||||||||||||||||||||||
Year Ended |
One Month Ended |
Eleven Months Ended |
||||||||||||||||||||||
December 31, |
January 30, |
December 31, |
Year Ended December 31, | |||||||||||||||||||||
2006 | 2007 | 2007 | 2008 | 2009* | 2010* | |||||||||||||||||||
Ratio of earnings to fixed charges
|
38.2x | 107.7x | 2.3x | 5.8x | | |
* | Earnings were insufficient to cover fixed charges by $279 million and $75 million for the years ended December 31, 2009 and 2010, respectively. |
41
42
As of |
||||
December 31, |
||||
2010 | ||||
Actual | ||||
(Dollars in |
||||
millions) | ||||
Cash and cash equivalents
|
$ | 56 | ||
Total Debt (including current portion):
|
||||
Revolving credit facility(1)
|
$ | 286 | ||
Midfield revolving credit facility(2)
|
2 | |||
Midfield term loan facility
|
14 | |||
Transmark revolving credit facility(3)
|
23 | |||
Transmark factoring facility
|
7 | |||
Outstanding notes
|
1,028 | |||
Total debt
|
1,360 | |||
Total equity
|
738 | |||
Total capitalization
|
$ | 2,098 | ||
(1) | As of December 31, 2010, we had availability of $360 million under our revolving credit facility. | |
(2) | As of December 31, 2010, we had availability of $69 million under the Midfield revolving credit facility. | |
(3) | As of December 31, 2010, there was $46 million of availability under the revolving portion of Transmarks primary credit facility. |
43
44
Predecessor | Successor | ||||||||||||||||||||||||
One Month |
Eleven |
||||||||||||||||||||||||
Year Ended |
Ended |
Months Ended |
|||||||||||||||||||||||
December 31, | January 30, | December 31, | Year Ended December 31, | ||||||||||||||||||||||
2006 | 2007 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||||||
(In millions, except per share information) | |||||||||||||||||||||||||
Statement of Income Data:
|
|||||||||||||||||||||||||
Sales
|
$ | 1,713.7 | $ | 142.5 | $ | 2,124.9 | $ | 5,255.2 | $ | 3,661.9 | $ | 3,845.5 | |||||||||||||
Cost of sales(1)
|
1,394.3 | 114.6 | 1,734.6 | 4,217.4 | 3,006.3 | 3,256.6 | |||||||||||||||||||
Inventory write-down
|
| | | | 46.5 | 0.4 | |||||||||||||||||||
Selling, general and administrative expenses
|
189.5 | 15.9 | 218.5 | 482.1 | 408.6 | 447.7 | |||||||||||||||||||
Depreciation and amortization
|
3.9 | 0.3 | 5.4 | 11.3 | 14.5 | 16.6 | |||||||||||||||||||
Amortization of intangibles
|
0.3 | | 21.9 | 44.4 | 46.6 | 53.9 | |||||||||||||||||||
Goodwill impairment charge
|
| | | | 309.9 | | |||||||||||||||||||
Total operating expenses
|
193.7 | 16.2 | 245.8 | 537.8 | 779.6 | 518.2 | |||||||||||||||||||
Operating income (loss)
|
125.7 | 11.7 | 144.5 | 500.0 | (170.5 | ) | 70.3 | ||||||||||||||||||
Other (expense) income
|
|||||||||||||||||||||||||
Interest expense
|
(2.8 | ) | (0.1 | ) | (61.7 | ) | (84.5 | ) | (116.5 | ) | (139.6 | ) | |||||||||||||
Net gain on early extinguishment of debt
|
| | | | 1.3 | | |||||||||||||||||||
Change in fair value of derivative instruments
|
| | | (6.2 | ) | 8.9 | (4.9 | ) | |||||||||||||||||
Other, net
|
(5.0 | ) | (0.4 | ) | (0.8 | ) | (2.6 | ) | (1.8 | ) | (1.0 | ) | |||||||||||||
Total other (expense) income
|
(7.8 | ) | (0.5 | ) | (62.5 | ) | (93.3 | ) | (108.1 | ) | (145.5 | ) | |||||||||||||
Income (loss) before income taxes
|
117.9 | 11.2 | 82.0 | 406.7 | (278.6 | ) | (75.2 | ) | |||||||||||||||||
Income taxes
|
48.3 | 4.6 | 32.1 | 153.2 | 13.1 | (23.4 | ) | ||||||||||||||||||
Net income (loss)
|
$ | 69.6 | $ | 6.6 | $ | 49.9 | $ | 253.5 | $ | (291.7 | ) | $ | (51.8 | ) | |||||||||||
Earnings (loss) per share:
|
|||||||||||||||||||||||||
Basic
|
| | $ | 0.72 | $ | 1.63 | $ | (1.84 | ) | $ | (0.31 | ) | |||||||||||||
Diluted
|
| | $ | 0.72 | $ | 1.63 | $ | (1.84 | ) | $ | (0.31 | ) | |||||||||||||
Dividends per common share
|
| | $ | | $ | 3.05 | $ | 0.02 | $ | | |||||||||||||||
Earnings per share:
|
|||||||||||||||||||||||||
Basic and diluted, Class A
|
$ | 3,972.08 | $ | 376.70 | | | | | |||||||||||||||||
Basic and diluted, Class B
|
$ | 4,012.28 | $ | 376.70 | | | | | |||||||||||||||||
Dividends per common share:
|
|||||||||||||||||||||||||
Class A
|
$ | 40.00 | $ | | | | | | |||||||||||||||||
Class B
|
$ | 80.00 | $ | | | | | | |||||||||||||||||
Balance Sheet Data:
|
|||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 3.7 | $ | 2.0 | $ | 10.1 | $ | 12.1 | $ | 56.2 | $ | 56.2 | |||||||||||||
Working capital(2)
|
212.3 | 211.1 | 674.1 | 1,208.0 | 930.2 | 842.6 | |||||||||||||||||||
Total assets
|
481.0 | 474.2 | 3,083.8 | 3,919.7 | 3,159.4 | 3,067.4 | |||||||||||||||||||
Total debt(3)
|
13.0 | 4.8 | 868.4 | 1,748.6 | 1,452.6 | 1,360.2 | |||||||||||||||||||
Stockholders equity
|
258.2 | 245.2 | 1,262.7 | 987.2 | 792.0 | 737.9 | |||||||||||||||||||
Other Financial Data:
|
|||||||||||||||||||||||||
Adjusted EBITDA(4)
|
$ | 129.5 | $ | 26.0 | $ | 334.6 | $ | 618.2 | $ | 334.1 | $ | 149.6 | |||||||||||||
Net cash provided by (used in) operations
|
18.4 | 6.6 | 110.2 | (137.4 | ) | 505.5 | 112.5 | ||||||||||||||||||
Net cash (used in) investing activities
|
(3.3 | ) | (0.2 | ) | (1,788.9 | ) | (314.2 | ) | (66.9 | ) | (16.2 | ) | |||||||||||||
Net cash (used in) provided by financing activities
|
(17.2 | ) | (8.3 | ) | 1,687.2 | 452.0 | (393.9 | ) | (97.9 | ) |
45
(1) | Cost of sales is exclusive of depreciation and amortization, which is shown separately. | |
(2) | Working capital is defined as current assets less current liabilities. | |
(3) | Includes current portion. | |
(4) | The following table reconciles Adjusted EBITDA with our net income (loss), as derived from our financial statements (in millions): |
Predecessor | Successor | |||||||||||||||||||||||
Year |
One Month |
Eleven Months |
Year |
Year |
Year |
|||||||||||||||||||
Ended |
Ended |
Ended |
Ended |
Ended |
Ended |
|||||||||||||||||||
December 31, |
January 30, |
December 31, |
December 31, |
December 31, |
December 31, |
|||||||||||||||||||
2006 | 2007 | 2007 | 2008 | 2009 | 2010 | |||||||||||||||||||
Net income (loss)
|
$ | 69.6 | $ | 6.6 | $ | 49.9 | $ | 253.5 | $ | (291.7 | ) | $ | (51.8 | ) | ||||||||||
Income taxes
|
48.3 | 4.6 | 32.1 | 153.2 | 13.1 | (23.4 | ) | |||||||||||||||||
Interest expense
|
2.8 | 0.1 | 61.7 | 84.5 | 116.5 | 139.6 | ||||||||||||||||||
Depreciation and amortization
|
3.9 | 0.3 | 5.4 | 11.3 | 14.5 | 16.6 | ||||||||||||||||||
Amortization of intangibles
|
0.3 | | 21.9 | 44.4 | 46.6 | 53.9 | ||||||||||||||||||
Goodwill impairment charge
|
| | | | 309.9 | | ||||||||||||||||||
Gain on early extinguishment of debt
|
| | | | (1.3 | ) | | |||||||||||||||||
Change in fair value of derivative instruments
|
| | | 6.2 | (8.9 | ) | 4.9 | |||||||||||||||||
Inventory write-down
|
| | | | 46.5 | 0.4 | ||||||||||||||||||
Red Man Pipe & Supply Co. pre-acquisition contribution
|
| 13.1 | 142.2 | | | | ||||||||||||||||||
Midway-Tristate pre-acquisition contribution
|
| 1.0 | 2.8 | | | | ||||||||||||||||||
Transmark Fcx pre-acquisition contribution
|
| | | | 38.5 | | ||||||||||||||||||
Other non-recurring and non-cash expenses(a)
|
4.6 | 0.3 | 18.6 | 65.1 | 50.4 | 9.4 | ||||||||||||||||||
Adjusted EBITDA
|
$ | 129.5 | $ | 26.0 | $ | 334.6 | $ | 618.2 | $ | 334.1 | $ | 149.6 | ||||||||||||
(a) | Other includes transaction-related expenses, equity based compensation and other items added back to net income pursuant to our debt agreements. |
46
47
| Oil and Natural Gas Commodity Prices. Sales of PVF and related products to the oil and natural gas industry constitute a significant portion of our sales. As a result, we depend upon the oil and natural gas industry and its ability and willingness to make capital and other expenditures to explore for, produce and process oil and natural gas and refined products. Oil and natural gas prices, both current and projected, impact other drivers of our business, including rig counts, drilling and completion spending, additions and maintenance to pipeline mileage and refinery utilization. | |
| Steel Prices, Availability and Supply and Demand. Fluctuations in steel prices can lead to volatility in the pricing of the products we distribute, especially carbon steel tubular products, which can influence the buying patterns of our customers. A majority of the products we distribute contain various types of steel, and the worldwide supply and demand for these products, or other steel products that we do not supply, impacts the pricing and availability of our products and, ultimately, our sales and operating profitability. | |
| Economic Conditions. The demand for the products we distribute is dependent on the general economy, the energy and industrials sectors and other factors. Changes in the general economy or in the energy and industrials sectors (domestically or internationally) can cause demand for the products we distribute to materially change. For instance, the recent economic downturn decreased demand for the products we distribute, resulting in lower sales volumes, and a prolonged economic downturn could have a material impact on our business. | |
| Customer, Manufacturer and Distributor Inventory Levels of PVF and Related Products. Customer, manufacturer and distributor inventory levels of PVF and related products can change significantly from period to period. Increases in our customers inventory levels can have an adverse effect on the demand for the products we distribute when customers draw from inventory rather than purchase new products. Reduced demand, in turn, would likely result in reduced sales volume and overall profitability. Increased inventory levels by manufacturers or other distributors can cause an oversupply of PVF and related products in our markets and reduce the prices that we are able to charge for the products we distribute. Reduced prices, in turn, would likely reduce our profitability. Conversely, decreased customer and manufacturer inventory levels may ultimately lead to increased demand for our products and would likely result in increased sales volumes and overall profitability. |
48
49
Year Ended | ||||||||||||
December 31, |
December 31, |
December 31, |
||||||||||
2010 | 2009 | 2008 | ||||||||||
Sales: | ||||||||||||
North America
|
$ | 3,589.9 | $ | 3,610.1 | $ | 5,255.2 | ||||||
International
|
255.6 | 51.8 | | |||||||||
Consolidated
|
$ | 3,845.5 | $ | 3,661.9 | $ | 5,255.2 | ||||||
Operating Income (Loss):
|
||||||||||||
North America
|
$ | 59.9 | $ | (174.3 | ) | $ | 500.0 | |||||
International
|
10.4 | 3.8 | | |||||||||
Consolidated
|
$ | 70.3 | $ | (170.5 | ) | $ | 500.0 | |||||
Year Ended | ||||||||||||
December 31, |
December 31, |
December 31, |
||||||||||
2010 | 2009 | 2008 | ||||||||||
Average Total Rig Count(1):
|
||||||||||||
United States
|
1,546 | 1,089 | 1,879 | |||||||||
Canada
|
351 | 221 | 381 | |||||||||
Total North America
|
1,897 | 1,310 | 2,260 | |||||||||
International
|
1,094 | 997 | 1,079 | |||||||||
Total Worldwide
|
2,991 | 2,307 | 3,339 | |||||||||
Average Natural Gas Rig Count(1)
|
||||||||||||
United States
|
943 | 801 | 1,491 | |||||||||
Canada
|
148 | 120 | 220 | |||||||||
Total North America
|
1,091 | 921 | 1,711 | |||||||||
Average Commodity Prices(2)
|
||||||||||||
Natural gas ($/Mcf)
|
$ | 4.16 | $ | 3.66 | $ | 7.98 | ||||||
WTI crude oil (per barrel)
|
$ | 79.39 | $ | 61.95 | $ | 99.67 | ||||||
Brent crude oil (per barrel)
|
$ | 79.50 | $ | 61.74 | $ | 96.94 | ||||||
Well Permits(3)
|
||||||||||||
United States
|
1,260 | 989 | 1,682 |
(1) | Source Baker Hughes (www.bakerhughes.com) | |
(2) | Source Department of Energy, Energy Information Administration (www.eia.gov) | |
(3) | Source RigData |
50
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Upstream
|
45 | % | 44 | % | 45 | % | ||||||
Midstream
|
23 | % | 24 | % | 22 | % | ||||||
Downstream and other industrials
|
32 | % | 32 | % | 33 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
51
Year Ended |
||||||||||||||||
December 31, | ||||||||||||||||
2010 | 2009 | $ Change | % Change | |||||||||||||
Sales:
|
||||||||||||||||
North America
|
$ | 3,589.9 | $ | 3,610.1 | $ | (20.2 | ) | <1 | % | |||||||
International
|
255.6 | 51.8 | 203.8 | 393 | % | |||||||||||
Consolidated
|
$ | 3,845.5 | $ | 3,661.9 | $ | 183.6 | 5 | % | ||||||||
Gross margin:
|
||||||||||||||||
North America
|
$ | 501.5 | $ | 592.7 | $ | (91.2 | ) | (15 | )% | |||||||
International
|
87.0 | 16.4 | 70.6 | 430 | % | |||||||||||
Consolidated
|
$ | 588.5 | $ | 609.1 | $ | (20.6 | ) | (3 | )% | |||||||
Selling, general and administrative expenses:
|
||||||||||||||||
North America
|
$ | 382.8 | $ | 397.9 | $ | (15.1 | ) | (4 | )% | |||||||
International
|
65.0 | 10.7 | 54.3 | 507 | % | |||||||||||
Consolidated
|
$ | 447.7 | $ | 408.6 | $ | 39.2 | 10 | % | ||||||||
Goodwill impairment charge:
|
||||||||||||||||
North America
|
$ | | $ | 309.9 | $ | (309.9 | ) | (100 | )% | |||||||
International
|
| | | | ||||||||||||
Consolidated
|
$ | | $ | 309.9 | $ | (309.9 | ) | (100 | )% | |||||||
Operating income (loss):
|
||||||||||||||||
North America
|
$ | 59.9 | $ | (174.3 | ) | $ | 234.2 | 134 | % | |||||||
International
|
10.4 | 3.8 | 6.6 | 174 | % | |||||||||||
Consolidated
|
$ | 70.3 | (170.5 | ) | $ | 240.8 | 141 | % | ||||||||
Interest expense
|
(139.6 | ) | (116.5 | ) | 23.1 | 20 | % | |||||||||
Other, net
|
(5.9 | ) | 8.4 | (14.3 | ) | (170 | )% | |||||||||
Income tax benefit (expense)
|
23.4 | (13.1 | ) | 36.5 | 279 | % | ||||||||||
Net (loss)
|
$ | (51.8 | ) | $ | (291.7 | ) | $ | 239.9 | 82 | % | ||||||
Adjusted EBITDA
|
$ | 149.6 | $ | 334.1 | $ | (184.5 | ) | (55 | )% | |||||||
52
53
Year Ended |
||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Net (loss)
|
$ | (51.8 | ) | $ | (291.7 | ) | ||
Income tax (benefit) expense
|
(23.4 | ) | 13.1 | |||||
Interest expense
|
139.6 | 116.5 | ||||||
Depreciation and amortization
|
16.6 | 14.5 | ||||||
Amortization of intangibles
|
53.9 | 46.6 | ||||||
Inventory write-down
|
0.4 | 46.5 | ||||||
Change in fair value of derivative instruments
|
4.9 | (8.9 | ) | |||||
Goodwill impairment charge
|
| 309.9 | ||||||
MRC Transmark pre-acquisition contribution
|
| 38.5 | ||||||
Gain on early extinguishment of debt
|
| (1.3 | ) | |||||
Other non-recurring and non-cash expenses(1)
|
9.4 | 50.4 | ||||||
Adjusted EBITDA(2)
|
$ | 149.6 | $ | 334.1 | ||||
(1) | Other non-recurring and non-cash expenses include transaction related expenses, equity based compensation and other items added back to net income pursuant to our debt agreements. | |
(2) | Adjusted EBITDA includes the impact of our LIFO costing methodology, which resulted in an increase in cost of sales of $75 million in 2010 and a decrease in cost of sales of $116 million in 2009. |
54
Year Ended |
||||||||||||||||
December 31, | ||||||||||||||||
2009 | 2008 | $ Change | % Change | |||||||||||||
Sales:
|
||||||||||||||||
North America
|
$ | 3,610.1 | $ | 5,255.2 | $ | (1,645.1 | ) | (31 | )% | |||||||
International
|
51.8 | | 51.8 | | ||||||||||||
Consolidated
|
$ | 3,661.9 | $ | 5,255.2 | $ | (1,593.3 | ) | (30 | )% | |||||||
Gross margin:
|
||||||||||||||||
North America
|
$ | 592.7 | $ | 1,037.8 | $ | (445.1 | ) | (43 | )% | |||||||
International
|
16.4 | | 16.4 | | ||||||||||||
Consolidated
|
$ | 609.1 | $ | 1,037.8 | $ | (428.7 | ) | (41 | )% | |||||||
Selling, general and administrative expenses:
|
||||||||||||||||
North America
|
$ | 397.9 | $ | 482.1 | $ | (84.2 | ) | (17 | )% | |||||||
International
|
10.7 | | 10.7 | | ||||||||||||
Consolidated
|
$ | 408.6 | $ | 482.1 | $ | (73.5 | ) | (15 | )% | |||||||
Goodwill impairment charge:
|
||||||||||||||||
North America
|
$ | 309.9 | $ | | $ | 309.9 | 100 | % | ||||||||
International
|
| | | | ||||||||||||
Consolidated
|
$ | 309.9 | $ | | $ | 309.9 | 100 | % | ||||||||
Operating income (loss):
|
||||||||||||||||
North America
|
$ | (174.3 | ) | $ | 500.0 | $ | (674.3 | ) | (135 | )% | ||||||
International
|
3.8 | | 3.8 | | ||||||||||||
Consolidated
|
(170.5 | ) | 500.0 | (670.5 | ) | (134 | )% | |||||||||
Interest expense
|
(116.5 | ) | (84.5 | ) | 32.0 | 38 | % | |||||||||
Other, net
|
8.4 | (8.7 | ) | 17.1 | 197 | % | ||||||||||
Income tax benefit (expense)
|
(13.1 | ) | (153.3 | ) | (140.2 | ) | (91 | )% | ||||||||
Net (loss)
|
$ | (291.7 | ) | $ | 253.5 | $ | (545.2 | ) | (215 | )% | ||||||
Adjusted EBITDA
|
$ | 334.1 | $ | 618.2 | $ | (284.1 | ) | (46 | )% | |||||||
55
56
Year Ended |
||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Net (loss) income
|
$ | (291.7 | ) | $ | 253.5 | |||
Income tax benefit (expense)
|
13.1 | 153.2 | ||||||
Interest expense
|
116.5 | 84.5 | ||||||
Depreciation and amortization
|
14.5 | 11.3 | ||||||
Amortization of intangibles
|
46.6 | 44.4 | ||||||
Inventory write-down
|
46.5 | | ||||||
Change in fair value of derivative instruments
|
(8.9 | ) | 6.2 | |||||
Goodwill impairment charge
|
309.9 | | ||||||
MRC Transmark pre-acquisition contribution
|
38.5 | | ||||||
Gain on early extinguishment of debt
|
(1.3 | ) | | |||||
Other non-recurring and non-cash expenses(1)
|
50.4 | 65.1 | ||||||
Adjusted EBITDA(2)
|
$ | 334.1 | $ | 618.2 | ||||
(1) | Other non-recurring and non-cash expenses include transaction related expenses, equity based compensation and other items added back to net income pursuant to our debt agreements. | |
(2) | Adjusted EBITDA includes the impact of our LIFO costing methodology, which resulted in an decrease in cost of sales of $116 million in 2009 and an increase in cost of sales of $126 million in 2008. |
December 31, |
December 31, |
|||||||
2010 | 2009 | |||||||
Inventory
|
$ | 765.4 | $ | 871.7 | ||||
Working capital
|
842.6 | 930.2 | ||||||
Long-term debt, including current portion
|
1,360.2 | 1,452.6 |
57
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net cash provided by (used in):
|
||||||||||||
Operating activities
|
$ | 112.5 | $ | 505.5 | $ | (137.4 | ) | |||||
Investing activities
|
(16.2 | ) | (66.9 | ) | (314.2 | ) | ||||||
Financing activities
|
(97.9 | ) | (393.9 | ) | 452.0 | |||||||
Net (decrease) increase in cash and cash equivalents
|
$ | (1.6 | ) | $ | 44.7 | $ | 0.4 | |||||
Effect of foreign exchange rate on cash
|
$ | 1.7 | $ | (0.6 | ) | $ | 1.7 |
58
Total | 2011 | 2012 to 2013 | 2014 to 2015 | After 2015 | ||||||||||||||||
Long-term debt
|
$ | 1,360.2 | $ | | $ | 332.3 | $ | | $ | 1,027.9 | ||||||||||
Interest payments(1)
|
625.4 | 110.8 | 219.5 | 199.5 | 95.6 | |||||||||||||||
Interest rate swap
|
12.0 | 9.5 | 2.5 | | | |||||||||||||||
Capital leases
|
8.6 | 1.2 | 2.4 | 1.8 | 3.2 | |||||||||||||||
Operating leases
|
90.9 | 27.6 | 38.7 | 19.0 | 5.6 | |||||||||||||||
Purchase obligations(2)
|
349.9 | 349.9 | | | | |||||||||||||||
Other long-term liabilities
|
17.8 | | | | 17.8 | |||||||||||||||
Total
|
$ | 2,464.8 | $ | 499.0 | $ | 595.4 | $ | 220.3 | $ | 1,150.1 | ||||||||||
(1) | Interest payments are based on interest rates in effect at December 31, 2010 and assume contractual amortization payments. | |
(2) | Purchase obligations reflect our commitments to purchase PVF products in the ordinary course of business. While our vendors often allow us to cancel these purchase orders without penalty, in certain cases cancellations may subject to cancellation fees or penalties, depending on the terms of the contract. |
59
60
61
62
Year
|
Percentage | |||
2012
|
107.125 | % | ||
2013
|
104.750 | % | ||
2014
|
102.375 | % | ||
2015 and thereafter
|
100.000 | % |
63
| the Canadian prime rate, plus (a) 2.25% if the average daily availability (as defined in the loan and security agreement for the facility) for the previous fiscal quarter was less than CAD$30 million (US$30 million), (b) 2.00% if the average daily availability for the previous fiscal quarter was greater than or equal to CAD$30 million (USD$30 million) but less than CAD$60 million (USD$60 million), or (c) 1.75% if the average daily availability for the previous fiscal quarter was greater than or equal to CAD$60 million (USD$60 million), or, at the borrowers option, | |
| the BA Equivalent Rate plus (a) 3.75% if the average daily availability for the previous fiscal quarter was less than CAD$30 million (USD$30 million), (b) 3.50% if the average daily availability for the previous fiscal quarter was greater than or equal to CAD$30 million (USD$30 million) but less than CAD$60 million (USD$60 million), or (c) 3.25% if the if the average daily availability for the previous fiscal quarter was greater than or equal to CAD$60 million (USD$60 million). |
64
65
Leverage Ratio
|
Margin | |||
Less than or equal to 0.75:1
|
1.50 | % | ||
Greater than 0.75:1, but less than or equal to 1.00:1
|
1.75 | % | ||
Greater than 1.00:1, but less than or equal to 1.50:1
|
2.00 | % | ||
Greater than 1.50:1, but less than or equal to 2.00:1
|
2.25 | % | ||
Greater than 2.00:1
|
2.50 | % |
66
Average |
||||||||||||||||||||||||||||
Settlement |
Settlement |
Defense |
||||||||||||||||||||||||||
Claims Pending |
Claims |
Claims |
Claims |
Payments |
Amount |
Costs |
||||||||||||||||||||||
at End of Period | Filed | Settled | Dismissed | $ | $ | $ | ||||||||||||||||||||||
Fiscal year ended December 31, 2006
|
815 | 27 | 6 | 11 | 75,000 | 12,500 | 179,791 | |||||||||||||||||||||
Fiscal year ended December 31, 2007
|
828 | 23 | 4 | 6 | 75,500 | 18,875 | 218,900 | |||||||||||||||||||||
Fiscal year ended December 31, 2008
|
849 | 43 | 15 | 7 | 292,500 | 19,500 | 336,497 | |||||||||||||||||||||
Nine months ended September 28, 2009
|
894 | 61 | 11 | 5 | 192,500 | 17,500 | 540,113 | |||||||||||||||||||||
Fiscal year ended September 30, 2010
|
942 | 111 | 29 | 34 | 482,000 | 16,620 | 538,354 |
67
| That our future settlement payments, disease mix and dismissal rates will be materially consistent with historic experience; | |
| That future incidences of asbestos-related diseases in the U.S. will be materially consistent with current public health estimates; | |
| That the rates at which future asbestos-related mesothelioma incidences result in compensable claims filings against us will be materially consistent with its historic experience; | |
| That insurance recoveries for settlement payments and defense costs will be materially consistent with historic experience; | |
| That legal standards (and the interpretation of these standards) applicable to asbestos litigation will not change in material respects; | |
| That there are no materially negative developments in the claims pending against us; and | |
| That key co-defendants in current and future claims remain solvent. |
68
69
70
71
| risks related to the notes, to the collateral and to high yield securities generally; | |
| decreases in oil and natural gas prices; | |
| decreases in oil and natural gas industry expenditure levels, which may result from decreased oil and natural gas prices or other factors; | |
| increased usage of alternative fuels, which may negatively affect oil and natural gas industry expenditure levels; | |
| U.S. and international general economic conditions; | |
| our ability to compete successfully with other companies in our industry; | |
| the risk that manufacturers of the products we distribute will sell a substantial amount of goods directly to end users in the markets that we serve; | |
| unexpected supply shortages; | |
| cost increases by our suppliers; | |
| our lack of long-term contracts with most of our suppliers; | |
| increases in customer, manufacturer and distributor inventory levels; | |
| price reductions by suppliers of products sold by us, which could cause the value of our inventory to decline; | |
| decreases in steel prices, which could significantly lower our profit; | |
| increases in steel prices, which we may be unable to pass along to our customers, which could significantly lower our profit; | |
| our lack of long-term contracts with many of our customers and our lack of contracts with customers that require minimum purchase volumes; | |
| changes in our customer and product mix; | |
| the potential adverse effects associated with integrating Transmark into our business and whether this acquisition will yield its intended benefits; | |
| ability to integrate other acquired companies into our business; | |
| the success of our acquisition strategies; | |
| our significant indebtedness; | |
| the dependence on our subsidiaries for cash to meet our debt obligations; | |
| changes in our credit profile; |
72
| a decline in demand for certain of the products we distribute if import restrictions on these products are lifted; | |
| environmental, health and safety laws and regulations; | |
| the sufficiency of our insurance policies to cover losses, including liabilities arising from litigation; | |
| product liability claims against us; | |
| pending or future asbestos-related claims against us; | |
| the potential loss of key personnel; | |
| interruption in the proper functioning of our information systems; | |
| loss of third-party transportation providers; | |
| potential inability to obtain necessary capital; | |
| risks related to hurricanes and other adverse weather events or natural disasters; | |
| impairment of our goodwill or other intangible assets; | |
| adverse changes in political or economic conditions in the countries in which we operate; | |
| exposure to U.S. and international laws and regulations, including the Foreign Corrupt Practices Act and other economic sanction programs; | |
| potential increases in costs and distraction of management resulting from the requirements of being a publicly reporting company; | |
| risks relating to evaluations of internal controls required by Section 404 of the Sarbanes-Oxley Act; and | |
| the limited usefulness of our historic financial statements. |
73
Year Ended |
||||
December 31, |
||||
2010 | ||||
United States
|
80 | % | ||
Canada
|
13 | % | ||
International
|
7 | % | ||
100 | % | |||
74
Year Ended December 31, | ||||||||||||
2008 | 2009 | 2010 | ||||||||||
Upstream
|
45 | % | 44 | % | 45 | % | ||||||
Midstream
|
22 | % | 24 | % | 22 | % | ||||||
Downstream and industrial
|
33 | % | 32 | % | 33 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
75
76
77
78
79
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Upstream
|
45 | % | 44 | % | 45 | % | ||||||
Midstream
|
23 | % | 24 | % | 22 | % | ||||||
Downstream and industrial
|
32 | % | 32 | % | 33 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
80
2011E | 2010E | 2009A | 2008A | 2007A | 2006A | |||||||||||||||||||
(In billions) | ||||||||||||||||||||||||
United States
|
$ | 140.6 | $ | 115.7 | $ | 83.5 | $ | 150.7 | $ | 127.6 | $ | 117.0 | ||||||||||||
Canada
|
21.0 | 17.0 | 10.0 | 20.5 | 17.7 | 21.1 | ||||||||||||||||||
North America total
|
$ | 161.6 | $ | 132.7 | $ | 93.5 | $ | 171.2 | $ | 145.3 | $ | 138.1 | ||||||||||||
International(2)
|
$ | 38.9 | $ | 36.6 | $ | 38.4 | $ | 39.5 | $ | 33.9 | $ | 30.1 |
(1) | Source Spears & Associates: Drilling and Production Outlook, December 2010 | |
(2) | Includes Europe and the Far East |
81
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Average Total Rig Count(1)
|
||||||||||||||||||||
United States
|
1,546 | 1,089 | 1,879 | 1,768 | 1,649 | |||||||||||||||
Canada
|
351 | 221 | 381 | 344 | 470 | |||||||||||||||
Total North America
|
1,897 | 1,310 | 2,260 | 2,112 | 2,119 | |||||||||||||||
International
|
1,094 | 997 | 1,079 | 1,005 | 925 | |||||||||||||||
Total Worldwide
|
2,991 | 2,307 | 3,339 | 3,117 | 3,044 | |||||||||||||||
Average Natural Gas Rig Count(1)
|
||||||||||||||||||||
United States
|
943 | 801 | 1,491 | 1,466 | 1,372 | |||||||||||||||
Canada
|
148 | 120 | 220 | 215 | 361 | |||||||||||||||
Total North America
|
1,091 | 921 | 1,711 | 1,681 | 1,733 | |||||||||||||||
Average Commodity Prices(2)
|
||||||||||||||||||||
Natural gas ($/Mcf)
|
$ | 4.16 | $ | 3.66 | $ | 7.98 | $ | 6.26 | $ | 6.40 | ||||||||||
WTI crude oil (per barrel)
|
$ | 79.39 | $ | 61.95 | $ | 99.67 | $ | 72.34 | $ | 66.05 | ||||||||||
Brent crude oil (per barrel)
|
$ | 79.50 | $ | 61.74 | $ | 96.94 | $ | 72.44 | $ | 65.16 | ||||||||||
Well Permit(3)
|
||||||||||||||||||||
United States
|
1,260 | 989 | 1,682 | 1,512 | 1,514 |
(1) | Source Baker Hughes (www.bakerhughes.com) | |
(2) | Source Department of Energy, Energy Information Administration (www.eia.gov) | |
(3) | Source RigData |
82
(1) | U.S. Energy Information Administration (www.eia.gov) |
83
United States
|
European Union |
(1) | Source BP Statistical Review of World Energy June 2010 (www.bp.com/statisticalreview) |
84
| Carbon Steel Fittings and Flanges. Products include carbon weld fittings, flanges and piping components used primarily to connect piping and valve systems for the transmission of various liquids and gases. These products are used across all the industries in which we operate. | |
| Carbon Steel Line Pipe and Oil Country Tubular Goods (OCTG). Carbon standard and line pipe are typically used in high-yield, high-stress, abrasive applications such as the gathering and transmission of oil, natural gas and phosphates. OCTG is used as down hole well casing, production casing and tubing for the conveying of hydrocarbons to the surface and is either classified as carbon or alloy depending on the grade of material. | |
| Natural Gas Distribution Products. Products include risers, meters, polyethylene pipe and fittings and various other components and supplies used primarily in the distribution of natural gas to residential and commercial customers. | |
| Oilfield Supplies. We offer a full range of oilfield supplies and completion equipment. Products offered include high density polyethylene pipe and fittings, valves, well heads, pumping units and rods. Additionally, we can supply a wide range of production equipment including meter runs, tanks and separators used in our upstream end market. | |
| Stainless Steel and Alloy Pipe and Fittings. Products include stainless, alloy and corrosion resistant pipe, tubing, fittings and flanges. These are used most often in the chemical, refining and power generation industries but are used across all of the end markets in which we operate. Alloy products are principally used in high-pressure, high-temperature and high-corrosion applications typically seen in process piping applications. | |
| Valves and Specialty Products. Products offered include ball, butterfly, gate, globe, check, needle and plug valves which are manufactured from cast steel, stainless/alloy steel, forged steel, carbon steel or cast and ductile iron. Valves are generally used in oilfield and industrial applications to control direction, velocity and pressure of fluids and gases within transmission networks. Specialty products include lined corrosion resistant piping systems, valve automation and top work components used for regulating flow and on/off service, and a wide range of steam and instrumentation products used in various process applications within our refinery, petrochemical and general industrial end markets. |
85
86
| Valves and Specialty Products. Products offered include ball, butterfly, gate, globe, check, needle and plug valves which are manufactured from cast steel, stainless/alloy steel, forged steel, carbon steel or cast and ductile iron. Valves are generally used in oilfield and industrial applications to control direction, velocity and pressure of fluids and gases within transmission networks. Specialty products include lined corrosion resistant piping systems, valve automation and top work components used for regulating flow and on/off service and a wide range of steam and instrumentation products used in various process applications within our offshore refinery, petrochemical and general industrial end markets. |
87
88
89
Age
|
Position
|
|||||
Andrew R. Lane
|
51 | Chairman, President and Chief Executive Officer | ||||
James F. Underhill
|
55 | Executive Vice President and Chief Financial Officer | ||||
Stephen W. Lake
|
47 | Executive Vice President and General Counsel | ||||
Gary A. Ittner
|
58 | Executive Vice President and Chief Administrative Officer | ||||
Rory M. Isaac
|
60 | Executive Vice President Business Development | ||||
Scott A. Hutchinson
|
55 | Executive Vice President North America Operations | ||||
Neil P. Wagstaff
|
47 | Executive Vice President International Operations | ||||
Leonard M. Anthony
|
56 | Director | ||||
Rhys J. Best
|
64 | Director | ||||
Peter C. Boylan III
|
46 | Director | ||||
Henry Cornell
|
54 | Director | ||||
Christopher A.S. Crampton
|
32 | Director | ||||
John F. Daly
|
44 | Director | ||||
Craig Ketchum
|
53 | Director | ||||
Gerard P. Krans
|
63 | Director | ||||
Dr. Cornelis A. Linse
|
61 | Director | ||||
John A. Perkins
|
63 | Director | ||||
H.B. Wehrle, III
|
59 | Director |
90
91
92
93
94
95
| Subject to the terms of any employment contracts, reviewing and determining, or making recommendations to our board of directors with respect to, the annual salary, bonus, stock options and other compensation, incentives and benefits, direct and indirect, of the CEO and other executive officers. In determining long-term incentive compensation of the CEO and other executive officers, the Committee will consider, among other things, the Companys performance and relative shareholder return, the value of similar incentive awards to chief executive officers and other executive officers of comparable companies and the awards given to the CEO and the executive officers in the past. | |
| Reviewing and approving corporate goals and objectives relevant to compensation of the CEO and other executive officers and evaluating the CEOs and other executive officers performance in light of those goals and objectives on an annual basis, and, either separately or together with other independent directors (as directed by the Board), determining and approving the CEOs and other executive officers compensation level based on this evaluation or making recommendations to the board of directors with respect thereto. |
96
| Reviewing and authorizing or recommending to our board of directors to authorize, as determined by the Committee, the Company to enter into, amend or terminate any employment, consulting, change in control, severance or termination, or other compensation agreements or arrangements with the CEO and other executive officers of the Company (and, at the option of the Committee, other officers and employees of the Company). | |
| Periodically reviewing and considering the competitiveness and appropriateness of our executive compensation. | |
| Reviewing new executive compensation programs, reviewing on a periodic basis the operation of our existing executive compensation programs to determine whether they integrate appropriately, and establishing and periodically reviewing policies for the administration of executive compensation programs. | |
| Overseeing the administration of incentive compensation plans and equity-based compensation plans and exercising all authority and discretion provided to the Committee under those plans and performing such duties and responsibilities as may be assigned by our board of directors with respect to such plans. | |
| Conducting a review at least annually of, and determining or making recommendations to our board of directors regarding compensation for non-employee directors (including compensation for service on the board of directors and committees thereof, meeting fees and equity-based compensation). The Committee is also responsible for and oversees administration of any plans or programs providing for the compensation of non-employee directors. | |
| Overseeing the procedures and substance of the Companys compensation and benefit policies (subject, if applicable, to shareholder approval), including establishing, reviewing, approving and making recommendations to our board of directors with respect to any incentive-compensation and equity-based plans of the Company that are subject to board approval. |
| To align the interests of our executive officers with those of our shareholders, thereby providing long-term economic benefit to our shareholders; | |
| To provide competitive financial incentives in the form of salary, bonus and benefits, with the goal of attracting and retaining talented executive officers; and | |
| To maintain a compensation program that includes at-risk, performance based awards whereby executive officers who demonstrate exceptional performance will have the opportunity to realize appropriate economic rewards. |
97
| Base salary; | |
| Short-term incentive compensation; | |
| Long-term equity compensation; | |
| Retirement benefits; and | |
| Perquisites and other personal benefits. |
98
99
100
101
102
103
Change in |
||||||||||||||||||||||||||||
Non-Equity |
Nonqualified |
|||||||||||||||||||||||||||
Incentive Plan |
Deferred |
All Other |
||||||||||||||||||||||||||
Name and |
Salary |
Compensation |
Option Awards |
Compensation |
Compensation |
|||||||||||||||||||||||
Principal Position
|
Year | ($) | ($)(1) | ($)(2) | Earnings ($) | ($)(3) | Total ($) | |||||||||||||||||||||
Andrew R. Lane,
|
2010 | 700,000 | 399,000 | | | 12,422 | 1,111,422 | |||||||||||||||||||||
Chairman, President and Chief Executive Officer
|
||||||||||||||||||||||||||||
James F. Underhill,
|
2010 | 500,000 | 285,000 | | 5,073 | 52,164 | 842,237 | |||||||||||||||||||||
Executive Vice President and Chief Financial Officer
|
||||||||||||||||||||||||||||
Neil P. Wagstaff,
|
2010 | 331,691 | 189,064 | 276,225 | | 88,816 | 885,796 | |||||||||||||||||||||
Executive Vice President International Operations(4)
|
||||||||||||||||||||||||||||
Gary A. Ittner,
|
2010 | 375,000 | 213,750 | | 4,348 | 74,812 | 667,910 | |||||||||||||||||||||
Executive Vice President and Chief Administrative Officer
|
||||||||||||||||||||||||||||
Scott A. Hutchinson,
|
2010 | 345,000 | 196,650 | | 2,899 | 66,226 | 610,775 | |||||||||||||||||||||
Executive Vice President North American Operations
|
||||||||||||||||||||||||||||
Rory M. Isaac,
|
2010 | 375,000 | 210,000 | | 4,348 | 16,324 | 605,672 | |||||||||||||||||||||
Executive Vice President Business Development
|
||||||||||||||||||||||||||||
Stephen W. Lake,
|
2010 | 375,000 | 213,750 | | | 11,479 | 600,229 | |||||||||||||||||||||
Executive Vice President and General Counsel
|
(1) | The amounts in this column represent cash awards earned pursuant to the annual Variable Compensation Plan in respect of performance during 2010. As a result of our companys level of achievement with respect to its performance goals for fiscal year 2010, Messrs. Lane, Underhill, Wagstaff, Ittner, Hutchinson and Lake were paid 57% of their target annual incentive bonuses and Mr. Isaac was paid 56% of his target annual bonus. Please refer to the narrative following the table titled Grants of Plan-Based Awards in Fiscal Year 2010 in the |
104
Compensation Discussion and Analysis for a discussion of the 2010 performance goals, including a discussion of the 5% maximum cap imposed on the portion of bonus attributable to individual performance in 2010. | ||
(2) | Mr. Wagstaff was granted options to purchase company stock of McJunkin Red Man Holding Corporation on April 1, 2010. The amount in this column represents the grant date fair value of such option award calculated pursuant to ASC Topic 718. This option award will become vested in three equal installments on the third, fourth and fifth anniversaries of the date of grant and is conditioned on continued employment through the applicable vesting date. In addition, this option award will become fully vested and exercisable upon the occurrence of a Transaction (as defined in the stock option plan) or upon the termination of the executives employment due to death or Disability (as defined in the stock option plan). All stock options granted, whether vested or unvested, will be forfeited in the event of a termination of employment for Cause (as defined in the stock option plan). | |
(3) | Amounts in this column include (i) company matching contributions made to the McJunkin Red Man Corporation Retirement Plan $9,800 for Messrs. Lane, Ittner, Hutchinson and Lake and $8,800 for Messrs. Underhill and Isaac; and (ii) the imputed value for company provided group life insurance of $2,622, $4,902, $4,902, $4,902, $7,524 and $1,679 for Messrs. Lane, Underhill, Ittner, Hutchinson, Isaac and Lake, respectively; (iii) $38,462 for the value of unused vacation to Mr. Underhill; and (iv) relocation payments made to Messrs. Ittner and Hutchinson in accordance with company policy in the amounts of $60,110 and $51,524, respectively. Amounts in this column for Mr. Wagstaff include $3,415 for medical insurance, $37,539 for pension contributions and an auto allowance of $47,862. | |
(4) | All compensation amounts paid to Mr. Wagstaff were paid in British pounds sterling and have been converted into U.S. Dollars for purposes of the Summary Compensation Table and tables that follow based on the exchange rate £1 = $1.5609 as of December 31, 2010. |
All Other Option |
||||||||||||||||||||
Estimated Future Payouts Under Non- |
Awards: Number of |
|||||||||||||||||||
Equity Incentive Plan Awards |
Securities |
Exercise or Base |
||||||||||||||||||
Threshold |
Target |
Maximum |
Underlying Options |
Price of |
||||||||||||||||
Name
|
($)(1) | ($)(2) | ($)(2) | (#) | Option Awards ($) | |||||||||||||||
Andrew R. Lane
|
14,000 | 700,000 | 805,000 | | | |||||||||||||||
James F. Underhill
|
10,000 | 500,000 | 575,000 | | | |||||||||||||||
Neil P. Wagstaff
|
6,633 | 331,691 | 381,445 | 87,413 | 11.44 | |||||||||||||||
Gary A. Ittner
|
7,500 | 375,000 | 431,250 | | | |||||||||||||||
Scott A. Hutchinson
|
6,900 | 345,000 | 396,750 | | | |||||||||||||||
Rory M. Isaac
|
7,500 | 375,000 | 431,250 | | | |||||||||||||||
Stephen W. Lake
|
7,500 | 375,000 | 431,250 | | |
(1) | Under the Variable Compensation Plan, no portion of the awards based on EBITDA or RONA for each named executive officer and additional executive officer are payable unless there is at least 51% achievement of those performance goals. At 51% achievement of each such performance goal, there is a payout of 2% of a participants target annual incentive bonus with respect to the performance metric for which such achievement has occurred. The amounts in this column reflect 2% of the named executive officers and additional executive officers target annual incentive bonuses for 2010. | |
(2) | Payouts for the EBITDA and RONA performance goals under the Variable Compensation Plan increase in 2% increments for each additional percent of achievement beyond 51% up to full achievement of those annual goals. Upon full achievement of each of those performance goals and full achievement of KPIs, 100% of the target annual incentive bonus is paid. If performance goals are exceeded, the maximum payment is 115% of target annual incentive. The amounts in these columns reflect 100% and 115% of the named executive officers and additional executive officers target annual incentive bonuses for 2010. |
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106
Option Awards | Stock Awards(2) | |||||||||||||||||||||||||||
Number of |
Number of |
Number of |
||||||||||||||||||||||||||
Securities |
Securities |
Shares or Units |
Market Value of |
|||||||||||||||||||||||||
Underlying |
Underlying |
Option |
Option |
Number of Shares |
of Stock That |
Shares or Units of |
||||||||||||||||||||||
Options |
Options |
Exercise |
Expiration |
or Units That |
Have Not |
Stock That Have Not |
||||||||||||||||||||||
Name
|
Exercisable | Unexercisable(1) | Price ($) | Date | Have Vested (#) | Vested (#) | Vested ($)(3) | |||||||||||||||||||||
Andrew R. Lane
|
439,732 | 1,319,197 | $ | 12.48 | (4) | 9/10/18 | | 50,000 | 375,500 | |||||||||||||||||||
James F. Underhill
|
| 43,706 | $ | 11.42 | (4) | 12/3/19 | 199.13 | 398.28 | 1,343,490 | |||||||||||||||||||
Neil P. Wagstaff
|
| 87,413 | $ | 11.44 | 10/30/19 | | | | ||||||||||||||||||||
Gary A. Ittner
|
| 43,706 | $ | 11.42 | (4) | 12/3/19 | 127.10 | 254.22 | 857,543 | |||||||||||||||||||
Scott A. Hutchinson
|
| 131,119 | $ | 11.42 | (4) | 12/3/19 | 55.08 | 110.15 | 371,561 | |||||||||||||||||||
Rory M. Isaac
|
| 43,706 | $ | 11.42 | (4) | 12/3/19 | 127.10 | 254.22 | 857,543 | |||||||||||||||||||
Stephen W. Lake
|
| 87,413 | $ | 11.42 | (4) | 12/3/19 | | 127.10 | 428,738 |
(1) | The stock options granted to Mr. Lane (and currently held by Andy & Cindy Lane Family, L.P.) become vested in equal installments on each of the second, third, fourth and fifth anniversaries of the date of grant, conditioned on continued employment through the applicable vesting date. One-fourth of Mr. Lanes options vested on September 10, 2010. Mr. Lanes options are subject to pro-rata accelerated vesting in the event his employment is terminated (i) by McJunkin Red Man other than for Cause (as defined in his employment agreement), (ii) by Mr. Lane for Good Reason (as defined in his employment agreement or (iii) by reason of Mr. Lanes death or Disability (as defined in his employment agreement). In addition, Mr. Lanes options will become fully vested and exercisable upon the occurrence of a Change in Control (as defined in his employment agreement). | |
The stock options held by Messrs. Underhill, Wagstaff, Ittner, Hutchinson, Isaac and Lake will become vested in three equal installments on the third, fourth and fifth anniversaries of the date of grant, and are conditioned on continued employment through the applicable vesting date. These options will become fully vested and exercisable upon the occurrence of a Transaction (as defined in the stock option plan) or upon the termination of the executives employment due to death or Disability (as defined in the stock option plan). | ||
(2) | For Mr. Lane, the amounts in these columns are in respect of an award of restricted stock made in February 2009 (and currently held by Andy & Cindy Lane Family, L.P.). For Messrs. Underhill, Ittner, Hutchinson, Isaac and Lake, the amounts in these columns are in respect of grants of profits units in PVF Holdings LLC made to Messrs. Underhill, Ittner, Hutchinson and Isaac in 2007 and to Mr. Lake in 2008. Profits units held by Messrs. Underhill, Ittner, Hutchinson, Isaac and Lake become vested in equal increments on each of the third, |
107
fourth and fifth anniversaries of the date of grant, subject to accelerated vesting in the event of certain terminations of employment or a Transaction (as defined in the PVF LLC Agreement). Messrs. Underhill, Ittner, Hutchinson and Isaac became vested in 33.33% of their profits units on January 31, 2010. | ||
(3) | The market value of Mr. Lanes restricted stock is based on a per share value of the companys stock of $7.51 as of December 31, 2010. The market value of unvested profits units is based on the value of profits units in PVF Holdings LLC as of December 31, 2010, which was $3,373.23 per unit. | |
(4) | In September 2009, the option exercise price of the stock options held by Andy & Cindy Lane Family, L.P. was reduced from $17.63 to $12.50, which is not less than the fair market value of our common stock as of the date of such amendment. In December 2009, in connection with the $2.9 million cash dividend paid by McJunkin Red Man Corporation to McJunkin Red Man Holding Corporation, the option exercise price for Mr. Lanes options reduced to $12.48. Also in connection with the December 2009 cash dividend, options granted to Messrs. Underhill, Ittner, Hutchinson, Isaac and Lake were reduced from $11.44 to $11.42. |
Stock Awards | ||||||||
Number of Shares |
||||||||
That Became |
Value Realized on |
|||||||
Name
|
Vested (#)(1) | Vesting ($)(2) | ||||||
Andrew R. Lane
|
| | ||||||
James F. Underhill
|
199.13 | 828,952 | ||||||
Neil P. Wagstaff
|
| | ||||||
Gary A. Ittner
|
127.10 | 529,101 | ||||||
Scott A. Hutchinson
|
55.08 | 229,291 | ||||||
Rory M. Isaac
|
127.10 | 529,101 | ||||||
Stephen W. Lake
|
| |
(1) | This column reflects the number of profits units in PVF LLC that became vested on January 31, 2010. | |
(2) | The value realized upon the vesting of profits units on January 31, 2010 is based on the value of profits units in PVF Holdings LLC as of January 31, 2010, which was $4,162.87 per unit. |
Registrant |
Aggregate Balance at |
|||||||
Contributions in |
Last Fiscal Year End |
|||||||
Name
|
Last Fiscal Year ($)(1) | ($) | ||||||
Andrew R. Lane
|
| | ||||||
James F. Underhill
|
5,073 | 147,814 | ||||||
Neil P. Wagstaff
|
| | ||||||
Gary A. Ittner
|
4,348 | 126,698 | ||||||
Scott A. Hutchinson
|
2,899 | 84,464 | ||||||
Rory M. Isaac
|
4,348 | 126,698 | ||||||
Stephen W. Lake
|
| |
(1) | No contributions were made by our company to participant accounts under the McJunkin Red Man Nonqualified Deferred Compensation Plan in 2010. However, during 2010 the accounts of the named executive officers with accounts under such plan were credited with interest in accordance with the plan. |
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Deferred |
||||||||||||
Accrued |
Compensation |
|||||||||||
Obligations |
Account |
|||||||||||
Name
|
($)(1) | Balance ($) | Total ($) | |||||||||
Andrew R. Lane
|
75,385 | | 75,385 | |||||||||
James F. Underhill
|
57,692 | 147,814 | 205,506 | |||||||||
Neil P. Wagstaff
|
15,308 | | 15,308 | |||||||||
Gary A. Ittner
|
50,481 | 126,698 | 177,179 | |||||||||
Scott A. Hutchinson
|
39,808 | 84,464 | 124,272 | |||||||||
Rory M. Isaac
|
43,269 | 126,698 | 169,967 | |||||||||
Stephen W. Lake
|
27,404 | | 27,404 |
(1) | These amounts represent accrued but unused vacation time as of December 31, 2010. |
| All accrued, but unpaid, obligations (including, but not limited to, salary, bonus, expense reimbursement and vacation pay); | |
| In the case of Messrs. Lane and Wagstaff, monthly payments equal to 1/12 of base salary at the rate in effect immediately prior to termination and 1/12 target annual bonus for 18 months following termination. In the case of Messrs. Underhill and Lake, continuation of base salary for 12 months following termination, at the rate in effect immediately prior to termination; | |
| Continuation of medical benefits for 18 months for Messrs. Lane and Wagstaff and 12 months for Messrs. Underhill and Lake or, in each case (except in the case of Mr. Wagstaff), until such earlier time as the executive becomes eligible for medical benefits from a subsequent employer; |
109
| A pro-rata annual bonus for the fiscal year in which termination occurs, based on actual performance through the end of the fiscal year; and | |
| Solely in the case of Mr. Lane, a pro-rata portion of the stock options granted to him, which are currently held by Andy & Cindy Lane Family, L.P., would become vested. However, the restricted stock granted to Mr. Lane, which is currently held by Andy & Cindy Lane Family, L.P., would be forfeited. |
Value of |
Deferred |
|||||||||||||||||||||||||||
Accrued |
Base Salary |
Pro Rata |
Value of |
Accelerated |
Compensation |
|||||||||||||||||||||||
Obligations |
Continuation |
Incentive |
Medical |
Vesting |
Account |
|||||||||||||||||||||||
($)(1) | ($) | ($)(2) | Benefits ($) | of Equity ($)(3) | Balance ($) | Total ($) | ||||||||||||||||||||||
Andrew R. Lane
|
75,385 | 1,050,000 | 399,000 | 28,062 | 0 | | 1,552,447 | |||||||||||||||||||||
James F. Underhill
|
57,692 | 500,000 | 285,000 | 18,708 | 0 | 147,814 | 1,009,214 | |||||||||||||||||||||
Neil P. Wagstaff
|
15,308 | 497,536 | 189,064 | 5,122 | 0 | | 707,030 | |||||||||||||||||||||
Gary A. Ittner
|
50,481 | | 213,750 | | 0 | 126,698 | 390,929 | |||||||||||||||||||||
Scott A. Hutchinson
|
39,808 | | 196,650 | | 0 | 84,464 | 320,922 | |||||||||||||||||||||
Rory M. Isaac
|
43,269 | | 210,000 | | 0 | 126,698 | 379,967 | |||||||||||||||||||||
Stephen W. Lake
|
27,404 | 375,000 | 213,750 | 18,708 | 0 | | 634,862 |
(1) | These amounts represent accrued but unused vacation time as of December 31, 2010. | |
(2) | Each of the named executive officers and additional executive officers has an annual target bonus of 100% of annual base salary in effect at the beginning of the relevant fiscal year. Assuming a termination date of December 31, 2010, each of Messrs. Lane, Underhill, Wagstaff, Ittner, Hutchinson and Lake would be entitled to receive 57% of his target annual incentive bonus and Mr. Isaac would be entitled to receive 56% of his target annual bonus. | |
(3) | In the case of Mr. Lane, the amount in this column represents the value of the pro-rata acceleration of the vesting of his stock options. Because the exercise price of these options is $12.48 per share, which was above the per share value of the companys stock as of December 31, 2010, which was $7.51, there would be no value realized upon this accelerated vesting. The restricted stock award granted to Mr. Lane would not be subject to accelerated vesting under these circumstances. In the case of Messrs. Underhill, Ittner, Hutchinson, Isaac and |
110
Lake, all of their unvested profits units held as of December 31, 2010 would be forfeited as of such date. Additionally, because the exercise price of awarded options is $11.42 for Messrs. Underhill, Ittner, Hutchinson, Isaac and Lake and $11.44 for Mr. Wagstaff, there would be no value realized upon this accelerated vesting. |
Deferred |
||||||||||||
Accrued |
Compensation |
|||||||||||
Obligations |
Account |
|||||||||||
Name
|
($)(1) | Balance ($) | Total ($) | |||||||||
Andrew R. Lane
|
75,385 | | 75,385 | |||||||||
James F. Underhill
|
57,692 | 147,814 | 205,506 | |||||||||
Neil P. Wagstaff
|
15,308 | | 15,308 | |||||||||
Gary A. Ittner
|
50,481 | 126,698 | 177,179 | |||||||||
Scott A. Hutchinson
|
39,808 | 84,464 | 124,272 | |||||||||
Rory M. Isaac
|
43,269 | 126,698 | 169,967 | |||||||||
Stephen W. Lake
|
27,404 | | 27,404 |
(1) | These amounts represent accrued but unused vacation time as of December 31, 2010. |
111
Value of |
Deferred |
|||||||||||||||
Accrued |
Accelerated |
Compensation |
||||||||||||||
Obligations |
Vesting of |
Account |
||||||||||||||
Name
|
($)(1) | Equity ($)(2) | Balance ($) | Total ($) | ||||||||||||
Andrew R. Lane
|
75,385 | 375,500 | | 450,885 | ||||||||||||
James F. Underhill
|
57,692 | 1,343,490 | 147,814 | 1,548,996 | ||||||||||||
Neil P. Wagstaff
|
15,308 | | | 15,308 | ||||||||||||
Gary A. Ittner
|
50,481 | 857,543 | 126,698 | 1,034,722 | ||||||||||||
Scott A. Hutchinson
|
39,808 | 371,561 | 84,464 | 495,833 | ||||||||||||
Rory M. Isaac
|
43,269 | 857,543 | 126,698 | 1,027,510 | ||||||||||||
Stephen W. Lake
|
27,404 | 428,738 | | 456,142 |
(1) | These amounts represent accrued but unused vacation time as of December 31, 2010. | |
(2) | In the case of Mr. Lane, the amount in this column includes the value of the pro-rata acceleration of the vesting of his unvested stock options and the full acceleration of vesting of his entire restricted stock award. Because the exercise price of his options is $12.48 per share, which was above the per share value of the companys stock as of December 31, 2010, which was $7.51, there would be no value realized upon this accelerated vesting. The value of the accelerated vesting of Mr. Lanes restricted stock is based on the per share value of the companys stock as of December 31, 2010, which was $7.51. In the case of Messrs. Underhill, Ittner, Hutchinson, Isaac and Lake, all of their profits units and stock options, and in the case of Mr. Wagstaff, stock options, held as of December 31, 2010 would become fully vested as of such date. With respect to profits units, the value realized upon such acceleration is based on the value of profits units in PVF Holdings LLC as of December 31, 2010, which was $3,373.23 per unit. With respect to options, because the exercise price of their options is $11.42 per share for Messrs. Underhill, Ittner, Hutchinson, Isaac and Lake, and $11.44 per share for Mr. Wagstaff, which was above the per share value of the companys stock as of December 31, 2010, which was $7.51, there would be no value realized upon this accelerated vesting. |
112
Value of |
Deferred |
|||||||||||||||
Accrued |
Accelerated |
Compensation |
||||||||||||||
Obligations |
Vesting of |
Account |
||||||||||||||
Name
|
($)(1) | Equity ($)(2) | Balance ($) | Total ($) | ||||||||||||
Andrew R. Lane
|
75,385 | 375,500 | | 450,885 | ||||||||||||
James F. Underhill
|
57,692 | 1,343,490 | 147,814 | 1,548,996 | ||||||||||||
Neil P. Wagstaff
|
15,308 | | | 15,308 | ||||||||||||
Gary A. Ittner
|
50,481 | 857,543 | 126,698 | 1,034,722 | ||||||||||||
Scott A. Hutchinson
|
39,808 | 371,561 | 84,464 | 495,833 | ||||||||||||
Rory M. Isaac
|
43,269 | 857,543 | 126,698 | 1,027,510 | ||||||||||||
Stephen W. Lake
|
27,404 | 428,738 | | 456,142 |
(1) | These amounts represent accrued but unused vacation time as of December 31, 2010. | |
(2) | In the case of Mr. Lane, all restricted stock and unvested stock options he held as of December 31, 2010 would become fully vested as of such date. Because the exercise price of his options is $12.48 per share, which was above the per share value of the companys stock as of December 31, 2010, which was $7.51, there would be no value realized upon this accelerated vesting. The value of the accelerated vesting of Mr. Lanes restricted stock is based on the per share value of the companys stock as of December 31, 2010, which was $7.51. In the case of Messrs. Underhill, Wagstaff, Ittner, Hutchinson, Isaac and Lake, all of the profits units and stock options they held as of December 31, 2010 would become fully vested as of such date. With respect to profits units, the value realized upon such acceleration is based on the value of profits units in PVF Holdings LLC as of December 31, 2010, which was $3,373.23 per unit. With respect to options, because the exercise price of their options is $11.42 per share, which was above the per share value of the companys stock as of December 31, 2010, which was $7.51, there would be no value realized upon this accelerated vesting. |
113
Fees Earned |
Stock |
|||||||||||||||||||
or Paid |
Awards |
Option |
All Other |
|||||||||||||||||
Name
|
in Cash ($) | ($)(1) | Awards ($) | Compensation ($) | Total ($) | |||||||||||||||
Leonard M. Anthony
|
100,000 | | 14,510 | | 114,510 | |||||||||||||||
Rhys J. Best
|
100,000 | | 14,510 | | 114,510 | |||||||||||||||
Peter C. Boylan, III
|
50,000 | | | | 50,000 | |||||||||||||||
Henry Cornell(2)
|
| | | | | |||||||||||||||
Christopher A.S. Crampton(2)
|
| | | | | |||||||||||||||
John F. Daly(2)
|
| | | | | |||||||||||||||
Harry K. Hornish, Jr.
|
100,000 | | | | 100,000 | |||||||||||||||
Craig Ketchum
|
100,000 | | | | 100,000 | |||||||||||||||
Gerard P. Krans
|
100,000 | | 14,510 | | 114,510 | |||||||||||||||
Dr. Cornelis A. Linse
|
75,000 | | 29,017 | | 104,017 | |||||||||||||||
John A. Perkins
|
100,000 | | | | 100,000 | |||||||||||||||
Sam B. Rovit
|
100,000 | | | | 100,000 | |||||||||||||||
H.B. Wehrle, III
|
100,000 | | | | 100,000 |
(1) | The following table indicates the aggregate number of shares of our common stock subject to outstanding option awards and the number of stock awards held by our non-employee directors as of December 31, 2010: |
Name
|
Stock Options (#)(a) | Stock Awards (#) | ||||||
Leonard M. Anthony
|
22,415 | 7,300 | (b) | |||||
Rhys J. Best
|
43,525 | | ||||||
Peter C. Boylan, III
|
38,131 | | ||||||
Craig Ketchum
|
| 381.31 | (c) | |||||
Gerard P. Krans
|
5,394 | | ||||||
Dr. Cornelis A. Linse
|
10,787 | | ||||||
John A. Perkins
|
8,741 | | ||||||
Sam B. Rovit
|
34,497 | | ||||||
H.B. Wehrle, III
|
| 381.31 | (c) |
(a) | All stock options held by directors were granted pursuant to the McJ Holding Stock Option Plan. Stock options held by directors vest in equal increments on each of the third, fourth and fifth anniversaries of the date of grant or in equal increments on each of the second, third, fourth and fifth anniversaries of the date of grant. Vesting of all options is conditioned on continued service and subject to accelerated vesting under certain circumstances, including termination of service by reason of death or disability or the occurrence of a Transaction (as defined in the plan). |
(b) | The restricted stock held by Mr. Anthony was granted pursuant to the McJ Holding Restricted Stock Plan and will vest on the fifth anniversary of the date of grant, conditioned on continued service and subject to accelerated vesting under certain circumstances including termination of service by reason of death or disability or the occurrence of a Transaction (as defined in the plan). |
(c) | Reflects profits units in PVF Holdings LLC held by Messrs. Ketchum and Wehrle. Pursuant to the PVF LLC Agreement, these profits units generally become vested in one-third increments on each of the third, fourth and fifth anniversaries of the date of grant. Also, in the event of a Transaction (as defined in the PVF LLC Agreement), all unvested profits units will become vested and nonforfeitable. In addition, the letter |
114
agreements entered into between Mr. Ketchum and McJunkin Red Man on December 22, 2008 and between Mr. Wehrle and McJunkin Red Man Holding Corporation on September 24, 2008 provide for accelerated vesting in additional circumstances. Pursuant to Mr. Ketchums letter, his profits units will become fully vested and no longer subject to forfeiture in the event that his service as Chairman of the Issuers board of directors and as a member of the Issuers board of directors is terminated for any reason. Pursuant to Mr. Wehrles letter, his profits units will become fully vested and no longer subject to forfeiture in the event of the termination of his service as Chairman of the board of directors of PVF Holdings LLC and as a member of the Issuers board of directors for any reason. |
(2) | Each of these directors served on our board of directors during 2010, but generally did not receive any cash compensation for such services. |
115
| each director of McJunkin Red Man Holding Corporation; | |
| each named executive officer of McJunkin Red Man Holding Corporation; | |
| each stockholder known by us to beneficially hold five percent or more of the common stock of McJunkin Red Man Holding Corporation; and | |
| all of the executive officers and directors as a group. |
Shares Beneficially Owned | ||||||||
Name and Address
|
Number | Percent | ||||||
PVF Holdings LLC(1)
|
168,428,052 | 99.7 | % | |||||
The Goldman Sachs Group, Inc.(1)
200 West Street New York, New York 10282 |
168,428,052 | 99.7 | % | |||||
Andrew R. Lane(2)
|
220,218 | * | ||||||
James F. Underhill(3)
|
| | ||||||
Stephen W. Lake(4)
|
| | ||||||
Gary A. Ittner(5)
|
| | ||||||
Rory M. Isaac(6)
|
| | ||||||
Scott A. Hutchinson(7)
|
| | ||||||
Neil P. Wagstaff(8)
|
| | ||||||
Leonard M. Anthony(9)
|
35,669 | * | ||||||
Rhys J. Best(10)
|
| | ||||||
Peter C. Boylan III(11)
|
||||||||
Henry Cornell(1)
|
168,428,052 | 99.7 | % | |||||
Christopher A.S. Crampton(1)
|
| | ||||||
John F. Daly(1)
|
168,428,052 | 99.7 | % | |||||
Craig Ketchum(12)
|
| | ||||||
Gerard P. Krans(13)
|
| | ||||||
Dr. Cornelis A. Linse(14)
|
21,575 | * | ||||||
John A. Perkins(15)
|
43,706 | * | ||||||
H.B. Wehrle, III(16)
|
| | ||||||
All directors and executive officers, as a group
(20 persons)(17)
|
168,749,220 | 99.8 | % |
* | Less than 1%. | |
(1) | PVF Holdings LLC directly owns 168,428,052 shares of common stock. GS Capital Partners V Fund, L.P., GS Capital Partners V Offshore Fund, L.P., GS Capital Partners V GmbH & Co. KG, GS Capital Partners V |
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Institutional, L.P., GS Capital Partners VI Fund, L.P., GS Capital Partners VI Offshore Fund, L.P., GS Capital Partners VI Parallel, L.P., and GS Capital Partners VI GmbH & Co. KG (collectively, the Goldman Sachs Funds) are members of PVF Holdings LLC and own common units of PVF Holdings LLC. The Goldman Sachs Funds common units in PVF Holdings LLC correspond to 102,386,912 shares of common stock. The Goldman Sachs Group, Inc., and Goldman, Sachs & Co. may be deemed to beneficially own indirectly, in the aggregate, all of the common stock owned by PVF Holdings LLC because (i) affiliates of Goldman, Sachs & Co. and The Goldman Sachs Group, Inc. are the general partner, managing general partner, managing partner, managing member or member of the Goldman Sachs Funds and (ii) the Goldman Sachs Funds control PVF Holdings LLC and have the power to vote or dispose of all of the common stock of the company owned by PVF Holdings LLC. Goldman, Sachs & Co. is a direct and indirect wholly owned subsidiary of The Goldman Sachs Group, Inc. Goldman, Sachs & Co. is the investment manager of certain of the Goldman Sachs Funds. Shares of common stock that may be deemed to be beneficially owned by the Goldman Sachs Funds that correspond to the Goldman Sachs Funds common units of PVF Holdings LLC consist of: (1) 28,820,018 shares of common stock deemed to be beneficially owned by GS Capital Partners V Fund, L.P. and its general partner, GSCP V Advisors, L.L.C., (2) 14,887,217 shares of common stock deemed to be beneficially owned by GS Capital Partners V Offshore Fund, L.P. and its general partner, GSCP V Offshore Advisors, L.L.C., (3) 9,882,779 shares of common stock deemed to be beneficially owned by GS Capital Partners V Institutional, L.P. and its general partner, GS Advisors V, L.L.C., (4) 1,142,616 shares of common stock deemed to be beneficially owned by GS Capital Partners V GmbH & Co. KG and its managing limited partner, GS Advisors V, L.L.C., (5) 22,244,574 shares of common stock deemed to be beneficially owned by GS Capital Partners VI Fund, L.P. and its general partner, GSCP VI Advisors, L.L.C., (6) 18,502,254 shares of common stock deemed to be beneficially owned by GS Capital Partners VI Offshore Fund, L.P. and its general partner, GSCP VI Offshore Advisors, L.L.C., (7) 6,116,878 shares of common stock deemed to be beneficially owned by GS Capital Partners VI Parallel, L.P. and its general partner, GS Advisors VI, L.L.C., and (8) 790,572 shares of common stock deemed to be beneficially owned by GS Capital Partners VI GmbH & Co. KG and its managing limited partner, GS Advisors VI, L.L.C. Henry Cornell and John F. Daly are managing directors of Goldman, Sachs & Co. Mr. Cornell, Mr. Daly, The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. each disclaims beneficial ownership of the shares of common stock owned directly or indirectly by PVF Holdings LLC and the Goldman Sachs Funds, except to the extent of their pecuniary interest therein, if any. | ||
(2) | Mr. Lane owns no shares of common stock directly. Mr. Lane owns 170,218 shares of common stock, 50,000 shares of restricted common stock and options to purchase 1,758,929 shares of our common stock at an exercise price of $12.48 through a limited partnership. The options were granted to Mr. Lane on September 10, 2008 and will generally vest in one-fourth annual increments on the second, third, fourth and fifth anniversaries of the date of grant. The restricted common stock was granted to Mr. Lane on February 24, 2009 and will generally become fully vested on the fifth anniversary of the date of grant. | |
(3) | Mr. Underhill owns no shares of common stock directly. Mr. Underhill owns 25,706 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Underhill does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Underhill also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Underhill beneficial ownership of any shares of our common stock because they do not give Mr. Underhill the power to vote or dispose of any such shares. Mr. Underhill also owns options to purchase 43,706 shares of our common stock at an exercise price of $11.42. The date of grant of Mr. Underhills options was December 3, 2009. These options will generally vest in equal increments on the third, fourth and fifth anniversaries of the date of grant. | |
(4) | Mr. Lake owns no shares of common stock directly. Mr. Lake owns 25,706 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Lake does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Lake also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Lake beneficial ownership of any shares of our common stock because they do not give Mr. Lake the power to vote or dispose of any such shares. Mr. Lake also owns options to purchase 87,413 shares of our common stock at an exercise price of $11.42. The date of grant of Mr. Lakes options was |
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December 3, 2009. These options will generally vest in equal increments on the third, fourth and fifth anniversaries of the date of grant. | ||
(5) | Mr. Ittner owns no shares of common stock directly. Mr. Ittner owns 12,798 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Ittner does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Ittner also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Ittner beneficial ownership of any shares of our common stock because they do not give Mr. Ittner the power to vote or dispose of any such shares. Mr. Ittner also owns options to purchase 43,706 shares of our common stock at an exercise price of $11.42. The date of grant of Mr. Ittners options was December 3, 2009. These options will generally vest in equal increments on the third, fourth and fifth anniversaries of the date of grant. | |
(6) | Mr. Isaac owns no shares of common stock directly. Mr. Isaac owns 64,101 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Isaac does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Isaac also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Isaac beneficial ownership of any shares of our common stock because they do not give Mr. Isaac the power to vote or dispose of any such shares. Mr. Isaac also owns options to purchase 43,706 shares of our common stock at an exercise price of $11.42. The date of grant of Mr. Isaacs options was December 3, 2009. These options will generally vest in equal increments on the third, fourth and fifth anniversaries of the date of grant. | |
(7) | Mr. Hutchinson owns no shares of common stock directly. Mr. Hutchinson owns 25,706 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Hutchinson does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Hutchinson also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Hutchinson beneficial ownership of any shares of our common stock because they do not give Mr. Hutchinson the power to vote or dispose of any such shares. Mr. Hutchinson also owns options to purchase 131,119 shares of our common stock at an exercise price of $11.42. The date of grant of Mr. Hutchinsons options was December 3, 2009. These options will generally vest in equal increments on the third, fourth and fifth anniversaries of the date of grant. | |
(8) | Mr. Wagstaff owns no shares of common stock directly. Mr. Wagstaff owns 1,551,291 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Wagstaff does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Wagstaff also owns options to purchase 87,143 shares of our common stock at an exercise price of $11.44. The date of grant of Mr. Wagstaffs options was April 1, 2010. These options will generally vest in equal increments on the third, fourth and fifth anniversaries of the date of grant. | |
(9) | Mr. Anthony owns 28,369 shares of common stock and 7,300 shares of restricted common stock directly. Mr. Anthony also owns options to purchase 17,021 shares of our common stock at an exercise price of $12.48 and options to purchase 5,394 shares of our common stock at an exercise price of $9.27. The dates of the grants of Mr. Anthonys options were October 3, 2008 and May 12, 2010, respectively. The options for 17,021 shares will generally vest in one-third annual increments on the third, fourth and fifth anniversaries of the date of grant. The options for 5,394 shares will generally vest in one-fourth annual increments on the second, third, fourth and fifth anniversaries of the date of grant. The date of grant of Mr. Anthonys restricted common stock was September 10, 2009. This restricted common stock will generally become vested on the fifth anniversary of the date of grant. | |
(10) | Mr. Best owns no shares of common stock directly. Mr. Best owns 63,991 shares indirectly due to his limited liability companys ownership of common units in PVF Holdings LLC. Mr. Best does not have the power to vote or dispose of shares of common stock that correspond to such limited liability companys ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Best also owns options to purchase 38,131 shares of our common stock at an exercise price of $4.81 and options to purchase 5,394 shares of our common stock at an exercise price of $9.27. The dates of the grants for the |
118
options were December 24, 2007 and May 12, 2010, respectively. The options for 38,131 shares will generally vest in equal annual increments on each of December 1, 2010, 2011 and 2012. The options for 5,394 shares will generally vest in one-fourth annual increments on the second, third, fourth and fifth anniversaries of the date of grant. | ||
(11) | Mr. Boylan owns no shares of common stock directly. Mr. Boylan owns 127,982 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Boylan does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Boylan also owns options to purchase 38,131 shares of our common stock at an exercise price of $4.81. The date of grant for the options was December 24, 2007. The options will generally vest in one-third annual increments on the third, fourth and fifth anniversaries of the date of grant. | |
(12) | Mr. Ketchum owns no shares of common stock directly. Mr. Ketchum owns common units in PVF Holdings LLC both directly and through a limited liability company which correspond to 5,648,791 shares of common stock. Mr. Ketchum does not have the power to vote or dispose of shares of common stock that correspond to his ownership or his limited liability companys ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Ketchum also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Ketchum beneficial ownership of any shares of our common stock because they do not give Mr. Ketchum the power to vote or dispose of any such shares. | |
(13) | Mr. Krans owns no shares of common stock directly. Mr. Krans owns 10,600,489 shares indirectly through his ownership of common units in PVF Holdings LLC. Mr. Krans does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Krans also owns options to purchase 5,394 shares of our common stock at an exercise price of $9.27. The date of grant of Mr. Krans options was May 12, 2010. The options will generally vest in one-fourth annual increments on the second, third, fourth and fifth anniversaries of the date of grant. | |
(14) | Dr. Linse owns 21,575 shares of common stock directly. Dr. Linse also owns options to purchase 10,787 shares of our common stock at an exercise price of $9.27. The date of grant of Dr. Linses options was May 12, 2010. The options will generally vest in one-fourth annual increments on the second, third, fourth and fifth anniversaries of the date of grant. | |
(15) | Mr. Perkins owns 43,706 shares of common stock directly. Mr. Perkins also owns options to purchase 8,741 shares of our common stock at an exercise price of $11.42. The date of grant of Mr. Perkinss options was December 3, 2009. These options will generally vest in one-fourth annual increments on the second, third, fourth and fifth anniversaries of the date of grant. | |
(16) | Mr. Wehrle owns no shares of common stock directly. Mr. Wehrle owns 2,607,138 shares through his ownership of common units in PVF Holdings LLC. Mr. Wehrle does not have the power to vote or dispose of shares of common stock that correspond to his ownership of common units in PVF Holdings LLC and thus does not have beneficial ownership of such shares. Mr. Wehrle also owns profits units in PVF Holdings LLC. These profits units do not give Mr. Wehrle beneficial ownership of any shares of our common stock because they do not give Mr. Wehrle the power to vote or dispose of any such shares. | |
(17) | The number of shares of common stock owned by all directors and executive officers, as a group, reflects (i) all shares of common stock directly owned by PVF Holdings LLC, with respect to which Henry Cornell and John F. Daly may be deemed to share beneficial ownership, (ii) 170,218 shares of unrestricted common stock and 50,000 shares of restricted common stock held indirectly by Andrew R. Lane, the chairman, president and chief executive officer and a director of McJunkin Red Man Holding Corporation through a limited partnership, (iii) 28,369 shares of unrestricted common stock and 7,300 shares of restricted common stock held directly by Leonard Anthony, a director of McJunkin Red Man Holding Corporation; (iv) 21,575 shares of unrestricted common stock held directly by Dr. Cornelis A. Linse, a director of McJunkin Red Man Holding Corporation; and (v) 43,706 shares of unrestricted common stock held directly by John Perkins, a director of McJunkin Red Man Holding Corporation. |
119
Common Units |
Profits Units |
|||||||
Owned Directly |
Owned Directly |
|||||||
Name of Beneficial Owner
|
or Indirectly | or Indirectly | ||||||
The Goldman Sachs Funds
|
203,365.2099 | | ||||||
Andrew R. Lane
|
| | ||||||
James F. Underhill
|
51.0592 | 597.3853 | ||||||
Stephen W. Lake
|
51.0592 | 127.1033 | ||||||
Gary A. Ittner
|
25.6386 | 381.3098 | ||||||
Rory M. Isaac
|
127.3212 | 381.3098 | ||||||
Scott A. Hutchinson
|
51.0592 | 165.2342 | ||||||
Neil P. Wagstaff
|
3,081.2400 | | ||||||
Leonard M. Anthony
|
| | ||||||
Rhys J. Best
|
127.1033 | | ||||||
Peter C. Boylan III
|
254.2065 | | ||||||
Henry Cornell
|
| | ||||||
Christopher A.S. Crampton
|
| | ||||||
John F. Daly
|
| | ||||||
Craig Ketchum
|
11,219.8688 | 381.3098 | ||||||
Gerard P. Krans
|
21,055.1400 | | ||||||
Dr. Cornelis A. Linse
|
| | ||||||
John A. Perkins
|
| | ||||||
H.B. Wehrle, III
|
5,128.1093 | 381.3098 | ||||||
The Goldman Sachs Funds and all of our directors and executive
officers, as a group
|
244,537.0152 | 2,414.9620 | ||||||
Other holders of common units of PVF Holdings, LLC, as a group
|
90,001.8910 | 2,707.2994 | ||||||
Total
|
334,538.9062 | 5,122.2614 | ||||||
120
121
Monthly 2010 |
Square |
|||||||||||||||
Location
|
Rent | Term | Expiration | Feet | Renewal Option | |||||||||||
Artesia, NM
|
$ | 2,200 | 5 years | May 31, 2013 | 8,750 | One five-year renewal option | ||||||||||
Lovington, NM
|
$ | 2,350 | 3 years | September 30, 2012 | 6,000 | Open option to renew | ||||||||||
Tulsa, OK
|
$ | 3,000 | 3 years | March 31, 2012 | 7,980 | One five-year renewal option | ||||||||||
Woodward, OK
|
$ | 3,500 | 5 years | July 31, 2012 | 6,000 | None |
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Monthly Rent |
||||||||||||||||
as of |
Square |
|||||||||||||||
Location
|
December 2010 | Term | Expiration | Feet | Renewal Option | |||||||||||
Hurricane, WV
|
$ | 10,005 | 3 years | December 31, 2013 | 17,350 | Four three-year renewal options | ||||||||||
Corbin, KY
|
$ | 4,473 | 3 years | May 31, 2012 | 8,000 | None |
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Proceeds from Distributions |
Proceeds from Distributions |
|||||||||||
Name
|
Paid on Common Units | Paid on Profits Units | Total | |||||||||
Randy K. Adams
|
$ | 6,131.28 | $ | 48,420.00 | $ | 54,551.28 | ||||||
Rhys J. Best(1)
|
$ | 194,826.51 | | $ | 194,826.51 | |||||||
Peter C. Boylan, III(2)
|
$ | 389,653.01 | | $ | 389,653.01 | |||||||
David Fox, III(3)
|
$ | 1,975,013.20 | | $ | 1,975,013.20 | |||||||
Ken Hayes
|
$ | 82,772.33 | $ | 16,140.00 | $ | 98,912.33 | ||||||
Harry K. Hornish, Jr
|
$ | 584,479.57 | | $ | 584,479.57 | |||||||
Scott A. Hutchinson
|
$ | 78,264.60 | $ | 20,982.00 | $ | 99,246.60 | ||||||
Rory M. Isaac
|
$ | 195,160.51 | $ | 48,420.00 | $ | 243,580.51 | ||||||
Russell L. Isaacs
|
$ | 137,300.00 | | $ | 137,300.00 | |||||||
Gary A. Ittner
|
$ | 39,299.30 | $ | 48,420.00 | $ | 87,719.30 | ||||||
Craig Ketchum(4)
|
$ | 17,198,047.58 | $ | 48,420.00 | $ | 17,246,467.58 | ||||||
Kent Ketchum(5)
|
$ | 6,878,317.54 | $ | 24,210.00 | $ | 6,902,527.54 | ||||||
Stephen W. Lake
|
$ | 78,264.59 | $ | 16,140.00 | $ | 94,404.59 | ||||||
Jeffrey Lang
|
$ | 38,965.30 | $ | 48,420.00 | $ | 87,385.30 | ||||||
Diana D. Morris
|
$ | 19,482.65 | | $ | 19,482.65 | |||||||
Dennis Niver
|
$ | 333.99 | $ | 32,280.00 | $ | 32,613.99 | ||||||
Dee Paige
|
$ | 77,930.60 | $ | 72,630.00 | $ | 150,560.60 | ||||||
James F. Underhill
|
$ | 78,264.60 | $ | 75,858.00 | $ | 154,122.60 | ||||||
E. Gaines Wehrle(6)
|
$ | 7,306,083.68 | | $ | 7,306,083.68 | |||||||
H.B. Wehrle, III
|
$ | 7,860,472.35 | $ | 48,420.00 | $ | 7,908,892.35 | ||||||
Stephen D. Wehrle
|
$ | 6,627,379.72 | $ | 24,210.00 | $ | 6,651,589.72 | ||||||
Michael H. Wehrle
|
$ | 7,095,097.13 | | $ | 7,095,097.13 | |||||||
Martha G. Wehrle
|
$ | 870,319.63 | | $ | 870,319.63 | |||||||
Other Wehrle Family Members(7)
|
$ | 34,345,051.67 | | $ | 34,345,051.67 | |||||||
Other Ketchum Family Members(8)
|
$ | 19,238,151.48 | | $ | 19,238,151.48 | |||||||
All executive officers, directors and their immediate family
members
|
$ | 111,395,062.82 | $ | 572,970.00 | $ | 111,968,032.82 |
(1) | Mr. Best holds common units in PVF Holdings LLC through a limited liability company which he controls. |
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(2) | Mr. Boylan holds common units in PVF Holdings LLC through a limited liability company which he owns and controls. | |
(3) | The $1,975,013.20 that is indicated as being distributed on account of Mr. Foxs common units (including common units) was distributed to a trust established by Mr. Fox. Of this sum, $993,087.61 was distributed with respect to common units and $81,345.60 was paid as a tax distribution with respect to restricted common units. The balance of this sum ($900,579.99) relates to proceeds of the dividend distributed with respect to restricted common units which are being held by PVF Holdings LLC subject to vesting of the restricted common units. | |
(4) | Craig Ketchum was paid $17,197,713.60 in proceeds with respect to common units held by a limited liability company which he controls. Craig Ketchum received $333.99 in proceeds with respect to common units that he holds directly. | |
(5) | Kent Ketchum was paid $6,877,983.55 in proceeds with respect to common units held by a limited liability company which he controls. Kent Ketchum received $333.99 in proceeds with respect to common units that he holds directly. | |
(6) | The $7,306,083.68 that is indicated as being distributed with respect to Mr. Wehrles common units was distributed to a trust established by Mr. Wehrle. | |
(7) | As used in this table, Other Wehrle Family Members include the immediate family members of H.B. Wehrle, III, E. Gaines Wehrle, Stephen D. Wehrle and Michael H. Wehrle. | |
(8) | As used in this table, Other Ketchum Family Members include the immediate family members of Craig Ketchum and Kent Ketchum. |
125
126
127
128
129
130
| may not rely on applicable interpretations of the staff of the SEC; and | |
| must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. |
131
132
133
134
135
136
| are pari passu in right of payment; | |
| are secured equally and ratably; | |
| vote together on any matter submitted to the holders for a vote, including waivers and amendments; and | |
| are otherwise treated as a single class for all purposes under the indenture, including redemptions and offers to purchase. |
| are general senior secured obligations of the Issuer; | |
| share, equally and ratably with all obligations of the Issuer under any other Priority Lien Debt, in the benefits of Liens held by the collateral trustee on all Notes Priority Collateral from time to time owned by the Issuer, which Liens will be junior to all Permitted Prior Liens on the Notes Priority Collateral and senior to the Liens on the Notes Priority Collateral securing any future Subordinated Lien Obligations; | |
| share, equally and ratably with all obligations of the Issuer under any other Priority Lien Debt, in the benefits of the Liens held by the collateral trustee on the ABL Priority Collateral, which Liens will be junior to all Permitted Prior Liens on the ABL Priority Collateral, including Liens securing the ABL Debt Obligations, |
137
and, consequently, the notes will be effectively junior to all ABL Debt Obligations to the extent of the value of the ABL Priority Collateral; |
| are structurally subordinated to any existing and future Indebtedness and other liabilities of the Issuers non-Guarantor Subsidiaries; | |
| are pari passu in right of payment with all existing and future Indebtedness of the Issuer that is not subordinated; | |
| are senior in right of payment to any existing and future subordinated Indebtedness of the Issuer; and | |
| are guaranteed on a senior secured basis by the Subsidiary Guarantors, and on a senior unsecured basis by Parent, as described under the caption The Note Guarantees. |
| is a general senior secured obligation of that Subsidiary Guarantor; | |
| shares, equally and ratably with all obligations of that Subsidiary Guarantor under any other Priority Lien Debt, in the benefit of Liens on all Notes Priority Collateral from time to time owned by that Subsidiary Guarantor, which Liens will be junior to all Permitted Prior Liens on the Notes Priority Collateral and senior to the Liens on the Notes Priority Collateral securing any future Subordinated Lien Obligations; | |
| shares, equally and ratably with all obligations of that Subsidiary Guarantor under any other Priority Lien Debt, in the benefits of the Liens held by the collateral trustee on the ABL Priority Collateral of that Subsidiary Guarantor, which Liens will be junior to all Permitted Prior Liens on the ABL Priority Collateral, including Liens securing the ABL Debt Obligations, and, consequently, the Note Guarantees will be effectively junior to all ABL Debt Obligations to the extent of the value of the ABL Priority Collateral of that Subsidiary Guarantor; | |
| is pari passu in right of payment with all existing and future Indebtedness of that Subsidiary Guarantor that is not subordinated; and | |
| is senior in right of payment to any future subordinated Indebtedness of that Subsidiary Guarantor. |
138
139
| the notes; | |
| all other Priority Lien Obligations outstanding from time to time; and | |
| all Subordinated Lien Obligations outstanding from time to time, if any. |
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
Year
|
Percentage | |||
2012
|
107.125% | |||
2013
|
104.750% | |||
2014
|
102.375% | |||
2015 and thereafter
|
100.000% |
162
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167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
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185
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188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
| dealers in securities or currencies; | |
| traders in securities; | |
| U.S. Holders (as defined below) whose functional currency is not the United States dollar; | |
| persons holding outstanding notes or exchange notes as part of a conversion, constructive sale, wash sale or other integrated transaction or a hedge, straddle or synthetic security; | |
| persons subject to the alternative minimum tax; | |
| certain United States expatriates; | |
| financial institutions; | |
| insurance companies; | |
| controlled foreign corporations and passive foreign investment companies, and shareholders of such corporations; | |
| regulated investment companies; | |
| real estate investment trusts; | |
| entities that are tax-exempt for United States federal income tax purposes and retirement plans, individual retirement accounts and tax-deferred accounts; and | |
| pass-through entities, including partnerships and entities and arrangements classified as partnerships for United States federal tax purposes, and beneficial owners of pass-through entities. |
225
| an individual citizen or resident of the United States; | |
| a corporation (or other entity classified as a corporation) created or organized in or under the laws of the United States, any State thereof or the District of Columbia; | |
| an estate, the income of which is subject to United States federal income taxation regardless of the source of such income; or |
226
| a trust, if (1) a United States court is able to exercise primary supervision over the trusts administration and one or more United States persons (within the meaning of the Internal Revenue Code) has the authority to control all of the trusts substantial decisions, or (2) the trust has a valid election in effect under applicable Treasury regulations to be treated as a United States person. |
227
228
| the amount realized on the disposition (less any amount attributable to accrued interest, which will be taxable as ordinary interest income to the extent not previously included in gross income, in the manner described under Certain Material United States Federal Tax Considerations U.S. Holders Stated Interest and Original Issue Discount); and | |
| your adjusted tax basis in the exchange notes. |
| to any payments made to you of principal of and interest on your exchange note, and | |
| to payment of the proceeds of a sale or other disposition of your exchange note, |
229
| you do not, directly or indirectly, actually or constructively, own ten percent or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of section 871(h)(3) of the Internal Revenue Code and the Treasury regulations thereunder; | |
| you are not a controlled foreign corporation for United States federal income tax purposes that is related, directly or indirectly, to us through sufficient stock ownership (as provided in the Internal Revenue Code); | |
| you are not a bank receiving interest described in section 881(c)(3)(A) of the Internal Revenue Code; | |
| such interest is not effectively connected with your conduct of a United States trade or business; and | |
| you provide a signed written statement, on an Internal Revenue Service Form W-8BEN (or other applicable form) which can reliably be related to you, certifying under penalties of perjury that you are not a United States person within the meaning of the Internal Revenue Code and providing your name and address to: |
230
| in the case of interest payments or disposition proceeds representing accrued interest, you cannot satisfy the requirements of the portfolio interest exception described above or claim a complete exemption from United States federal income tax on such interest under an applicable income tax treaty (and your United States federal income tax liability has not otherwise been fully satisfied through the United States federal withholding tax described above); | |
| in the case of gain, you are an individual who is present in the United States for 183 days or more during the taxable year of the sale or other disposition of your exchange notes and specific other conditions are met (in which case, except as otherwise provided by an applicable income tax treaty, the gain, which may be offset by United States source capital losses, generally will be subject to a flat 30 percent United States federal income tax, even though you are not considered a resident alien under the Internal Revenue Code); or | |
| the interest or gain is effectively connected with your conduct of a United States trade or business and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment maintained by you. |
| you directly or indirectly, actually or constructively, own ten percent or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of section 871(h)(3) of the Internal Revenue Code and the Treasury regulations thereunder; or | |
| your interest on the exchange notes is effectively connected with your conduct of a United States trade or business. |
231
232
233
234
235
Audited Consolidated Financial Statements of McJunkin Red Man
Holding Corporation and Subsidiaries:
|
||
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 |
F-1
F-2
December 31, | ||||||||
2010 | 2009 | |||||||
(In thousands, except per share amounts) | ||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | 56,202 | $ | 56,244 | ||||
Accounts receivable, net
|
596,404 | 506,194 | ||||||
Inventories
|
765,367 | 871,653 | ||||||
Income taxes receivable
|
32,593 | 21,260 | ||||||
Other current assets
|
10,209 | 12,264 | ||||||
Total current assets
|
1,460,775 | 1,467,615 | ||||||
Other assets:
|
||||||||
Debt issuance costs, net
|
32,211 | 35,618 | ||||||
Assets held for sale
|
12,722 | 25,117 | ||||||
Other assets
|
14,212 | 17,605 | ||||||
59,145 | 78,340 | |||||||
Fixed assets:
|
||||||||
Property, plant and equipment, net
|
104,725 | 111,480 | ||||||
Intangible assets:
|
||||||||
Goodwill, net
|
549,384 | 549,733 | ||||||
Other intangible assets, net
|
893,365 | 952,188 | ||||||
1,442,749 | 1,501,921 | |||||||
$ | 3,067,394 | $ | 3,159,356 | |||||
Liabilities and stockholders equity
|
||||||||
Current liabilities:
|
||||||||
Trade accounts payable
|
$ | 426,632 | $ | 338,512 | ||||
Accrued expenses and other current liabilities
|
102,807 | 120,816 | ||||||
Deferred revenue
|
18,140 | 17,023 | ||||||
Deferred income taxes
|
70,636 | 51,984 | ||||||
Current portion of long-term debt
|
| 9,114 | ||||||
Total current liabilities
|
618,215 | 537,449 | ||||||
Long-term obligations:
|
||||||||
Long-term debt, net
|
1,360,241 | 1,443,496 | ||||||
Deferred income taxes
|
331,183 | 354,064 | ||||||
Payable to shareholders
|
2,028 | 16,665 | ||||||
Other liabilities
|
17,869 | 15,684 | ||||||
1,711,321 | 1,829,909 | |||||||
Commitments and contingencies
|
||||||||
Stockholders equity:
|
||||||||
Common stock, $0.01 par value per share;
800,000 shares authorized,
|
||||||||
issued and outstanding December 2010 168,808, issued
and
|
||||||||
outstanding December 2009 168,735
|
1,688 | 1,687 | ||||||
Preferred stock, $0.01 par value per share;
150,000 shares authorized,
|
||||||||
no shares issued and outstanding
|
| | ||||||
Additional
paid-in-capital
|
1,273,716 | 1,269,772 | ||||||
Retained (deficit)
|
(517,690 | ) | (466,116 | ) | ||||
Accumulated other comprehensive loss
|
(19,856 | ) | (13,345 | ) | ||||
737,858 | 791,998 | |||||||
$ | 3,067,394 | $ | 3,159,356 | |||||
F-3
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Sales
|
$ | 3,845,536 | $ | 3,661,922 | $ | 5,255,166 | ||||||
Cost of sales (exclusive of depreciation and
|
||||||||||||
amortization shown separately below)
|
3,256,641 | 3,006,346 | 4,217,371 | |||||||||
Inventory write-down
|
362 | 46,491 | | |||||||||
Gross margin
|
588,533 | 609,085 | 1,037,795 | |||||||||
Operating expenses:
|
||||||||||||
Selling, general and administrative expenses
|
447,808 | 408,564 | 482,084 | |||||||||
Depreciation and amortization
|
16,579 | 14,516 | 11,335 | |||||||||
Amortization of intangibles
|
53,852 | 46,575 | 44,398 | |||||||||
Goodwill impairment charge
|
| 309,900 | | |||||||||
Total operating expenses
|
518,239 | 779,555 | 537,817 | |||||||||
Operating income (loss)
|
70,294 | (170,470 | ) | 499,978 | ||||||||
Other income (expense):
|
||||||||||||
Interest expense
|
(139,641 | ) | (116,504 | ) | (84,493 | ) | ||||||
Change in fair value of derivative instruments
|
(4,926 | ) | 8,946 | (6,233 | ) | |||||||
Net gain on early extinguishment of debt
|
| 1,304 | | |||||||||
Other, net
|
(904 | ) | (1,830 | ) | (2,503 | ) | ||||||
(145,471 | ) | (108,084 | ) | (93,229 | ) | |||||||
(Loss) income before income taxes
|
(75,177 | ) | (278,554 | ) | 406,749 | |||||||
Income tax (benefit) expense
|
(23,353 | ) | 13,117 | 153,263 | ||||||||
Net (loss) income
|
$ | (51,824 | ) | $ | (291,671 | ) | $ | 253,486 | ||||
Basic (loss) earnings per common share
|
$ | (0.31 | ) | $ | (1.84 | ) | $ | 1.63 | ||||
Diluted (loss) earnings per common share
|
$ | (0.31 | ) | $ | (1.84 | ) | $ | 1.63 | ||||
Weighted-average common shares, basic
|
168,768 | 158,134 | 155,292 | |||||||||
Weighted-average common shares, diluted
|
168,768 | 158,134 | 155,656 | |||||||||
Dividends per common share
|
$ | | $ | 0.02 | $ | 3.05 |
F-4
Accumulated |
||||||||||||||||||||||||||||
Additional |
Retained |
Other |
Total |
|||||||||||||||||||||||||
Common Stock |
Paid-in |
Earnings |
Comprehensive |
Noncontrolling |
Stockholders |
|||||||||||||||||||||||
Shares | Amount | Capital | (Deficit) | Income (Loss) | Interest | Equity | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balance at December 31, 2007
|
150,074 | $ | 1,501 | $ | 1,152,647 | $ | 49,969 | $ | (810 | ) | $ | 59,263 | $ | 1,262,570 | ||||||||||||||
Net income
|
| | | 253,486 | | | 253,486 | |||||||||||||||||||||
Foreign currency translation
|
| | | | (36,869 | ) | | (36,869 | ) | |||||||||||||||||||
Change in fair value of derivative instruments (net of
$10.3 million of deferred income taxes)
|
| | | | (17,410 | ) | | (17,410 | ) | |||||||||||||||||||
Net comprehensive income
|
199,207 | |||||||||||||||||||||||||||
Shares released from escrow associated with the acquisition of
Red Man Pipe & Supply Co.
|
896 | 9 | 7,016 | | | | 7,025 | |||||||||||||||||||||
Equity contribution
|
4,928 | 49 | 41,299 | | | | 41,348 | |||||||||||||||||||||
Payment of stock subscription receivable
|
| | 1,033 | | | | 1,033 | |||||||||||||||||||||
Dividends
|
| | | (475,000 | ) | | | (475,000 | ) | |||||||||||||||||||
Equity-based compensation expense
|
| | 10,241 | | | | 10,241 | |||||||||||||||||||||
Redemption of noncontrolling interest
|
| | | | | (59,263 | ) | (59,263 | ) | |||||||||||||||||||
Balance at December 31, 2008
|
155,898 | 1,559 | 1,212,236 | (171,545 | ) | (55,089 | ) | | 987,161 | |||||||||||||||||||
Net loss
|
| | | (291,671 | ) | | | (291,671 | ) | |||||||||||||||||||
Foreign currency translation
|
| | | | 23,434 | | 23,434 | |||||||||||||||||||||
Pension related adjustments, net of tax
|
| | | | 651 | | 651 | |||||||||||||||||||||
Change in fair value of derivative instrument
|
| | | | 1,761 | | 1,761 | |||||||||||||||||||||
Fair value of derivative instrument reclassified into earnings
|
| | | | 15,898 | | 15,898 | |||||||||||||||||||||
Net comprehensive loss
|
(249,927 | ) | ||||||||||||||||||||||||||
Common stock issued for acquisition of Transmark Fcx
|
12,733 | 128 | 49,276 | | | | 49,404 | |||||||||||||||||||||
Equity contribution
|
43 | | 500 | | | | 500 | |||||||||||||||||||||
Restricted stock vested during period
|
65 | | | | | | | |||||||||||||||||||||
Repurchase of common stock
|
(4 | ) | | (70 | ) | | | | (70 | ) | ||||||||||||||||||
Dividends
|
| | | (2,900 | ) | | | (2,900 | ) | |||||||||||||||||||
Equity-based compensation expense
|
| | 7,830 | | | | 7,830 | |||||||||||||||||||||
Balance at December 31, 2009
|
168,735 | 1,687 | 1,269,772 | (466,116 | ) | (13,345 | ) | | 791,998 | |||||||||||||||||||
Net loss
|
| | | (51,824 | ) | | | (51,824 | ) | |||||||||||||||||||
Foreign currency translation
|
| | | | (4,707 | ) | | (4,707 | ) | |||||||||||||||||||
Pension related adjustments, net of tax
|
| | | | (1,804 | ) | | (1,804 | ) | |||||||||||||||||||
Net comprehensive loss
|
(58,335 | ) | ||||||||||||||||||||||||||
Equity contribution
|
| | 200 | | | | 200 | |||||||||||||||||||||
Restricted stock vested during period
|
73 | 1 | | | | | 1 | |||||||||||||||||||||
Forfeited dividends on forfeited unvested restricted stock
|
| | | 250 | | | 250 | |||||||||||||||||||||
Equity-based compensation expense
|
| | 3,744 | | | | 3,744 | |||||||||||||||||||||
Balance at December 31, 2010
|
168,808 | $ | 1,688 | $ | 1,273,716 | $ | (517,690 | ) | $ | (19,856 | ) | $ | | $ | 737,858 | |||||||||||||
F-5
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Operating activities
|
||||||||||||
Net (loss) income
|
$ | (51,824 | ) | $ | (291,671 | ) | $ | 253,486 | ||||
Adjustments to reconcile net (loss) income to net cash provided
by
|
||||||||||||
(used in) operations:
|
||||||||||||
Depreciation and amortization
|
16,579 | 14,516 | 11,335 | |||||||||
Amortization of intangibles
|
53,852 | 46,575 | 44,398 | |||||||||
Amortization of debt issuance costs
|
11,800 | 6,900 | 5,208 | |||||||||
Deferred income tax expense (benefit)
|
2,673 | (21,137 | ) | (18,661 | ) | |||||||
Equity-based compensation expense
|
3,744 | 7,830 | 10,241 | |||||||||
Increase (decrease) in LIFO reserve
|
74,557 | (115,597 | ) | 126,210 | ||||||||
Inventory write-down
|
362 | 46,491 | | |||||||||
Change in fair value of derivative instruments
|
4,926 | (8,946 | ) | 6,233 | ||||||||
Hedge termination
|
(25,038 | ) | | | ||||||||
Amortization and release of previously designated hedge from OCI
|
| 27,925 | | |||||||||
Goodwill and other intangible asset impairment
|
| 309,900 | | |||||||||
Net gain on early extinguishment of debt
|
| (1,304 | ) | | ||||||||
Provision for uncollectible accounts
|
(2,042 | ) | 994 | 7,681 | ||||||||
Nonoperating (gains) losses and other items not (providing)
using cash
|
260 | (573 | ) | 1,927 | ||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(83,648 | ) | 311,613 | (265,282 | ) | |||||||
Inventories
|
27,098 | 521,528 | (594,089 | ) | ||||||||
Income taxes
|
(12,278 | ) | (79,827 | ) | 41,770 | |||||||
Other current assets
|
1,249 | 9,296 | (8,528 | ) | ||||||||
Accounts payable
|
85,074 | (193,825 | ) | 160,787 | ||||||||
Deferred revenue
|
1,071 | (18,322 | ) | 34,342 | ||||||||
Accrued expenses and other current liabilities
|
4,043 | (66,874 | ) | 45,587 | ||||||||
Net cash provided by (used in) operations
|
112,458 | 505,492 | (137,355 | ) | ||||||||
Investing activities
|
||||||||||||
Purchases of property, plant and equipment
|
(14,307 | ) | (16,698 | ) | (20,874 | ) | ||||||
Proceeds from the disposition of assets
|
3,054 | 6,518 | 2,430 | |||||||||
Acquisitions:
|
||||||||||||
Dresser Oil Tools, Inc.
|
(9,446 | ) | | | ||||||||
The South Texas Supply Company, Inc., net of cash of $781
|
(2,947 | ) | | | ||||||||
Transmark Fcx, net of cash of $42,989
|
| (55,490 | ) | | ||||||||
LaBarge Pipe & Steel Company, net of cash of $2,163
|
| | (152,089 | ) | ||||||||
Red Man Pipe & Supply Co., net of cash of $13,886
|
| | (14,896 | ) | ||||||||
Purchase of remaining 49% interest in Midfield Supply ULC
|
| | (100,000 | ) | ||||||||
Payment of shareholder loans in connection with the purchase
|
||||||||||||
of remaining 49% interest in Midfield Supply ULC
|
| | (31,749 | ) | ||||||||
Proceeds from the sale of assets held for sale, net of payment
to shareholders
|
4,060 | | | |||||||||
Other investment and notes receivable transactions
|
3,351 | (1,266 | ) | 2,935 | ||||||||
Net cash used in investing activities
|
(16,235 | ) | (66,936 | ) | (314,243 | ) | ||||||
Financing activities
|
||||||||||||
Proceeds from issuance of long-term obligations
|
47,897 | 975,330 | 450,000 | |||||||||
Payments on long-term obligations
|
| (997,359 | ) | (5,750 | ) | |||||||
Net (payments) proceeds on/from revolving credit facilities
|
(141,899 | ) | (342,476 | ) | 452,832 | |||||||
Debt issuance costs paid
|
(4,386 | ) | (26,875 | ) | (12,361 | ) | ||||||
Cash equity contributions
|
200 | 500 | 41,348 | |||||||||
Repurchase of common stock
|
| (70 | ) | | ||||||||
Dividends paid
|
| (2,900 | ) | (475,000 | ) | |||||||
Dividends held in escrow for restricted stock shareholders
|
| | 906 | |||||||||
Forfeited dividends on forfeited unvested restricted stock
|
250 | | | |||||||||
Net cash (used in) provided by financing activities
|
(97,938 | ) | (393,850 | ) | 451,975 | |||||||
(Decrease) increase in cash
|
(1,715 | ) | 44,706 | 377 | ||||||||
Effect of foreign exchange rate on cash
|
1,673 | (567 | ) | 1,653 | ||||||||
Cash beginning of period
|
56,244 | 12,105 | 10,075 | |||||||||
Cash end of period
|
$ | 56,202 | $ | 56,244 | $ | 12,105 | ||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid for interest
|
$ | 125,419 | $ | 78,398 | $ | 84,740 | ||||||
Cash (received) paid for income taxes
|
$ | (10,250 | ) | $ | 112,620 | $ | 130,978 |
F-6
NOTE 1 | SIGNIFICANT ACCOUNTING POLICIES |
F-7
F-8
F-9
F-10
F-11
F-12
NOTE 2 | TRANSACTIONS |
F-13
2010 |
2009 |
2008 |
||||||||||
Acquisition of |
Acquisition of |
Acquisition of |
||||||||||
South Texas Supply |
Transmark Fcx |
LaBarge Pipe & |
||||||||||
and Dresser | Group BV | Steel Company | ||||||||||
Consideration:
|
||||||||||||
Cash consideration paid
|
$ | 13.2 | $ | 98.5 | $ | 150.4 | ||||||
Transaction costs(1)
|
| | 3.8 | |||||||||
Total cash consideration
|
13.2 | 98.5 | 154.2 | |||||||||
Common stock issued
|
| 49.4 | | |||||||||
Total consideration
|
$ | 13.2 | $ | 147.9 | $ | 154.2 | ||||||
Number of shares issued
|
| 12.7 | | |||||||||
Fair value of shares issued
|
$ | | $ | 49.4 | $ | | ||||||
Net assets acquired:
|
||||||||||||
Cash
|
$ | 0.7 | $ | 43.0 | $ | 2.3 | ||||||
Accounts receivable
|
7.1 | 71.9 | 21.7 | |||||||||
Inventory
|
7.3 | 65.1 | 138.6 | |||||||||
Other current assets
|
| 11.4 | | |||||||||
Fixed assets
|
0.9 | 11.1 | 4.4 | |||||||||
Other assets
|
0.1 | 11.2 | 0.9 | |||||||||
Customer base intangibles
|
| 43.0 | 33.0 | |||||||||
Trade name
|
| 14.0 | 1.1 | |||||||||
Sales order backlog
|
| 6.0 | | |||||||||
Goodwill
|
3.6 | 44.4 | 0.3 | |||||||||
Accounts payable
|
(5.5 | ) | (47.2 | ) | (43.7 | ) | ||||||
Accrued expenses
|
(0.6 | ) | (22.0 | ) | (4.4 | ) | ||||||
Income taxes payable
|
| (6.8 | ) | | ||||||||
Deferred income taxes
|
| (12.8 | ) | | ||||||||
Debt
|
| (80.2 | ) | | ||||||||
Other liabilities
|
(0.4 | ) | (4.2 | ) | | |||||||
$ | 13.2 | $ | 147.9 | $ | 154.2 | |||||||
Goodwill deductible for tax purposes
|
No | No | Yes |
(1) | Prior to the adoption of ASC 805 (on January 1, 2009), transaction costs were capitalized as a component of the purchase price of the acquisition. Subsequent to the adoption, transaction costs are expensed as incurred. |
F-14
2009 | ||||
Pro forma sales
|
$ | 3,933 | ||
Pro forma net loss
|
(278 | ) | ||
Loss per common share, basic
|
$ | (1.65 | ) | |
Loss per common share, diluted
|
$ | (1.65 | ) |
NOTE 3 | ACCOUNTS RECEIVABLE |
December 31, |
||||||||||||
2010 | 2009 | 2008 | ||||||||||
Allowance for doubtful accounts
|
||||||||||||
Beginning balance
|
$ | 8,790 | $ | 9,915 | $ | 2,247 | ||||||
Net charge-offs
|
(2,297 | ) | (2,119 | ) | (536 | ) | ||||||
Other
|
| | 523 | |||||||||
Provision
|
(2,042 | ) | 994 | 7,681 | ||||||||
Ending balance
|
$ | 4,451 | $ | 8,790 | $ | 9,915 | ||||||
NOTE 4 | INVENTORIES |
December 31, | ||||||||
2010 | 2009 | |||||||
Finished goods inventory at average cost:
|
||||||||
Energy carbon steel tubular products
|
$ | 396,611 | $ | 503,948 | ||||
Valves, fittings, flanges and all other products
|
481,137 | 402,690 | ||||||
877,748 | 906,638 | |||||||
Less: Excess of average cost over LIFO cost (LIFO reserve)
|
(101,419 | ) | (26,862 | ) | ||||
Less: Other inventory reserves
|
(10,962 | ) | (8,123 | ) | ||||
$ | 765,367 | $ | 871,653 | |||||
F-15
NOTE 5 | PROPERTY, PLANT AND EQUIPMENT |
December 31, | ||||||||||||
Depreciable Life | 2010 | 2009 | ||||||||||
Land and improvements
|
| $ | 24,685 | $ | 17,918 | |||||||
Building and building improvements
|
40 years | 48,803 | 47,052 | |||||||||
Machinery and equipment
|
3 to 10 years | 70,960 | 69,542 | |||||||||
Construction in progress
|
| 2,902 | 3,597 | |||||||||
Property held under capital leases
|
20 to 30 years | 2,089 | 2,089 | |||||||||
149,439 | 140,198 | |||||||||||
Allowances for depreciation and amortization
|
(44,714 | ) | (28,718 | ) | ||||||||
$ | 104,725 | $ | 111,480 | |||||||||
NOTE 6 | GOODWILL AND OTHER INTANGIBLE ASSETS |
North America | International | Total | ||||||||||
Balances at December 31, 2008
|
$ | 807,250 | $ | | $ | 807,250 | ||||||
Goodwill impairment charge
|
(309,900 | ) | | (309,900 | ) | |||||||
Acquisition of Transmark
|
| 44,441 | 44,441 | |||||||||
Other
|
(172 | ) | | (172 | ) | |||||||
Effect of foreign currency translation
|
9,396 | (1,282 | ) | 8,114 | ||||||||
Balances at December 31, 2009:
|
||||||||||||
Goodwill
|
816,474 | 43,159 | 859,633 | |||||||||
Accumulated impairment losses
|
(309,900 | ) | | (309,900 | ) | |||||||
Net goodwill at December 31, 2009
|
506,574 | 43,159 | 549,733 | |||||||||
Acquisition of South Texas Supply and Dresser
|
3,591 | | 3,591 | |||||||||
Other
|
(687 | ) | | (687 | ) | |||||||
Effect of foreign currency translation
|
| (3,253 | ) | (3,253 | ) | |||||||
Balances at December 31, 2010:
|
||||||||||||
Goodwill
|
819,378 | 39,906 | 859,284 | |||||||||
Accumulated impairment losses
|
(309,900 | ) | | (309,900 | ) | |||||||
Net goodwill at December 31, 2010
|
$ | 509,478 | $ | 39,906 | $ | 549,384 | ||||||
F-16
Weighted- |
||||||||||||||||
Average |
||||||||||||||||
Amortization |
Accumulated |
Net Book |
||||||||||||||
Period (in years) | Gross | Amortization | Value | |||||||||||||
December 31, 2010
|
||||||||||||||||
Customer base
|
16.2 | $ | 693,809 | $ | (149,312 | ) | $ | 544,497 | ||||||||
Amortizable trade names
|
5.9 | 21,699 | (9,264 | ) | 12,435 | |||||||||||
Unamortizable trade names
|
N/A | 336,223 | | 336,223 | ||||||||||||
Noncompete agreements
|
5 | 970 | (760 | ) | 210 | |||||||||||
Sales order backlog
|
1 | 8,914 | (8,914 | ) | | |||||||||||
15.8 | $ | 1,061,615 | $ | (168,250 | ) | $ | 893,365 | |||||||||
December 31, 2009
|
||||||||||||||||
Customer base
|
16.2 | $ | 696,489 | $ | (103,327 | ) | $ | 593,162 | ||||||||
Amortizable trade names
|
5.9 | 22,643 | (5,244 | ) | 17,399 | |||||||||||
Unamortizable trade names
|
N/A | 336,223 | | 336,223 | ||||||||||||
Noncompete agreements
|
5 | 970 | (566 | ) | 404 | |||||||||||
Sales order backlog
|
1 | 9,526 | (4,526 | ) | 5,000 | |||||||||||
15.8 years | $ | 1,065,851 | $ | (113,663 | ) | $ | 952,188 | |||||||||
2011
|
$ | 49.4 | ||
2012
|
47.3 | |||
2013
|
47.3 | |||
2014
|
47.3 | |||
2015
|
47.3 |
F-17
NOTE 7 | LONG-TERM DEBT |
December 31, | ||||||||
2010 | 2009 | |||||||
Issuer:
|
||||||||
9.50% senior secured notes due 2016, net of discount of
$22,062 and $24,670
|
$ | 1,027,938 | $ | 975,330 | ||||
Asset-based revolving credit facility
|
286,398 | 340,126 | ||||||
Non-Guarantors:
|
||||||||
Midfield revolving credit facility
|
1,297 | 50,209 | ||||||
Midfield term loan facility
|
14,415 | 13,680 | ||||||
MRC Transmark revolving credit facility
|
23,214 | 52,791 | ||||||
MRC Transmark term loan facility
|
| 10,750 | ||||||
MRC Transmark factoring facility
|
6,979 | 9,034 | ||||||
Other
|
| 690 | ||||||
1,360,241 | 1,452,610 | |||||||
Less current portion
|
| 9,114 | ||||||
$ | 1,360,241 | $ | 1,443,496 | |||||
F-18
Year
|
Percentage | |||
2012
|
107.125 | % | ||
2013
|
104.750 | % | ||
2014
|
102.375 | % | ||
2015 and thereafter
|
100.000 | % |
F-19
| A first-priority security interest in personal property consisting of inventory and accounts receivable; | |
| A second-priority pledge of certain of the capital stock held by us or any subsidiary guarantor; and | |
| A second-priority security interest in, and mortgages on, substantially all of our other tangible and intangible assets and of each subsidiary guarantor. |
F-20
F-21
MRC Transmarks Leverage Ratio
|
Margin | |||
Less than or equal to 0.75:1
|
1.50 | % | ||
Greater than 0.75:1, but less than or equal to 1.00:1
|
1.75 | % | ||
Greater than 1.00:1, but less than or equal to 1.50:1
|
2.00 | % | ||
Greater than 1.50:1, but less than or equal to 2.00:1
|
2.25 | % | ||
Greater than 2.00:1
|
2.50 | % |
F-22
Eligible |
||||||||||||||||||||
Collateral (up |
||||||||||||||||||||
Commitment |
to Commitment |
Amount |
Letters of |
|||||||||||||||||
Amount | Amount) | Outstanding | Credit | Availability | ||||||||||||||||
ABL
|
$ | 900 | $ | 651 | $ | 286 | $ | 5 | $ | 360 | ||||||||||
Midfield Revolver
|
80 | 71 | 2 | | 69 | |||||||||||||||
MRC Transmark Revolver
|
80 | 80 | 23 | 11 | 46 | |||||||||||||||
$ | 1,060 | $ | 802 | $ | 311 | $ | 16 | $ | 475 | |||||||||||
Cash on hand:
|
56 | |||||||||||||||||||
Liquidity at December 31, 2010:
|
$ | 531 | ||||||||||||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
9.50% senior secured notes due December 2016
|
9.88 | % | 9.87 | % | ||||
Asset-based revolving credit facility
|
3.34 | % | 3.29 | % | ||||
Midfield revolving credit facility
|
5.00 | % | 4.25 | % | ||||
Midfield term loan facility
|
5.86 | % | 4.40 | % | ||||
Transmark revolving credit facility
|
2.61 | % | 2.96 | % | ||||
Transmark term loan facility
|
| 2.42 | % | |||||
Transmark factoring facility
|
1.46 | % | 1.16 | % | ||||
Other
|
| 5.50 | % | |||||
8.29 | % | 7.72 | % | |||||
2011
|
$ | | ||
2012
|
22,691 | |||
2013
|
309,612 | |||
2014
|
| |||
2015
|
| |||
Thereafter
|
1,027,938 |
NOTE 8 | DERIVATIVE FINANCIAL INSTRUMENTS |
F-23
December 31, 2010 | December 31, 2009 | |||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||
Interest rate contracts(1)
|
$ | | $ | 8,975 | $ | | $ | 26,773 | ||||||||
Foreign exchange forward contracts(2)
|
| 209 | | 955 |
(1) | Included in Accrued expenses and other current liabilities in our consolidated balance sheets. The total notional amount of our interest rate contracts approximated $.5 billion and $1.2 billion at December 31, 2010 and 2009. | |
(2) | Included in Other current assets and Accrued expenses and other current liabilities in our consolidated balance sheets. The total notional amount of our foreign exchange forward contracts approximated $8 million and $21 million at December 31, 2010 and 2009. |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||
Interest rate contracts(1)
|
$ | | $ | (27,925 | ) | $ | (255 | ) | ||||
Derivatives not designated as hedging instruments:
|
||||||||||||
Interest rate contracts
|
(5,548 | ) | 8,045 | (5,978 | ) | |||||||
Foreign exchange forward contracts
|
622 | 901 | |
(1) | On June 29, 2009, we removed the designation of our $700 million swap as a cash flow hedge. As a result, we reclassified $28 million from accumulated other comprehensive income to earnings. The amount is included in Interest expense in our consolidated statements of income. |
F-24
NOTE 9 | INCOME TAXES |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
United States
|
$ | (59,375 | ) | $ | (197,216 | ) | $ | 385,338 | ||||
Foreign
|
(15,802 | ) | (81,338 | ) | 21,411 | |||||||
$ | (75,177 | ) | $ | (278,554 | ) | $ | 406,749 | |||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Current:
|
||||||||||||
Federal
|
$ | (26,111 | ) | $ | 32,684 | $ | 149,123 | |||||
State
|
(1,709 | ) | 3,609 | 13,885 | ||||||||
Foreign
|
1,794 | (2,039 | ) | 8,916 | ||||||||
(26,026 | ) | 34,254 | 171,924 | |||||||||
Deferred:
|
||||||||||||
Federal
|
5,801 | (18,156 | ) | (15,252 | ) | |||||||
State
|
458 | (1,401 | ) | (2,462 | ) | |||||||
Foreign
|
(3,586 | ) | (1,580 | ) | (947 | ) | ||||||
2,673 | (21,137 | ) | (18,661 | ) | ||||||||
Income tax (benefit) expense
|
$ | (23,353 | ) | $ | 13,117 | $ | 153,263 | |||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Federal tax expense at statutory rates
|
$ | (26,311 | ) | $ | (97,576 | ) | $ | 142,362 | ||||
State taxes
|
(813 | ) | 1,436 | 7,424 | ||||||||
Nondeductible expenses
|
1,024 | 1,303 | 766 | |||||||||
Goodwill impairment charge
|
| 104,049 | | |||||||||
Foreign
|
701 | 3,501 | 475 | |||||||||
Change in valuation allowance
|
1,615 | | | |||||||||
Other
|
431 | 404 | 2,236 | |||||||||
Income tax (benefit) expense
|
$ | (23,353 | ) | $ | 13,117 | $ | 153,263 | |||||
Effective tax rate
|
31.1 | % | (4.7 | )% | 37.7 | % | ||||||
F-25
December 31, | ||||||||
2010 | 2009 | |||||||
Deferred tax assets:
|
||||||||
Accounts receivable valuation
|
$ | 1,141 | $ | 3,419 | ||||
Accruals and reserves
|
2,445 | 8,808 | ||||||
Net operating loss carryforwards
|
3,005 | 2,389 | ||||||
Other
|
3,103 | 1,730 | ||||||
Total deferred tax assets
|
9,694 | 16,346 | ||||||
Valuation allowance
|
(1,615 | ) | | |||||
8,079 | 16,346 | |||||||
Deferred tax liabilities:
|
||||||||
Accounts receivable
|
(4,550 | ) | (4,549 | ) | ||||
Inventory valuation
|
(73,470 | ) | (62,306 | ) | ||||
Property, plant and equipment
|
(21,006 | ) | (12,281 | ) | ||||
Interest in foreign subsidiary
|
(9,813 | ) | (7,829 | ) | ||||
Investments
|
| (7,269 | ) | |||||
Intangible assets
|
(294,537 | ) | (321,087 | ) | ||||
Debt
|
(5,745 | ) | (5,744 | ) | ||||
Other
|
(777 | ) | (1,329 | ) | ||||
Total deferred tax liabilities
|
(409,898 | ) | (422,394 | ) | ||||
Net deferred tax liability
|
$ | (401,819 | ) | $ | (406,048 | ) | ||
F-26
NOTE 10 | STOCKHOLDERS EQUITY |
December 31, | ||||||||
2010 | 2009 | |||||||
Currency translation adjustments
|
$ | (18,703 | ) | $ | (13,996 | ) | ||
Pension related adjustments
|
(1,153 | ) | 651 | |||||
Accumulated other comprehensive loss
|
$ | (19,856 | ) | $ | (13,345 | ) | ||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net (loss) income
|
$ | (51,824 | ) | $ | (291,671 | ) | $ | 253,486 | ||||
Average basic shares outstanding
|
168,768 | 158,134 | 155,292 | |||||||||
Effect of dilutive securities
|
| | 364 | |||||||||
Average dilutive shares outstanding
|
168,768 | 158,134 | 155,656 | |||||||||
Net (loss) income per share:
|
||||||||||||
Basic
|
$ | (0.31 | ) | $ | (1.84 | ) | $ | 1.63 | ||||
Diluted
|
$ | (0.31 | ) | $ | (1.84 | ) | $ | 1.63 |
F-27
NOTE 11 | EMPLOYEE BENEFIT PLANS |
Weighted |
||||||||||||||||
Weighted |
Average |
|||||||||||||||
Average |
Remaining |
Aggregate |
||||||||||||||
Exercise |
Contractual |
Intrinsic |
||||||||||||||
Options | Price | Term | Value | |||||||||||||
(years) | (thousands) | |||||||||||||||
Stock Options
|
||||||||||||||||
Balance at December 31, 2009
|
3,979,210 | $ | 9.77 | |||||||||||||
Granted
|
190,702 | 11.31 | ||||||||||||||
Exercised
|
| | ||||||||||||||
Forfeited
|
(215,843 | ) | 8.38 | |||||||||||||
Expired
|
(16,947 | ) | 4.82 | |||||||||||||
Balance at December 31, 2010
|
3,937,122 | $ | 9.95 | 7.7 | $ | 3,021 | ||||||||||
At December 31, 2010:
|
||||||||||||||||
Options exercisable
|
809,363 | $ | 8.99 | 7.2 | $ | 994 | ||||||||||
Options outstanding and vested
|
809,363 | $ | 8.99 | 7.2 | $ | 994 | ||||||||||
Options outstanding, vested and expected to vest
|
3,729,121 | $ | 10.02 | 7.7 | $ | 2,795 |
Weighted |
||||||||
Average |
||||||||
Grant-Date |
||||||||
Shares | Fair Value | |||||||
Restricted Stock
|
||||||||
Nonvested at December 31, 2009
|
227,885 | $ | 5.57 | |||||
Granted
|
| | ||||||
Vested
|
(50,664 | ) | 4.71 | |||||
Forfeited
|
(21,756 | ) | 4.71 | |||||
Nonvested at December 31, 2010
|
155,465 | $ | 5.97 | |||||
F-28
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Stock Options
|
||||||||||||
Weighted-average, grant-date fair value of awards granted
|
$ | 2.55 | $ | 0.91 | $ | 3.82 | ||||||
Total intrinsic value of stock options exercised
|
$ | | $ | | $ | | ||||||
Total fair value of stock options vested
|
$ | 727,441 | $ | 23,061 | $ | | ||||||
Restricted Stock
|
||||||||||||
Weighted-average, grant-date fair value of awards granted
|
$ | | $ | 466,505 | $ | | ||||||
Total fair value of restricted stock vested
|
$ | 514,082 | $ | 955,866 | $ | |
Year Ended December 31, |
||||||||||||
2010 | 2009 | 2008 | ||||||||||
Risk-free interest rate
|
2.54 | % | 2.45 | % | 3.14 | % | ||||||
Dividend yield(1)
|
0.00 | % | 0.00 | % | 0.00 | % | ||||||
Expected volatility
|
22.07 | % | 22.07 | % | 22.07 | % | ||||||
Expected life (in years)
|
6.2 | 6.2 | 6.2 |
(1) | The expected dividend yield reflects the restriction on our ability to pay dividends and does not anticipate special dividends. |
F-29
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Equity-based compensation expense:
|
||||||||||||
Stock options
|
$ | 2,425 | $ | 3,077 | $ | 1,911 | ||||||
Restricted stock
|
253 | 247 | 241 | |||||||||
Restricted common units
|
(337 | ) | 2,466 | 1,130 | ||||||||
Profit units
|
1,403 | 2,040 | 6,959 | |||||||||
Total equity-based compensation expense
|
$ | 3,744 | $ | 7,830 | $ | 10,241 | ||||||
Income tax benefits related to equity-based compensation
|
$ | 1,383 | $ | 2,892 | $ | 3,584 | ||||||
Weighted- |
||||||||
Average Vesting |
December 31, |
|||||||
Period (in years) | 2010 | |||||||
Unrecognized equity-based compensation expense:
|
||||||||
Stock options
|
2.8 | $ | 9,994 | |||||
Restricted stock
|
2.5 | 610 | ||||||
Restricted common units
|
| | ||||||
Profit units
|
1.5 | 2,012 | ||||||
Total unrecognized equity-based compensation expense
|
$ | 12,616 | ||||||
F-30
Approximate |
||
Country
|
Employer Contribution
|
|
Belgium
|
Service prior to January 1, 1999, contributions at a rate of 1.5% of salary | |
Service after January 1, 1999, contributions at a rate of 4% of salary | ||
Australia
|
Statutory minimum of 9% of salary | |
United Kingdom
|
Employer contributions at rates of 5%, 8% and 10% of salary | |
New Zealand
|
Service after April 1, 2008, statutory minimum of 1% of salary in 2008, and 2% of salary thereafter | |
Service prior to April 1, 2008, contributions at a rate of 5% of salary | ||
France
|
Employer contribution rate of 6% of salary |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Defined contribution plans
|
$ | 5,179 | $ | 4,075 | $ | 3,152 | ||||||
Profit-sharing expenses
|
| | 25,530 | |||||||||
$ | 5,179 | $ | 4,075 | $ | 28,682 | |||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Change in projected benefit obligation:
|
||||||||
Projected benefit obligation at beginning of period
|
$ | 26,277 | $ | | ||||
Acquisition of Transmark
|
| 26,744 | ||||||
Service cost
|
927 | 168 | ||||||
Interest cost
|
1,315 | 234 | ||||||
Actuarial loss
|
2,362 | 30 | ||||||
Benefits paid
|
(1,139 | ) | (211 | ) | ||||
Expenses paid
|
(133 | ) | | |||||
Foreign currency exchange
|
(2,071 | ) | (688 | ) | ||||
Projected benefit obligation at end of period
|
$ | 27,538 | $ | 26,277 | ||||
Accumulated benefit obligation at end of period
|
$ | 25,388 | $ | 24,702 | ||||
F-31
December 31, | ||||||||
2010 | 2009 | |||||||
Change in plan assets:
|
||||||||
Fair value of plan assets at beginning of period
|
$ | 29,838 | $ | | ||||
Acquisition of Transmark
|
| 29,059 | ||||||
Return on plan assets
|
1,703 | 1,115 | ||||||
Employer contributions
|
755 | 356 | ||||||
Participant contributions
|
457 | 408 | ||||||
Benefits paid
|
(1,139 | ) | (211 | ) | ||||
Expenses paid
|
(133 | ) | | |||||
Foreign currency exchange
|
(2,250 | ) | (889 | ) | ||||
Fair value of plan assets at end of period
|
$ | 29,231 | $ | 29,838 | ||||
Funded status and net amounts recognized:
|
||||||||
Plan assets, net of projected benefit obligation
|
$ | 1,693 | $ | 3,561 | ||||
Unrecognized actuarial loss (gain)
|
1,401 | (814 | ) | |||||
Net amount recognized in the consolidated balance sheets
|
$ | 3,094 | $ | 2,747 | ||||
Amounts recognized in the consolidated balance sheets consist of:
|
||||||||
Noncurrent other assets
|
$ | 2,306 | $ | 4,393 | ||||
Noncurrent other liabilities
|
(613 | ) | (832 | ) | ||||
Accrued benefit obligation
|
1,693 | 3,561 | ||||||
Other comprehensive income loss (income)
|
1,401 | (814 | ) | |||||
Net amount recognized in the consolidated balance sheets
|
$ | 3,094 | $ | 2,747 | ||||
Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
Service cost
|
$ | 927 | $ | 168 | ||||
Interest cost
|
1,315 | 234 | ||||||
Expected return on plan assets
|
(1,498 | ) | (248 | ) | ||||
Net periodic pension cost
|
$ | 744 | $ | 154 | ||||
F-32
Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
Benefit obligation:
|
||||||||
Discount rate
|
5.00% | 5.38% | ||||||
Rate of compensation increase
|
2.00% | 2.00% | ||||||
Benefit cost:
|
||||||||
Discount rate
|
5.00% | 5.38% | ||||||
Rate of compensation increase
|
2.00% | 2.00% | ||||||
Expected return on plan assets
|
5.55% | 5.93% |
2010 | 2009 | |||||||
Fixed income securities
|
73% | 76% | ||||||
Equity securities
|
22% | 19% | ||||||
Insurance contracts
|
5% | 5% | ||||||
Total
|
100% | 100% | ||||||
F-33
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, 2010
|
||||||||||||||||
Cash and cash equivalents
|
$ | 200 | $ | 200 | $ | | $ | | ||||||||
Fixed income
|
19,250 | 19,250 | | | ||||||||||||
Mutual fund
|
5,886 | 5,886 | | | ||||||||||||
Insurance contracts
|
3,895 | | 3,895 | | ||||||||||||
$ | 29,231 | $ | 25,336 | $ | 3,895 | $ | | |||||||||
December 31, 2009
|
||||||||||||||||
Cash and cash equivalents
|
$ | 223 | $ | 223 | $ | | $ | | ||||||||
Fixed income
|
20,098 | 20,098 | | | ||||||||||||
Mutual fund
|
5,667 | 5,667 | | | ||||||||||||
Insurance contracts
|
3,850 | | 3,850 | | ||||||||||||
$ | 29,838 | $ | 25,988 | $ | 3,850 | $ | | |||||||||
2011
|
$ | 1,164 | ||
2012
|
1,231 | |||
2013
|
1,543 | |||
2014
|
1,333 | |||
2015
|
1,948 | |||
2016-2020
|
7,692 |
F-34
NOTE 12 | RELATED-PARTY TRANSACTIONS |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Affiliates of the Goldman Sachs Funds
|
$ | 700 | $ | 10,750 | $ | 4,400 | ||||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Hansford Associates
|
$ | 2,545 | $ | 2,547 | $ | 2,468 | ||||||
Appalachian Leasing
|
174 | 170 | 165 | |||||||||
Prideco
|
1,510 | 2,374 | 3,281 | |||||||||
Former Midfield shareholders
|
2,484 | 1,998 | 1,138 | |||||||||
$ | 6,713 | $ | 7,089 | $ | 7,052 | |||||||
F-35
2015 and |
||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | thereafter | ||||||||||||||||
Hansford Associates
|
$ | 2,237 | $ | 652 | $ | 528 | $ | 203 | $ | | ||||||||||
Appalachian Leasing
|
174 | 142 | 120 | | | |||||||||||||||
Prideco
|
557 | 83 | 13 | | | |||||||||||||||
Former Midfield shareholders
|
2,010 | 1,563 | 1,238 | 686 | 551 | |||||||||||||||
$ | 4,978 | $ | 2,440 | $ | 1,899 | $ | 889 | $ | 551 | |||||||||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Affiliates of the Goldman Sachs Funds
|
$ | 24,430 | $ | 17,839 | $ | 41,968 | ||||||
Year Ended December 31, | ||||||||
2010 | 2009 | |||||||
Affiliates of the Goldman Sachs Funds
|
$ | 1,900 | $ | 1,223 | ||||
NOTE 13 | SEGMENT, GEOGRAPHIC AND PRODUCT LINE INFORMATION |
F-36
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Sales
|
||||||||||||
North America
|
$ | 3,589.9 | $ | 3,610.1 | $ | 5,255.2 | ||||||
International
|
255.6 | 51.8 | | |||||||||
Consolidated revenues
|
$ | 3,845.5 | $ | 3,661.9 | $ | 5,255.2 | ||||||
Depreciation and amortization
|
||||||||||||
North America
|
$ | 14.8 | $ | 14.0 | $ | 11.3 | ||||||
International
|
1.8 | 0.5 | | |||||||||
Total depreciation and amortization expense
|
$ | 16.6 | $ | 14.5 | $ | 11.3 | ||||||
Amortization of intangibles
|
||||||||||||
North America
|
$ | 44.1 | $ | 44.6 | $ | 44.4 | ||||||
International
|
9.8 | 2.0 | | |||||||||
Total amortization of intangibles expense
|
$ | 53.9 | $ | 46.6 | $ | 44.4 | ||||||
Goodwill impairment charge
|
||||||||||||
North America
|
$ | | $ | 309.9 | $ | | ||||||
International
|
| | | |||||||||
Total goodwill impairment charge
|
$ | | $ | 309.9 | $ | | ||||||
Operating income (loss)
|
||||||||||||
North America
|
$ | 59.9 | $ | (174.3 | ) | $ | 500.0 | |||||
International
|
10.4 | 3.8 | | |||||||||
Total operating income (loss)
|
70.3 | (170.5 | ) | 500.0 | ||||||||
Interest expense
|
139.6 | 116.5 | 84.5 | |||||||||
Other expense (income)
|
5.9 | (8.4 | ) | 8.8 | ||||||||
(Loss) income before income taxes
|
$ | (75.2 | ) | $ | (278.6 | ) | $ | 406.7 | ||||
December 31, | ||||||||
2010 | 2009 | |||||||
Goodwill
|
||||||||
North America
|
$ | 509.5 | $ | 506.6 | ||||
International
|
39.9 | 43.1 | ||||||
Total goodwill
|
$ | 549.4 | $ | 549.7 | ||||
Total assets
|
||||||||
North America
|
$ | 2,824.9 | $ | 2,848.5 | ||||
International
|
242.5 | 310.9 | ||||||
Total assets
|
$ | 3,067.4 | $ | 3,159.4 | ||||
F-37
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Revenues
|
||||||||||||
United States
|
80 | % | 88 | % | 88 | % | ||||||
Canada
|
13 | % | 11 | % | 12 | % | ||||||
International(1)
|
7 | % | 1 | % | | |||||||
100 | % | 100 | % | 100 | % | |||||||
December 31, | ||||||||
2010 | 2009 | |||||||
Fixed assets
|
||||||||
United States
|
63% | 62% | ||||||
Canada
|
28% | 29% | ||||||
International(1)
|
9% | 9% | ||||||
100% | 100% | |||||||
(1) | International includes our operations in Europe, Asia and Australasia. |
Year Ended December 31, | ||||||||||||
Type
|
2010 | 2009 | 2008 | |||||||||
Energy carbon steel tubular products
|
38% | 40% | 44% | |||||||||
Oilfield and natural gas distribution products
|
62% | 60% | 56% | |||||||||
100% | 100% | 100% | ||||||||||
NOTE 14 | FAIR VALUE MEASUREMENTS |
F-38
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
December 31, 2010
|
||||||||||||||||
Assets:
|
$ | | $ | | $ | | $ | | ||||||||
Liabilities:
|
||||||||||||||||
Interest rate swap agreements
|
8,975 | | 8,975 | | ||||||||||||
Foreign exchange forward contracts
|
209 | | 209 | | ||||||||||||
December 31, 2009
|
||||||||||||||||
Assets:
|
||||||||||||||||
Assets held for sale (marketable equity securities)
|
$ | 22,690 | $ | 22,690 | $ | | $ | | ||||||||
Liabilities:
|
||||||||||||||||
Foreign exchange forward contracts
|
955 | | 955 | | ||||||||||||
Interest rate swap agreements
|
26,773 | | 26,773 | |
December 31, 2010 | December 31, 2009 | |||||||||||||||
Carrying |
Estimated |
Carrying |
Estimated |
|||||||||||||
Value | Fair Value | Value | Fair Value | |||||||||||||
Financial assets
|
||||||||||||||||
Cash
|
$ | 56,202 | $ | 56,202 | $ | 56,244 | $ | 56,244 | ||||||||
Accounts receivable, net
|
596,404 | 596,404 | 506,194 | 506,194 | ||||||||||||
Financial liabilities
|
||||||||||||||||
Trade accounts payable
|
426,632 | 426,632 | 338,512 | 338,512 | ||||||||||||
Accrued expenses and other liabilities
|
102,807 | 102,807 | 120,816 | 120,816 | ||||||||||||
Long-term debt
|
1,360,241 | 1,292,826 | 1,452,610 | 1,435,110 |
NOTE 15 | COMMITMENTS AND CONTINGENCIES |
F-39
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Operating rental expense
|
$ | 37,804 | $ | 30,371 | $ | 24,982 | ||||||
Operating |
Capital |
|||||||
Leases | Leases | |||||||
2011
|
$ | 27,576 | $ | 1,181 | ||||
2012
|
22,445 | 1,192 | ||||||
2013
|
16,265 | 1,203 | ||||||
2014
|
10,627 | 1,087 | ||||||
2015
|
8,382 | 754 | ||||||
Thereafter
|
5,618 | 3,195 | ||||||
$ | 90,913 | $ | 8,612 | |||||
F-40
| That our future settlement payments, disease mix and dismissal rates will be materially consistent with historic experience; | |
| That future incidences of asbestos-related diseases in the U.S. will be materially consistent with current public health estimates; | |
| That the rates at which future asbestos-related mesothelioma incidences result in compensable claims filings against us will be materially consistent with its historic experience; | |
| That insurance recoveries for settlement payments and defense costs will be materially consistent with historic experience; | |
| That legal standards (and the interpretation of these standards) applicable to asbestos litigation will not change in material respects; | |
| That there are no materially negative developments in the claims pending against us; and | |
| That key co-defendants in current and future claims remain solvent. |
F-41
NOTE 16 | GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS |
December 31, 2010 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Cash
|
$ | 1.1 | $ | 4.4 | $ | | $ | 50.7 | $ | | $ | 56.2 | ||||||||||||
Accounts receivable, net
|
0.7 | 447.1 | | 148.6 | | 596.4 | ||||||||||||||||||
Inventory, net
|
| 625.4 | | 140.0 | | 765.4 | ||||||||||||||||||
Income taxes receivable
|
1.0 | 89.8 | | 1.9 | (60.1 | ) | 32.6 | |||||||||||||||||
Other current assets
|
| 2.7 | 2.1 | 5.4 | | 10.2 | ||||||||||||||||||
Total current assets
|
2.8 | 1,169.4 | 2.1 | 346.6 | (60.1 | ) | 1,460.8 |
F-42
December 31, 2010 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Investment in subsidiaries
|
734.7 | 478.3 | | | (1213.0 | ) | | |||||||||||||||||
Intercompany receivable
|
6.5 | | 480.2 | | (486.7 | ) | | |||||||||||||||||
Other assets
|
| 138.0 | 0.1 | 9.7 | (88.7 | ) | 59.1 | |||||||||||||||||
Fixed assets, net
|
| 46.3 | 19.9 | 38.5 | | 104.7 | ||||||||||||||||||
Goodwill
|
| 509.5 | | 39.9 | | 549.4 | ||||||||||||||||||
Other intangible assets, net
|
| 823.5 | | 69.9 | | 893.4 | ||||||||||||||||||
$ | 744.0 | $ | 3,165.0 | $ | 502.3 | $ | 504.6 | $ | (1,848.5 | ) | $ | 3,067.4 | ||||||||||||
Trade accounts payable
|
$ | | $ | 306.5 | $ | 1.1 | $ | 119.0 | $ | | $ | 426.6 | ||||||||||||
Accrued expenses
|
0.1 | 67.2 | 11.1 | 24.4 | | 102.8 | ||||||||||||||||||
Income taxes payable
|
| | 60.1 | | (60.1 | ) | | |||||||||||||||||
Deferred revenue
|
| 17.4 | | 0.7 | | 18.1 | ||||||||||||||||||
Deferred income taxes
|
| 73.2 | (0.6 | ) | (2.0 | ) | | 70.6 | ||||||||||||||||
Total current liabilities
|
0.1 | 464.3 | 71.7 | 142.1 | (60.1 | ) | 618.1 | |||||||||||||||||
Long-term debt, net
|
| 1,314.3 | | 134.6 | (88.7 | ) | 1,360.2 | |||||||||||||||||
Intercompany payable
|
| 327.6 | | 159.1 | (486.7 | ) | | |||||||||||||||||
Other liabilities
|
6.1 | 324.1 | 3.4 | 17.7 | | 351.3 | ||||||||||||||||||
Shareholders equity
|
737.8 | 734.7 | 427.2 | 51.1 | (1,213.0 | ) | 737.8 | |||||||||||||||||
$ | 744.0 | $ | 3,165.0 | $ | 502.3 | $ | 504.6 | $ | (1,848.5 | ) | $ | 3,067.4 | ||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Cash
|
$ | 0.4 | $ | 5.1 | $ | | $ | 50.7 | $ | | $ | 56.2 | ||||||||||||
Accounts receivable, net
|
0.6 | 344.6 | 0.1 | 163.3 | (2.4 | ) | 506.2 | |||||||||||||||||
Inventory, net
|
| 708.3 | | 163.4 | | 871.7 | ||||||||||||||||||
Income taxes receivable
|
5.9 | 53.5 | | (2.3 | ) | (35.8 | ) | 21.3 | ||||||||||||||||
Other current assets
|
| 3.4 | 1.6 | 7.2 | | 12.2 | ||||||||||||||||||
Total current assets
|
6.9 | 1,114.9 | 1.7 | 382.3 | (38.2 | ) | 1,467.6 | |||||||||||||||||
Investment in subsidiaries
|
788.9 | 451.0 | | | (1,239.9 | ) | | |||||||||||||||||
Intercompany receivable
|
| 0.5 | 423.4 | | (423.9 | ) | | |||||||||||||||||
Other assets
|
1.0 | 145.9 | 0.4 | 10.3 | (79.2 | ) | 78.4 | |||||||||||||||||
Fixed assets, net
|
| 49.6 | 18.9 | 43.0 | | 111.5 | ||||||||||||||||||
Goodwill
|
| 506.6 | | 43.1 | | 549.7 | ||||||||||||||||||
Other intangible assets, net
|
| 863.3 | | 88.9 | | 952.2 | ||||||||||||||||||
$ | 796.8 | $ | 3,131.8 | $ | 444.4 | $ | 567.6 | $ | (1,781.2 | ) | $ | 3,159.4 | ||||||||||||
F-43
December 31, 2009 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Trade accounts payable
|
$ | | $ | 238.4 | $ | 5.9 | $ | 97.1 | $ | (2.9 | ) | $ | 338.5 | |||||||||||
Accrued expenses
|
0.4 | 78.4 | 15.5 | 26.5 | | 120.8 | ||||||||||||||||||
Income taxes payable
|
| | 35.8 | | (35.8 | ) | | |||||||||||||||||
Deferred revenue
|
| 15.5 | | 1.5 | | 17.0 | ||||||||||||||||||
Deferred income taxes
|
| 55.1 | (1.3 | ) | (1.9 | ) | | 51.9 | ||||||||||||||||
Total current liabilities
|
0.4 | 387.4 | 55.9 | 123.2 | (38.7 | ) | 528.2 | |||||||||||||||||
Long-term debt, net
|
| 1,315.5 | | 216.3 | (79.2 | ) | 1,452.6 | |||||||||||||||||
Intercompany payable
|
| 282.8 | | 140.6 | (423.4 | ) | | |||||||||||||||||
Other liabilities
|
4.4 | 357.2 | 4.4 | 20.6 | | 386.6 | ||||||||||||||||||
Shareholders equity
|
792.0 | 788.9 | 384.1 | 66.9 | (1,239.9 | ) | 792.0 | |||||||||||||||||
$ | 796.8 | $ | 3,131.8 | $ | 444.4 | $ | 567.6 | $ | (1,781.2 | ) | $ | 3,159.4 | ||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||||||
Sales
|
$ | | $ | 3,124.8 | $ | | $ | 726.7 | $ | (6.0 | ) | $ | 3,845.5 | |||||||||||||||
Cost of sales
|
| 2,694.5 | | 568.5 | (6.0 | ) | 3,257.0 | |||||||||||||||||||||
Gross margin
|
| 430.3 | | 158.2 | | 588.5 | ||||||||||||||||||||||
Operating expenses
|
0.4 | 291.3 | 82.4 | 144.1 | | 518.2 | ||||||||||||||||||||||
Operating (loss) income
|
(0.4 | ) | 139.0 | (82.4 | ) | 14.1 | | 70.3 | ||||||||||||||||||||
Other (expense) income
|
(1.3 | ) | (267.3 | ) | 153.1 | (30.0 | ) | | (145.5 | ) | ||||||||||||||||||
(Loss) income before taxes
|
(1.7 | ) | (128.3 | ) | 70.7 | (15.9 | ) | | (75.2 | ) | ||||||||||||||||||
Equity in earnings of
|
||||||||||||||||||||||||||||
subsidiary
|
(51.1 | ) | 29.2 | | | 21.9 | | |||||||||||||||||||||
Income tax (benefit)
|
(1.0 | ) | (48.0 | ) | 27.4 | (1.8 | ) | | (23.4 | ) | ||||||||||||||||||
Net (loss) income
|
$ | (51.8 | ) | $ | (51.1 | ) | $ | 43.3 | $ | (14.1 | ) | $ | 21.9 | $ | (51.8 | ) | ||||||||||||
F-44
Year Ended December 31, 2009 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Sales
|
$ | | $ | 3,215.6 | $ | | $ | 448.3 | $ | (2.0 | ) | $ | 3,661.9 | |||||||||||
Cost of sales
|
| 2,641.6 | | 366.7 | (2.0 | ) | 3,006.3 | |||||||||||||||||
Inventory write-down
|
| 44.1 | | 2.4 | | 46.5 | ||||||||||||||||||
Gross margin
|
| 529.9 | | 79.2 | | 609.1 | ||||||||||||||||||
Operating expenses
|
0.3 | 295.3 | 92.1 | 82.0 | | 469.7 | ||||||||||||||||||
Goodwill impairment charge
|
| 240.9 | | 69.0 | | 309.9 | ||||||||||||||||||
Operating (loss) income
|
(0.3 | ) | (6.3 | ) | (92.1 | ) | (71.8 | ) | | (170.5 | ) | |||||||||||||
Other (expense) income
|
(7.1 | ) | (385.0 | ) | 293.6 | (9.6 | ) | | (108.1 | ) | ||||||||||||||
(Loss) income before taxes
|
(7.4 | ) | (391.3 | ) | 201.5 | (81.4 | ) | | (278.6 | ) | ||||||||||||||
Equity in earnings of
|
||||||||||||||||||||||||
subsidiary
|
(286.6 | ) | 47.9 | | | 238.7 | | |||||||||||||||||
Income tax (benefit)
|
(2.3 | ) | (56.8 | ) | 75.8 | (3.6 | ) | | 13.1 | |||||||||||||||
Net (loss) income
|
$ | (291.7 | ) | $ | (286.6 | ) | $ | 125.7 | $ | (77.8 | ) | $ | 238.7 | $ | (291.7 | ) | ||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Sales
|
$ | | $ | 2,653.2 | $ | 1,977.6 | $ | 632.7 | $ | (8.3 | ) | $ | 5,255.2 | |||||||||||
Cost of sales
|
| 2,132.7 | 1,585.9 | 506.4 | (7.6 | ) | 4,217.4 | |||||||||||||||||
Gross margin
|
| 520.5 | 391.7 | 126.3 | (0.7 | ) | 1,037.8 | |||||||||||||||||
Operating expenses
|
7.1 | 211.6 | 228.7 | 90.4 | | 537.8 | ||||||||||||||||||
Operating (loss) income
|
(7.1 | ) | 308.9 | 163.0 | 35.9 | (0.7 | ) | 500.0 | ||||||||||||||||
Other (expense) income
|
(17.1 | ) | (300.7 | ) | 239.1 | (14.5 | ) | | (93.2 | ) | ||||||||||||||
(Loss) income before taxes
|
(24.2 | ) | 8.2 | 402.1 | 21.4 | (0.7 | ) | 406.8 | ||||||||||||||||
Equity in earnings of
|
||||||||||||||||||||||||
subsidiary
|
270.0 | 264.9 | 13.4 | | (548.3 | ) | | |||||||||||||||||
Income tax (benefit)
|
(8.4 | ) | 3.1 | 150.6 | 8.0 | | 153.3 | |||||||||||||||||
Net (loss) income
|
$ | 254.2 | $ | 270.0 | $ | 264.9 | $ | 13.4 | $ | (549.0 | ) | $ | 253.5 | |||||||||||
F-45
Year Ended December 31, 2010 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Cash flows provided by (used in):
|
||||||||||||||||||||||||
Operating activities
|
$ | (0.2 | ) | $ | 32.3 | $ | 5.5 | $ | 74.8 | $ | | $ | 112.4 | |||||||||||
Investing activities
|
0.6 | (13.6 | ) | (5.5 | ) | 2.3 | | (16.2 | ) | |||||||||||||||
Financing activities
|
0.3 | (15.5 | ) | | (82.7 | ) | | (97.9 | ) | |||||||||||||||
Effect of exchange rate on cash
|
| (4.0 | ) | | 5.7 | | 1.7 | |||||||||||||||||
Increase (decrease) in cash
|
0.7 | (0.8 | ) | | 0.1 | | | |||||||||||||||||
Cash beginning of period
|
0.4 | 5.2 | | 50.6 | | 56.2 | ||||||||||||||||||
Cash end of period
|
$ | 1.1 | $ | 4.4 | $ | | $ | 50.7 | $ | | $ | 56.2 | ||||||||||||
Year Ended December 31, 2009 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Cash flows provided by (used in):
|
||||||||||||||||||||||||
Operating activities
|
$ | (9.2 | ) | $ | 480.7 | $ | 4.8 | $ | 29.2 | $ | | $ | 505.5 | |||||||||||
Investing activities
|
(0.2 | ) | (106.3 | ) | (4.9 | ) | 44.5 | | (66.9 | ) | ||||||||||||||
Financing activities
|
9.8 | (377.1 | ) | | (26.6 | ) | | (393.9 | ) | |||||||||||||||
Effect of exchange rate on cash
|
| 1.4 | | (2.0 | ) | | (0.6 | ) | ||||||||||||||||
Increase (decrease) in cash
|
0.4 | (1.3 | ) | (0.1 | ) | 45.1 | | 44.1 | ||||||||||||||||
Cash beginning of period
|
| 6.5 | 0.1 | 5.5 | | 12.1 | ||||||||||||||||||
Cash end of period
|
$ | 0.4 | $ | 5.2 | $ | | $ | 50.6 | $ | | $ | 56.2 | ||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||||||
Non- |
||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Elim | Total | |||||||||||||||||||
Cash flows provided by (used in):
|
||||||||||||||||||||||||
Operating activities
|
$ | (22.5 | ) | $ | (133.7 | ) | $ | (37.2 | ) | $ | 56.0 | $ | | $ | (137.4 | ) | ||||||||
Investing activities
|
(0.9 | ) | (293.4 | ) | 67.5 | (87.4 | ) | | (314.2 | ) | ||||||||||||||
Financing activities
|
23.4 | 426.2 | (29.8 | ) | 32.1 | | 451.9 | |||||||||||||||||
Effect of exchange rate on cash
|
| | 1.0 | 0.7 | | 1.7 | ||||||||||||||||||
Increase (decrease) in cash
|
| (0.9 | ) | 1.5 | 1.4 | | 2.0 | |||||||||||||||||
Cash beginning of period
|
| 5.8 | 0.2 | 4.1 | | 10.1 | ||||||||||||||||||
Cash end of period
|
$ | | $ | 4.9 | $ | 1.7 | $ | 5.5 | $ | | $ | 12.1 | ||||||||||||
F-46
NOTE 17 | QUARTERLY INFORMATION (UNAUDITED) |
First | Second | Third | Fourth | Year | ||||||||||||||||
2010
|
||||||||||||||||||||
Revenues
|
$ | 858.3 | $ | 926.9 | $ | 1,025.5 | $ | 1,034.8 | $ | 3,845.5 | ||||||||||
Gross margin
|
147.3 | 135.1 | 154.5 | 151.6 | 588.5 | |||||||||||||||
Net loss
|
(11.9 | ) | (15.9 | ) | (10.5 | ) | (13.5 | ) | (51.8 | ) | ||||||||||
EPS:
|
||||||||||||||||||||
Basic
|
$ | (0.07 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.31 | ) | |||||
Diluted
|
$ | (0.07 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.31 | ) | |||||
2009
|
||||||||||||||||||||
Revenues
|
$ | 1,153.7 | $ | 857.5 | $ | 822.1 | $ | 828.6 | $ | 3,661.9 | ||||||||||
Gross margin
|
258.0 | 140.5 | 70.7 | 139.9 | 609.1 | |||||||||||||||
Net income (loss)
|
71.8 | 16.7 | (361.7 | ) | (18.5 | ) | (291.7 | ) | ||||||||||||
EPS:
|
||||||||||||||||||||
Basic
|
$ | 0.46 | $ | 0.11 | $ | (2.32 | ) | $ | (0.09 | ) | $ | (1.84 | ) | |||||||
Diluted
|
$ | 0.46 | $ | 0.11 | $ | (2.32 | ) | $ | (0.09 | ) | $ | (1.84 | ) |
F-47
Item 20. | Indemnification of Directors and Officers. |
II-1
II-2
II-3
Item 21. | Exhibits and Financial Statement Schedules. |
Exhibit |
||||
Number
|
Description
|
|||
2 | .1* | Agreement and Plan of Merger, dated as of December 4, 2006, by and among McJunkin Corporation, McJ Holding Corporation and Hg Acquisition Corp. | ||
2 | .1.1* | McJunkin Contribution Agreement, dated as of December 4, 2006, by and among McJunkin Corporation, McJ Holding LLC and certain shareholders of McJunkin Corporation. | ||
2 | .1.2* | McApple Contribution Agreement, dated as of December 4, 2006, among McJunkin Corporation, McJ Holding LLC and certain shareholders of McJunkin Appalachian Oilfield Supply Company. | ||
2 | .2* | Stock Purchase Agreement, dated as of April 5, 2007, by and between McJunkin Development Corporation, Midway-Tristate Corporation and the other parties thereto. | ||
2 | .2.1* | Assignment Agreement, dated as of April 27, 2007, by and among McJunkin Development Corporation, McJunkin Appalachian Oilfield Supply Company, Midway-Tristate Corporation, and John A. Selzer, as Representative of the Shareholders. | ||
2 | .3* | Stock Purchase Agreement, dated as of July 6, 2007, by and among West Oklahoma PVF Company, Red Man Pipe & Supply Co., the Shareholders listed on Schedule 1 thereto, PVF Holdings LLC, and Craig Ketchum, as Representative of the Shareholders. | ||
2 | .3.1* | Contribution Agreement, dated July 6, 2007, by and among McJ Holding LLC and certain shareholders of Red Man Pipe &U Supply Co. | ||
2 | .3.2* | Amendment No. 1 to Stock Purchase Agreement, dated as of October 24, 2007, by and among West Oklahoma PVF Company, Red Man Pipe & Supply Co., and Craig Ketchum, as Representative of the Shareholders. | ||
2 | .3.3* | Joinder Agreement and Amendment No. 2 to the Stock Purchase Agreement, dated as of October 31, 2007, by and among West Oklahoma PVF Company, Red Man Pipe & Supply Co., PVF Holdings LLC, Craig Ketchum, as Representative of the Shareholders, and the other parties thereto. | ||
3 | .1 | Certificate of Incorporation of McJunkin Red Man Corporation. | ||
3 | .2 | Bylaws of McJunkin Red Man Corporation. | ||
3 | .3 | Certificate of Incorporation of McJunkin Red Man Holding Corporation. | ||
3 | .4 | Bylaws of McJunkin Red Man Holding Corporation. | ||
3 | .5 | Certificate of Incorporation of McJunkin Red Man Development Corporation. | ||
3 | .6 | Bylaws of McJunkin Red Man Development Corporation. | ||
3 | .7 | Certificate of Incorporation of McJunkin Nigeria Limited. | ||
3 | .8 | Bylaws of McJunkin Nigeria Limited. | ||
3 | .9 | Certificate of Incorporation of McJunkin-Puerto Rico Corporation. | ||
3 | .10 | Bylaws of McJunkin-Puerto Rico Corporation. | ||
3 | .11 | Certificate of Incorporation of McJunkin-West Africa Corporation. | ||
3 | .12 | Bylaws of McJunkin-West Africa Corporation. | ||
3 | .13 | Certificate of Incorporation of Milton Oil & Gas Company. | ||
3 | .14 | Bylaws of Milton Oil & Gas Company. | ||
3 | .15 | Certificate of Incorporation of Ruffner Realty Company. | ||
3 | .16 | Bylaws of Ruffner Realty Company. | ||
3 | .17 | Certificate of Incorporation of Greenbrier Petroleum Corporation. | ||
3 | .18 | Bylaws of Greenbrier Petroleum Corporation. |
II-4
Exhibit |
||||
Number
|
Description
|
|||
3 | .19 | Certificate of Incorporation of Midway-Tristate Corporation. | ||
3 | .20 | Bylaws of Midway-Tristate Corporation. | ||
3 | .21 | Certificate of Incorporation of MRC Management Company. | ||
3 | .22 | Bylaws of MRC Management Company. | ||
3 | .23 | Certificate of Incorporation of The South Texas Supply Company, Inc. | ||
3 | .24 | Bylaws of The South Texas Supply Company, Inc. | ||
4 | .1 | Indenture, dated as of December 21, 2009, by and among McJunkin Red Man Corporation, the guarantors named therein and U.S. Bank National Association, as trustee. | ||
4 | .2 | Form of 9.50% Senior Secured Notes due December 15, 2016 (included as part of Exhibit 4.1 above). | ||
4 | .3 | Exchange and Registration Rights Agreement, dated as of December 21, 2009, by and among McJunkin Red Man Corporation, McJunkin Red Man Holding Corporation, the subsidiary guarantors party thereto, Goldman, Sachs & Co., Barclays Capital Inc., Banc of America Securities LLC and J.P. Morgan Securities Inc. | ||
4 | .4 | Exchange and Registration Rights Agreement, dated as of February 11, 2010, by and among McJunkin Red Man Corporation, McJunkin Red Man Holding Corporation, the subsidiary guarantors party thereto, Goldman, Sachs & Co. and Barclays Capital Inc. | ||
4 | .5 | Reaffirmation Agreement, dated as of February 11, 2010, by and among McJunkin Red Man Corporation, McJunkin Red Man Holding Corporation, the subsidiary guarantors party thereto, and U.S. Bank National Association, as collateral trustee. | ||
5 | .1 | Opinion of Fried, Frank, Harris, Shriver & Jacobson LLP. | ||
5 | .2 | Opinion of Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. | ||
5 | .3 | Opinion of Bowles Rice McDavid Graff & Love LLP. | ||
10 | .1.1* | Revolving Loan Credit Agreement, dated as of October 31, 2007, by and among McJunkin Red Man Corporation and the other parties thereto. | ||
10 | .1.2* | Joinder Agreement, dated as of June 10, 2008, by and among The Huntington National Bank, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.3* | Joinder Agreement, dated as of June 10, 2008, by and among JP Morgan Chase Bank, N.A., McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.4* | Joinder Agreement, dated as of June 10, 2008, by and among TD Bank, N.A., McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.5* | Joinder Agreement, dated as of June 10, 2008, by and among United Bank Inc., McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.6** | Joinder Agreement, dated as of October 3, 2008, by and among Raymond James Bank, FSB, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.7** | Joinder Purchase Agreement, dated as of October 3, 2008, by and among Raymond James Bank, FSB, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.8** | Joinder Agreement, dated as of October 16, 2008, by and among SunTrust Bank, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.9** | Joinder Purchase Agreement, dated as of October 16, 2008, by and among SunTrust Bank, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.10 | Joinder Agreement, dated as of January 2, 2009, by and among Barclays Bank PLC, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.11 | Joinder Purchase Agreement, dated as of January 2, 2009, by and among Barclays Bank PLC, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.12 | Amendment No. 1, dated as of December 21, 2009, to the Revolving Loan Credit Agreement, by and among McJunkin Red Man Corporation and the other parties thereto. | ||
10 | .2.1* | Revolving Loan Security Agreement, dated as of October 31, 2007, by and among McJunkin Red Man Corporation and the other parties thereto. |
II-5
Exhibit |
||||
Number
|
Description
|
|||
10 | .2.2 | Supplement No. 1 to Revolving Loan Security Agreement, dated as of December 31, 2007. | ||
10 | .2.3 | Supplement No. 2 to Revolving Loan Security Agreement, dated as of October 16, 2008. | ||
10 | .3.1 | Revolving Loan Guarantee, dated as of October 31, 2007. | ||
10 | .3.2 | Supplement No. 1 to Revolving Loan Guarantee, dated as of December 31, 2007. | ||
10 | .3.3 | Supplement No. 2 to Revolving Loan Guarantee, dated as of October 16, 2008. | ||
10 | .4 | Amended and Restated Loan and Security Agreement, dated as of November 18, 2009, by and among Midfield Supply ULC and the other parties thereto. | ||
10 | .5 | Amended and Restated Letter Agreement, dated as of November 13, 2009, by and between Alberta Treasury Branches and Midfield Supply ULC. | ||
10 | .6 | Revolving Facility Agreement, dated September 17, 2010, between MRC Transmark Holdings UK Limited, HSBC Bank plc and the other parties thereto. | ||
10 | .7* | Employment Agreement, dated as of September 10, 2008, by and among McJunkin Red Man Holding Corporation and Andrew R. Lane. | ||
10 | .7.1 | Amendment to Employment Agreement by and among McJunkin Red Man Holding Corporation and Andrew R. Lane, dated February 23, 2011. | ||
10 | .8 | Amended and Restated Employment Agreement, dated as of December 31, 2009, by and among McJunkin Red Man Holding Corporation and James Underhill. | ||
10 | .8.1 | Amendment to Employment Agreement by and among McJunkin Red Man Holding Corporation and James Underhill, dated February 23, 2011. | ||
10 | .9.1 | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Director Grant May 2010 Dutch residents). | ||
10 | .9.2 | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Director Grant May 2010 US residents). | ||
10 | .10.1 | Employment Agreement, dated as of September 10, 2009, by and between Transmark Fcx Limited and Neil P. Wagstaff. | ||
10 | .10.2 | Amendment to Employment Agreement by and between MRC Transmark Limited and Neil P. Wagstaff, dated February 23, 2011. | ||
10 | .11* | Letter Agreement, dated as of September 24, 2008, by and among H.B. Wehrle, III, PVF Holdings LLC and McJunkin Red Man Corporation. | ||
10 | .12 | Letter Agreement, dated as of December 22, 2008, by and among McJunkin Red Man Holding Corporation and Craig Ketchum. | ||
10 | .13.1 | McJ Holding Corporation 2007 Stock Option Plan, as amended. | ||
10 | .13.2* | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement. | ||
10 | .14.1 | McJ Holding Corporation 2007 Restricted Stock Plan, as amended. | ||
10 | .14.2* | Form of McJunkin Red Man Holding Corporation Restricted Stock Award Agreement. | ||
10 | .15.1* | McJunkin Red Man Holding Corporation 2007 Stock Option Plan (Canada). | ||
10 | .15.2* | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Canada) (for plan participants who are parties to non-competition agreements). | ||
10 | .15.3* | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Canada) (for plan participants who are not parties to non-competition agreements). | ||
10 | .16* | McJunkin Red Man Corporation Deferred Compensation Plan. | ||
10 | .17* | Indemnity Agreement, dated as of December 4, 2006, by and among McJunkin Red Man Holding Corporation, Hg Acquisition Corp., McJunkin Red Man Corporation, and certain shareholders of McJunkin Red Man Corporation named therein. | ||
10 | .18.1* | Management Stockholders Agreement, dated as of March 27, 2007, by and among PVF Holdings LLC, McJunkin Red Man Holding Corporation, and the other parties thereto. | ||
10 | .18.2* | Amendment No. 1 to the Management Stockholders Agreement, dated as of December 21, 2007, executed by PVF Holdings LLC. |
II-6
Exhibit |
||||
Number
|
Description
|
|||
10 | .18.3* | Amendment No. 2 to the Management Stockholders Agreement, dated as of December 26, 2007, executed by PVF Holdings LLC. | ||
10 | .19 | Amended and Restated Limited Liability Company Agreement of PVF Holdings LLC, dated as of October 31, 2007. | ||
10 | .20.1 | Amendment No. 1, dated as of December 18, 2007, to the Amended and Restated Limited Liability Company Agreement of PVF Holdings LLC. | ||
10 | .20.2 | Amendment No. 2, dated as of October 31, 2009, to the Amended and Restated Limited Liability Company Agreement of PVF Holdings LLC. | ||
10 | .21.1 | Amended and Restated Registration Rights Agreement of PVF Holdings LLC, dated as of October 31, 2007. | ||
10 | .21.2 | Amendment No. 1 to the Amended and Restated Registration Rights Agreement of PVF Holdings LLC, dated as of October 31, 2009. | ||
10 | .22* | Subscription Agreement, dated as of September 10, 2008, by and among McJunkin Red Man Holding Corporation, Andrew R. Lane, and PVF Holdings LLC. | ||
10 | .23.1* | McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of September 10, 2008, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .23.2 | Amendment to the McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of June 1, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .23.3 | Second Amendment to the McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of September 10, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .24.1 | McJunkin Red Man Holding Corporation Restricted Stock Award Agreement, dated as of February 24, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .24.2 | Amendment to the McJunkin Red Man Holding Corporation Restricted Stock Award Agreement, dated as of June 1, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .25 | Subscription Agreement, dated as of October 3, 2008, by and among McJunkin Red Man Holding Corporation, Len Anthony, and PVF Holdings LLC. | ||
10 | .26.1 | McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of October 3, 2008, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Len Anthony. | ||
10 | .26.2 | Amendment to the McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of September 10, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Len Anthony. | ||
10 | .27 | McJunkin Red Man Holding Corporation Restricted Stock Award Agreement, dated as of September 10, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Len Anthony. | ||
10 | .28 | Subscription Agreement, dated as of October 30, 2009, by and among McJunkin Red Man Holding Corporation, John A. Perkins, and PVF Holdings LLC. | ||
10 | .29 | McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of December 3, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and John A. Perkins. | ||
10 | .30 | Indemnification Agreement by and between the Company and Peter C. Boylan, III, dated August 11, 2010. | ||
12 | .1 | Computation of Ratio of Earnings to Fixed Charges. | ||
21 | .1 | List of Subsidiaries of McJunkin Red Man Holding Corporation. | ||
23 | .1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. |
II-7
Exhibit |
||||
Number
|
Description
|
|||
23 | .2 | Consent of Fried, Frank, Harris, Shriver & Jacobson LLP (included in Exhibit 5.1). | ||
23 | .3 | Consent of Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. (included in Exhibit 5.2). | ||
23 | .4 | Consent of Bowles Rice McDavid Graff & Love LLP (included in Exhibit 5.3). | ||
24 | .1 | Powers of Attorney (included on signature pages). | ||
25 | .1 | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 with respect to the Indenture governing the 9.50% Senior Secured Notes due December 15, 2016. | ||
99 | .1 | Form of Letter of Transmittal, with respect to outstanding notes and exchange notes. | ||
99 | .2 | Form of Notice of Guaranteed Delivery, with respect to outstanding notes and exchange notes. | ||
99 | .3 | Form of Instructions to Registered Holder Beneficial Owners. | ||
99 | .4 | Form of Letter to Clients. | ||
99 | .5 | Form of Letter to Registered Holders |
* | Incorporated by reference to Amendment No. 1 to the Registration Statement on Form S-1 of McJunkin Red Man Holding Corporation (No. 333-153091), filed with the SEC on September 26, 2008. | |
** | Incorporated by reference to Amendment No. 2 to the Registration Statement on Form S-1 of McJunkin Red Man Holding Corporation (No. 333-153091), filed with the SEC on October 31, 2008. | |
| Management contract or compensatory plan or arrangement required to be posted as an exhibit to this report. |
Item 22. | Undertakings. |
II-8
(iv) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
II-9
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-10
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 | ||||
/s/ Leonard
M. Anthony Leonard M. Anthony |
Director | March 24, 2011 | ||||
/s/ Rhys
J. Best Rhys J. Best |
Director | March 24, 2011 | ||||
/s/ Peter
C. Boylan III Peter C. Boylan III |
Director | March 24, 2011 | ||||
/s/ Henry
Cornell Henry Cornell |
Director | March 24, 2011 |
II-11
Signature
|
Title
|
Date
|
||||
/s/ Christopher
A.S. Crampton Christopher A.S. Crampton |
Director | March 24, 2011 | ||||
/s/ John
F. Daly John F. Daly |
Director | March 24, 2011 | ||||
/s/ Craig
Ketchum Craig Ketchum |
Director | March 24, 2011 | ||||
/s/ Gerard
P. Krans Gerard P. Krans |
Director | March 24, 2011 | ||||
/s/ Dr. Cornelis
A. Linse Dr. Cornelis A. Linse |
Director | March 24, 2011 | ||||
/s/ John
A. Perkins John A. Perkins |
Director | March 24, 2011 | ||||
/s/ H.B.
Wehrle, III H.B. Wehrle, III |
Director | March 24, 2011 |
II-12
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-13
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-14
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-15
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-16
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-17
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-18
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-19
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-20
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-21
By: |
/s/ Andrew
R. Lane
|
Signature
|
Title
|
Date
|
||||
/s/ Andrew
R. Lane Andrew R. Lane |
Chairman, President and Chief Executive Officer (Principal Executive Officer) | March 24, 2011 | ||||
/s/ James
F. Underhill James F. Underhill |
Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 24, 2011 |
II-22
Exhibit |
||||
Number
|
Description
|
|||
2 | .1* | Agreement and Plan of Merger, dated as of December 4, 2006, by and among McJunkin Corporation, McJ Holding Corporation and Hg Acquisition Corp. | ||
2 | .1.1* | McJunkin Contribution Agreement, dated as of December 4, 2006, by and among McJunkin Corporation, McJ Holding LLC and certain shareholders of McJunkin Corporation. | ||
2 | .1.2* | McApple Contribution Agreement, dated as of December 4, 2006, among McJunkin Corporation, McJ Holding LLC and certain shareholders of McJunkin Appalachian Oilfield Supply Company. | ||
2 | .2* | Stock Purchase Agreement, dated as of April 5, 2007, by and between McJunkin Development Corporation, Midway-Tristate Corporation and the other parties thereto. | ||
2 | .2.1* | Assignment Agreement, dated as of April 27, 2007, by and among McJunkin Development Corporation, McJunkin Appalachian Oilfield Supply Company, Midway-Tristate Corporation, and John A. Selzer, as Representative of the Shareholders. | ||
2 | .3* | Stock Purchase Agreement, dated as of July 6, 2007, by and among West Oklahoma PVF Company, Red Man Pipe & Supply Co., the Shareholders listed on Schedule 1 thereto, PVF Holdings LLC, and Craig Ketchum, as Representative of the Shareholders. | ||
2 | .3.1* | Contribution Agreement, dated July 6, 2007, by and among McJ Holding LLC and certain shareholders of Red Man Pipe &U Supply Co. | ||
2 | .3.2* | Amendment No. 1 to Stock Purchase Agreement, dated as of October 24, 2007, by and among West Oklahoma PVF Company, Red Man Pipe & Supply Co., and Craig Ketchum, as Representative of the Shareholders. | ||
2 | .3.3* | Joinder Agreement and Amendment No. 2 to the Stock Purchase Agreement, dated as of October 31, 2007, by and among West Oklahoma PVF Company, Red Man Pipe & Supply Co., PVF Holdings LLC, Craig Ketchum, as Representative of the Shareholders, and the other parties thereto. | ||
3 | .1 | Certificate of Incorporation of McJunkin Red Man Corporation. | ||
3 | .2 | Bylaws of McJunkin Red Man Corporation. | ||
3 | .3 | Certificate of Incorporation of McJunkin Red Man Holding Corporation. | ||
3 | .4 | Bylaws of McJunkin Red Man Holding Corporation. | ||
3 | .5 | Certificate of Incorporation of McJunkin Red Man Development Corporation. | ||
3 | .6 | Bylaws of McJunkin Red Man Development Corporation. | ||
3 | .7 | Certificate of Incorporation of McJunkin Nigeria Limited. | ||
3 | .8 | Bylaws of McJunkin Nigeria Limited. | ||
3 | .9 | Certificate of Incorporation of McJunkin-Puerto Rico Corporation. | ||
3 | .10 | Bylaws of McJunkin-Puerto Rico Corporation. | ||
3 | .11 | Certificate of Incorporation of McJunkin-West Africa Corporation. | ||
3 | .12 | Bylaws of McJunkin-West Africa Corporation. | ||
3 | .13 | Certificate of Incorporation of Milton Oil & Gas Company. | ||
3 | .14 | Bylaws of Milton Oil & Gas Company. | ||
3 | .15 | Certificate of Incorporation of Ruffner Realty Company. | ||
3 | .16 | Bylaws of Ruffner Realty Company. | ||
3 | .17 | Certificate of Incorporation of Greenbrier Petroleum Corporation. | ||
3 | .18 | Bylaws of Greenbrier Petroleum Corporation. | ||
3 | .19 | Certificate of Incorporation of Midway-Tristate Corporation. | ||
3 | .20 | Bylaws of Midway-Tristate Corporation. | ||
3 | .21 | Certificate of Incorporation of MRC Management Company. | ||
3 | .22 | Bylaws of MRC Management Company. |
Exhibit |
||||
Number
|
Description
|
|||
3 | .23 | Certificate of Incorporation of The South Texas Supply Company, Inc. | ||
3 | .24 | Bylaws of The South Texas Supply Company, Inc. | ||
4 | .1 | Indenture, dated as of December 21, 2009, by and among McJunkin Red Man Corporation, the guarantors named therein and U.S. Bank National Association, as trustee. | ||
4 | .2 | Form of 9.50% Senior Secured Notes due December 15, 2016 (included as part of Exhibit 4.1 above). | ||
4 | .3 | Exchange and Registration Rights Agreement, dated as of December 21, 2009, by and among McJunkin Red Man Corporation, McJunkin Red Man Holding Corporation, the subsidiary guarantors party thereto, Goldman, Sachs & Co., Barclays Capital Inc., Banc of America Securities LLC and J.P. Morgan Securities Inc. | ||
4 | .4 | Exchange and Registration Rights Agreement, dated as of February 11, 2010, by and among McJunkin Red Man Corporation, McJunkin Red Man Holding Corporation, the subsidiary guarantors party thereto, Goldman, Sachs & Co. and Barclays Capital Inc. | ||
4 | .5 | Reaffirmation Agreement, dated as of February 11, 2010, by and among McJunkin Red Man Corporation, McJunkin Red Man Holding Corporation, the subsidiary guarantors party thereto, and U.S. Bank National Association, as collateral trustee. | ||
5 | .1 | Opinion of Fried, Frank, Harris, Shriver & Jacobson LLP. | ||
5 | .2 | Opinion of Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. | ||
5 | .3 | Opinion of Bowles Rice McDavid Graff & Love LLP. | ||
10 | .1.1* | Revolving Loan Credit Agreement, dated as of October 31, 2007, by and among McJunkin Red Man Corporation and the other parties thereto. | ||
10 | .1.2* | Joinder Agreement, dated as of June 10, 2008, by and among The Huntington National Bank, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.3* | Joinder Agreement, dated as of June 10, 2008, by and among JP Morgan Chase Bank, N.A., McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.4* | Joinder Agreement, dated as of June 10, 2008, by and among TD Bank, N.A., McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.5* | Joinder Agreement, dated as of June 10, 2008, by and among United Bank Inc., McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.6** | Joinder Agreement, dated as of October 3, 2008, by and among Raymond James Bank, FSB, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.7** | Joinder Purchase Agreement, dated as of October 3, 2008, by and among Raymond James Bank, FSB, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.8** | Joinder Agreement, dated as of October 16, 2008, by and among SunTrust Bank, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.9** | Joinder Purchase Agreement, dated as of October 16, 2008, by and among SunTrust Bank, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.10 | Joinder Agreement, dated as of January 2, 2009, by and among Barclays Bank PLC, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.11 | Joinder Purchase Agreement, dated as of January 2, 2009, by and among Barclays Bank PLC, McJunkin Red Man Corporation and The CIT Group/Business Credit, Inc. | ||
10 | .1.12 | Amendment No. 1, dated as of December 21, 2009, to the Revolving Loan Credit Agreement, by and among McJunkin Red Man Corporation and the other parties thereto. | ||
10 | .2.1* | Revolving Loan Security Agreement, dated as of October 31, 2007, by and among McJunkin Red Man Corporation and the other parties thereto. | ||
10 | .2.2 | Supplement No. 1 to Revolving Loan Security Agreement, dated as of December 31, 2007. | ||
10 | .2.3 | Supplement No. 2 to Revolving Loan Security Agreement, dated as of October 16, 2008. |
Exhibit |
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Number
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Description
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10 | .3.1 | Revolving Loan Guarantee, dated as of October 31, 2007. | ||
10 | .3.2 | Supplement No. 1 to Revolving Loan Guarantee, dated as of December 31, 2007. | ||
10 | .3.3 | Supplement No. 2 to Revolving Loan Guarantee, dated as of October 16, 2008. | ||
10 | .4 | Amended and Restated Loan and Security Agreement, dated as of November 18, 2009, by and among Midfield Supply ULC and the other parties thereto. | ||
10 | .5 | Amended and Restated Letter Agreement, dated as of November 13, 2009, by and between Alberta Treasury Branches and Midfield Supply ULC. | ||
10 | .6 | Revolving Facility Agreement, dated September 17, 2010, between MRC Transmark Holdings UK Limited, HSBC Bank plc and the other parties thereto. | ||
10 | .7* | Employment Agreement, dated as of September 10, 2008, by and among McJunkin Red Man Holding Corporation and Andrew R. Lane. | ||
10 | .7.1 | Amendment to Employment Agreement by and among McJunkin Red Man Holding Corporation and Andrew R. Lane, dated February 23, 2011. | ||
10 | .8 | Amended and Restated Employment Agreement, dated as of December 31, 2009, by and among McJunkin Red Man Holding Corporation and James Underhill. | ||
10 | .8.1 | Amendment to Employment Agreement by and among McJunkin Red Man Holding Corporation and James Underhill, dated February 23, 2011. | ||
10 | .9.1 | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Director Grant May 2010 Dutch residents). | ||
10 | .9.2 | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Director Grant May 2010 US residents). | ||
10 | .10.1 | Employment Agreement, dated as of September 10, 2009, by and between Transmark Fcx Limited and Neil P. Wagstaff. | ||
10 | .10.2 | Amendment to Employment Agreement by and between MRC Transmark Limited and Neil P. Wagstaff, dated February 23, 2011. | ||
10 | .11* | Letter Agreement, dated as of September 24, 2008, by and among H.B. Wehrle, III, PVF Holdings LLC and McJunkin Red Man Corporation. | ||
10 | .12 | Letter Agreement, dated as of December 22, 2008, by and among McJunkin Red Man Holding Corporation and Craig Ketchum. | ||
10 | .13.1 | McJ Holding Corporation 2007 Stock Option Plan, as amended. | ||
10 | .13.2* | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement. | ||
10 | .14.1 | McJ Holding Corporation 2007 Restricted Stock Plan, as amended. | ||
10 | .14.2* | Form of McJunkin Red Man Holding Corporation Restricted Stock Award Agreement. | ||
10 | .15.1* | McJunkin Red Man Holding Corporation 2007 Stock Option Plan (Canada). | ||
10 | .15.2* | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Canada) (for plan participants who are parties to non-competition agreements). | ||
10 | .15.3* | Form of McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement (Canada) (for plan participants who are not parties to non-competition agreements). | ||
10 | .16* | McJunkin Red Man Corporation Deferred Compensation Plan. | ||
10 | .17* | Indemnity Agreement, dated as of December 4, 2006, by and among McJunkin Red Man Holding Corporation, Hg Acquisition Corp., McJunkin Red Man Corporation, and certain shareholders of McJunkin Red Man Corporation named therein. | ||
10 | .18.1* | Management Stockholders Agreement, dated as of March 27, 2007, by and among PVF Holdings LLC, McJunkin Red Man Holding Corporation, and the other parties thereto. | ||
10 | .18.2* | Amendment No. 1 to the Management Stockholders Agreement, dated as of December 21, 2007, executed by PVF Holdings LLC. |
Exhibit |
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Number
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Description
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10 | .18.3* | Amendment No. 2 to the Management Stockholders Agreement, dated as of December 26, 2007, executed by PVF Holdings LLC. | ||
10 | .19 | Amended and Restated Limited Liability Company Agreement of PVF Holdings LLC, dated as of October 31, 2007. | ||
10 | .20.1 | Amendment No. 1, dated as of December 18, 2007, to the Amended and Restated Limited Liability Company Agreement of PVF Holdings LLC. | ||
10 | .20.2 | Amendment No. 2, dated as of October 31, 2009, to the Amended and Restated Limited Liability Company Agreement of PVF Holdings LLC. | ||
10 | .21.1 | Amended and Restated Registration Rights Agreement of PVF Holdings LLC, dated as of October 31, 2007. | ||
10 | .21.2 | Amendment No. 1 to the Amended and Restated Registration Rights Agreement of PVF Holdings LLC, dated as of October 31, 2009. | ||
10 | .22* | Subscription Agreement, dated as of September 10, 2008, by and among McJunkin Red Man Holding Corporation, Andrew R. Lane, and PVF Holdings LLC. | ||
10 | .23.1* | McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of September 10, 2008, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .23.2 | Amendment to the McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of June 1, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .23.3 | Second Amendment to the McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of September 10, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .24.1 | McJunkin Red Man Holding Corporation Restricted Stock Award Agreement, dated as of February 24, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .24.2 | Amendment to the McJunkin Red Man Holding Corporation Restricted Stock Award Agreement, dated as of June 1, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Andrew R. Lane. | ||
10 | .25 | Subscription Agreement, dated as of October 3, 2008, by and among McJunkin Red Man Holding Corporation, Len Anthony, and PVF Holdings LLC. | ||
10 | .26.1 | McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of October 3, 2008, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Len Anthony. | ||
10 | .26.2 | Amendment to the McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of September 10, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Len Anthony. | ||
10 | .27 | McJunkin Red Man Holding Corporation Restricted Stock Award Agreement, dated as of September 10, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and Len Anthony. | ||
10 | .28 | Subscription Agreement, dated as of October 30, 2009, by and among McJunkin Red Man Holding Corporation, John A. Perkins, and PVF Holdings LLC. | ||
10 | .29 | McJunkin Red Man Holding Corporation Nonqualified Stock Option Agreement, dated as of December 3, 2009, by and among McJunkin Red Man Holding Corporation, PVF Holdings LLC, and John A. Perkins. | ||
10 | .30 | Indemnification Agreement by and between the Company and Peter C. Boylan, III, dated August 11, 2010. | ||
12 | .1 | Computation of Ratio of Earnings to Fixed Charges. |
Exhibit |
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Number
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Description
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21 | .1 | List of Subsidiaries of McJunkin Red Man Holding Corporation. | ||
23 | .1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. | ||
23 | .2 | Consent of Fried, Frank, Harris, Shriver & Jacobson LLP (included in Exhibit 5.1). | ||
23 | .3 | Consent of Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. (included in Exhibit 5.2). | ||
23 | .4 | Consent of Bowles Rice McDavid Graff & Love LLP (included in Exhibit 5.3). | ||
24 | .1 | Powers of Attorney (included on signature pages). | ||
25 | .1 | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 with respect to the Indenture governing the 9.50% Senior Secured Notes due December 15, 2016. | ||
99 | .1 | Form of Letter of Transmittal, with respect to outstanding notes and exchange notes. | ||
99 | .2 | Form of Notice of Guaranteed Delivery, with respect to outstanding notes and exchange notes. | ||
99 | .3 | Form of Instructions to Registered Holder Beneficial Owners. | ||
99 | .4 | Form of Letter to Clients. | ||
99 | .5 | Form of Letter to Registered Holders |
* | Incorporated by reference to Amendment No. 1 to the Registration Statement on Form S-1 of McJunkin Red Man Holding Corporation (No. 333-153091), filed with the SEC on September 26, 2008. | |
** | Incorporated by reference to Amendment No. 2 to the Registration Statement on Form S-1 of McJunkin Red Man Holding Corporation (No. 333-153091), filed with the SEC on October 31, 2008. | |
| Management contract or compensatory plan or arrangement required to be posted as an exhibit to this report. |
Name | Mailing Address | |
Stephen W. Lake
|
McJunkin Red Man Corporation | |
8023 East 63rd Place | ||
Tulsa, Oklahoma 74133 |
/s/ Stephen W. Lake | ||||
Stephen W. Lake, Incorporator | ||||
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McJunkin Red Man Holding Corporation |
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By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Senior Vice President, General Counsel and Corporate Secretary |
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| First: The name of this Corporation is McJunkin Development Corporation. | |
| Second: Its Registered office in the State of Delaware is to be located at 1209 Orange Street, in the City of Wilmington County of New Castle Zip Code 19801. The registered agent in charge thereof is The Corporation Trust Company | |
| Third: The purpose of the corporation is to engage in any lawful act of activity for which corporations may be organized under the General Corporation Law of Delaware. | |
| Fourth: The amount of the total authorized capital stock of this corporation is Dollars ($ ) divided into 1,000 shares of $1.00 Dollars ($ ) each. | |
| Fifth: The name and mailing address of the incorporator are as follows: |
Name | H. B. Wehrle, III | |||||||
Mailing Address | 835 Hillcrest Drive | |||||||
Charleston, WV Zip Code 25311 |
| I, The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 3rd day of April, A.D. 2003. |
BY: | /s/ H. B. Wehrle, III
|
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NAME: | H. B. Wehrle, III
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(1) | ARTICLE 1 of the Certificate of Incorporation of the Corporation is amended to read in its entirety as follows: |
1: The name of the corporation (hereinafter called the Corporation) is McJunkin Red Man Development Corporation. |
(2) | This Certificate of Amendment has been duly adopted by the stockholders of the Corporation in accordance with Sections 228 and 242 of the General Corporation Law of the State of Delaware. |
By: | /s/ Tom Graff, Jr. | |||
Name: | Tom Graff, Jr. | |||
Title: | Secretary | |||
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/s/ L. J. Vitalo |
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L. J. Vitalo |
STATE OF DELAWARE | ||
SECRETARY OF STATE | ||
DIVISION OF CORPORATIONS | ||
FILED 10:00 AM 04/01/1998 | ||
981125186 2878724 |
| First: That at a meeting of the Board of Directors of McJunkin Acquisition Corporation resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: | |
Resolved, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered First so that, as amended, said Article shall be and read as follows: | ||
McJunkin Nigeria Limited | ||
| Second: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. | |
| Third: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. | |
| Fourth: That the capital of said corporation shall not be reduced under or by reason of said amendment. |
BY: | /s/ Joan C. Burns
|
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NAME: | Joan C. Burns
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STATE OF DELAWARE | ||
SECRETARY OF STATE | ||
DIVISION OF CORPORATIONS | ||
FILED 09:00 AM 03/19/2001 | ||
010137379 2878724 |
| First: That at a meeting of the Board of Directors of McJunkin Acquisition Corporation resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: | |
Resolved, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered First so that, as amended, said Article shall be and read as follows: | ||
McJunkin Nigeria Limited | ||
| Second: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. | |
| Third: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. | |
| Fourth: That the capital of said corporation shall not be reduced under or by reason of said amendment. |
BY: | /s/ Joan C. Burns
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NAME: | Joan C. Burns
|
STATE OF DELAWARE | ||
SECRETARY OF STATE | ||
DIVISION OF CORPORATIONS | ||
FILED 09:00 AM 03/19/2001 | ||
010137379 2878724 |
| First: That at a meeting of the Board of Directors of McJunkin Acquisition Corporation (4-1-98) resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: | |
Resolved, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered First so that, as amended, said Article shall be and read as follows: | ||
McJunkin Nigeria Limited 3-19-01 | ||
| Second: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. | |
| Third: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. | |
| Fourth: That the capital of said corporation shall not be reduced under or by reason of said amendment. |
BY: | /s/ Joan C. Burns
|
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NAME: | Joan C. Burns
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| First: The name of this Corporation is McJunkin-Puerto Rico Corporation. | |
| Second: Its Registered office in the State of Delaware is to be located at 615 South Highway Street, in the City of Dover County of Kent Zip Code 19901. The registered agent in charge thereof is Capitol Services, Inc. | |
| Third: The purpose of the corporation is to engage in any lawful act of activity for which corporations may be organized under the General Corporation Law of Delaware. | |
| Fourth: The amount of the total authorized capital stock of this corporation is Dollars ($ ) divided into 1,000 shares of $1.00 Dollars ($ ) each. | |
| Fifth: The name and mailing address of the incorporator are as follows: |
Name | H.B. Wehrle, III
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Mailing Address | 835 Hillcrest Drive | |||||||
Charleston, WV Zip Code 25311 |
| I, The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 8th day of June, A.D. 2004. |
BY: | /s/ H.B. Wehrle, III
|
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NAME: | H.B. Wehrle, III
|
State of Delaware | ||
Secretary of State | ||
Division of Corporations | ||
Delivered 10:45 AM 06/09/2004 | ||
FILED 10:45 AM 06/09/2004 | ||
SRV 040426312 - 3813784 FILE |
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State of Delaware | ||
Secretary of State | ||
Division of Corporations | ||
Delivered 08:00 AM 02/14/2006 | ||
FILED 08:00 AM 02/14/2006 | ||
SRV 060136327 4109683 FILE |
| First: The name of this Corporation is McJunkin-West Africa Corporation |
| Second: Its registered office in the State of Delaware is to be located at 615 South Dupont Highway, in the City of Dover County of Kent Zip Code 19901. The registered agent in charge thereof is Capitol Services, Inc. |
Third: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. |
| Fourth: The amount of the total stock of this corporation is authorized to issue is 1,000 shares (number of authorized shares) with a par value of $1.00 per share. | |
| Fifth: The name and mailing address of the incorporator are as follows: | |
Name H.B. Wehrle, III Mailing Address 835 Hillcrest Drive Charleston, WV Zip Code 25311 |
| I, The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 10th day of February, A.D. 2006. |
BY: |
/s/ H.B. Wehrle, III
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NAME: | H.B. Wehrle, III | |||||
(Type or print) |
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V. | Name (5) and P. O. Address (6) Write plainly, typewrite if possible; W. Va. Code 31-1-6 (e) The full names and addresses, including street and street numbers, if any, and the city, town or village, of the incorporators, and if a stock corporation, the number of shares subscribed by each. |
No. of Shares | No. of Shares | Total No. of | ||||||
NAME (5) | ADDRESS (6) | Common Stock | Preferred Stock | Shares | ||||
Frances A. Baldwin |
1200 Commerce Square Charleston, W. Va. | 98 | -0- | 98 | ||||
Patricia A. Willard |
1200 Commerce Square Charleston, W. Va. | 1 | -0- | 1 | ||||
Barbara S. Hibbs |
1200 Commerce Square Charleston, W. Va. | 1 | -0- | 1 |
VI. | The existence of this corporation is to be perpetual. | |
VII. | The stockholders may adopt by-law provisions to reasonably restrict the transfer of shares of stock of this corporation during the lifetime of, or upon the death of, any stockholder. | |
VII. | For any additional provisions desired and which are authorized by law, see art. 1, c. 31, Code. Also set forth number of acres of land desired to be held in West Virginia. If such number be above 10,000 acres pursuant to section (illegible) 12, c. 11, Code. If more space is required, add one or more sheets of paper this size. |
All the incorporators must sign below signatures being the same as shown in Article V | ||||
/s/ Frances A. Baldwin
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/s/ Patricia A. Willard
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/s/ Barbara S. Hibbs
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V. | Name (5) and P. O. Address (6) Write plainly, typewrite if possible; W. Va. Code 31-1-6 (e) The full names and addresses, including street and street numbers, if any, and the city, town or village, of the incorporators, and if a stock corporation, the number of shares subscribed by each. |
No. of Shares | No. of Shares | Total No. of | ||||||||||
NAME (5) | ADDRESS (6) | Common Stock | Preferred Stock | Shares | ||||||||
Frances A. Baldwin
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1200 Commerce Square |
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Charleston, West Virginia | 98 | -0- | 98 | |||||||||
Patricia A. Willard |
1200 Commerce Square | |||||||||||
Charleston, West Virginia | 1 | -0- | 1 | |||||||||
Barbara S. Hibbs |
1200 Commerce Square | |||||||||||
Charleston, West Virginia | 1 | -0- | 1 |
VI. | The existence of this corporation is to be perpetual. |
VII. | The stockholders may adopt by-law provisions to reasonably restrict the transfer of shares of stock of this corporation during the lifetime of, or upon the death of, any stockholder. |
All the incorporators must sign below, signatures being the same as shown in Article V |
/s/ Frances A. Baldwin
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/s/ Patricia A. Willard
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/s/ Barbara S. Hibbs
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Henry B. Wehrle, Jr. R. S. Wehrle Howard P. McJunkin George S. Herscher David G. Huffman |
Number | Shares |
THIS CERTIFIES THAT is the owner of shares of the capital stock of |
transferable only on the books of the corporation by the holder hereof in person or by attorney upon surrender of this certificate properly endorsed. | ||
IN WITNESS WHEREOF, the said corporation has caused this certificate to be signed by its duly authorized officers and its corporate seal to be hereunto affixed this day of , A. D., 19___. |
Secretary | President |
/s/ Patricia A. Willard | ||||
Patricia A. Willard, Secretary | ||||
/s/ Frances A. Baldwin
|
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NOTE: | In the case of a corporation NOT organized for profit and not authorized to issue capital stock, a statement to that effect shall be set forth. |
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NAME | ADDRESS | NO. OF SHARES | ||
(Optional) | ||||
H. D. Wells, III
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Suite 604 Commerce Square Charleston, West Virginia 25301 |
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NAME | ADDRESS | |
/s/ H. D. Wells, III | ||||
H. D. WELLS, III | ||||
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Class | Shares | |||
Common |
10 |
Greenbrier Petroleum Corp. (Note 4) |
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By | /s/ H. D. Wells III | |||
Its Vice President | ||||
(Note 5) |
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and | /s/ H B Wehrle | |||
Its Secretary | ||||
[ILLEGIBLE] - (notarized)
Notary Public |
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Notes: | 1. Change to board of directors if no shares have been issued. | |
2. If inapplicable, omit. | ||
3. This article may be omitted if the subject matter is set forth in the amendment or if it is inapplicable. | ||
4. Exact corporate name of corporation adopting the Articles of Amendment. | ||
5. Signatures and titles of officers signing for the corporation. | ||
6. This articles of amendment to the articles of incorporation must be filed in duplicate. |
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/s/ Kathleen A. McEntyre
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Incorporator | ||||
805 Third Avenue | ||||
New York, New York 10022 |
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State of Delaware | ||
Secretary of State | ||
Division of Corporations | ||
Delivered 09:42 PM 12/11/2007 | ||
FILED 07:00 PM 12/11/2007 | ||
SRV 071310491 4471792 FILE |
| First: The name of this Corporation is MRM West Virginia Management Company. | |
| Second: Its registered office in the State of Delaware is to be located at Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware, 19801. The registered agent in charge thereof is The Corporation Trust Company. | |
| Third: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. | |
| Fourth: The amount of the total stock this corporation is authorized to issue is One Hundred (100) shares, with a par value of One Dollar ($1.00) per share. | |
| Fifth: The name and mailing address of the incorporator are as follows: |
Name: | H. B. Wehrle, III | |||
Mailing Address: | 835 Hillcrest Drive | |||
Charleston, West Virginia 25311 |
I, the undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 11 day of December, A.D. 2007. |
By: | /s/ H. B. Wehrle, III
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Name: | H. B. Wehrle, III |
State of Delaware | ||
Secretary of State | ||
Division of Corporations | ||
Delivered 11:54 AM 12/29/2008 | ||
FILED 11:54 AM 12/29/2008 | ||
SRV 081232382 4471792 FILE |
By: | /s/ Andrew Lane
|
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Its: | President and Chief Executive Officer |
By: | /s/ Andrew Lane
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Its: | President and Chief Executive Officer |
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/s/ Todd L. Williams
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Todd L. Williams |
1. | The name of the corporation is The South Texas Supply Company, Inc. | |
2. | The name of its present registered agent, as shown in the records of the Secretary of the State of Texas, prior to filing this statement is: Todd L. Williams. | |
3. | The name of its successor registered agent is: Jeffery A. Brymer. | |
4. | The address of its registered office and the address of the business office of its registered agent, as shown in the records of the Secretary of the State of Texas, prior to filing this statement is: 1402 Commerce Street, Big Wells, Texas 78830. | |
5. | The address of its registered office and the address of the business office of its registered agent, as changed by filing this statement is: P.O. Box 214, Pearsall, Texas 78061 or Texas State Highway 1581, 1/4 mile Southwest of Interstate 35, Pearsall, Texas 78061. The address of the corporations registered office and the address of the business office of its registered agent, as changed, will be identical. | |
6. | Such changes were authorized by the Corporations Board of Directors. |
The South Texas Supply Company, Inc. |
||||
By: | /s/ Jeffery A. Brymer | |||
Jeffery A. Brymer, Secretary | ||||
Articles of Amendment to the Articles of Incorporation The South Texas Supply Company, Inc. |
Page 1 of 2 |
The South Texas Supply Company, Inc., a Texas corporation |
||||
By: | /s/ Jeffery A. Brymer | |||
Jeffery A. Brymer, | ||||
Chief Executive Officer | ||||
Articles of Amendment to the Articles of Incorporation The South Texas Supply Company, Inc. |
Page 2 of 2 |
2
3
4
5
6
/s/ Todd L. Williams | ||||
/s/ Jeff Brymer | ||||
7
Trust Indenture | |||||
Act Section | Indenture Section | ||||
310 | (a)(1) | 7.08; 7.10 | |||
(a)(2) | 7.10 | ||||
(a)(3) | N.A. | ||||
(a)(4) | N.A. | ||||
(a)(5) | 7.10 | ||||
(b) | 7.10 | ||||
(c) | N.A. | ||||
311 | (a) | 7.11 | |||
(b) | 7.11 | ||||
(c) | N.A. | ||||
312 | (a) | 2.05 | |||
(b) | 13.03 | ||||
(c) | 13.03 | ||||
313 | (a) | 7.06 | |||
(b)(1) | 10.05 | ||||
(b)(2) | 7.06; 7.07 | ||||
(c) | 7.06;13.02 | ||||
(d) | 7.06 | ||||
314 | (a) | 4.03;13.02; 13.05 | |||
(b) | N/A | ||||
(c)(1) | 13.04 | ||||
(c)(2) | 13.04 | ||||
(c)(3) | N.A. | ||||
(d) | 10.05 | ||||
(e) | 13.05 | ||||
(f) | N.A. | ||||
315 | (a) | 7.01 | |||
(b) | 7.05; 12.02 | ||||
(c) | 7.01 | ||||
(d) | 7.01 | ||||
(e) | 6.11 | ||||
316 | (a) (last sentence) | 2.09 | |||
(a)(1)(A) | 6.05 | ||||
(a)(1)(B) | 6.04 | ||||
(a)(2) | N.A. | ||||
(b) | 6.07 | ||||
(c) | 2.12 | ||||
317 | (a)(1) | 6.08 | |||
(a)(2) | 6.09 | ||||
(b) | 2.04 | ||||
318 | (a) | 13.01 | |||
(b) | N.A. | ||||
(c) | 13.01 |
* | This Cross Reference Table is not part of the Indenture. |
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE |
||||
Section 1.01 Definitions |
1 | |||
Section 1.02 Other Definitions |
43 | |||
Section 1.03 Incorporation by Reference of Trust Indenture Act |
44 | |||
Section 1.04 Rules of Construction |
44 | |||
ARTICLE 2 THE NOTES |
||||
Section 2.01 Form and Dating |
45 | |||
Section 2.02 Execution and Authentication |
46 | |||
Section 2.03 Registrar and Paying Agent |
46 | |||
Section 2.04 Paying Agent to Hold Money in Trust |
47 | |||
Section 2.05 Holder Lists |
47 | |||
Section 2.06 Transfer and Exchange |
47 | |||
Section 2.07 Replacement Notes |
60 | |||
Section 2.08 Outstanding Notes |
60 | |||
Section 2.09 Treasury Notes |
60 | |||
Section 2.10 Temporary Notes |
60 | |||
Section 2.11 Cancellation |
61 | |||
Section 2.12 Defaulted Interest |
61 | |||
ARTICLE 3 REDEMPTION AND PREPAYMENT |
||||
Section 3.01 Notices to Trustee |
61 | |||
Section 3.02 Selection of Notes to Be Redeemed or Purchased |
61 | |||
Section 3.03 Notice of Redemption |
62 | |||
Section 3.04 Effect of Notice of Redemption |
63 | |||
Section 3.05 Deposit of Redemption or Purchase Price |
63 | |||
Section 3.06 Notes Redeemed or Purchased in Part |
63 | |||
Section 3.07 Optional Redemption |
63 | |||
Section 3.08 Mandatory Redemption |
64 | |||
Section 3.09 Offer to Purchase by Application of Excess Proceeds |
64 | |||
ARTICLE 4 COVENANTS |
||||
Section 4.01 Payment of Notes |
66 | |||
Section 4.02 Maintenance of Office or Agency |
66 | |||
Section 4.03 Reports |
67 | |||
Section 4.04 Compliance Certificate |
68 | |||
Section 4.05 Taxes |
69 | |||
Section 4.06 Stay, Extension and Usury Laws |
69 | |||
Section 4.07 Restricted Payments |
69 | |||
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries |
75 | |||
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock |
77 | |||
Section 4.10 Asset Sales |
81 | |||
Section 4.11 Transactions with Affiliates |
84 |
Section 4.12 Liens |
86 | |||
Section 4.13 Corporate Existence |
86 | |||
Section 4.14 Offer to Repurchase Upon Change of Control |
87 | |||
Section 4.15 Limitation on Layering |
88 | |||
Section 4.16 Designation of Restricted and Unrestricted Subsidiaries |
88 | |||
Section 4.17 Guarantees |
89 | |||
Section 4.18 Changes in Covenants When Notes Rated Investment Grade |
90 | |||
ARTICLE 5 SUCCESSORS |
||||
Section 5.01 Merger, Consolidation or Sale of Assets |
90 | |||
Section 5.02 Successor Corporation Substituted |
91 | |||
ARTICLE 6 DEFAULTS AND REMEDIES |
||||
Section 6.01 Events of Default |
92 | |||
Section 6.02 Acceleration |
94 | |||
Section 6.03 Other Remedies |
95 | |||
Section 6.04 Waiver of Past Defaults |
95 | |||
Section 6.05 Control by Majority |
95 | |||
Section 6.06 Limitation on Suits |
95 | |||
Section 6.07 Rights of Holders of Notes to Receive Payment |
96 | |||
Section 6.08 Collection Suit by Trustee |
96 | |||
Section 6.09 Trustee May File Proofs of Claim |
96 | |||
Section 6.10 Priorities |
97 | |||
Section 6.11 Undertaking for Costs |
97 | |||
ARTICLE 7 TRUSTEE |
||||
Section 7.01 Duties of Trustee |
97 | |||
Section 7.02 Rights of Trustee |
98 | |||
Section 7.03 Individual Rights of Trustee |
99 | |||
Section 7.04 Trustees Disclaimer |
100 | |||
Section 7.05 Notice of Defaults |
100 | |||
Section 7.06 Reports by Trustee to Holders of the Notes |
100 | |||
Section 7.07 Compensation and Indemnity |
100 | |||
Section 7.08 Replacement of Trustee |
101 | |||
Section 7.09 Successor Trustee by Merger, etc. |
102 | |||
Section 7.10 Eligibility; Disqualification |
102 | |||
Section 7.11 Preferential Collection of Claims Against Company |
102 | |||
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE |
||||
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance |
102 | |||
Section 8.02 Legal Defeasance and Discharge |
103 | |||
Section 8.03 Covenant Defeasance |
103 | |||
Section 8.04 Conditions to Legal or Covenant Defeasance |
104 | |||
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions |
105 | |||
Section 8.06 Repayment to Company |
105 | |||
Section 8.07 Reinstatement |
106 |
ii
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER |
||||
Section 9.01 Without Consent of Holders of Notes |
106 | |||
Section 9.02 With Consent of Holders of Notes |
108 | |||
Section 9.03 Compliance with Trust Indenture Act |
110 | |||
Section 9.04 Revocation and Effect of Consents |
110 | |||
Section 9.05 Notation on or Exchange of Notes |
110 | |||
Section 9.06 Trustee to Sign Amendments, etc. |
110 | |||
ARTICLE 10 COLLATERAL AND SECURITY |
||||
Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Priority Lien Debt |
111 | |||
Section 10.02 Ranking of Subordinated Liens |
111 | |||
Section 10.03 Release of Liens in Respect of Notes |
111 | |||
Section 10.04 Relative Rights |
112 | |||
Section 10.05 Compliance with Trust Indenture Act |
112 | |||
Section 10.06 Collateral Trustee |
113 | |||
Section 10.07 Further Assurances |
113 | |||
Section 10.08 Insurance |
113 | |||
Section 10.09 Real Property |
114 | |||
Section 10.10 Recording, Registration and Opinions |
115 | |||
ARTICLE 11 NOTE GUARANTEES |
||||
Section 11.01 Guarantee |
115 | |||
Section 11.02 Limitation on Guarantor Liability |
116 | |||
Section 11.03 Execution and Delivery of Note Guarantee |
116 | |||
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms |
117 | |||
Section 11.05 Releases |
118 | |||
ARTICLE 12 SATISFACTION AND DISCHARGE |
||||
Section 12.01 Satisfaction and Discharge |
119 | |||
Section 12.02 Application of Trust Money |
120 | |||
ARTICLE 13 MISCELLANEOUS |
||||
Section 13.01 Trust Indenture Act Controls |
120 | |||
Section 13.02 Notices |
120 | |||
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
|
122 | |||
Section 13.04 Certificate and Opinion as to Conditions Precedent |
122 | |||
Section 13.05 Statements Required in Certificate or Opinion |
122 | |||
Section 13.06 Rules by Trustee and Agents |
122 | |||
Section 13.07 No Personal Liability of Directors, Officers, Employees, Incorporators and Stockholders |
122 | |||
Section 13.08 Governing Law |
123 | |||
Section 13.09 No Adverse Interpretation of Other Agreements |
123 | |||
Section 13.10 Successors |
123 | |||
Section 13.11 Severability |
123 | |||
Section 13.12 Counterpart Originals |
123 |
iii
Section 13.13 Table of Contents, Headings, etc. |
123 | |||
Section 13.14 Conflicts with Intercreditor Agreement or Collateral Trust Agreement
|
123 |
Exhibit A1
|
FORM OF NOTE | |
Exhibit A2
|
FORM OF REGULATION S TEMPORARY GLOBAL NOTE | |
Exhibit B
|
FORM OF CERTIFICATE OF TRANSFER | |
Exhibit C
|
FORM OF CERTIFICATE OF EXCHANGE | |
Exhibit D
|
FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR | |
Exhibit E
|
FORM OF NOTATION OF GUARANTEE | |
Exhibit F
|
FORM OF SUPPLEMENTAL INDENTURE | |
Exhibit G
|
LIST OF INITIAL MORTGAGE PROPERTIES |
iv
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
(i) | any liability for foreign, federal, state, local or other taxes, |
(ii) | performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations not in connection with money borrowed, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business, |
(iii) | any liability arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such liability is extinguished within five Business Days of its incurrence, |
(iv) | any liability owed to any Person in connection with workers compensation, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business, |
(v) | any indebtedness existing on the date of this Indenture that has been satisfied and discharged or defeased by legal defeasance, |
(vi) | agreements providing for indemnification, adjustment of purchase price or earnouts or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition or acquisition of any business, assets or |
22
Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the principal amount does not exceed the gross proceeds actually received in connection with such transaction, or |
(vii) | indebtedness under leases that exists solely as a result of the implementation of the proposed revisions to lease accounting standards by the Financial Accounting Standards Board and the International Accounting Standards Board, as described in the discussion paper Leases: Preliminary Views dated March 2009. |
23
24
25
26
27
28
and, in each case, any Investment held by such Person, provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer; |
29
30
31
32
33
34
35
36
37
38
39
40
41
42
Defined in | ||||
Term | Section | |||
Affiliate Transaction |
4.11 | |||
After-Acquired Property |
10.09 | |||
Asset Sale Offer |
3.09 | |||
Authentication Order |
2.02 | |||
Calculation Date |
1.01 | |||
Change of Control Offer |
4.14 | |||
Change of Control Payment |
4.14 | |||
Change of Control Payment Date |
4.14 | |||
Covenant Defeasance |
8.03 | |||
DTC |
2.03 | |||
Event of Default |
6.01 | |||
Excess Proceeds |
4.10 | |||
Initial Mortgaged Property |
10.09 | |||
Legal Defeasance |
8.02 | |||
Mortgage |
10.09 | |||
Offer Amount |
3.09 | |||
Offer Period |
3.09 | |||
Paying Agent |
2.03 | |||
Permitted Debt |
4.09 | |||
Payment Default |
6.01 | |||
Purchase Date |
3.09 | |||
Registrar |
2.03 | |||
Restricted Payments |
4.07 | |||
relevant transactions |
1.01 |
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Year | Percentage | |||
2012 |
107.125 | % | ||
2013 |
104.750 | % | ||
2014 |
102.375 | % | ||
2015 and thereafter |
100.000 | % |
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
(1) | the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; | ||
(2) | the Holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or | ||
(3) | the default that is the basis for such Event of Default has been cured. |
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
MCJUNKIN RED MAN CORPORATION |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer | |||
MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President, Chief Executive Officer and Chairman |
|||
SUBSIDIARY GUARANTORS: MCJUNKIN RED MAN DEVELOPMENT CORPORATION MCJUNKIN NIGERIA LIMITED MCJUNKIN-PUERTO RICO CORPORATION MCJUNKIN-WEST AFRICA CORPORATION MILTON OIL & GAS COMPANY RUFFNER REALTY COMPANY GREENBRIER PETROLEUM CORPORATION MIDWAY-TRISTATE CORPORATION MRC MANAGEMENT COMPANY MRM OKLAHOMA MANAGEMENT LLC LBPS HOLDING COMPANY LABARGE PIPE & STEEL COMPANY |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer |
U.S. BANK NATIONAL ASSOCIATION |
||||
By: | /s/ Richard Prokosch | |||
Name: | Richard Prokosch | |||
Title: | Vice President |
No. ___ | $____________ |
MCJUNKIN RED MAN CORPORATION |
||||
By: | ||||
Name: | ||||
Title: | ||||
U.S. BANK NATIONAL ASSOCIATION, as Trustee |
||||
By: | ||||
Authorized Signatory | ||||
A1-1
A1-2
Year | Percentage | |||
2012 |
107.125 | % | ||
2013 |
104.750 | % | ||
2014 |
102.375 | % | ||
2015 and thereafter |
100.000 | % |
A1-3
A1-4
A1-5
A1-6
A1-7
A1-8
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A1-9
¬Section 4.10
|
¬Section 4.14 |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A1-10
Principal Amount | ||||||||||||||||||
Amount of decrease | Amount of increase | of this Global Note | Signature of | |||||||||||||||
in Principal Amount | in Principal Amount | following such | authorized officer | |||||||||||||||
of | of | decrease | of Trustee or | |||||||||||||||
Date of Exchange | this Global Note | this Global Note | (or increase) | Custodian |
A1-11
No. ___
|
$__________ |
MCJUNKIN RED MAN CORPORATION |
||||
By: | ||||
Name: | ||||
Title: |
A2-1
A2-2
A2-3
A2-4
Year | Percentage | |||
2012 |
107.125 | % | ||
2013 |
104.750 | % | ||
2014 |
102.375 | % | ||
2015 and thereafter |
100.000 | % |
A2-5
A2-6
A2-7
A2-8
A2-9
A2-10
(I) or (we) assign and transfer this Note to: |
||
(Insert assignees legal name) |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A2-11
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
A2-12
Principal Amount | ||||||||
Amount of decrease | Amount of increase | of this Global Note | Signature of | |||||
in Principal Amount | in Principal Amount | following such | authorized officer | |||||
of | of | decrease | of Trustee or | |||||
Date of Exchange | this Global Note | this Global Note | (or increase) | Custodian | ||||
A2-13
1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
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20
21
22
23
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25
26
27
28
Very truly yours, McJunkin Red Man Corporation |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer | |||
McJunkin Red Man Holding Corporation |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President, Chief Executive Officer and Chairman | |||
Subsidiary Guarantors: MCJUNKIN RED MAN DEVELOPMENT CORPORATION MCJUNKIN NIGERIA LIMITED MCJUNKIN-PUERTO RICO CORPORATION MCJUNKIN-WEST AFRICA CORPORATION MILTON OIL & GAS COMPANY RUFFNER REALTY COMPANY GREENBRIER PETROLEUM CORPORATION MIDWAY-TRISTATE CORPORATION MRC MANAGEMENT COMPANY MRM OKLAHOMA MANAGEMENT LLC LBPS HOLDING COMPANY LABARGE PIPE & STEEL COMPANY |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer |
29
Accepted as of the date hereof: Goldman, Sachs & Co. |
||||
By: | /s/ Goldman, Sachs & Co. | |||
(Goldman, Sachs & Co.) | ||||
Barclays Capital Inc. |
||||
By: | /s/ Benjamin Burton | |||
Name: | Benjamin Burton | |||
Title: | Director | |||
J.P. Morgan Securities Inc. |
||||
By: | /s/ Cornelius J. Droogan | |||
Name: | Cornelius J. Droogan | |||
Title: | Executive Director | |||
Banc of America Securities LLC |
||||
By: | /s/ Michael Browne | |||
Name: | Michael Browne | |||
Title: | Managing Director | |||
30
1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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Very truly yours, MCJUNKIN RED MAN CORPORATION |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer | |||
MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President, Chief Executive Officer and Chairman | |||
Subsidiary Guarantors: MCJUNKIN RED MAN DEVELOPMENT CORPORATION MCJUNKIN NIGERIA LIMITED MCJUNKIN-PUERTO RICO CORPORATION MCJUNKIN-WEST AFRICA CORPORATION MILTON OIL & GAS COMPANY RUFFNER REALTY COMPANY GREENBRIER PETROLEUM CORPORATION MIDWAY-TRISTATE CORPORATION MRC MANAGEMENT COMPANY MRM OKLAHOMA MANAGEMENT LLC |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer | |||
Accepted as of the date hereof: Goldman, Sachs & Co. |
|||||
By: | /s/ Goldman, Sachs & Co. | ||||
(Goldman, Sachs & Co.) | |||||
Barclays Capital Inc. |
|||||
By: | /s/ Benjamin Burton | ||||
Name: | Benjamin Burton | ||||
Title: | Managing Director |
||||
On behalf of each of the Purchasers | |||||
2
3
Issuer: MCJUNKIN RED MAN CORPORATION (f/k/a McJunkin Corporation) |
||||
By | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer | |||
Holdings: MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | Chairman of the Board, President and Chief Executive Officer |
|||
Subsidiary Grantors: MCJUNKIN RED MAN DEVELOPMENT CORPORATION MCJUNKIN NIGERIA LIMITED MCJUNKIN-PUERTO RICO CORPORATION MILTON OIL & GAS COMPANY GREENBRIER PETROLEUM CORPORATION RUFFNER REALTY COMPANY MCJUNKIN-WEST AFRICA CORPORATION MRC MANAGEMENT COMPANY MRM OKLAHOMA MANAGEMENT LLC MIDWAY- TRISTATE CORPORATION |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | President and Chief Executive Officer | |||
Acknowledged and Agreed to by: U.S. BANK NATIONAL ASSOCIATION, as Collateral Trustee |
||||
By: | /s/ Richard Prokosch | |||
Name: | Richard Prokosch | |||
Title: | Vice President | |||
(a) | the Indenture, dated as of December 21, 2009, among the Company, the Guarantors and U.S. Bank National Association, as trustee (as supplemented, the Indenture); | ||
(b) | the Outstanding Notes and the Outstanding Note Guarantees; and | ||
(c) | the forms of Exchange Notes and the Exchange Note Guarantees. |
- 2 -
1. | The Exchange Notes, when executed, issued and delivered in accordance with the terms of the Indenture in exchange for the Outstanding Notes in the manner contemplated by the Registration Statement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. | ||
2. | The Exchange Note Guarantees by the Guarantors, when the Exchange Notes have been duly executed, issued and delivered in accordance with the terms of the Indenture in exchange for the Outstanding Notes in the manner contemplated by the Registration Statement, will constitute a valid and binding obligation of each of the Guarantors, enforceable against each of the Guarantors in accordance with their terms. |
- 3 -
- 4 -
- 5 -
- 6 -
1. | The Guarantor is validly existing as a corporation in good standing under the laws of the State of Texas. | ||
2. | The Guarantor has the corporate power and authority to execute and deliver the Exchange Note Guarantees and perform its obligations thereunder; and | ||
3. | The Exchange Note Guarantees have been duly authorized by the Guarantor. |
- 2 -
- 3 -
101 South Queen Street Martinsburg, West Virginia 25401 (304) 263-0836 |
![]() |
5th Floor, United Square 501 Avery Street Parkersburg, West Virginia 26101 (304) 485-8500 |
||
600 Quarrier Street | ||||
7000 Hampton Center | Charleston, West Virginia 25301 | |||
Morgantown, West Virginia 26505 | 480 West Jubal Early Drive | |||
(304) 285-2500 | Suite 130 Winchester, Virginia 22601 (540) 723-8877 |
|||
Post Office Box 1386 | ||||
333 West Vine Street, Suite 1700 | Charleston, West Virginia 25325-1386 | |||
Lexington, Kentucky 40507-1639 | (304) 347-1100 | |||
(859) 252-2202 | ||||
www.bowlesrice.com |
Amy J. Tawney | March 24, 2011 | E-Mail Address: | ||
Telephone (304) 347-1123 | atawney@bowlesrice.com | |||
Facsimile (304) 343-3058 |
Re: | Exchange of 9.50% Senior Secured Notes Due 2016 of McJunkin Red Man Corporation |
MCJUNKIN RED MAN CORPORATION (f/k/a McJunkin Corporation) |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Executive Vice President and Chief Financial Officer |
|||
BARCLAYS BANK PLC | ||||||||||
By: | /s/ Douglas Bernegger | |||||||||
Name: | DOUGLAS BERNEGGER | |||||||||
Title: | DIRECTOR | |||||||||
Notice Address: | c/o Barclays Capital | |||||||||
745 7th Avenue, 21st Floor | ||||||||||
New York, NY 10119 | ||||||||||
Attention: | Maria Lund | |||||||||
Telephone: | (212) 526-1456 | |||||||||
Facsimile: | (212) 526-5115 |
Consented to by: THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent |
||||
By: | /s/ Carmen Caporrino | |||
Name: | Carmen Caporrino | |||
Title: | Vice President | |||
BARCLAYS BANK PLC |
||||
By: | /s/ Douglas Bernegger | |||
Name: | DOUGLAS BERNEGGER | |||
Title: | DIRECTOR | |||
Acknowledged and Agreed as of the date first above written: THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent |
||||
By: | /s/ Carmen Caporrino | |||
Name: | Carmen Caporrino | |||
Title: | Vice President | |||
Acknowledged and Agreed as of the date first above written: MCJUNKIN RED MAN CORPORATION (f/k/a Mcjunkin Corporation) |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Executive Vice President and Chief Financial Officer |
|||
Applicable ABR Margin for | ||||
Status | Revolving Credit Loans and Swingline Loans | |||
Level I Status |
2.00 | % | ||
Level II Status |
1.75 | % | ||
Level III Status |
1.50 | % |
Applicable LIBOR Margin for | ||||
Status | Revolving Credit Loans | |||
Level I Status |
3.00 | % | ||
Level II Status |
2.75 | % | ||
Level III Status |
2.50 | % |
Status | Commitment Fee Rate | |||
Level I Status |
0.50 | % | ||
Level II Status |
0.375 | % | ||
Level III Status |
0.375 | % |
2
3
4
5
6
7
8
9
10
BORROWER: MCJUNKIN RED MAN CORPORATION (f/k/a McJunkin Corporation) |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
CREDIT SUPPORT PARTIES: MCJUNKIN RED MAN DEVELOPMENT CORPORATION (f/k/a McJunkin Development Corporation) |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MCJUNKIN NIGERIA LIMITED |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MCJUNKIN-PUERTO RICO CORPORATION |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MILTON OIL & GAS COMPANY |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
GREENBRIER PETROLEUM CORPORATION |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
RUFFNER REALTY COMPANY |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MCJUNKIN-WEST AFRICA CORPORATION |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MRC MANAGEMENT COMPANY (f/k/a MRM West Virginia Management Company) |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MRM OKLAHOMA MANAGEMENT LLC |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
MIDWAY-TRISTATE CORPORATION |
||||
By: | /s/ James F. Underhill | |||
Name: James F. Underhill | ||||
Title: | Vice President and Chief Financial Officer | |||
LBPS HOLDING COMPANY |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
LABARGE PIPE & STEEL COMPANY |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Vice President and Chief Financial Officer | |||
BANK OF AMERICA, N.A., as Co-Collateral Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
BANK OF AMERICA, N.A., as Syndication Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
BANK OF AMERICA, N.A., as a Lender |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent and a Lender |
||||
By: | /s/ Dan Bueno | |||
Name: | Dan Bueno | |||
Title: | Vice President | |||
JPMORGAN CHASE BANK, N.A., as Co-Documentation Agent and a Lender |
||||
By: | /s/ Kim Nguyen | |||
Name: | Kim Nguyen | |||
Title: | Vice President | |||
Wachovia Bank NA, as a Lender |
||||
By: | /s/ Katherine Houser | |||
Name: | Katherine Houser | |||
Title: | Director | |||
Raymond James Bank, FSB, as a Lender |
||||
By: | /s/ James M. Armstrong | |||
Name: | James M. Armstrong | |||
Title: | Vice President | |||
Sun Trust Bank, as a Lender |
||||
By: | /s/ Hector Molina | |||
Name: | Hector Molina | |||
Title: | Associate | |||
Fifth Third Bank, as a Lender |
||||
By: | /s/ Paul R. Schubert | |||
Name: | Paul R. Schubert | |||
Title: | Vice President | |||
Mizuho Corporate Bank, Ltd., as a Lender |
||||
By: | /s/ James R. Fayen | |||
Name: | James R. Fayen | |||
Title: | Deputy General Manager | |||
PNC BANK, N.A., as a Lender |
||||
By: | /s/ John D. Trott | |||
Name: | John D. Trott | |||
Title: | Vice President | |||
TD BANK, N.A., as a Lender |
||||
By: | /s/ Deborah Gravinese | |||
Name: | Deborah Gravinese | |||
Title: | Senior Vice President |
BURDALE FINANCIAL LIMITED, as a Lender |
||||
By: | /s/ Phillip R. Webb | |||
Name: | Phillip R. Webb | |||
Title: | Duly Authorized Signatory | |||
By: | /s/ Antimo Barbieri | |||
Name: | Antimo Barbieri | |||
Title: | Duly Authorized Signatory |
The Huntington National Bank, as a Lender |
||||
By: | /s/ Joshua Elsea | |||
Name: | Joshua Elsea | |||
Title: | Officer |
ALLIED IRISH BANKS., PLC., as a Lender |
||||
By: | /s/ Brent Phillips | |||
Name: | Brent Phillips | |||
Title: | Vice President | |||
By: | /s/ Martin Chin | |||
Name: | Martin Chin | |||
Title: | Senior Vice President |
City National Bank of West Virginia, as a Lender |
||||
By: | /s/ Jack Cavender | |||
Name: | Jack Cavender | |||
Title: | Executive Vice President |
United Bank, Inc., as a Lender |
||||
By: | /s/ James A. Ward | |||
Name: | James A. Ward | |||
Title: | Vice President |
Capital One Leverage Finance Corp., as a Lender |
||||
By: | /s/ Nick Malatestinic | |||
Name: | Nick Malatestinic | |||
Title: | Senior Vice President |
CITIZENS BANK, as a Lender |
||||
By: | /s/ THOMAS COUTURE | |||
Name: | THOMAS COUTURE | |||
Title: | FIRST VICE PRESIDENT |
BANK OF OKLAHOMA, N.A., as a Lender |
||||
By: | /s/ Michael L. Elder | |||
Name: | Michael L. Elder | |||
Title: | Vice President |
Branch Banking & Trust Company, as a Lender |
||||
By: | /s/ Preston W. Bergen | |||
Name: | Preston W. Bergen | |||
Title: | Senior Vice President |
GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender |
||||
By: | /s/ Rebecca L. Milligan | |||
Name: | Rebecca L. Milligan | |||
Title: | Duly Authorized Signatory |
UPS Capital Corporation, as a Lender |
||||
By: | /s/ John P. Holloway | |||
Name: | John P. Holloway | |||
Title: | Director of Portfolio Management |
BARCLAYS BANK PLC, as a Lender |
||||
By: | /s/ Kevin Cullen | |||
Name: | Kevin Cullen | |||
Title: | Director |
MRM West Virginia Management Company, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | V.P. and Chief Financial Officer | |||
MRM Oklahoma Management LLC, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Treasurer | |||
The CIT Group/Business Credit, Inc., as Co-Collateral Agent |
||||
By: | /s/ Howard Trebach | |||
Name: | Howard Trebach | |||
Title: | Vice President | |||
Bank of America, N.A., as Co-Collateral Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
LBPS Holding Company, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | E.V.P. and C.F.O. | |||
LaBarge Pipe & Steel Company, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | E.V.P. and C.F.O. | |||
The CIT Group/Business Credit, Inc., as Co-Collateral Agent |
||||
By: | /s/ Howard Trebach | |||
Name: | Howard Trebach | |||
Title: | Vice President | |||
Bank of America, N.A., as Co-Collateral Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
2
3
4
5
6
7
8
9
10
11
RED MAN PIPE & SUPPLY CO., as a Guarantor |
||||
By: | /s/ Dee Paige | |||
Name: | Dee Paige | |||
Title: | Chief Financial Officer | |||
MIDWAY-TRISTATE CORPORATION, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
MCJUNKIN APPALACHIAN OILFIELD SUPPLY COMPANY, as a Guarantor |
||||
By: | /s/ David A. Fox, III | |||
Name: | David A. Fox, III | |||
Title: | Executive Vice President | |||
MCJUNKIN NIGERIA LIMITED, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | Vice President | |||
MCJUNKIN DEVELOPMENT CORPORATION, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | Vice President | |||
MCJUNKIN-PUERTO RICO CORPORATION, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
MCJUNKIN-WEST AFRICA CORPORATION, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
MILTON OIL & GAS COMPANY, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
GREENBRIER PETROLEUM CORPORATION, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
RUFFNER REALTY COMPANY, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
WEST OKLAHOMA PVF COMPANY, as a Guarantor |
||||
By: | /s/ Henry B. Wehrle III | |||
Name: | Henry B. Wehrle III | |||
Title: | President | |||
WESCO ACQUISITION PARTNERS, INC., as a Guarantor |
||||
By: | /s/ Craig Ketchum | |||
Name: | Craig Ketchum | |||
Title: | Chairman of the Board | |||
The CIT Group/Business Credit, Inc., as Co-Collateral Agent |
||||
By: | /s/ Cyntra A. Trani | |||
Name: | Cyntra A. Trani | |||
Title: | Senior Vice President | |||
Bank of America, N.A., as Co-Collateral Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
2
MRM West Virginia Management Company, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | V.P. and Chief Financial Officer | |||
MRM Oklahoma Management LLC, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | Treasurer | |||
The CIT Group/Business Credit, Inc., as Co-Collateral Agent |
||||
By: | /s/ Howard Trebach | |||
Name: | Howard Trebach | |||
Title: | Vice President | |||
Bank of America,
N.A., as Co-Collateral Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
2
LBPS Holding Company, as a New Guarantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | E.V.P. and C.F.O. | |||
LaBarge Pipe & Steel Company, as New Grantor |
||||
By: | /s/ James F. Underhill | |||
Name: | James F. Underhill | |||
Title: | E.V.P. and C.F.O. | |||
The CIT Group/Business Credit,
Inc., as Co-Collateral Agent |
||||
By: | /s/ Howard Trebach | |||
Name: | Howard Trebach | |||
Title: | Vice President | |||
Bank of America, N.A., as Co-Collateral Agent |
||||
By: | /s/ Joy L. Bartholomew | |||
Name: | Joy L. Bartholomew | |||
Title: | Senior Vice President | |||
SECTION 1
DEFINITIONS; RULES OF CONSTRUCTION |
1 | |||
1.1 Definitions |
1 | |||
1.2 Accounting Terms |
30 | |||
1.3 Certain Matters of Construction |
30 | |||
1.4 Interest Calculations and Payments |
31 | |||
1.5 Interest Act (Canada) |
31 | |||
1.6 Equivalent Amount |
32 | |||
SECTION 2 CREDIT FACILITIES |
32 | |||
2.1 Revolver Commitment |
32 | |||
2.2 Letter of Credit Facility |
36 | |||
SECTION 3 INTEREST, FEES AND CHARGES |
39 | |||
3.1 Interest |
39 | |||
3.2 Fees |
40 | |||
3.3 Computation of Interest, Fees, Yield Protection |
41 | |||
3.4 Overdraft Loans |
42 | |||
3.5 Illegality |
42 | |||
3.6 Increased Costs |
42 | |||
3.7 Capital Adequacy |
43 | |||
3.8 Mitigation |
43 | |||
3.9 Funding Losses |
44 | |||
3.10 Maximum Interest |
44 | |||
SECTION 4 LOAN ADMINISTRATION |
44 | |||
4.1 Manner of Borrowing and Funding Revolver Loans |
44 | |||
4.2 Defaulting Lender |
46 | |||
4.3 Number and Amount of BA Equivalent Loans; Determination of Rate |
49 | |||
4.4 Effect of Termination |
49 | |||
SECTION 5 PAYMENTS |
49 | |||
5.1 General Payment Provisions |
49 | |||
5.2 Repayment of Revolver Loans |
49 | |||
5.3 Payment of Other Obligations |
50 | |||
5.4 Marshalling; Payments Set Aside |
50 | |||
5.5
PostDefault Allocation of Payments |
50 | |||
5.6 Application of Payments |
51 | |||
5.7 Loan Account; Account Stated |
51 | |||
5.8 Taxes |
52 | |||
SECTION 6 CONDITIONS PRECEDENT |
52 | |||
6.1 Conditions Precedent to Amendment and Restatement |
52 | |||
6.2 Conditions Precedent to All Credit Extensions |
55 | |||
6.3 Limited Waiver of Conditions Precedent |
56 | |||
SECTION 7 COLLATERAL |
56 | |||
7.1 Grant of Security Interest |
56 | |||
7.2 Lien on Deposit Accounts/Dominion Accounts; Cash Collateral |
57 | |||
7.3 Other Collateral |
58 |
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7.4 No Assumption of Liability |
58 | |||
7.5 Further Assurances |
58 | |||
SECTION 8 COLLATERAL ADMINISTRATION |
58 | |||
8.1 Borrowing Base Certificates |
58 | |||
8.2 Administration of Accounts |
59 | |||
8.3 Administration of Inventory |
60 | |||
8.4 Administration of Equipment and Real Estate |
60 | |||
8.5 Administration of Deposit Accounts |
61 | |||
8.6 General Provisions |
61 | |||
8.7 Power of Attorney |
62 | |||
SECTION 9 REPRESENTATIONS AND WARRANTIES |
63 | |||
9.1 General Representations and Warranties |
63 | |||
9.2 Complete Disclosure |
70 | |||
SECTION 10 COVENANTS AND CONTINUING AGREEMENTS |
70 | |||
10.1 Affirmative Covenants |
70 | |||
10.2 Negative Covenants |
76 | |||
10.3 Financial Covenants |
81 | |||
SECTION 11 EVENTS OF DEFAULT; REMEDIES ON DEFAULT |
81 | |||
11.1 Events of Default |
81 | |||
11.2 Remedies upon Default |
83 | |||
11.3 License |
84 | |||
11.4 Setoff |
85 | |||
11.5 Remedies Cumulative; No Waiver |
85 | |||
11.6 Equity Cure |
86 | |||
SECTION 12 AGENT |
87 | |||
12.1 Appointment, Authority and Duties of Agent |
87 | |||
12.2 Agreements Regarding Collateral and Field Examination Reports |
88 | |||
12.3 Reliance By Agent |
89 | |||
12.4 Action Upon Default |
89 | |||
12.5 Ratable Sharing |
89 | |||
12.6 Indemnification of Agent Indemnitees |
90 | |||
12.7 Limitation on Responsibilities of Agent |
90 | |||
12.8 Successor Agent and Co-Agents |
91 | |||
12.9 Due Diligence and Non-Reliance |
92 | |||
12.10 Replacement of Certain Lenders |
92 | |||
12.11 Remittance of Payments and Collections |
93 | |||
12.12 Agent in its Individual Capacity |
93 | |||
12.13 Agent Titles |
94 | |||
12.14 No Third Party Beneficiaries |
94 | |||
SECTION 13 BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS |
94 | |||
13.1 Successors and Assigns |
94 | |||
13.2 Participations |
94 | |||
13.3 Assignments |
95 | |||
13.4 Representation of Lenders |
96 | |||
SECTION 14 GUARANTEES |
96 |
- ii -
14.1 The Guarantees |
96 | |||
14.2 Guarantee Absolute |
96 | |||
14.3 Consents, Waivers and Renewals |
97 | |||
14.4 Subrogation |
98 | |||
14.5 Subordination |
98 | |||
14.6 Protection Clause |
99 | |||
14.7 Limitation on Guarantee of Obligations |
99 | |||
14.8 Guarantee of Payment |
100 | |||
SECTION 15 MISCELLANEOUS |
100 | |||
15.1 Consents, Amendments and Waivers |
100 | |||
15.2 Indemnity |
101 | |||
15.3 Notices and Communications |
102 | |||
15.4 Performance of Obligors Obligations |
102 | |||
15.5 Credit Inquiries |
103 | |||
15.6 Severability |
103 | |||
15.7 Cumulative Effect; Conflict of Terms |
103 | |||
15.8 Counterparts; Facsimile Signatures |
103 | |||
15.9 Entire Agreement |
103 | |||
15.10 Obligations of Lenders |
103 | |||
15.11 Confidentiality |
104 | |||
15.12 Governing Law; Choice of Forum; Service of Process |
104 | |||
15,13 Waivers by Obligors |
105 | |||
15.14 Survival of Representations and Warranties |
106 | |||
15.15 Fees and Expenses |
106 | |||
15.16 Limitation of Liability |
107 | |||
15.17 Final Agreement |
107 | |||
15.18 Precedence |
107 | |||
15.19 Judgment Currency |
108 | |||
15.20 Canadian Anti-Money Laundering Legislation |
108 | |||
15.21 Existing Loan and Security Agreement Amended and Restated |
109 |
- iii -
Exhibit A
|
Revolver Note | |
Exhibit B
|
Intentionally Deleted | |
Exhibit C
|
Assignment and Acceptance | |
Exhibit D
|
Assignment Notice | |
Exhibit E
|
Borrowing Base Certificate | |
Exhibit F
|
Notice of Continuation/Conversion | |
Exhibit G
|
Compliance Certificate | |
Exhibit H
|
Notice of Borrowing | |
Schedule 1.1
|
Commitments of Lenders | |
Schedule 1 .2
|
EBITDA Adjustments | |
Schedule 8.5
|
Dominion Accounts | |
Schedule 8.6.1
|
Business Locations | |
Schedule 9.1.4
|
Names and Capital Structure | |
Schedule 9.1.5
|
Former Names and Companies | |
Schedule 9.1.12
|
Patents, Trademarks, Copyrights and Licenses | |
Schedule 9.1.15
|
Environmental Matters | |
Schedule 9.1.16
|
Restrictive Agreements | |
Schedule 9.1.17
|
Litigation | |
Schedule 9.1.19
|
Pension Compliance | |
Schedule 9.1.21
|
Labour Contracts | |
Schedule 9.1.29
|
Real Estate | |
Schedule 10.2.2
|
Existing Liens | |
Schedule 10.2.17
|
Existing Affiliate Transactions |
- 2 -
Average Daily | ||||||||||||
Availability for | ||||||||||||
previous Fiscal | ||||||||||||
Level | Quarter | Prime Rate Loans | BA Equivalent Loans | |||||||||
I |
<$30,000,000 | 2.25 | % | 3.75 | % | |||||||
II |
≥$30,000,000 and <$60,000,000 | 2.00 | % | 3.50 | % | |||||||
III |
≥$60,000,000 | 1.75 | % | 3.25 | % |
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(a) | Request for Increase. Provided that there exists no Default or Event of Default, the Borrower may, at any time after delivery of the Section 10.1.2 Financials for the Fiscal Quarter ending September 30, 2010 evidencing compliance with the covenants under Section 10.3, and from time to time thereafter, request an increase in the Revolver Commitments (New Revolver Commitments) by an amount (for all such requests) not exceeding $140,000,000 in the aggregate by issuing a notice to that effect to the Agent and the Lenders (a Commitment Increase Notice); provided that (A) any such request for an increase shall be in a minimum amount of $10,000,000, and (B) the Borrower may make a maximum of four such requests. At the time of sending a Commitment Increase Notice, the |
- 33 -
Borrower (in consultation with the Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders). |
(b) | Lender Elections to Increase. Each Lender shall notify the Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Pro Rata share of such requested increase (each such requested increase a Commitment Increase Amount). Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. | ||
(c) | Notification by Agent; Additional Lenders. The Agent shall notify the Borrower and each Lender of the Lenders responses to each Commitment Increase Notice. To achieve the full amount of a Commitment Increase Amount and subject to the approval of the Agent (which approval shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Agent and its counsel. | ||
(d) | Effective Date and Allocations. If the Revolver Commitments are increased in accordance with this Section 2.1.7, the Agent and the Borrower shall determine the effective date (the Commitment Increase Date) and the final allocation of such increase. The Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Commitment Increase Date. For the avoidance of doubt, any Loans made and Letters of Credit issued following the Commitment Increase Date and utilizing any increase in the Revolver Commitments shall constitute Obligations for all purposes of the Loan Documents. | ||
(e) | Conditions to Effectiveness of Increase. As a condition precedent to any such increase, the Borrower shall deliver to the Agent a certificate of each Obligor dated as of the Commitment Increase Date signed by a Senior Officer of such Obligor (i) certifying and attaching the resolutions adopted by such Obligor approving or consenting to such increase, and (ii) in the case of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Section 9 and the other Loan Documents are true and correct on and as of the Commitment Increase Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.1.7, the representations and warranties contained in subsection 9.1.8 shall be deemed to refer to the most recent financial statements furnished pursuant to subsection 10.1.2, (B) no Default or Event of Default exists, and (C) the increase will not result in any obligation to grant any Liens in favour of any other Person (other than any Liens in favour of Agent, as agent for New Revolving Lenders). |
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(f) | On any Commitment Increase Date on which New Revolver Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (i) each of the Lenders with Revolver Commitments shall assign to each Lender with a New Revolver Commitment (each, a New Revolver Lender) and each of the New Revolver Lenders shall purchase from each of the Lenders with Revolver Commitments, at the principal amount thereof (together with accrued interest), such interests in the Revolver Loans outstanding on such Commitment Increase Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolver Loans will be held by existing Lenders with Revolver Loans and New Revolver Lenders ratably in accordance with their Revolver Commitments after giving effect to the addition of such New Revolver Commitments to the Revolver Commitments, (ii) each New Revolver Commitment shall be deemed for all purposes a Revolver Commitment and each Loan made thereunder shall be deemed, for all purposes, a Revolver Loan and (iii) each New Revolver Lender shall become a Lender with respect to the New Revolver Commitment and all matters relating thereto. |
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(a) | Borrower acknowledges that Issuing Banks willingness to issue any Letter of Credit is conditioned upon Issuing Banks receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; and (ii) each LC Condition is satisfied. If Issuing Bank receives written notice from a Lender at least one Business Day before issuance of a Letter of Credit that any LC Condition has not been satisfied, Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until such notice is withdrawn in writing by that Lender or until Required Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions. | ||
(b) | Letters of Credit may be requested by Borrower only (i) to support obligations of Borrower incurred in the Ordinary Course of Business; or (ii) for other purposes as Agent and Lenders may approve from time to time in writing. The renewal or extension of any Letter of Credit shall be treated as the issuance of a new Letter of Credit, except that delivery of a new LC Application shall be required at the discretion of Issuing Bank. | ||
(c) | Borrower assumes all risks of the acts, omissions or misuses of any Letter of Credit by the beneficiary. In connection with issuance of any Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or |
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otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any Lender, including any act or omission of a Governmental Authority. The rights and remedies of Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrower are discharged with proceeds of any Letter of Credit. | |||
(d) | In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, notice or other communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person, Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Issuing Bank may employ agents and attorneys in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of any such agents or attorneys selected with reasonable care. |
(a) | If Issuing Bank honours any request for payment under a Letter of Credit, Borrower shall pay to Issuing Bank, on the same day (Reimbursement Date), the amount paid by Issuing Bank under such Letter of Credit, together with interest at the interest rate for Prime Rate Revolver Loans from the Reimbursement Date until payment by Borrower. The obligation of Borrower to reimburse Issuing Bank for any payment made under a Letter of Credit shall be absolute, unconditional and irrevocable, and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right that Borrower may have at any time against the beneficiary. Whether or not Borrower submits a Notice of Borrowing, Borrower shall be deemed to have requested a Borrowing of Prime Rate Revolver Loans, in an amount necessary to pay all amounts due Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro Rata share of such Borrowing whether or not the Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied. The amount of any request for payment under a Letter of Credit denominated in a currency other than Dollars shall be converted into Dollars at the Agents spot buying rate in Toronto at approximately 12:00 p.m. (Eastern time) on the date of such drawing/request for payment. |
(b) | Upon issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased from Issuing Bank, without |
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recourse or warranty, an undivided Pro Rata interest and participation in all LC Obligations relating to the Letter of Credit. If Issuing Bank makes any payment under a Letter of Credit and Borrower does not reimburse such payment on the Reimbursement Date, Agent shall promptly notify Lenders and each Lender shall promptly (within one Business Day) and unconditionally pay to Agent, for the benefit of Issuing Bank, the Lenders Pro Rata share of such payment. Upon request by a Lender, Issuing Bank shall furnish copies of any Letters of Credit and LC Documents in its possession at such time. |
(c) | The obligation of each Lender to make payments to Agent for the account of Issuing Bank in connection with Issuing Banks payment under a Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, compensation, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a Letter of Credit having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or the existence of any setoff compensation or defense that any Obligor may have with respect to any Obligations. Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by Borrower or other Person of any obligations under any LC Documents. Issuing Bank does not make to Lenders any express or implied warranty, representation or guarantee with respect to the Collateral, LC Documents or any Obligor. Issuing Bank shall not be responsible to any Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any LC Documents; the validity, genuineness, enforceability, collectibility, value or sufficiency of any Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor. |
(d) | No Issuing Bank Indemnitee shall be liable to any Lender or other Person for any action taken or omitted to be taken in connection with any LC Documents except as a result of its actual gross negligence or wilful misconduct. Issuing Bank shall not have any liability to any Lender if Issuing Bank refrains from any action under any Letter of Credit or LC Documents until it receives written instructions from Required Lenders. |
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(a) | The Obligations shall bear interest (i) if a Prime Rate Loan, at the Prime Rate in effect from time to time, plus the Applicable Margin for Prime Rate Revolver Loans; (ii) if a BA Equivalent Loan, at the BA Equivalent Rate for the applicable Interest Period, plus the Applicable Margin for BA Equivalent Revolver Loans; and (iii) if any other Obligation (including, to the extent permitted by law, interest not paid when due), at the Prime Rate in effect from time to time, plus the Applicable Margin for Prime Rate Revolver Loans. Interest shall accrue from the date the Loan is advanced or the Obligation is incurred or payable, until paid by Borrower. If a Loan is repaid on the same day made, one days interest shall accrue. | ||
(b) | During any Default or Event of Default, if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate. Borrower acknowledges that the cost and expense to Agent and each Lender due to a Default or an Event of Default are difficult to ascertain and that the Default Rate is a fair and reasonable estimate to compensate Agent and Lenders for such added cost and expense. | ||
(c) | Interest accrued on the Loans shall be due and payable in arrears, (i) on the first day of each month and, for any BA Equivalent Loan, the last day of its Interest Period; and (ii) on the Commitment Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand. Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand. |
(a) | Borrower may on any Business Day, subject to delivery of a Notice of Conversion/Continuation, elect to convert any portion of the Prime Rate Loans to, or to continue any BA Equivalent Loan at the end of its Interest Period as, a BA Equivalent Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a BA Equivalent Loan. | ||
(b) | Whenever Borrower desires to convert or continue Loans as BA Equivalent Loans, Borrower shall give Agent a Notice of Conversion/Continuation, no later than 12:00 p.m. (Eastern time) at least three Business Days before the |
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requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the aggregate principal amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be one month if not specified). If, upon the expiration of any Interest Period in respect of any BA Equivalent Loans, Borrower shall have failed to deliver a Notice of Conversion/Continuation, it shall be deemed to have elected to convert such Loans into Prime Rate Loans. |
(a) | the Interest Period shall commence on the date the Loan is made or continued as, or converted into, a BA Equivalent Loan, and shall expire on the numerically corresponding day in the calendar month at its end; | ||
(b) | if any Interest Period commences on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of such month, then the Interest Period shall expire on the last Business Day of such month; and if any Interest Period would expire on a day that is not a Business Day, the period shall expire on the next Business Day; and | ||
(c) | no Interest Period shall extend beyond the Revolver Termination Date. |
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(i) | a Lender shall be subject to any Tax with respect to any BA Equivalent Loan or Letter of Credit or its obligation to make BA Equivalent Loans, issue Letters of Credit or participate in LC Obligations, or a change shall result in the basis of taxation of any payment to a Lender with respect to its BA Equivalent Loans, or its obligation to make BA Equivalent Loans, issue Letters of Credit or participate in LC Obligations (except for Excluded Taxes); or |
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(ii) | any reserve (including any imposed by the Board of Governors or any other Governmental Authority), special deposits or similar requirement against assets of, deposits with or for the account of, or credit extended by, a Lender shall be imposed or deemed applicable, or any other condition affecting a Lenders BA Equivalent Loans or obligation to make BA Equivalent Loans, issue Letters of Credit or participate in LC Obligations shall be imposed on such Lender; |
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(a) | Whenever Borrower desires funding of a Borrowing of Revolver Loans, Borrower shall give Agent a Notice of Borrowing. Such notice must be |
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received by Agent no later than 12:00 p.m. (Eastern time) (i) on the Business Day of the requested funding date, in the case of Prime Rate Loans, and (ii) at least three Business Days prior to the requested funding date, in the case of BA Equivalent Loans. Notices received after 12:00 p.m. (Eastern time) shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the principal amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as Prime Rate Loans or BA Equivalent Loans, and (D) in the case of BA Equivalent Loans, the duration of the applicable Interest Period (which shall be deemed to be one month if not specified). | |||
(b) | Unless payment is otherwise timely made by Borrower, the becoming due of any Obligations (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt) shall be deemed to be a request for Prime Rate Loans, on the due date, in the amount of such Obligations. The proceeds of such Loans shall be disbursed as direct payment of the relevant Obligation. | ||
(c) | If Borrower establishes a controlled disbursement account with Agent or any Affiliate of Agent, then the presentation for payment of any cheque or other item of payment drawn on such account at a time when there are insufficient funds to cover it shall be deemed to be a request for Prime Rate Loans, on the date of such presentation, in the amount of the cheque and items presented for payment. The proceeds of such Revolver Loans may be disbursed directly to the controlled disbursement account or other appropriate account. |
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(a) | Agent may, but shall not be obligated to, advance Swingline Loans to Borrower out of Agents own funds, up to an aggregate outstanding amount of $15,000,000, unless the funding is specifically required to be made by all Lenders hereunder. Each Swingline Loan shall constitute a Revolver Loan for all purposes, except that payments thereon shall be made to Agent for its own account. The obligation of Borrower to repay Swingline Loans shall be evidenced by the records of Agent and need not be evidenced by any promissory note. | ||
(b) | To facilitate administration of the Revolver Loans, Lenders and Agent agree (which agreement is solely among them, and not for the benefit of or enforceable by Borrower) that settlement among them with respect to Revolver Loans (other than Swingline Loans) may take place periodically on a date determined from time to time by Agent, which shall occur at least once every five Business Days. On each settlement date, settlement shall be made with each Lender in accordance with the Settlement Report delivered by Agent to Lenders. Between settlement dates, Agent may in its discretion apply payments on Revolver Loans to Swingline Loans, regardless of any designation by Borrower or any provision herein to the contrary. Each Lenders obligation to make settlements with Agent is absolute and unconditional, without offset, compensation, counterclaim or other defense, and whether or not the Commitments have terminated, an Overadvance exists, or the conditions in Section 6 are satisfied. |
(a) | Agent may, in its discretion, retain payments that would otherwise be made to such Defaulting Lender hereunder, apply the payments to such Lenders defaulted obligations or readvance the funds to Borrower in accordance with this Agreement and this Section 4.2. The failure of any Defaulting Lender to fund a Loan or to make a payment in respect of a LC Obligation |
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shall not relieve any other Lender of its obligations hereunder, and no Lender shall be responsible for default by another Lender provided, however, that neither the Agent nor any Lender shall be required to make any Loans, issue any Letters of Credit, make available any Bank Products or otherwise extend any form of credit to the Borrower (Defaulting Lender Credit Extensions) which may require the Agent or any such Lender to obtain settlement with or payment or repayment or reimbursement from such Defaulting Lender, all of which Defaulting Lender Credit Extensions being in the sole discretion of the Agent and Lenders exercised in good faith; | |||
(b) | The sum of such Defaulting Lenders outstanding Loans plus its risk participations in outstanding Swingline Loans, Bank Products (if any) and LC Obligations (collectively, its Credit Exposure) and such Defaulting Lenders Commitment shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 15.1); provided that the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender (it being understood that any Commitments or Loans held or deemed held by the Defaulting Lender shall be excluded for a vote of the Lenders hereunder requiring the consent of the Lenders); | ||
(c) | Subject to clause (d) below, a Defaulting Lender shall be deemed to have assigned any and all payments due to it from the Obligor, whether on account of outstanding Loans, interest, fees or otherwise, to the remaining non-defaulting Lenders for application to, and reduction of, their proportionate shares of all outstanding Obligations until, as a result of application of such assigned payments, the Lenders respective Pro Rata share of all outstanding Obligations shall have returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment causing such delinquency; | ||
(d) | Subject to Section 3.2, at the option of the Agent, any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 4.2) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Agent in a segregated account and, subject to any applicable requirements of law, be applied at such time or times as may be determined by the Agent, (i) first, to the payment of any amounts owing by such Defaulting Lender to any Agent hereunder, (ii) second, Pro Rata, to the payment of any amounts owing by such Defaulting Lender to any Issuing Bank or the Swingline Lender hereunder, (iii) third, if so determined by the Agent or requested by an Issuing Bank or the Swingline Lender, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any existing or future participating interest in any Swingline Loan or Letter of Credit, (iv) fourth, to the funding of any Loan in respect of which |
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such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent, (v) fifth, if so determined by the Agent, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any Loans under this Agreement, (vi) sixth, to the payment of any amounts owing to the Lenders or any Issuing Bank or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender or such Issuing Bank or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lenders breach of its obligations under this Agreement, and (vii) seventh, to such Defaulting Lender; provided that if such payment is (x) a prepayment of the principal amount of any Loans or reimbursement obligations in respect of LC disbursements which a Defaulting Lender has funded its participation obligations and (y) made at a time when the conditions set forth in Section 6.2 are satisfied, such payment shall be applied solely to prepay the Loans of, and reimbursement obligations owed to, all non-Defaulting Lenders Pro Rata prior to being applied to the prepayment of any Loans, or reimbursement obligations owed to, any Defaulting Lender. | |||
(e) | The Defaulting Lenders decision-making and participation rights and rights to payments as set forth in clauses (a) through (d) hereinabove shall be restored only upon the payment by the Defaulting Lender of its Pro Rata share of any Obligations, any participation obligation, or expenses as to which it is delinquent, together with interest thereon at the Default Rate from the date when originally due until the date upon which any such amounts are actually paid and/or such Lender otherwise ceases to constitute a Defaulting Lender. | ||
(f) | The non-defaulting Lenders shall also have the right, but not the obligation, in their respective, sole and absolute discretion, to acquire for no cash consideration, (Pro Rata, based on the respective Commitments of those Lenders electing to exercise such right) the Defaulting Lenders Commitment to fund future Loans (the Defaulting Lenders Future Commitment). Upon any such purchase of the Pro Rate Share of any Defaulting Lenders Future Commitment, the Defaulting Lenders share in future Loans and its rights under the Loan Documents with respect thereto shall terminate on the date of purchase, and the Defaulting Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest, including, if so requested, an Assignment and Acceptance. Each Defaulting Lender shall indemnify the Agent and each non-defaulting Lender from and against any and all loss, damage or expenses, including but not limited to reasonable attorneys fees and funds advanced by any Agent or by any non-defaulting Lender, on account of a Defaulting Lenders failure to timely fund its Pro Rata share of a Loan or to otherwise perform its obligations under the Loan Documents. Nothing contained in this Section 4.2(f) shall be deemed to limit or modify the rights of the Borrower and Agent pursuant to Section 12.10 hereof. |
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(a) | first, to all costs and expenses, including Extraordinary Expenses, owing to Agent; | ||
(b) | second, to all amounts owing to Agent on Swingline Loans or Protective Advances; | ||
(c) | third, to all amounts owing to Issuing Bank on LC Obligations; | ||
(d) | fourth, to all Obligations constituting fees owing to Agent and owing to Lenders (on a Pro Rata basis), (excluding amounts relating to Bank Products); | ||
(e) | fifth, to all Obligations constituting interest owing to Agent and owing to the Lenders (on a Pro Rata basis), (excluding amounts relating to Bank Products); | ||
(f) | sixth, to provide Cash Collateral for outstanding Letters of Credit; | ||
(g) | seventh, to all other Obligations owing to Agent, and owing to the Lenders (on a Pro Rata basis), other than Bank Product Debt; and |
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(a) | Notes shall have been executed by Borrower and delivered to each Lender that requests issuance of a Note. Each other Loan Document not delivered under the Existing Loan and Security Agreement shall have been duly executed and delivered to Agent by each of the signatories thereto, and each Obligor shall be in compliance with all terms thereof. | ||
(b) | Agent shall have received all PPSA and other Lien searches and other evidence satisfactory to Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens. | ||
(c) | The Agent shall have received: |
(i) | acknowledgment copies of proper financing or filing statements, publications or recordations, duly filed on or before the Closing Date under the PPSA of all jurisdictions that the Agent may deem necessary or desirable in order to perfect the Agents Lien; and | ||
(ii) | duly executed Termination Statements and such other instruments, in form and substance satisfactory to the Agent, as shall be necessary to terminate and discharge and satisfy all Liens on the Property of the Obligors (except Permitted Liens). |
(d) | Agent shall have received all subordination and postponement agreements required pursuant to the terms hereof, including, as necessary, any amendment or restatements of the: |
(i) | ATB Intercreditor Agreement; and | ||
(ii) | the Shareholder Subordination Agreement. |
(e) | Agent shall have received duly executed agreements establishing each Dominion Account, in form and substance satisfactory to Agent, to the extent not delivered under the Existing Loan and Security Agreement. | ||
(f) | Agent shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of each Obligor certifying that, after giving effect to the Loans outstanding on the Closing Date and transactions hereunder, (i) such Obligor is Solvent; (ii) no Default or Event of Default exists; (iii) the representations and warranties set forth in Section 9 are true and correct; and (iv) such Obligor has complied with all agreements and conditions to be satisfied by it under the Loan Documents. | ||
(g) | Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligors Organic Documents are true and complete, and in full force and effect, without amendment except as shown, or there have been no amendments thereto |
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since November 2, 2006, (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility, and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing. |
(h) | Agent shall have received a written opinion of McCarthy Tetrault LLP as well as any local counsel to Obligors or Agent, in form and substance reasonably satisfactory to Agent. | ||
(i) | Agent shall have received compliance certificates, certificates of status, certificates dattestation and good standing certificates for each Obligor, issued by the appropriate official of such Obligors jurisdiction of organization and each jurisdiction where such Obligors conduct of business or ownership of Property necessitates qualification. | ||
(j) | Agent shall have received copies of policies or certificates of insurance and binders of Insurance for the insurance policies carried by Obligors with requisite loss payable endorsements, all in compliance with the Loan Documents and in form and substance satisfactory to the Agent, to the extent not delivered under the Existing Loan and Security Agreement. | ||
(k) | Agent shall have completed its legal due diligence of Obligors, with results satisfactory to Agent. | ||
(1) | Agent shall have received a Borrowing Base Certificate prepared as of September 28, 2009. | ||
(m) | The Borrower shall have paid all fees and expenses of the Agent and Lenders, including as provided in the Fee Letter and hereunder, and all attorney costs and audit costs incurred in connection with any of the Loan Documents and the transactions contemplated thereby to the extent invoiced. | ||
(n) | The Agent shall have received an officers certificate from the Borrower certifying, and/or received other evidence satisfactory to the Agent, that the terms of this Agreement and the other Loan Documents are not in violation of or contrary to the provisions of any other document to which Borrower or any Subsidiary is a party or by which they are bound. | ||
(o) | There shall exist no action, suit, investigation, litigation, or proceeding pending or threatened in any court or before any arbitrator or governmental authority that in Lenders good faith credit discretion (a) could reasonably be expected to have a Material Adverse Effect or impair Obligors ability to perform their obligations under the Loan Agreement, or (b) could |
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reasonably be expected to materially and adversely affect the Obligations or the transactions contemplated thereby. | |||
(p) | Agent shall have reviewed and confirmed its satisfaction with the instruments/debt documents evidencing the Debt of and any other creditors not being paid out and discharged on or prior to the Closing Date, including, without limitation, its satisfaction with the terms of the ATB Financial Debt (including any amendments or renewals thereto) as it exists on the Closing Date. | ||
(q) | The Agent shall have received an officers certificate from the Borrower certifying, and/or received other evidence satisfactory to it, that each Obligor shall have obtained all governmental and third party consents and approvals as Agent may consider necessary or appropriate in connection with this Agreement and the transactions contemplated thereby. | ||
(r) | Assignment and Acceptance agreements amongst the Lenders party to the Existing Loan and Security Agreement and the Lenders party to this Agreement shall have been executed and delivered to the Agent to the extent deemed necessary by the Agent. | ||
(s) | All proceedings taken in connection with the execution of this Agreement, all other Loan Documents and all documents and papers relating thereto shall be satisfactory in form, scope, and substance to the Agent and the Lenders. |
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(a) | No Default or Event of Default shall exist at the time of, or result from, such funding, issuance or grant; | ||
(b) | The representations and warranties of each Obligor in the Loan Documents shall be true and correct on the date of, and upon giving effect to, such funding, issuance or grant (except for representations and warranties that expressly relate to an earlier date); | ||
(c) | All conditions precedent in any other Loan Document shall be satisfied; | ||
(d) | No event shall have occurred or circumstance exist that has or could reasonably be expected to have a Material Adverse Effect; and | ||
(e) | With respect to issuance of a Letter of Credit, the LC Conditions shall be satisfied. |
(a) | all Accounts; | ||
(b) | all Chattel Paper, including electronic chattel paper; | ||
(c) | all Deposit Accounts and Dominion Accounts; | ||
(d) | all General Intangibles, including Intellectual Property; | ||
(e) | all Goods, including Inventory but excluding Equipment; |
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(f) | all Instruments; | ||
(g) | all Investment Property; | ||
(h) | all monies, whether or not in the possession or under the control of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender, including any Cash Collateral; | ||
(i) | all accessions to, substitutions for, and all replacements, products, and cash and non-cash proceeds of the foregoing, including proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any Collateral; and | ||
(j) | all books and records (including customer lists, files, correspondence, tapes, computer programs, print-outs and computer records) pertaining to the foregoing. |
(a) | To further secure the prompt payment and performance of all Obligations, each Obligor hereby grants to Agent, for the benefit of Secured Parties, a continuing security interest in and Lien upon all of Obligors right, title and interest in and to each Deposit Account and Dominion Account of such Obligor and any deposits or other sums at any time credited to any such Deposit Account and Dominion Account, including any sums in any blocked or lockbox accounts or in any accounts into which such sums are swept. For greater certainty, Obligors hereby agree that, unless otherwise agreed to by Agent, they will not maintain any Deposit Accounts, other than Dominion Accounts with the Bank. | ||
(b) | Each Obligor authorizes and directs Bank to deliver to Agent, on a daily basis, all balances in the Dominion Accounts maintained by such Obligor with such depository for application to the Obligations then outstanding. Each Obligor irrevocably appoints Agent as such Obligors attorney to collect such balances to the extent any such delivery is not so made. |
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(a) | Each Obligor shall maintain insurance with respect to the Collateral, covering casualty, hazard, public liability, theft, malicious mischief, and such other risks, in such amounts, with such endorsements, and with such insurers (rated A+ or better by A.M. Best Rating Guide) as are satisfactory to Agent. All proceeds under each policy shall be payable to Agent. From time to time upon request, Obligors shall deliver to Agent the originals or certified copies of its insurance policies and updated flood plain searches. Unless Agent shall agree otherwise, each policy shall include satisfactory endorsements (i) showing Agent as sole loss payee, first mortgagee or additional insured, as appropriate; (ii) requiring 30 days prior written notice to Agent in the event of cancellation of the policy for any reason whatsoever; and (iii) specifying that the interest of Agent shall not be impaired or invalidated by any act or neglect of any Obligor or the owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy. If any Obligor fails to provide and pay for such insurance, Agent may, at its option, but shall not be required to, procure the insurance and charge Obligors therefor. Each Obligor agrees to deliver to Agent, promptly as rendered, copies of all reports made to insurance companies. While no Event of Default exists, Obligors may settle, adjust or compromise any insurance claim, as long as the proceeds are delivered to Agent. If an Event of Default exists, only Agent shall be authorized to settle, adjust and compromise such claims. |
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(b) | Any proceeds of insurance (other than proceeds from workers compensation or D&O insurance) and any awards arising from condemnation of any Collateral shall be paid to Agent. Any such proceeds or awards that relate to Inventory shall be applied to payment of the Revolver Loans, and then to any other Obligations outstanding. |
(a) | Endorse an Obligors name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Agents possession or control; and |
(b) | During an Event of Default, (i) notify any Account Debtors of the assignment of their Accounts or to set-up or render opposable any Lien in respect thereof, demand and enforce payment of Accounts, by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Agent deems advisable; (iv) take control, in any manner, of any proceeds of Collateral; (v) prepare, file and sign in Obligors name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to an Obligor, and notify postal authorities to change the address for delivery thereof to such address as Agent may designate; (vii) endorse any Chattel Paper, Document, Instrument, invoice, freight bill, bill of lading, or similar document or agreement relating to any |
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Accounts, Inventory or other Collateral; (viii) use an Obligors stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to any Collateral; (x) make and adjust claims under policies of insurance; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit or bankers acceptance for which an Obligor is a beneficiary; and (xii) take all other actions as Agent deems appropriate to fulfill any Obligors obligations under the Loan Documents. |
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(a) | it is genuine and in all respects what it purports to be, and is not evidenced by a judgment; |
(b) | it arises out of a completed, bona fide sale and delivery of goods or rendition of services in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto; |
(c) | it is for a sum certain, maturing as stated in the invoice covering such sale or rendition of services, a copy of which has been furnished or is available to Agent on request; |
(d) | it is not subject to any offset, compensation, Lien (other than Agents Lien), deduction, defense, dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of Business and disclosed to Agent; and it is absolutely owing by the Account Debtor, without contingency in any respect; |
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(e) | no purchase order, agreement, document or Applicable Law restricts assignment of the Account to Agent (regardless of whether, under the UCC, the PPSA or the Civil Code, the restriction is ineffective); |
(f) | no extension, compromise, settlement, modification, credit, deduction or return has been authorized with respect to the Account, except discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Agent hereunder; and |
(g) | to the best of Borrowers knowledge, (i) there are no facts or circumstances that are reasonably likely to impair the enforceability or collectibility of such Account; (ii) the Account Debtor had the capacity to contract when the Account arose, continues to meet the applicable Borrowers customary credit standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably be expected to have a material adverse effect on the Account Debtors financial condition. |
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(a) | Each Plan is in compliance in all material respects with all applicable laws and the terms of such Plans. Each of the Obligors and each of its Subsidiaries Plans are duly registered where required by, and are in compliance and good standing in all material respects under, all applicable laws, acts, statutes, regulations, orders, directives and agreements, including, without limitation, the ITA and the PBA, any successor legislation thereto, and other applicable laws of any jurisdiction. Each Obligor has made all required contributions to any Plan when due, and no application for or taking of a funding waiver or an extension of any amortization period has been made with respect to any Plan. | ||
(b) | There are no pending or, to the best knowledge of Obligors, threatened claims, actions or lawsuits, or action by any Governmental Authority or any Plan administrator or trustee, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or breach of the fiduciary responsibility rules with respect to any Plan or any breach by the Borrower of any other laws, rules, regulations or terms of any Plans or any whole or partial termination or wind up of any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. |
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(c) | (i) No Pension Event has occurred during the last 5 years, or is reasonably expected to occur; (ii) no Plan has any Unfunded Pension Liability; and (iii) No Obligor has incurred during the last 5 years, or reasonably expects to incur, any liability under applicable laws with respect to any Plan (other than premiums due and not delinquent). | ||
(d) | No Lien on any property of an Obligor has arisen in respect of any Plan (except inchoate Liens for premiums and contributions not due and delinquent). | ||
(e) | No Obligor or Subsidiary has any Multiemployer Plan or Foreign Plan. Each Obligor and Subsidiary is in full compliance with the requirements of all Applicable Laws, including ERISA, relating to each Multiemployer Plan and Foreign Plan. No fact or situation exists that could reasonably be expected to result in a Material Adverse Effect in connection with any Multiemployer Plan or Foreign Plan. No Obligor or Subsidiary has any withdrawal liability in connection with a Multiemployer Plan or Foreign Plan. All employer and employee contributions to Foreign Plans, to the extent required by law or the terms of such plans, have been made or accrued in accordance with normal accounting principles. The fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance and/or the book reserve established for each Foreign Plan, together with any accrued contributions, are sufficient to provide the accrued benefit obligations of all participants in such plans according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles. Each Foreign Plan required to be registered has been registered and is maintained in good standing with all applicable regulatory authorities. |
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(a) | (a) Except as advised in writing to the Agent, no investigation or proceeding of any Governmental Authority is pending against the Real Estate or against an Obligor in respect of the Real Estate. No part of the Real Estate has been condemned, taken or expropriated by any Governmental Authority, federal, state, provincial, municipal or any other competent authority; | ||
(b) | Except as advised in writing to the Agent, all present uses in respect of the Real Estate may lawfully be continued and all permitted uses are satisfactory for the Obligors current and intended purposes; | ||
(c) | All Obligor owned Real Estate is set forth in Schedule 9.1.29; and | ||
(d) | No Inventory is located at any leased Premises except as indicated in Schedule 8.6.1. |
(a) | Permit Agent from time to time, subject (except when a Default or Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Obligor or Subsidiary, inspect, audit and make extracts from any Obligors or Subsidiarys books and records, and discuss with its officers, employees, agents, mandataries, advisors and independent accountants such Obligors or Subsidiarys business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense. Neither Agent nor any Lender shall have any duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor. To |
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the extent any appraisal or other information is shared by Agent or a Lender with any Obligor, such Obligor acknowledges that it was prepared by Agent and Lenders for their purposes and Obligors shall not be entitled to rely upon it. Agent (or its representatives) shall conduct, every year during the term of this Agreement, at least one appraisal of Inventory and one examination. | |||
(b) | Reimburse Agent for all charges, costs and expenses of Agent in connection with (i) examinations of any Obligors books and records or any other financial or Collateral matters; and (ii) appraisals of Inventory. Subject to the foregoing, Obligors shall pay Agents then standard charges, costs and expenses for each day that an employee of Agent or its Affiliates is engaged in any examination activities (the standard per diem, per individual, is US$1,000 (excluding costs and expenses)). This Section 10.1.1 shall not be construed to limit Agents or its representatives right to conduct examinations or to obtain appraisals at any time in its discretion, nor to use third parties for such purposes. |
(a) | as soon as available, and in any event within 120 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders equity for such Fiscal Year, on consolidated and consolidating bases for Obligors and Subsidiaries, which consolidated statements shall be audited and certified (without qualification as to scope, going concern or similar items) by a firm of independent chartered accountants of recognized standing selected by Borrower and acceptable to Agent, and shall set forth in comparative form corresponding figures for the preceding Fiscal Year and other information acceptable to Agent; | ||
(b) | as soon as available, and in any event within 30 days after the end of each calendar month, (i) unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on consolidated and consolidating bases for Obligors and Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such month and period, subject to normal year end adjustments and the absence of footnotes, (ii) a reconciliation of the detailed accounts receivable aged trial balance most recently delivered to Agent pursuant to the requirements of Section 8.2.1 to the accounts receivable balance provided in the unaudited balance sheet delivered pursuant to clause |
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(i) above, (iii) a reconciliation of the detailed trade payable listing most recently delivered to Agent pursuant to the requirements of Section 10.1.2(f) to the trade payable balance provided in the unaudited balance sheet delivered pursuant to clause (i) above, and (iv) a reconciliation of the detailed inventory reports most recently delivered to Agent pursuant to the requirements of Section 8.3.1 to the inventory balance provided in the unaudited balance sheet delivered pursuant to clause (i) above; |
(c) | concurrently with delivery of financial statements under clauses (a) and (b) above,or more frequently if requested by Agent while a Default or Event of Default exists, a Compliance Certificate executed by the chief financial officer of Borrower; | ||
(d) | concurrently with delivery of financial statements under clause (a) above, copies of all management letters and other material reports submitted to Obligors by its accountant in connection with such financial statements; | ||
(e) | not later than ninety (90) days after the beginning of each Fiscal Year, projections of Obligors consolidated balance sheets, results of operations, cash flow and Availability for the next Fiscal Year, month by month; | ||
(f) | on or before the 30th day of each month, or as frequent as the Agent may request, a listing of each Obligors trade payables as of the end of the preceding month, specifying the trade creditor and balance due, all in form satisfactory to Agent; | ||
(g) | promptly after the sending or filing thereof, copies of any proxy statements, financial statements or reports that any Obligor has made generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses that any Obligor files with the Securities and Exchange Commission. any provincial securities commission (including the Ontario Securities Commission) or any other Governmental Authority, or any securities exchange; and copies of any press releases or other statements made available by an Obligor to the public concerning material changes to or developments in the business of such Obligor; | ||
(h) | promptly after the sending or filing thereof, copies of any annual report, valuation, notice on other filing to be filed in connection with each Plan or Foreign Plan, to the FSCO, the Canada Revenue Agency, or otherwise; | ||
(i) | upon request, or, in the event that such filing reflects a significant change with respect to the matters covered thereby, within five (5) Business Days after the filing thereof with the FSCO or any other Governmental Authority, as applicable, copies of the following: (i) each annual report filed with the FSCO or any other Governmental Authority with respect to each Plan and (ii) a copy of each other filing or notice filed with the FSCO or any other Governmental Authority with respect to each Plan by an Obligor; |
(j) | upon request, copies of each actuarial report for any Plan or Multi- Employer Plan and within five (5) Business Days after receipt thereof by an Obligor copies of any notices of the FSCOs or any other Governmental Authorities intention to terminate a Plan or to have a third party appointed to administer such Plan or determination that a whole or partial termination has occurred in respect of any Plan or that any withdrawal liability exists in respect of any Plan; or (ii) any notice regarding the imposition of withdrawal liability; | ||
(k) | within fifteen (15) Business Days after the occurrence thereof: (i) any changes in the benefits of any existing Plan which increase the Obligors annual costs with respect thereto by an amount in excess of $250,000, or the establishment of any new Plan or the commencement of contributions to any Plan to which the Obligors or any of their Subsidiaries was not previously contributing, in either case if the annual costs with respect thereto are in excess of $250,000, and (ii) any failure by the Obligors or any of their Subsidiaries to make a required instalment or any other required payment in respect of a Pension Plan on or before the due date for such instalment or payment or any other material breach or material default by the Obligors or any of their Subsidiaries under or in respect of any Plan or (iii) the occurrence of any event or condition which might constitute grounds for termination, or winding up of a Plan or which might give rise to any Lien on any property of the Obligors or any of their Subsidiaries in respect of any Plan; | ||
(l) | At Agents request, a copy of any tax return filed by an Obligor; and | ||
(m) | such other reports and information (financial or otherwise) as Agent may request from time to time in connection with any Collateral or any Obligors, Subsidiarys or other Obligors financial condition or business. |
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(a) | Maintain all of its Property necessary and useful in its businesses in the ordinary course in good operating condition and repair, ordinary wear and tear excepted; | ||
(b) | To perform or cause to be performed all of its covenants and obligations contained in all Leases and keep all such Leases in good standing (unless and until terminated in the ordinary course of business); and | ||
(c) | Promptly notify the Agent of any fire or other casualty or any notice of expropriation, action or proceeding affecting the Real Estate or any part thereof immediately upon obtaining knowledge of the same. |
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(a) | the Obligations; | ||
(b) | ATB Financial Debt, provided same is subject to the ATB Intercreditor Agreement; | ||
(c) | The Shareholders Notes, the Class R Note, other indebtedness to a shareholder or Affiliate of the Borrower, provided same are subject to the Shareholders Subordination Agreement; | ||
(d) | Permitted Purchase Money Debt; | ||
(e) | Borrowed Money (other than the Obligations, ATB Financial Debt, the Shareholders Notes, the Class R Note, Permitted Purchase Money Debt and other permitted Debt under Section 10.2.1(c)), but only to the extent outstanding on the Closing Date and satisfactory to the Lenders, and not satisfied with proceeds of the initial Loans; | ||
(f) | Permitted Contingent Obligations; | ||
(g) | Debt that is not included in any of the preceding clauses of this Section, is not secured by a Lien and does not exceed $250,000 in the aggregate at any time; and | ||
(h) | Accounts payable and accrued liabilities arising in the Ordinary Course of Business. |
(a) | Liens in favour of Agent; | ||
(b) | Purchase Money Liens securing Permitted Purchase Money Debt; |
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(c) | Liens for Taxes not yet due or being Properly Contested; | ||
(d) | statutory Liens (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of any Obligor or Subsidiary; | ||
(e) | Liens incurred or deposits made in the Ordinary Course of Business to secure the performance of tenders, bids, leases, contracts (except those relating to Borrowed Money), statutory obligations and other similar obligations, or arising as a result of progress payments under government contracts, as long as such Liens are at all times junior to Agents Liens; | ||
(f) | Liens arising by virtue of a judgment or judicial order against any Obligor or Subsidiary, or any Property of an Obligor or Subsidiary, as long as such Liens are (i) in existence for less than twenty (20) consecutive days or being Properly Contested, and (ii) at all times junior to Agents Liens; | ||
(g) | Liens which constitute easements, servitudes, rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business; | ||
(h) | normal and customary rights of setoff or compensation upon deposits in favour of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection; | ||
(i) | Liens on Equipment and Real Estate in favour of ATB Financial securing the ATB Financial Debt and as permitted pursuant to the ATB Intercreditor Agreement; and | ||
(j) | existing Liens shown on Schedule 10.2.2. | ||
10.2.3 | Capital Expenditures. |
10.2.4 | Payments to Shareholders. |
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10.2.5 | Restricted Investments. |
10.2.6 | Disposition of Assets. |
10.2.7 | Advances. |
10.2.8 | Restrictions on Payment of Certain Debt. |
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10.2.9 | Fundamental Changes. |
10.2.10 | Subsidiaries. |
10.2.11 | Organic Documents. |
10.2.12 | Tax Consolidation. |
10.2.13 | Accounting Changes. |
10.2.14 | Restrictive Agreements. |
10.2.15 Conduct of Business. |
10.2.16 | Affiliate Transactions. |
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10.2.17 | Plans. |
10.2.18 | Amendments to Subordinated Debt. |
10.2.19 | Acquisitions. |
10.2.20 | Transactions Affecting Collateral or Obligations. |
10.2.21 | Sale and Leaseback Transactions |
10.2.22 | Inactive Subsidiaries |
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10.2.23 | Distributor Agreements |
10.3 | Financial Covenants. |
For so long as any Commitments or Obligations are outstanding, Borrower shall: | ||
10.3.1 | ||
Maintain Adjusted EBITDA of: |
| $1,500,000 for the two Fiscal Quarters ending December 31, 2009; | ||
| $4,800,000 for the three Fiscal Quarters ending March 31, 2010; and | ||
| $3,700,000 for the four Fiscal Quarters ending June 30, 2010. |
10.3.2 | Leverage Ratio. |
10.3.3 | Fixed Charge Coverage Ratio. |
11.1 | Events of Default. |
(a) | Any Obligor fails to pay any Obligations when due (whether at stated maturity, on demand, upon acceleration or otherwise); | ||
(b) | Any representation, warranty or other written statement of any Obligor made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect when given; |
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(c) | Any Obligor breaches or fails to perform any covenant contained in Section 7.2, 7.3, 7.5, 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2, 10.1.3(d), 10.1.7 or 10.3; | ||
(d) | Any Obligor breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured within 15 days after a Senior Officer of such Obligor has knowledge thereof or receives notice thereof from Agent, whichever is sooner; provided, however, that such notice and opportunity to cure shall not apply if the breach or failure to perform is not capable of being cured within such period or is a wilful breach by an Obligor; | ||
(e) | Any Guarantor repudiates, terminates, revokes or attempts to revoke its Guarantee; any Obligor denies or contests the validity or enforceability of any Loan Documents or Obligations, or the perfection, opposability or priority of any Lien granted to Agent; or any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release by Agent and Lenders); | ||
(f) | Any breach or default of an Obligor occurs under any document, instrument or agreement to which it is a party or by which it or any of its Properties is bound, relating to any Debt (other than the Obligations) in excess of $250,000 if the maturity of or any payment with respect to such Debt may be accelerated or demanded due to such breach; | ||
(g) | Any judgment or order for the payment of money is entered against an Obligor in an amount that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Obligors, $250,000 (net of any insurance coverage therefor acknowledged in writing by the insurer), unless a stay of enforcement of such judgment or order is in effect, by reason of a pending appeal or otherwise; | ||
(h) | Any loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $500,000 (excluding any related deductible under insurance policies); | ||
(i) | Any Obligor is enjoined, restrained or in any way prevented by any Governmental Authority from conducting any material part of its business; any Obligor suffers the loss, revocation or termination of any material license, permit, lease or agreement necessary to its business; there is a cessation of any material part of an Obligors business or enterprise for a material period of time; any material Collateral or Property of an Obligor is taken or impaired through condemnation; any Obligor agrees to or commences any liquidation, dissolution or winding up of its affairs; or any Obligor ceases to be Solvent; | ||
(j) | Any Insolvency Proceeding is commenced by any Obligor; an Insolvency Proceeding is commenced against any Obligor and such Obligor consents to the institution of the proceeding against it; the petition commencing the proceeding is not timely controverted by such Obligor; such petition is not |
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(k) | A Reportable Event occurs that constitutes grounds for termination by the Pension Benefit Guaranty Corporation of any Multiemployer Plan or appointment of a trustee or receiver for any Multiemployer Plan; any Multiemployer Plan is terminated or any such trustee is requested or appointed; any Obligor is in default (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from any withdrawal therefrom; or any event similar to the foregoing occurs or exists with respect to a Foreign Plan; | ||
(1) | A Pension Event shall occur which, in Agents determination, constitutes grounds for the termination under any applicable law, of any Plan or for the appointment by the appropriate Governmental Authority of a trustee for any Plan, or if any Plan shall be terminated or any such trustee shall be requested or appointed, or if an Obligor or any of its Subsidiaries is in default with respect to payments to a Multiemployer Plan or Plan resulting from their complete or partial withdrawal from such Plan and any such event may reasonably be expected to have a Material Adverse Effect or any Lien arises (save for contribution amounts not yet due) in connection with any Plan; | ||
(m) | Any Obligor or any of its Senior Officers is criminally indicted or convicted for (i) a felony committed in the conduct of such Obligors business, or (ii) any provincial, state or federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials Act) that could lead to forfeiture of any material Property or any Collateral; | ||
(n) | Any amendment is made to the Shareholders Agreement without the prior written consent of the Agent; | ||
(o) | A Change of Control occurs; or | ||
(p) | Any event occurs or condition exists that has a Material Adverse Effect. |
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(a) | declare any Obligations immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Obligors to the fullest extent permitted by law; | ||
(b) | terminate, reduce or condition any Commitment, or make any adjustment to the Borrowing Base; | ||
(c) | require Obligors to Cash Collateralize LC Obligations, Bank Product Debt and other Obligations that are contingent or not yet due and payable, and, if Obligors fail promptly to deposit such Cash Collateral, Agent may (and shall upon the direction of Required Lenders) advance the required Cash Collateral as Revolver Loans (whether or not an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied); and | ||
(d) | exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC, PPSA, Civil Code, BIA or CCAA. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Obligors to assemble Collateral, at Obligors expense, and make it available to Agent at a place designated by Agent; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Agent, in its discretion, deems advisable. Each Obligor agrees that 10 days notice of any proposed sale or other disposition of Collateral by Agent shall be reasonable. Agent shall have the right to conduct such sales on any Obligors premises, without charge, and such sales may be adjourned from time to time in accordance with Applicable Law. Agent shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Agent may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may set off or compensate the amount of such price against the Obligations. After an Event of Default which is continuing, the Agent is hereby granted a licence to use, without charge, the Obligors labels, patents, copyrights, name, trade secrets, trade names, trademarks, and advertising matter, or any similar property, in completing production of, advertising or selling any Collateral, and the Obligors rights under all licences and all franchise agreements shall inure to the Agents benefit for such purpose. The proceeds of sale shall be applied first to all expenses of sale, including legal fees, and then to the Obligations. The Agent will return any excess to the Borrower and the Borrower shall remain liable for any deficiency. |
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(a) | Subject to paragraph (b) of this Section, each Lender and the Bank represents and warrants to the Agent and the other Lenders and the Borrower that it is a Qualified Lender; | ||
(b) | If the Canada Revenue Agency or any other Governmental Authority of Canada or other jurisdiction asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender such Lender shall indemnify the Agent and the Borrower fully for all amounts paid, directly or indirectly, by the Agent or the Borrower as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to the Agent under this Section, together with all costs and expenses (including costs of legal counsel); | ||
(c) | Without prejudice to the survival of any other agreement contained herein, the representations and warranties contained in paragraph (a) of this Section and the agreements and obligations contained in paragraph (b) of this Section shall survive the payment in full of principal, interest, fees and any other amounts payable hereunder, the termination of this Agreement and any other Loan Document and the replacement of the Agent. |
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SECTION 13 | BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS |
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SECTION 14 | GUARANTEES |
(a) | Any lack of validity or enforceability of the Obligations or the Guaranteed Obligations or any agreement or instrument relating thereto; | ||
(b) | Any change in the time, manner or place of the payment of, or in any other term of, all or any of the Obligations or the Guaranteed Obligations, or any amendment or modification of or any consent to departure from this Agreement or any other Loan Document; |
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(c) | Any exchange, release, unopposability or nonperfection of any Collateral or any release or amendment to, waiver of, or consent to departure from, or any Guarantee for, all or any part of the Obligations or the Guaranteed Obligations; | ||
(d) | the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent or any Lender with respect thereto; | ||
(e) | Any whole or partial termination of this Guarantee as to any other Guarantor; | ||
(f) | the insolvency of any Obligor; (e) any election by Agent or any Lender to avail itself of an Insolvency Proceeding or any election in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code, or otherwise; (f) any borrowing or grant of a Lien by Borrower, as debtor-in-possession; (g) the disallowance of any claims of Agent or any Lender against any Obligor for the repayment of any Obligations under debtor relief laws; or | ||
(g) | Any other circumstance which might otherwise constitute a defence available to, or a discharge of, the Borrower in respect of the Obligations or the Guaranteed Obligations or a Guarantor in respect of this Guarantee or the Guaranteed Obligations. |
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(a) | In any action or proceeding with respect to any Guarantor involving any state or provincial corporate law, or any state or provincial or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of such Guarantor under Section 14.1 hereof would otherwise be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under said Section 14.1, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Lender, the Agent or any other Person, be automatically limited and reduced to the highest amount which is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding. | ||
(b) | To the extent that any Guarantor shall make a payment under this Agreement of all or any of the Guaranteed Obligations (a Guarantor Payment) which, taking into account all other Guarantor Payments then previously or concurrently made by the Guarantor, exceeds the amount which the Guarantor would otherwise have paid if the Guarantor had paid the aggregate Obligations satisfied by such Guarantor Payment in the same proportion that such Guarantors Allocable Amount (as defined below) (in effect immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of the Guarantor in effect immediately prior to the making of such Guarantor Payment, then, following payment in full in cash of the Obligations and termination of the Commitments, such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, the Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. |
(i) | As of any date of determination, the Allocable Amount of any Guarantor shall be equal to the maximum amount of the claim which could then be recovered from such Guarantor under this Agreement without rendering |
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such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law. |
(ii) | This subsection (b) is intended only to define the relative rights of the Guarantor and nothing set forth in this subsection (b) is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement. | ||
(iii) | The rights of the parties under this subsection (b) shall be exercisable upon the full and indefeasible payment of the Obligations and the termination of this Agreement and the other Loan Documents. | ||
(iv) | The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of any Guarantor to which such contribution and indemnification is owing. |
SECTION 15 | MISCELLANEOUS |
(a) | without the prior written consent of Agent, no modification shall be effective with respect to any provision in a Loan Document that relates to any rights, duties or discretion of Agent; | ||
(b) | without the prior written consent of Issuing Bank, no modification shall be effective with respect to any LC Obligations or Section 2.2; | ||
(c) | without the prior written consent of each affected Lender, no modification shall be effective that would (i) increase the Commitment of such Lender; |
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. | or (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender; and | ||
(d) | without the prior written consent of all Lenders (except a Defaulting Lender), no modification shall be effective that would (i) extend the Revolver Termination Date; (ii) alter Section 5.5, 7.1 (except to add Collateral), or 15.1.1; (iii) amend the definitions of Borrowing Base (and the defined terms used in such definition), Pro Rata or Required Lenders; (iv) increase any advance rate, or increase total Commitments; (v) release Collateral with a book value greater than $2,000,000 during any calendar year, except as currently contemplated by the Loan Documents; or (vi) release any Obligor from liability for any Obligations, if such Obligor is Solvent at the time of the release. |
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(a) | THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE IX OF THE UCC OR IN THE PPSA OR CIVIL CODE OF QUEBEC, AS APPLICABLE) OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN. | ||
(b) | ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE PROVINCE OF ONTARIO, AND |
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BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE OBLIGORS, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE OBLIGORS, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST AN OBLIGOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS. | |||
(c) | EACH OBLIGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL OR BY PERSONAL DELIVERY OR TELECOPIER AS PROVIDED IN SECTION 15.3 DIRECTED TO THE ATTENTION OF OBLIGORS AT ITS ADDRESS SET FORTH HEREIN AND SERVICE MADE BY REGISTERED MAIL SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE MAIL POSTAGE PREPAID AND IF MADE OTHERWISE SHALL BE DEEMED TO BE COMPLETED AT THE TIMES PROVIDED IN SECTION 15.3. NOTWITHSTANDING THE FOREGOING, IF THE PARTY EFFECTING SUCH SERVICE OF PROCESS KNOWS OR OUGHT REASONABLY TO KNOW OF ANY DIFFICULTIES WITH THE POSTAL SYSTEM THAT MIGHT AFFECT THE DELIVERY OF MAIL, SUCH SERVICE OF PROCESS MAY NOT BE MAILED BUT MUST BE EFFECTED BY PERSONAL DELIVERY OR BY A TELECOMMUNICATIONS DEVICE CAPABLE OF CREATING A WRITTEN RECORD. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW. |
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(a) | Each Obligor acknowledges that, pursuant to the Proceeds of Crime Act and other applicable anti-money laundering, anti-terrorist financing, government sanction and know your client laws (collectively, including any guidelines or orders thereunder, AML Legislation), the Lenders may be required to obtain, verify and record information regarding the Obligors and their respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of the Obligors, and the transactions contemplated hereby. Each Obligor shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or any prospective assignee or participant of a Lender, any Issuing Bank or any Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence. | ||
(b) | If the Agent has ascertained the identity of any Obligor or any authorized signatories of the Obligors for the purposes of applicable AML Legislation, then the Agent: |
(i) | shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a written agreement in such regard between each Lender and the Agent within the meaning of the applicable AML Legislation; and | ||
(ii) | shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness. |
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BORROWER: MIDFIELD SUPPLY ULC |
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Per: | /s/ Kathy Kirkup | |||
Name: | Kathy Kirkup | |||
Title: | Chief Financial Officer | |||
Address: | 1600-101 6th Avenue SW Calgary, Alberta T2P 3P4 |
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Attn: | Kathy Kirkup Facsimile: 403.265.8544 |
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GUARANTORS MEGA PRODUCTION TESTING INC. |
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Per: | /s/ Kathy Kirkup | |||
Name: | Kathy Kirkup | |||
Title: | Chief Financial Officer | |||
Address: |
1600-101 6th Avenue SW Calgary, Alberta T2P 3P4 |
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Attn: | Kathy Kirkup Facsimile: 403.265.8544 |
HAGAN OILFIELD SUPPLY LTD. |
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Per: | /s/ Kathy Kirkup | |||
Name: | Kathy Kirkup | |||
Title: | Chief Financial Officer | |||
Address: |
1600-101 6th Avenue SW Calgary, Alberta T2P 3P4 |
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Attn: | Kathy Kirkup Facsimile: 403.265.6544 |
AGENT AND LENDERS: BANK OF AMERICA, N.A. (acting through its Canada branch), as Agent |
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Per: | /s/ Medina Sales De Andrade | |||
Name: | Medina Sales De Andrade | |||
Title: | Vice President | |||
Address: | Bank of America, N.A. (acting through its Canada branch) 200 Front Street W., Suite 2700 Toronto, Ontario M5V 3L2 |
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Attn: | Medina Sales De Andrade/Loan Administration | |||
Facsimile: | (416) 349-4282 | |||
With a Copy to: | ||||
Address: | Bank of America, N.A. TX1-492-11-23 901 Main Street, 11th Floor Dallas, Texas 75202 |
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Attn: | Loan Administration | |||
Facsimile: | (214) 209-4766 | |||
BANK OF AMERICA, N.A. (acting through its Canada branch), as a Lender |
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Per: | /s/ Medina Sales De Andrade | |||
Name: | Medina Sales De Andrade | |||
Title: | Vice President | |||
Address: | Bank of America, N.A. (acting through its Canada branch) 200 Front Street W., Suite 2700 Toronto, Ontario M5V 3L2 |
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Attn: | Medina Sales De Andrade/Loan Administration | |||
Facsimile: | (416) 349-4282 | |||
With a copy to: | ||||
Address: | Bank of America, N.A. TX1-492-11-23 901 Main Street, 11th Floor Dallas, Texas 75202 |
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Attn: | Loan Administration | |||
Facsimile: | (214) 209-4766 | |||
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as a Lender |
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Per: | / s/ Dan Howat | |||
Name: | Dan Howat | |||
Title: | Senior Vice President | |||
Address: |
200 Bay Street, Suite 1800 Toronto M5J 2J2 Canada |
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Attn: Facsimile: |
Loan Administration (416) 981-2365 |
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ALBERTA TREASURY BRANCHES | ||||
By:
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/s/ Corey J. Hilling
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Authorized Signatory | ||||
By:
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/s/ Tim Poole
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Authorized Signatory | ||||
Encl. |
Per:
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/s/ Kathy Kirkup
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Chief Financial Officer |
LENDER: | ALBERTA TREASURY BRANCHES | |||
BORROWER: | MIDFIELD SUPPLY ULC |
1. | AMOUNTS AND TYPES OF FACILITIES (each referred to as a Facility) | |
Facility #1 Revolving Term Loan Facility Cdn. $15,000,000 |
- | Facility #1 is available by way of: |
- | Prime-based loans in Canadian dollars | ||
- | Guaranteed Notes in Canadian dollars |
- | Notwithstanding the amount of Facility #1 (and except as otherwise provided in the Repayment section hereof), advances will be limited to the amount equal to the lesser of: |
- | the maximum principal amount of Facility #1; and | ||
- | an amount equal to 50% of the Tangible Asset Value. |
- | Facility #1 is to be used for the acquisition of Tangible Assets, and no advance shall exceed 100% of the cost of the asset being acquired less GST and all appropriate taxes. |
2. | INTEREST RATES AND PREPAYMENT: | |
Facility #1: |
- | Pricing applicable to Facility #1 is as follows: |
- | Prime-based loans: Interest is payable in Canadian dollars at Prime plus the Applicable Facility #1 Margin per 365-day period. | ||
- | Guaranteed Notes: Acceptance fee is payable in Canadian dollars at the Applicable Facility #1 Margin per 365-day period. |
- | The Applicable Facility #1 Margin shall be equal to the percentage rate per annum set out in the following table opposite the applicable ratio for the Borrower at the time of determination: |
Midfield Supply ULC | November 13, 2009 | |
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Ratio of Tangible Asset | ||||||||
Value to outstanding | Prime-based | Guaranteed | ||||||
Borrowings | loans | Notes | ||||||
> 3.00:1 |
2.00 | % | 3.50 | % | ||||
>2.50:1 but < 3.00:1 |
2.25 | % | 3.75 | % | ||||
> 2.00:1 but < 2.50:1 |
2.50 | % | 4.00 | % |
- | The effective date of any change to the Applicable Facility #1 Margin shall be the 1st day of the fiscal quarter immediately following the last day on which the Borrower is required to deliver its listing of Tangible Assets hereunder. If the listing of Tangible Assets is not delivered as required hereunder, the Applicable Facility #1 Margin shall immediately be the highest rate applicable, until such time as such listing of Tangible Assets is delivered and the ratio determined. If the Applicable Facility #1 Margin changes during the term of any Guaranteed Note, the acceptance fee paid shall be adjusted to reflect the Applicable Facility #1 Margin for the remaining term, and the parties shall forthwith make whatever payments are necessary to reflect such adjustment. |
- | The Applicable Facility #1 Margin shall be subject to a 0.50% increase on and after the Term Date. |
- | Facility #1 may be prepaid in whole or in part at any time (subject to the notice periods provided hereunder) without penalty, except that Guaranteed Notes cannot be prepaid prior to their maturity. |
3. | REPAYMENT: | |
Facility #1: |
- | Facility #1 is a committed term facility, as detailed herein. | ||
- | The Term Date is currently May 31, 2010, subject to extension as herein provided. | ||
- | Prior to the Term Date, Facility #1 may revolve in multiples as permitted hereunder, and Borrower may borrow, repay, reborrow and convert between types of Borrowings, up to the amount and subject to the notice periods provided herein. | ||
- | On the Term Date, any unutilized amount of Facility #1 will be cancelled, and the amount of Facility #1 will be reduced to the aggregate Borrowings outstanding on that date. On and after the Term Date, Facility #1 is non-revolving, and amounts repaid may not be re-borrowed, but Borrower can convert between types of Borrowings subject to the notice periods provided hereunder. All amounts outstanding under Facility #1 are due and payable in full on the date falling one (1) year after the Term Date. |
Midfield Supply ULC | November 13, 2009 | |
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- | Borrower may request an extension of the Term Date by sending Lender a written request for extension in the form attached as Schedule C by no later than 90 days prior to the then current Term Date, and Lender may in its sole discretion agree to extend the Term Date for a further period of up to 364 days. Lender shall advise Borrower of its decision regarding the extension by no later than 30 days prior to the then current Term Date. |
4. | FEES: |
- | Non-refundable application fee of $52,500 is payable on acceptance of this offer. Lender is hereby authorized to debit Borrowers current account for any unpaid portion of the fee. |
- | Any amount in excess of established credit facilities may be subject to a fee where Lender in its sole discretion permits excess Borrowings, if any. |
- | For monthly or quarterly reports or statements not received within the stipulated periods (and without limiting Lenders rights by virtue of such default), Borrower will be subject to a fee of $50 per month (per report or statement) for each late reporting occurrence, which will be deducted from Borrowers account. |
- | For annual reports or statements not received within the stipulated periods (and without limiting Lenders rights by virtue of such default), Borrower will be subject to a fee of $250 per month (per report or statement) for each late reporting occurrence, which will be deducted from Borrowers account. |
- | Non-refundable standby fee, for the period from and including the date of this amended and restated letter agreement to the Term Date (as such date may be extended pursuant to Section 3 hereof) is payable monthly in arrears on the last day of each month, calculated daily on the unused portion of the authorized amount of Facility #1. Such fee is equal to the percentage rate per annum set out in the following table opposite the applicable ratio of Tangible Asset Value to outstanding Borrowings for the Borrower at the time of determination: |
Ratio of Tangible Asset | ||||
Value to outstanding | Standby | |||
Borrowings | Fees | |||
> 3.00:1 |
0.55 | % | ||
> 2.50:1 but < 3.00:1 |
0.60 | % | ||
> 2.00:1 but < 2.50:1 |
0.65 | % |
The effective date of any change in the percentage rate of such fee shall be the 1st day of the fiscal quarter immediately following the last day on which the Borrower is required to deliver its listing of Tangible Assets hereunder. If the listing of Tangible Assets is not delivered as required hereunder, such percentage rate shall immediately be the highest rate applicable, until such time as such listing of Tangible Assets is delivered and the ratio determined. |
Midfield Supply ULC | November 13, 2009 | |
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5. | SECURITY DOCUMENTS: | |
All Security Documents (whether now held or later delivered) shall secure all Facilities and all other obligations of Borrower to Lender (whether present or future, direct or indirect, contingent or matured). | ||
The Security Documents currently held include the following: |
(a) | Solicitor prepared debenture dated as of May 14, 2007 from Borrower in the amount of $15,000,000 providing a fixed charge over certain real property and a floating charge over all other present and after-acquired real property, as may be amended from time to time; | ||
(b) | Solicitor prepared security agreement dated as of May 17, 2007 from Borrower providing a security interest over all present and after-acquired equipment of the Borrower and specifically listing all equipment then owned having a net book value of $250,000 or more; | ||
(c) | Solicitor prepared inter-creditor agreement dated as of May 17, 2007 (the Intercreditor Agreement) with Bank of America, N.A. as agent under the Syndicated Facility; | ||
(d) | Solicitor prepared blocked accounts agreement dated as of May 17, 2007 (the Blocked Accounts Agreement) among Borrower, Bank of America, N.A. as agent under the Syndicated Facility and the Lender; and | ||
(e) | Solicitor prepared subordination agreement dated May 17, 2007, as amended from time to time, among McJunkin Canada, Midfield Holdings, the Borrower and the Lender (the Original Subordination Agreement). |
Borrower acknowledges that it continues to be bound by the existing Security Documents and that such Security Documents continue to secure the obligations of Borrower to Lender under this Agreement. | ||
The additional Security Documents required at this time are as follows: |
(a) | Supplemental Debenture from the Borrower providing a fixed charge over the Anzac, Kindersley, Redwater and Fort Nelson properties; | ||
(b) | Solicitor prepared amended and restated postponement and subordination agreement among McJunkin Red Man Corporation (MRC), McJunkin Canada, Midfield Holdings, the Borrower and the Lender (the Subordination Agreement) amending and restating the provisions of the Original Subordination Agreement; and | ||
(c) | Confirmation of insurance coverage on the Tangible Assets with first loss payable to Lender. |
All Security Documents shall be in form and substance acceptable to Lender and shall be supported by satisfactory legal opinions from Borrowers counsel. The Security Documents have been or are to be registered in Alberta, British Columbia and Saskatchewan, with specific registrations against all real property, and against equipment having a net book value of $250,000 or more. |
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Upon a Person becoming a Loan Party after the date hereof, the Borrower shall deliver or cause to be delivered to the Lender the following: |
(a) | Solicitor prepared debenture from such Loan Party in the amount of $15,000,000 providing a fixed charge over all of its real property then owned and a floating charge over, all of its other present and after-acquired real property; | ||
(b) | Solicitor prepared security agreement from such Loan Party providing a security interest over all present and after-acquired equipment of such Loan Party and specifically listing each piece of equipment having an individual net book value of $250,000 or more; | ||
(c) | an addition agreement or such other agreement as required by Lender, acting reasonably, pursuant to which such Loan Party becomes a party to the Subordination Agreement; | ||
(d) | the Authorizations and Supporting Documents referred to in Section 12; | ||
(e) | a legal opinion of counsel to such Loan Party, in form and substance satisfactory to Lender, acting reasonably; and | ||
(f) | such other documents, certificates and opinions as required by Lender, acting reasonably. |
6. | REPRESENTATIONS AND WARRANTIES: | |
Borrower represents and warrants to Lender that: |
(a) | it is an unlimited liability corporation duly incorporated, validly existing and duly registered or qualified to carry on business in the Province of Alberta and in each other jurisdiction where it carries on any material business; | ||
(b) | if a Person becomes a Guarantor, then: |
(i) | if such Guarantor is a corporation, it is a corporation duly incorporated, validly existing and duly registered or qualified to carry on business in the Province of Alberta and in each other jurisdiction where it carries on any material business, and | ||
(ii) | if such Guarantor is a partnership, it is a partnership duly created, validly existing and duly registered or qualified to carry on business in the Province of Alberta and in each other jurisdiction where it carries on any material business; |
(c) | as of the date hereof, McJunkin Red Man Canada Ltd. (McJunkin Canada) and Midfield Holdings (Alberta) Ltd. (Midfield Holdings) are the only shareholders of Borrower, and McJunkin Canada is the sole shareholder of Midfield Holdings; | ||
(d) | the execution, delivery and performance by each Loan Party of this Agreement and each Security Document to which it is a party have been duly authorized by all necessary actions and do not violate its governing documents or any applicable laws or agreements to which it is subject or by which it is bound; | ||
(e) | no Default or Event of Default has occurred and is continuing; |
Midfield Supply ULC | November 13, 2009 | |
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(f) | no Default or Event of Default (as each of those terms are defined under the credit agreement detailing the Syndicated Facility) has occurred and is continuing under the Syndicated Facility; | ||
(g) | the most recent financial statements of Borrower and, if applicable, any Guarantor, provided to Lender fairly present its financial position as of the date thereof and its results of operations and cash flows for the fiscal period covered thereby, and since the date of such financial statements, there has occurred no material adverse change in its business or financial condition; | ||
(h) | each Loan Party has good and marketable title to all of its properties and assets, free and clear of any encumbrances, other than Permitted Encumbrances; | ||
(i) | each Loan Party is in compliance in all material respects with all applicable laws including, without limitation, all environmental laws, and there is no existing material impairment to its properties and assets as a result of environmental damage, except to the extent disclosed in writing to Lender and acknowledged by Lender; and | ||
(j) | the obligations of each Loan Party under this Agreement and under the Security Documents to which it is a party are legal, valid and binding obligations of such Loan Party enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and other similar laws affecting creditors rights generally. |
All representations and warranties are deemed to be repeated by Borrower on each request for an advance hereunder. |
7. | POSITIVE COVENANTS: | |
Borrower covenants with Lender that so long as it is indebted or otherwise obligated (contingently or otherwise) to Lender, it will do and perform the following covenants, and if any such covenant is to be done or performed by a Guarantor, Borrower also covenants with Lender to cause Guarantor to do or perform such covenant: |
(a) | Borrower will pay to Lender when due all amounts (whether principal, interest or other sums) owing by it to Lender from time to time; | ||
(b) | Borrower will deliver to Lender the Security Documents, in all cases in form and substance satisfactory to Lender and Lenders solicitor; | ||
(c) | Borrower will ensure that (i) all Tangible Assets, and (ii) at least 95% of its consolidated assets, are held by Borrower directly or by any Guarantors which have provided security in favour of and to the extent required by Lender; | ||
(d) | Borrower will, prior to acquiring any Subsidiary or allowing any Subsidiary to have assets of a type or in an amount which would otherwise violate Subsection 7(c) above, cause such Subsidiary to provide a guarantee in favour of Lender, in a form reasonably satisfactory to Lender, as well as grant similar Security Documents in favour of Lender as those delivered by Borrower hereunder; | ||
(e) | Borrower will use the proceeds of loans only for the purposes approved by Lender; |
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(f) | each Loan Party will maintain its valid existence as a corporation or partnership, as the case may be, and, in the case of Borrower, as an unlimited liability corporation, and, except to the extent any failure to do so could not reasonably be expected to have a Material Adverse Effect, will maintain all licenses and authorizations required from any Governmental Authority to permit it to carry on its business, including, without limitation, any licenses, certificates, permits and consents for the protection of the environment; | ||
(g) | each Loan Party will maintain appropriate books of account and records relative to the operation of its business and financial condition; | ||
(h) | each Loan Party will maintain and defend title to all of its property and assets, will maintain, repair and keep in good working order and condition all of its property and assets and will continuously carry on and conduct its business in a proper, efficient and businesslike manner; | ||
(i) | each Loan Party will maintain appropriate types and amounts of insurance with Lender shown as first loss payee on any property insurance covering any assets on which Lender has security, and promptly advise Lender in writing of any significant loss or damage to its property; | ||
(j) | each Loan Party will, at the time of acquisition of any Tangible Asset, provide evidence of insurance to Lender on such Tangible Asset, and otherwise, on request; | ||
(k) | each Loan Party will permit Lender, by its officers or authorized representatives at any reasonable time and on reasonable prior notice, to enter its premises and to inspect its plant, machinery, equipment and other real and personal property and their operation, and to examine and copy all of its relevant books of accounts and records; | ||
(l) | each Loan Party will remit all sums when due to any Governmental Authority (including, without limitation, any sums in respect of employees and GST) and will pay when due all other Potential Prior-Ranking Claims, and upon request, will provide Lender with such information and documentation in respect thereof as Lender may reasonably require from time to time; | ||
(m) | each Loan Party will comply with all applicable laws, including without limitation, environmental laws, except to the extent any failure to do so could not reasonably be expected to have a Material Adverse Effect; | ||
(n) | Borrower will promptly advise Lender in writing, giving reasonable details, of: |
(i) | the discovery of any contaminant or any spill, discharge or release of a contaminant into the environment from or upon any property of a Loan Party which could reasonably be expected to result in a Material Adverse Effect; | ||
(ii) | the occurrence or existence of any Default or Event of Default; | ||
(iii) | each event which has or is reasonably likely to have a Material Adverse Effect; | ||
(iv) | any amendment to or waiver given in connection with the Syndicated Facility, together with a copy of such amendment or waiver; |
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(v) | the occurrence or existence of any Default or Event of Default (as each of those terms are defined under the credit agreement detailing the Syndicated Facility) under the Syndicated Facility; | ||
(vi) | any change in its shareholders or other direct holders of its Equity Interests; and | ||
(vii) | any proposed Purchase Money Security Interest, Capital Lease or sale-leaseback transaction involving a Tangible Asset (which for greater certainty, requires Lenders consent prior to the entering into thereof); and |
(o) | Borrower undertakes that, upon request from Lender, it will, or will cause a Guarantor to, grant a fixed mortgage and charge to Lender on any or all real property of a Loan Party not already subject to a fixed charge, and a specifically registered security interest on any or all equipment of a Loan Party not already the subject of a serial number registration, in each case as so designated by Lender. Each Loan Party shall promptly provide to Lender all information reasonably requested by Lender to assist it in that regard. Each Loan Party acknowledges that this undertaking constitutes present and continuing security in favour of Lender, and that Lender may file such caveats, security notices, financing statements or other filings in regard thereto at any time and from time to time as Lender may determine. |
8. | NEGATIVE COVENANTS: | |
Borrower covenants with Lender that while it is indebted or otherwise obligated (contingently or otherwise) to Lender, it will not do any of the following, and if a Guarantor is not to do an act, Borrower also covenants with Lender not to permit Guarantor to do such act, in each case without the prior written consent of Lender: |
(a) | a Loan Party will not create or permit to exist any mortgage, charge, lien, encumbrance or other security interest on any of its present or future assets, other than Permitted Encumbrances; | ||
(b) | a Loan Party will not create, incur, assume or allow to exist any Indebtedness other than Permitted Indebtedness; | ||
(c) | a Loan Party will not sell, lease or otherwise dispose of any assets except (i) inventory sold, leased or disposed of in the ordinary course of business, (ii) obsolete equipment which is being replaced with equipment of an equivalent value, (iii) assets sold, leased or disposed of to another Loan Party (but only if that Loan Party has provided security in favour of the Lender), and (iv) assets (other than Tangible Assets) sold, leased or disposed of during a fiscal year having an aggregate fair market value not exceeding $5,000,000 for such fiscal year; | ||
(d) | a Loan Party will not provide financial assistance (by means of a loan, guarantee or otherwise) to any Person (other than Lender), other than (i) guarantees granted to support Indebtedness arising under the Syndicated Facility, and (ii) the loan previously provided by the Borrower to Europump Systems Inc. (Europump) in the original principal amount of $5,500,000, which has been paid down to not more than $760,000 on the date hereof, provided that Borrower shall not advance any further amounts to Europump after the date hereof, or allow any upward revolvement after any paydown occurs thereunder; |
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(e) | a Loan Party will not create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make any Distribution to Borrower, except for restrictions under applicable law, and those permitted by the terms of this Agreement or the Syndicated Facility; | ||
(f) | a Loan Party will not make any Distributions or any payments to Persons having an Equity Interest in any Loan Party (except a Distribution to Borrower); provided, however, that Borrower may from and after October 1, 2010: |
(i) | pay Distributions in an amount necessary to fund Shared Administrative Costs if payable by the direct or indirect parent of Borrower; and | ||
(ii) | pay Tax Distributions; |
provided, in each case, that (A) no Default or Event of Default exists at the time of making such payments and no Default or Event of Default would occur as a consequence of the making of such payments; and (B) Borrower shall have delivered a certificate executed by a senior officer of the Borrower at least 10 days prior to such payment certifying (x) the calculation of taxes owing by McJunkin Canada or Shared Administration Cost owing by the direct or indirect parent of the Borrower, as applicable, and (y) that the proforma Fixed Charge Coverage Ratio calculation for the 12 months following such payment will be at least that provided in Section 10(a)(ii) for each fiscal quarter during such 12 month period (together with Borrowers calculations thereof); | |||
(g) | a Loan Party will not make Capital Expenditures exceeding, in the aggregate for all Loan Parties, $10,000,000 per fiscal year; provided, however, that if the amount of Capital Expenditures permitted to be made in any fiscal year exceeds the amount actually made, up to $250,000 of such excess may be carried forward to the next fiscal year; | ||
(h) | a Loan Party will not amalgamate, merge, combine or consolidate with any Person, or liquidate, wind-up its assets or dissolve, except that a Guarantor may do so with or into another Guarantor or the Borrower if no Default or Event of Default is then in existence or would be caused as a result thereof; | ||
(i) | a Loan Party will not acquire any Tangible Assets in, or move or allow any of its Tangible Assets to be moved to, a jurisdiction where Lender has not registered or perfected the Security Documents; | ||
(j) | a Loan Party will not change the nature of its business from that conducted on the date hereof and any activities incidental thereto; | ||
(k) | a Loan Party will not enter into any Hedging Agreement which is not used for risk management in relation to its business or which is not entered into in the ordinary course of its business but is entered into for speculative purposes, or which, in the case of commodity swaps or similar transactions of either a financial or physical nature, have a term exceeding two years; | ||
(l) | a Loan Party will not allow any pollutant (including any pollutant now on, under or about such land) to be placed, handled, stored, disposed of or released on, under or about any of its lands unless done in the normal course of its business and then only as long as it complies with all applicable laws in placing, handling, storing, transporting, disposing of |
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or otherwise dealing with such pollutants, except to the extent any failure to do so could not reasonably be expected to have a Material Adverse Effect; and | |||
(m) | Borrower will not utilize Borrowings to finance a hostile takeover. |
9. | REPORTING COVENANTS | |
Borrower will provide to Lender: |
(a) | within 120 days after the end of each of its fiscal years: |
(i) | financial statements of Borrower on an audited, consolidated basis prepared by a firm of qualified accountants; | ||
(ii) | a compliance certificate executed by a senior officer of Borrower in the form attached hereto as Schedule A; | ||
(iii) | an environmental questionnaire and disclosure statement in the form requested by Lender; |
(b) | within 60 days following the end of each of its first 3 fiscal quarters: |
(i) | internally produced consolidated financial statements of Borrower for that quarter, and | ||
(ii) | a compliance certificate executed by a senior officer of Borrower in the form attached hereto as Schedule A; |
(c) | within 60 days after the end of each of its fiscal quarters, a list of all Tangible Assets disclosing all real property (with both municipal and legal description and disclosing whether Lender has a registered mortgage or charge thereon) and all equipment broken down by category of asset and providing details (including make, model and serial numbers, for each piece of Equipment having an individual net book value of $250,000 or more), with details of any Potential Prior-Ranking Claims and other Permitted Encumbrances which may affect such Tangible Assets; | ||
(d) | within 120 days after the end of each of its fiscal year ends, annual consolidated and non-consolidated capital and revenue budgets, projected balance sheet, income statement and cash flow statement from Borrower for the next following fiscal year; and | ||
(e) | on request, any further information regarding its assets, operations and financial condition that Lender may from time to time reasonably require. |
10. | FINANCIAL COVENANTS: |
(a) | Borrower will at all times comply with the following financial covenants on a consolidated basis: |
(i) | Borrower must maintain a Leverage Ratio not greater than 3.50:1; | ||
(ii) | Borrower must maintain a Fixed Charge Coverage Ratio of at least 1.15:1; and |
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(iii) | Borrower must maintain a ratio of Tangible Asset Value to Borrowings outstanding of at least 2.00:1. |
Each of the financial ratios in this Section 10(a) shall be maintained at all applicable times and shall be detailed in the compliance certificate required to be delivered hereunder; provided, however, that the requirement to maintain the Leverage Ratio as described in Section 10(a)(i) above and the Fixed Charge Coverage Ratio as described in Section 10(a)(ii) above and the requirement to detail such ratios in the compliance certificate is hereby waived from the date of this Agreement until and including the fiscal quarter ending June 30, 2010. | |||
(b) | Borrower shall not permit the Adjusted EBITDA to be less than: |
(i) | $300,000 for the fiscal quarter ending September 28, 2009; | ||
(ii) | $1,500,000 for the two fiscal quarters ending December 31, 2009; | ||
(iii) | $4,800,000 for the three fiscal quarters ending March 31, 2010; and | ||
(iv) | $3,700,000 for the four fiscal quarters ending June 30, 2010; |
and the Adjusted EBITDA shall be detailed in the compliance certificate required to be delivered hereunder. |
11. | CONDITIONS PRECEDENT: |
The effectiveness of this Agreement is subject to and conditional upon the receipt by the Lender of each of the following: |
(a) | a duly executed copy of this Agreement; | ||
(b) | a duly executed copy of all additional Security Documents required by Section 5 hereof; | ||
(c) | payment of all fees due in respect hereof; | ||
(d) | confirmation that there is no Default or Event of Default hereunder and no default under any Security Document, and that all representations and warranties hereunder are true and correct in all material respects as if made on such date; | ||
(e) | confirmation that all registrations and filings of the Security Documents have been completed in Alberta, British Columbia and Saskatchewan, in all cases in form and substance satisfactory to Lender (provided that the Lender acknowledges that confirmation of registration at Land Titles of the Supplemental Debenture may be provided post-closing); | ||
(f) | Borrower and Guarantors (if any) have provided all authorizations and all financial statements, appraisals, environmental reports and any other information that Lender may require, to the extent not previously provided to Lender (provided that the Lender acknowledges that the environmental questionnaire and disclosure statement may be provided post-closing, but Borrower must work diligently towards its completion and provide it as soon as possible after closing); |
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(g) | Lender is satisfied as to the value of Borrowers and any Guarantors assets and financial condition, and Borrowers and any Guarantors ability to carry on business and repay any amount owed to Lender from time to time; | ||
(h) | an environmental assessment and appraisal report for all real estate projects having a Tangible Asset Value greater than $500,000 over which Lender has a registered mortgage or charge, to the extent not previously provided to Lender; | ||
(i) | confirmation that no Default or Event of Default (as each of those terms are defined under the credit agreement detailing the Syndicated Facility) has occurred and is continuing under the Syndicated Facility; and | ||
(j) | a copy of the executed credit agreement detailing the Syndicated Facility. |
It is a condition precedent to each subsequent advance hereunder that, at the time of such advance, (i) all representations and warranties hereunder must be true and correct in all material respects as if made on such date, and (ii) there must be no Default or Event of Default hereunder and no default under any Security Document. |
12. | AUTHORIZATIONS AND SUPPORTING DOCUMENTS | |
Borrower has delivered or will deliver the following authorizations and supporting documents to Lender on behalf of Borrower and any Guarantor: |
(a) | Incorporation documents including Certificate of Incorporation/Amalgamation, Articles of Incorporation/Amalgamation (including any amendments), any unanimous shareholders agreements and last Notice of Directors; | ||
(b) | Business Corporation Agreement; | ||
(c) | Environmental Questionnaire & Disclosure Statement; | ||
(d) | Sun Life Assurance Company of Canada Group Creditors Life Insurance application or waiver; and | ||
(e) | Credit Information and Alberta Land Titles Office Name Search Consent Form. |
13. | DRAWDOWNS, PAYMENTS AND EVIDENCE OF INDEBTEDNESS |
(a) | Interest on Prime-based loans is calculated on the daily outstanding principal balance, and is payable on the last day of each month. | ||
(b) | If revolvement of loans is permitted hereunder, principal advances and repayments on Prime-based loans are to be in the minimum sum of Cdn. $100,000 or multiples of it. | ||
(c) | If Guaranteed Notes are available hereunder, Borrower will issue non-interest bearing promissory notes to Lender in multiples of $100,000, subject to a minimum of $1,000,000, with a minimum term of 30 days and up to 90 day maturity dates. Borrower agrees to be bound by the power of attorney set out in Schedule B hereto. On the date of drawdown, Lender shall make an advance to Borrower in an amount equal to the proceeds which would have been realized from a hypothetical sale of those Guaranteed |
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Notes at the Discount Rate, less the acceptance fees payable hereunder. Lender is authorized to hold or negotiate any such promissory notes. Guaranteed Notes shall remain in effect until the maturity of the term selected and notwithstanding anything to the contrary contained herein, may not be repaid prior to their maturity. On the maturity date thereof, Borrower shall pay Lender the face amount of each Guaranteed Note. If Lender does not receive written instructions from Borrower prior to maturity concerning the renewal of the Guaranteed Notes, then the face amount of the Guaranteed Notes shall be automatically deemed to be outstanding as a Prime-based loan under the relevant Facility until written instructions are received from Borrower. |
(d) | Borrower shall monitor its Borrowings (including the face amount and maturity date of each Guaranteed Note) to ensure that the Borrowings hereunder do not exceed the maximum amount available hereunder. Lender shall have no obligation to make any Borrowing available in excess of amounts available hereunder. | ||
(e) | Borrower shall provide notice to Lender prior to requesting an advance or making a repayment or conversion of Borrowings hereunder, as follows: | ||
For Borrowings: |
- | under Cdn. $5,000,000 same day notice | ||
- | Cdn. $5,000,000 and over one Business Day prior written notice |
(f) | Borrower may cancel the availability of any unused portion of a Facility on five Business Days notice. Any such cancellation is irrevocable. | ||
(g) | The annual rates of interest or fees to which the rates calculated in accordance with this Agreement are equivalent, are the rates so calculated multiplied by the actual number of days in the calendar year in which such calculation is made and divided by 365. | ||
(h) | If any amount due hereunder is not paid when due, Borrower shall pay interest on such unpaid amount (including without limitation, interest on interest) if and to the fullest extent permitted by applicable law, at a rate per annum equal to Prime plus 5%. | ||
(i) | The branch of Lender (the Branch of Account) where Borrower maintains an account and through which the Borrowings will be made available is located at 219 2nd Street West, Brooks, Alberta T1R 1B5. Funds under the Facilities will be advanced into and repaid from account no. 752-1090003-24 at the Branch of Account, or such other branch or account as Borrower and Lender may agree upon from time to time. | ||
(j) | Lender shall maintain at the Branch of Account accounts and records evidencing the Borrowings made available to Borrower by Lender under this Agreement. Lender shall record the principal amount of each Borrowing and the payment of principal, interest and fees and all other amounts becoming due to Lender under this Agreement. Lenders accounts and records constitute, in the absence of manifest error, conclusive evidence of the indebtedness of Borrower to Lender pursuant to this Agreement. | ||
(k) | Borrower authorizes and directs Lender to automatically debit, by mechanical, electronic or manual means, any bank account of Borrower for all amounts payable by Borrower to Lender pursuant to this Agreement. Any amount due on a day other than a Business Day shall be deemed to be due on the Business Day next following such day, and interest shall accrue accordingly. |
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14. | EVENTS OF DEFAULT: | |
If any of the events set forth below (an Event of Default) occurs and is continuing, Lender may at its option, by notice to Borrower, terminate any or all of the Facilities hereunder and demand immediate payment in full of all or any part of the amounts owed by Borrower thereunder: |
(a) | if Borrower defaults in paying when due all or any part of the principal amount due hereunder; | ||
(b) | if Borrower or any Guarantor defaults in paying when due all or any part of its indebtedness or other liability to Lender (other than as provided under Subsection (a) above) and such default continues for 3 Business Days after notice from Lender; | ||
(c) | if Borrower or any Guarantor defaults in the observance or performance of any of its covenants or obligations hereunder or in any of the Security Documents (other than as provided under Subsections (a) or (b) above), or in any other document under which Borrower or such Guarantor is obligated to Lender, and in any such cases, the default continues for 15 days after notice from Lender; | ||
(d) | if any charge or encumbrance on any Tangible Assets of Borrower or any Guarantor becomes enforceable and steps are taken to enforce it; | ||
(e) | if any charge or encumbrance on any property of Borrower or any Guarantor (other than the Tangible Assets) having a fair market value in excess of $5,000,000 becomes enforceable and steps are taken to enforce it; | ||
(f) | if Borrower or any Guarantor defaults in any obligation under the Syndicated Facility; | ||
(g) | if a Remedial Action Notice (as defined in the Intercreditor Agreement) is delivered under the Intercreditor Agreement; | ||
(h) | if an Activation Notice (as defined in the Blocked Account Agreement) is delivered under the Blocked Account Agreement; | ||
(i) | if Borrower or any Guarantor defaults in any obligation to any Person (other than Lender or under the Syndicated Facility) which involves or may involve a sum exceeding $5,000,000, and the default has not been cured within 5 days of the date Borrower first knew or should have known of the default; | ||
(j) | if any other creditor of Borrower or any Guarantor takes collection steps against Borrower or such Guarantor or its assets; | ||
(k) | if final judgment or judgments should be entered against Borrower or any Guarantor for the payment of any amount of money exceeding $5,000,000, and the judgment or judgments are not discharged within 20 days after entry; | ||
(l) | if an order is made, an effective resolution passed, or a petition is filed for the winding up the affairs of Borrower or any Guarantor or if a receiver or liquidator of Borrower or any Guarantor or any part of its assets is appointed; |
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(m) | if Borrower or any Guarantor becomes insolvent or makes a general assignment for the benefit of its creditors or an assignment in bankruptcy or files a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or otherwise acknowledges its insolvency or if a bankruptcy petition is filed or receiving order is made against Borrower or any Guarantor and is not being disputed in good faith; | ||
(n) | if Borrower or any Guarantor ceases or threatens to cease to carry on its business; | ||
(o) | if any of the licences, permits or approvals granted by Governmental Authority and material to the business of Borrower or any Guarantor is withdrawn, cancelled, suspended or adversely amended; | ||
(p) | if (i) McJunkin Red Man Holding Corporation ceases to directly or indirectly own or control, beneficially and of record, 100% of the voting Equity Interests in the Borrower, (ii) McJunkin Red Man Holding Corporation ceases to directly or indirectly own or control, beneficially and of record, 100% of the voting Equity Interests in McJunkin Canada, (iii) there is a change in the majority of the directors of the Borrower, unless approved by the then majority of the directors of the Borrower; or (iv) all or substantially all of the assets of Borrower or any Guarantor are sold or transferred; or | ||
(q) | if any event or circumstance occurs which has or would reasonably be expected to have a Material Adverse Effect (as determined by Lender in its sole discretion). |
Failing such immediate payment, Lender may, without further notice, realize under the Security Documents to the extent Lender chooses. |
15. | MISCELLANEOUS: |
(a) | All legal and other costs and expenses incurred by Lender in respect of the Facilities, the Security Documents and other related matters will be paid or reimbursed by Borrower on demand by Lender. Lender is authorized to debit Borrowers current account for any such unpaid legal and other costs and expenses. | ||
(b) | All documents and matters incidental hereto will be prepared or conducted by or under the supervision of Lenders solicitors, unless Lender otherwise permits. Acceptance of this offer will authorize Lender to instruct Lenders solicitors to prepare all necessary documents and proceed with related matters. | ||
(c) | Lender, without restriction, may waive in writing the satisfaction, observance or performance of any of the provisions of this Agreement. The obligations of a Guarantor (if any) will not be diminished, discharged or otherwise affected by or as a result of any such waiver, except to the extent that such waiver relates to an obligation of such Guarantor. Any waiver by Lender of the strict performance of any provision hereof will not be deemed to be a waiver of any subsequent default, and any partial exercise of any right or remedy by Lender shall not be deemed to affect any other right or remedy to which Lender may be entitled. | ||
(d) | Borrower shall reimburse Lender for any additional cost or reduction in income arising as a result of (i) the imposition of, or increase in, taxes on payments due to Lender hereunder (other than taxes on the overall net income of Lender), (ii) the imposition of, or increase in, any reserve or other similar requirement, (iii) the imposition of, or change in, |
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any other condition affecting the Facilities imposed by any applicable law or the interpretation thereof. | |||
(e) | Lender is authorized but not obligated, at any time, to apply any credit balance, whether or not then due, to which Borrower or Guarantor is entitled on any account in any currency at any branch or office of Lender in or towards satisfaction of the obligations of Borrower or such Guarantor due to Lender under this Agreement or any guarantee granted in support hereof, as applicable. Lender is authorized to use any such credit balance to buy such other currencies as may be necessary to effect such application. | ||
(f) | Words importing the singular will include the plural and vice versa, and words importing gender will include the masculine, feminine and neuter, and anything importing or referring to a Person will include a body corporate and a partnership and any entity, in each case all as the context and the nature of the parties requires. | ||
(g) | Where more than one Person is liable as Borrower (or as a Guarantor) for any obligation hereunder, then the liability of each such Person for such obligation is joint and several with each other such Person. | ||
(h) | If any portion of this Agreement is held invalid or unenforceable, the remainder of this Agreement will not be affected and will be valid and enforceable to the fullest extent permitted by law. In the event of a conflict between the provisions hereof and of any Security Documents, the provisions hereof shall prevail to the extent of the conflict. | ||
(i) | Where the interest rate for a credit is based on Prime, the applicable rate on any day will depend on the Prime rate in effect on that day. The statement by Lender as to Prime and as to the rate of interest applicable to a credit on any day will be binding and conclusive for all purposes. All interest rates specified are nominal annual rates. The effective annual rate in any case will vary with payment frequency. All interest payable hereunder bears interest as well after as before maturity, default and judgment with interest on overdue interest at the applicable rate payable hereunder. To the extent permitted by law, Borrower waives the provisions of the Judgment Interest Act (Alberta). | ||
(j) | Any written communication which a party may wish to serve on any other party may be served personally (in the case of a body corporate, on any officer or director thereof) or by leaving the same at or couriering or mailing the same by registered mail to the Branch of Account (for Lender) or to the last known address (for Borrower or any Guarantor), and in the case of mailing will be deemed to have been received two (2) Business Days after mailing except in the case of postal disruption. | ||
(k) | Unless otherwise specified, references herein to $ and dollars mean Canadian dollars. | ||
(l) | Lender shall have the right to assign, sell or participate its rights and obligations in the Facilities or in any Borrowing thereunder, in whole or in part, to one or more Persons, provided that the consent of Borrower shall be required if no Default or Event of Default is then in existence, such consent not to be unreasonably withheld or delayed. | ||
(m) | Borrower shall indemnify Lender against all losses, liabilities, claims, damages or expenses (including without limitation legal expenses on a solicitor and his own client basis) (i) incurred in connection with the entry into, performance or enforcement of this Agreement, the use of the Facility proceeds or any breach by Borrower or any Guarantor |
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of the terms hereof or any document related hereto, and (ii) arising out of or in respect of: (A) the release of any hazardous or toxic waste or other substance into the environment from any property of Borrower or any of its Subsidiaries, and (B) the remedial action (if any) taken by Lender in respect of any such release, contamination or pollution. This indemnity will survive the repayment or cancellation of any of the Facilities or any termination of this Agreement. | |||
(n) | For certainty, the permission to create a Permitted Encumbrance shall not be construed as a subordination or postponement, express or implied, of Lenders Security Documents to such Permitted Encumbrance. | ||
(o) | Each accounting term used hereunder, unless otherwise defined herein, has the meaning assigned to it under GAAP consistently applied. If there occurs a change in generally accepted accounting principles (an Accounting Change), including as a result of a conversion to International Financial Reporting Standards, and such change would result in a change (other than an immaterial change) in the calculation of any financial covenant, standard or term used hereunder, then at the request of Borrower or Lender, Borrower and Lender shall enter into negotiations to amend such provisions so as to reflect such Accounting Change with the result that the criteria for evaluating the financial condition of Borrower or any other party, as applicable, shall be the same after such Accounting Change, as if such Accounting Change had not occurred. If, however, within 30 days of the foregoing request by Borrower or Lender, Borrower and Lender have not reached agreement on such amendment, the method of calculation shall not be revised and all amounts to be determined thereunder shall be determined without giving effect to the Accounting Change. | ||
(p) | Borrowers information, corporate or personal, may be subject to disclosure without its consent pursuant to provincial, federal, national or international laws as they apply to the product or service Borrower has with Lender or any third party acting on behalf of or contracting with Lender. | ||
(q) | The terms of this Agreement as well as any information provided pursuant to the terms of this Agreement are confidential and neither party shall disclose them to any third party (other than the partys Affiliates, directors, officers, employees, counsel, accountants, independent contractors, subcontractors, agents, auditors or lenders (collectively, Representatives) who have a need to know such information); provided that each party shall be entitled to disclose such information: |
(i) | as is or becomes generally available to the public, other than as a result of a violation of this Agreement; | ||
(ii) | as may be required or appropriate in response to any summons, subpoena or otherwise in connection with any litigation or any court or regulatory proceeding, or to comply with any applicable law, order, regulation, ruling, or accounting disclosure rule or standard or any rule, policy or order of any stock exchange, securities commission or like body; | ||
(iii) | as may be obtained from a non-confidential source that disclosed such information in a manner that did not violate its obligations of confidentiality in making such disclosure; |
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(iv) | as required pursuant to the Syndicated Facility; and | ||
(v) | with the consent of the other party hereto, such consent not to be unreasonably withheld. |
(r) | Time shall be of the essence in all provisions of this Agreement. | ||
(s) | This Agreement may be executed in counterpart. | ||
(t) | This Agreement shall be governed by the laws of Alberta. |
16. | DEFINITIONS: |
(a) | Indebtedness that: |
(i) | arises from the lending of money by any Person to such Loan Party; | ||
(ii) | is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments; | ||
(iii) | accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the ordinary course of business); or | ||
(iv) | was issued or assumed as full or partial payment for property; |
(b) | Capital Leases; | ||
(c) | reimbursement obligations with respect to letters of credit; and | ||
(d) | guarantees of any Indebtedness of the foregoing types owing by another Person. |
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(a) | interest rate swaps, forward rate transactions, interest rate options, cap transactions, floor transactions and similar rate-related transactions; | ||
(b) | forward rate agreements, foreign exchange forward agreements, cross currency transactions and other similar currency-related transactions; or | ||
(c) | commodity swaps, hedging transactions and other similar commodity-related transactions (whether physically or financially settled), including without limitation, commodity swaps; |
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November 13, 2009 |
(a) | the financial condition of Borrower and Guarantors on a consolidated basis; or | ||
(b) | the ability of Borrower and Guarantors on a consolidated basis to repay amounts owing hereunder or under its guarantee in respect hereof. |
(a) | liens for taxes, assessments or governmental charges not yet due or delinquent or the validity of which is being contested in good faith; | ||
(b) | liens arising in connection with workers compensation, unemployment insurance, pension, employment or other social benefits laws or regulations which are not yet due or delinquent or the validity of which is being contested in good faith; | ||
(c) | liens under or pursuant to any judgment rendered or claim filed which are or will be appealed in good faith provided any execution thereof has been stayed; | ||
(d) | undetermined or inchoate liens and charges incidental to construction or current operations which have not at such time been filed pursuant to law or which relate to obligations not due or delinquent; | ||
(e) | liens arising by operation of law such as builders liens, carriers liens, materialmens liens and other liens of a similar nature which relate to obligations not due or delinquent; | ||
(f) | easements, rights-of-way, servitudes or other similar rights in land (including, without in any way limiting the generality of the foregoing, rights-of-way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) granted to or reserved or taken by other Persons which singularly or in the aggregate do not materially detract from the value of the land concerned or materially impair its use in the operation of the business of Borrower or such Guarantor; | ||
(g) | security given to a public utility or any Governmental Authority when required by such utility or municipality or other authority in connection with the operations of Borrower or such Guarantor, all in the ordinary course of its business which singularly or in the aggregate do not materially impair the operation of its business; | ||
(h) | the reservation in any original grants from the Crown of any land or interests therein and statutory exceptions to title; | ||
(i) | operating leases of assets other than the Tangible Assets; | ||
(j) | Capital Lease transactions or sale-leaseback transactions involving an asset other than a Tangible Asset, or, with the prior written consent of Lender, involving equipment which |
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November 13, 2009 |
is a Tangible Asset, where the indebtedness represented by all such transactions does not at any time exceed $100,000 in aggregate; | |||
(k) | security interests granted or assumed to finance the purchase of any property or asset (a Purchase Money Security Interest) other than a Tangible Asset, or, with the prior written consent of Lender, of equipment which is a Tangible Asset, where: |
(i) | the security interest is granted at the time of or within 60 days after the purchase, | ||
(ii) | the security interest is limited to the property and assets acquired, and | ||
(iii) | the indebtedness represented by all Purchase Money Security Interests does not at any time exceed $100,000 in aggregate; |
(l) | security interests granted in connection with the Syndicated Facility on properties and assets of the Borrower or such Guarantor other than the Tangible Assets; and | ||
(m) | security interests or liens (other than those hereinbefore listed) of a specific nature (and excluding for greater certainty floating charges) on properties and assets other than a Tangible Asset having a fair market value not in excess of $100,000 in aggregate. |
(a) | trade payables incurred in the ordinary course of business; | ||
(b) | any Indebtedness secured by a Permitted Encumbrance, provided that such Indebtedness is within any limits detailed in the definition of Permitted Encumbrances; | ||
(c) | any unsecured advances from Affiliates/shareholders (including MRC, McJunkin Canada and Midfield Holdings) which are postponed in all respects to the Facilities pursuant to the Subordination Agreement or another subordination agreement acceptable to Lender; | ||
(d) | any Indebtedness arising under the Syndicated Facility; | ||
(e) | any debt created in connection with an acquisition of a business or an asset other than a Tangible Asset, provided the acquisition and the proposed debt have been approved under the Syndicated Facility; | ||
(f) | any Indebtedness owing from a Loan Party to another Loan Party (but only if that other Loan Party has provided security in favour of the Lender); and | ||
(g) | any Indebtedness owing to Lender. |
(a) | all amounts owing or required to be paid, where the failure to pay any such amount could give rise to a claim pursuant to any law, statute, regulation or otherwise, which ranks or is |
Midfield Supply ULC Page 23 |
November 13, 2009 |
capable of ranking in priority to Lenders security or otherwise in priority to any claim by Lender for repayment of any amounts owing under this Agreement; and | |||
(b) | all amounts owing under or in connection with a Purchase Money Security Interest, Capital Lease or sale-leaseback transaction involving equipment which is a Tangible Asset. |
(a) | a Person of which another Person alone or in conjunction with its other subsidiaries owns an aggregate number of voting shares sufficient to elect a majority of the directors regardless of the manner in which other voting shares are voted; and | ||
(b) | a partnership of which at least a majority of the outstanding income interests or capital interests are directly or indirectly owned or controlled by such Person, |
Midfield Supply ULC Page 24 |
November 13, 2009 |
(a) | the net book value of all real property owned by the Loan Parties over which the Lender has a registered fixed charge mortgage (unless the value is supported by a drive-by real estate appraisal or a formal appraisal in each case acceptable to Lender, in which case such appraised value may be used); | ||
(b) | the net book value of each piece of equipment owned by the Loan Parties having an individual net book value of less than $250,000, regardless of whether specific serial number registrations in respect thereof have been made in favour of the Lender; and | ||
(c) | the net book value of each piece of equipment owned by the Loan Parties having an individual net book value of $250,000 or more, if specific serial number registrations in respect thereof have been made in favour of Lender; |
Page | ||||
1. DEFINITIONS AND INTERPRETATION |
1 | |||
2. THE FACILITY |
39 | |||
3. PURPOSE |
41 | |||
4. CONDITIONS OF UTILISATION |
42 | |||
5. UTILISATION LOANS |
43 | |||
6. UTILISATION LETTERS OF CREDIT |
44 | |||
7. LETTERS OF CREDIT |
46 | |||
8. OPTIONAL CURRENCIES |
50 | |||
9. REPAYMENT |
50 | |||
10. ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION |
53 | |||
11. MANDATORY PREPAYMENT |
55 | |||
12. RESTRICTIONS |
58 | |||
13. INTEREST |
59 | |||
14. INTEREST PERIODS |
60 | |||
15. CHANGES TO THE CALCULATION OF INTEREST |
61 | |||
16. FEES |
62 | |||
17. TAX GROSS UP AND INDEMNITIES |
63 | |||
18. INCREASED COSTS |
69 | |||
19. OTHER INDEMNITIES |
70 | |||
20. MITIGATION BY THE LENDERS |
71 | |||
21. COSTS AND EXPENSES |
72 | |||
22. GUARANTEE AND INDEMNITY |
73 | |||
23. REPRESENTATIONS |
77 | |||
24. INFORMATION UNDERTAKINGS |
84 | |||
25. FINANCIAL COVENANTS |
89 | |||
26. GENERAL UNDERTAKINGS |
93 | |||
27. EVENTS OF DEFAULT |
103 |
Page | ||||
28. CHANGES TO THE LENDERS |
107 | |||
29. CHANGES TO THE OBLIGORS |
113 | |||
30. ROLE OF THE AGENT, THE ARRANGER, THE ISSUING BANK AND OTHERS |
116 | |||
31. CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
123 | |||
32. SHARING AMONG THE FINANCE PARTIES |
123 | |||
33. PAYMENT MECHANICS |
124 | |||
34. SET-OFF |
127 | |||
35. NOTICES |
128 | |||
36. CALCULATIONS AND CERTIFICATES |
130 | |||
37. PARTIAL INVALIDITY |
131 | |||
38. REMEDIES AND WAIVERS |
131 | |||
39. AMENDMENTS AND WAIVERS |
131 | |||
40. CONFIDENTIALITY |
135 | |||
41. COUNTERPARTS |
137 | |||
42. GOVERNING LAW |
137 | |||
43. ENFORCEMENT |
137 | |||
SCHEDULE 1 |
139 | |||
THE ORIGINAL PARTIES |
139 | |||
Part I The Original Obligors |
139 | |||
Part II I The Original Lenders |
140 | |||
SCHEDULE 2 |
141 | |||
CONDITIONS PRECEDENT |
141 | |||
Part I Conditions precedent to first Utilisation |
141 | |||
Part II Conditions precedent required to be delivered by an Additional Obligor |
146 | |||
Part III |
150 | |||
Transaction Security Documents of Initial Obligors |
150 | |||
SCHEDULE 3 UTILISATION REQUEST LOANS |
152 | |||
SCHEDULE 4 MANDATORY COST FORMULA |
153 | |||
SCHEDULE 5 FORM OF TRANSFER CERTIFICATE |
156 | |||
SCHEDULE 6 FORM OF ASSIGNMENT AGREEMENT |
160 | |||
SCHEDULE 7 FORM OF ACCESSION DEED |
164 | |||
SCHEDULE 8 FORM OF RESIGNATION LETTER |
167 |
Page | ||||
SCHEDULE 9 FORM OF COMPLIANCE CERTIFICATE |
169 | |||
SCHEDULE 10 TIMETABLES |
171 | |||
Part I Loans |
171 | |||
Part II Letters of Credit |
172 | |||
SCHEDULE 11 AGREED SECURITY PRINCIPLES |
173 | |||
SCHEDULE 12 FORM OF INCREASE CONFIRMATION |
176 |
(1) | MRC TRANSMARK GROUP B.V. (incorporated in the Netherlands with registered number 39062651) (the Parent); | |
(2) | MRC TRANSMARK HOLDINGS UK LIMITED (incorporated in England with registered number 05436123) as an Original Borrower and the Obligors Agent (the Company); | |
(3) | THE COMPANIES listed in Part I of Schedule 1 (The Original Parties) as original guarantors (the Original Guarantors); | |
(4) | HSBC BANK plc as arranger, (the Arranger); | |
(5) | HSBC BANK plc as the original lender (the Original Lender); | |
(6) | HSBC BANK plc as hedge counterparty (the Original Hedge Counterparty); | |
(7) | HSBC BANK plc as agent of the other Finance Parties (the Agent); | |
(8) | HSBC BANK plc as security trustee for the Secured Parties (the Security Agent); | |
(9) | HSBC BANK plc as Issuing Bank; and | |
(10) | HSBC Bank plc as MOF Lender (the Original MOF Lender). |
1. | DEFINITIONS AND INTERPRETATION | |
1.1 | Definitions | |
In this Agreement: | ||
Acceding Obligors means the Subsidiaries of the Parent listed in Part II of Schedule 1 (The Original Parties). | ||
Acceptable Bank means: |
(a) | a bank or financial institution duly authorised under applicable loans to carry on the business of banking (including, without limitation, the business of taking deposits) which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A or higher by Standard & Poors Rating Services or Fitch Ratings Ltd or A2 or higher by Moodys Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; or | ||
(b) | any other bank or financial institution approved by the Agent. |
Accession Deed means a document substantially in the form set out in Schedule 7 (Form of Accession Deed). | ||
Accounting Principles means, in respect of an Obligor, generally accepted accounting principles in the jurisdiction of incorporation of that Obligor, including IFRS. | ||
Accounting Reference Date means 31 December. |
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Additional Borrower means a company which becomes an Additional Borrower in accordance with Clause 29 (Changes to the Obligors). | ||
Additional Cost Rate has the meaning given to it in Schedule 4 (Mandatory Cost Formula). | ||
Additional Guarantor means a company which becomes an Additional Guarantor in accordance with Clause 29 (Changes to the Obligors). | ||
Additional Obligor means an Additional Borrower or an Additional Guarantor. | ||
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company. | ||
Agents Spot Rate of Exchange means the Agents spot rate of exchange for the purchase of the relevant currency with the Base Currency in the London foreign exchange market at or about 11:00 a.m. on a particular day. | ||
Aggregate Total Acquisition Price has the meaning given to that term in paragraph (f) of the definition of Permitted Acquisition. | ||
Aggregate Total Purchase Price has the meaning given to that term paragraph (g) of the definition of Permitted Acquisition. | ||
Agreed Security Principles means the principles set out in Schedule 11 (Agreed Security Principles). | ||
Annual Financial Statements has the meaning given to that term in Clause 24 (Information undertakings). | ||
Approved Country means any country which is not subject to OFAC sanctions or United Nations sanctions under Article 41 of the UN Charter and any other country approved by all the Lenders. | ||
ASIC means the Australian Securities and Investments Commission. | ||
Assignment Agreement means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee provided that if that other form does not contain the undertaking set out in the form set out in Schedule 6 (Form of Assignment Agreement) it shall not be a Creditor/Agent Accession Undertaking as defined in, and for the purposes of, the Security Trust Deed. | ||
Auditors means one of PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte & Touche or any other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed). | ||
Australian Dollars means the lawful currency for the time being of Australia. | ||
Australian Obligor means an Obligor incorporated in the Commonwealth of Australia. | ||
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration. | ||
Availability Period means the period from and including the date of this Agreement to and including the date falling one month prior to the Termination Date. |
2
Available Commitment means a Lenders Commitment minus: |
(a) | the Base Currency Amount of its participation in any outstanding Utilisations; and | ||
(b) | in relation to any proposed Utilisation, the Base Currency Amount of its participation in any other Utilisations that are due to be made on or before the proposed Utilisation Date. |
For the purposes of calculating a Lenders Available Commitment that Lenders participation in any Revolving Facility Utilisations that are due to be repaid or prepaid on or before the proposed Utilisation Date shall not be deducted from a Lenders Commitment. | ||
Available Facility means, in relation to the Revolving Facility, the aggregate for the time being of each Lenders Available Commitment in respect of that Facility. | ||
Base Currency means euros. | ||
Base Currency Amount means: |
(a) | save as provided in paragraph (b) below, the amount specified in the Utilisation Request delivered by a Borrower for that Utilisation (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agents Spot Rate of Exchange on the date which is three Business Days before the Utilisation Date or, if later, on the date the Agent receives the Utilisation Request in accordance with the terms of this Agreement) and, in the case of a Letter of Credit, as adjusted under Clause 6.8 (Revaluation of Letters of Credit) at six-monthly intervals; and | ||
(b) | for the purposes only of paragraph (a) of the definition of Available Commitment in relation to the amount of any outstanding Utilisations, that amount converted into the Base Currency at the Agents Spot Rate of Exchange on the date which is three Business Days before the proposed Utilisation Date for the proposed Utilisation or, if later, the date the Agent receives the Utilisation Request for the proposed Utilisation in accordance with the terms of this Agreement), |
as adjusted to reflect any repayment, prepayment, consolidation or division of a Utilisation. | ||
Base Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Base Reference Banks: |
(a) | in relation to LIBOR, as the rate at which the relevant Base Reference Bank could borrow funds in the London interbank market; and | ||
(b) | in relation to EURIBOR, as the rate at which the relevant Base Reference Bank could borrow funds in the European interbank market, |
in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period. |
Base Reference Banks means, in relation to LIBOR, the principal London offices of HSBC Bank plc, Barclays Bank PLC and The Royal Bank of Scotland plc and, in relation to EURIBOR, the principal office in Paris of HSBC Bank plc, BNP Paribas and Société Générale or such other banks as may be appointed by the Agent in consultation with the Company. | ||
Belgian Obligor means an Obligor incorporated in Belgium. |
3
Borrower means an Original Borrower or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 29 (Changes to the Obligors). | ||
Borrowings has the meaning given to that term in Clause 25.1 (Financial definitions). | ||
Break Costs means the amount (if any) by which: |
(a) | the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; |
exceeds: |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. |
Budget means: |
(a) | in relation to the Financial Year ending on 31 December 2010, the Groups budget for that Financial Year to be delivered by the Parent to the Agent pursuant to Clause 4.1 (Initial conditions precedent) (the 2010 Budget); and | ||
(b) | in relation to any other period, any budget delivered by the Parent to the Agent in respect of that period pursuant to Clause 24.4 (Budget). |
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London, and: |
(a) | (in relation to any date for payment or purchase of a currency other than euro) the principal financial centre of the country of that currency; or | ||
(b) | (in relation to any date for payment or purchase of euro) any TARGET Day. |
Cash means, at any time, cash in hand or at bank and (in the latter case) credited to an account in the name of a member of the Group and to which a member of the Group is alone (or together with other members of the Group) beneficially entitled and for so long as: |
(a) | that cash is repayable within 90 days after the relevant date of calculation; | ||
(b) | repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition; | ||
(c) | there is no Security over that cash except for Transaction Security or any Permitted Security constituted by a netting or set-off arrangement entered into by members of the Group in the ordinary course of their banking arrangements; and | ||
(d) | (except for cash subject to the security described in paragraph (c) above) the cash is freely and (except as mentioned in paragraph (a) above) immediately available to be applied in repayment or prepayment of the Facility without any condition other than the lapse of time and notice being given having to be fulfilled. |
4
Cash Equivalent Investments means at any time: |
(a) | certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank; | ||
(b) | any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; | ||
(c) | commercial paper not convertible or exchangeable to any other security: |
(i) | for which a recognised trading market exists; | ||
(ii) | issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State; | ||
(iii) | which matures within one year after the relevant date of calculation; and | ||
(iv) | which has a credit rating of either A-1 or higher by Standard & Poors Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moodys Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
(d) | sterling bills of exchange eligible for rediscount at the Bank of England and accepted by an Acceptable Bank (or their dematerialised equivalent); | ||
(e) | any investment in money market funds which (i) have a credit rating of either A-1 or higher by Standard & Poors Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moodys Investor Services Limited, (ii) which invest substantially all their assets in securities of the types described in paragraphs (a) to (d) above and (iii) can be turned into cash on not more than 30 days notice; or | ||
(f) | any other debt security approved by the Majority Lenders, |
in each case, denominated in euro, Sterling or US Dollars (or any currency of a country in which a member of the Group has operations provided that such currency is freely convertible into one or more of euro, Sterling or US Dollars) to which any member of the Group is alone or together with other members of the Group beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security (other than Security arising under the Transaction Security Documents). | ||
Cash Pooling Agreement means any agreement entered into between HSBC Bank plc and any members of the Group in respect of cash pooling and/or cash management services. | ||
Change of Control means any person or group of persons acting in concert gains direct or indirect control of the Parent or McJunkin UK. For the purposes of this definition: |
5
(a) | control means: |
(i) | the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: |
(A) | cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the Parent or McJunkin UK (as appropriate); or | ||
(B) | appoint or remove all, or the majority, of the directors or other equivalent officers of the Parent or McJunkin UK (as appropriate); or | ||
(C) | give directions with respect to the operating and financial policies of the Parent or McJunkin UK (as appropriate) with which the directors or other equivalent officers of the Parent are obliged to comply; or |
(ii) | the holding beneficially of more than 50% of the issued share capital of the Parent or McJunkin UK (as appropriate) (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); and |
(b) | acting in concert means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Parent or McJunkin UK (as appropriate) by any of them, either directly or indirectly, to obtain or consolidate control of the Parent or McJunkin UK (as appropriate). |
Charged Property means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security. | ||
Commitment means a Revolving Facility Commitment. | ||
Compliance Certificate means a certificate substantially in the form set out in Schedule 9 (Form of Compliance Certificate). | ||
Confidential Information means all information relating to the Parent, any Obligor, the Group, the McJunkin Group, the Finance Documents or a Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either: |
(a) | any member of the Group or any of its advisers; or | ||
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers, |
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that: |
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 40 (Confidentiality); or | ||
(iii) | is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or |
6
(iv) | is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality. |
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Parent and the Agent. | ||
Constitutional Documents means the up-to-date memorandum and articles of association of the Parent. | ||
Corporations Act means the Australian Corporations Act 2001 (Cth) | ||
CTA means the Corporation Tax Act 2009. | ||
Default means an Event of Default or any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default. | ||
Defaulting Lender means any Lender (other than a Lender which is a Sponsor Affiliate): |
(a) | which has failed to make its participation in a Loan available or has notified the Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders participation) or has failed to provide cash collateral (or has notified the Issuing Bank that it will not provide cash collateral) in accordance with Clause 7.4 (Cash collateral by Non-Acceptable L/C Lender); | ||
(b) | which has otherwise rescinded or repudiated a Finance Document; or | ||
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
unless, in the case of paragraph (a) above: |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or | ||
(B) | a Disruption Event; and |
payment is made within three Business Days of its due date; or | |||
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
Delegate means any delegate, agent, attorney or co-trustee appointed by the Security Agent. | ||
Disruption Event means either or both of: |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions |
7
contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or | |||
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or | ||
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted. | ||
Distributable Net Profit means, in any Financial Year of the Group, Groups net income (post tax and minority interests) for that Financial Year (as set out in the corresponding Annual Financial Statements of the Parent). | ||
Dormant Subsidiary means: |
(a) | Transmark Valves Limited; | ||
(b) | Zidell Valve Corporation Limited; | ||
(c) | Transmark Projects Limited; | ||
(d) | Heaton Valves Limited; | ||
(e) | Transmark Heaton Limited; | ||
(f) | Delta Pacific Valves Limited; | ||
(g) | Transmark Scotland Limited; | ||
(h) | Transmark International Limited; | ||
(i) | Transmark Fortim Engineering Pte. Ltd; | ||
(j) | Pegler Hattersley Holdings Pty Limited; | ||
(k) | Pegler Beacon Australia Pty Limited; and | ||
(l) | any other member of the Group (other than an Obligor) which does not trade (for itself or as agent for any person), as is confirmed in writing by the Parent to the Agent. |
Dormant Subsidiary Loan means any loan made by a Dormant Subsidiary to any member of the Group that is not a Dormant Subsidiary. | ||
Dutch Obligor means an Obligor incorporated in the Netherlands. | ||
ECB Rates means the European Central Bank Eurosystem Euro foreign exchange reference rates displayed on the relevant page of the European Central Bank website after 2.00 pm (UK time on the relevant day) or if such page is replaced or ceases to be available, such other page displaying such rates as agreed as soon as possible by the Agent and the Company (acting reasonably and in good faith). |
8
Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media: |
(a) | air (including, without limitation, air within natural or man-made structures, whether above or below ground); | ||
(b) | water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and | ||
(c) | land (including, without limitation, land under water). |
Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law. | ||
Environmental Law means any applicable law or regulation which relates to: |
(a) | the pollution or protection of the Environment; | ||
(b) | the conditions of the workplace; or | ||
(c) | the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste. |
Environmental Permits means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group. | ||
EURIBOR means, in relation to any Loan in euro: |
(a) | the applicable Screen Rate; or | ||
(b) | (f no Screen Rate is available for the Interest Period of that Loan) the Base Reference Bank Rate, |
as of the Specified Time on the Quotation Day for euro and for a period comparable to the Interest Period of that Loan. | ||
Event of Default means any event or circumstance specified as such in Clause 27 (Events of Default). | ||
Expiry Date means, for a Letter of Credit, the last day of its Term. | ||
Facility means the Revolving Facility. | ||
Facility Office means: |
(a) | in respect of a Lender or the Issuing Bank, the office or offices notified by that Lender or the Issuing Bank to the Agent in writing on or before the date it becomes a Lender or the Issuing Bank (or, following that date, by not less than five Business Days written notice) as the office or offices through which it will perform its obligations under this Agreement; or | ||
(b) | in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes. |
9
Finance Document means this Agreement, any Accession Deed, any Compliance Certificate, any Hedging Agreement, any MOF Document, any Resignation Letter, the Security Trust Agreement, any Transaction Security Document, any Utilisation Request and any other document designated as a Finance Document by the Agent and the Parent, provided that where the term Finance Document is used in, and construed for the purposes of, this Agreement or the Security Trust Agreement, a Hedging Agreement or MOF Document shall be a Finance Document only for the purposes of: |
(a) | the definition of Material Adverse Effect; | ||
(b) | paragraph (a) of the definition of Permitted Transaction; | ||
(c) | the definition of Transaction Security Document; | ||
(d) | paragraph (a)(iv) of Clause 1.2 (Construction); | ||
(e) | Clause 22 (Guarantee and Indemnity); and | ||
(f) | Clause 27 (Events of Default) (other than Clause 27.17 (Acceleration)). |
Finance Party means the Agent, the Arranger, the Security Agent, a Lender, the Issuing Bank, a Hedge Counterparty or MOF Lender provided that where the term Finance Party is used in, and construed for the purposes of, this Agreement or the Security Trust Agreement, a Hedge Counterparty or MOF Lender shall be a Finance Party only for the purposes of: |
(a) | the definition of Secured Parties; | ||
(b) | paragraph (a)(i) of Clause 1.2 (Construction); | ||
(c) | paragraph (c) of the definition of Material Adverse Effect; | ||
(d) | Clause 22 (Guarantee and Indemnity); and | ||
(e) | Clause 31 (Conduct of business by the Finance Parties). |
Financial Assistance Memo means the MRC Transmark Group Financial Assistance Summary delivered to the Agent pursuant to Schedule 2 Part I (Conditions precedent to first Utilisation). | ||
Financial Indebtedness means (without double counting) any indebtedness for or in respect of: |
(a) | moneys borrowed and debit balances at banks or other financial institutions; | ||
(b) | any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); | ||
(c) | any note purchase facility or the issue of bonds (but not Trade Instruments), notes, debentures, loan stock or any similar instrument; | ||
(d) | the amount of any liability in respect of Finance Leases; | ||
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); | ||
(f) | any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount (on a net |
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basis) is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account); | |||
(g) | any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability (but not, in any case, Trade Instruments) of an entity which is not a member of the Group which liability would fall within one of the other paragraphs of this definition; | ||
(h) | any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under the Accounting Principles; | ||
(i) | any amount of any liability under an advance or deferred purchase agreement if the primary reason behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question and payment is due more than 180 days after the date of supply or is deferred by more than 180 days; | ||
(j) | any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing and which is classified as borrowings under the Accounting Principles; and | ||
(k) | the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (j) above, |
but excluding for the avoidance of doubt all pension-related and intra-group liabilities. | ||
Financial Quarter has the meaning given to that term in Clause 25.1 (Financial definitions). | ||
Financial Year has the meaning given to that term in Clause 25.1 (Financial definitions). | ||
French Guarantor means any Guarantor incorporated in France. | ||
Group means the Parent and each of its Subsidiaries for the time being. | ||
Group Structure Chart means the group structure chart in the agreed form. | ||
Guarantor means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 29 (Changes to the Obligors). | ||
Guarantor Coverage Test has the meaning given to that term in Clause 26.24 (Guarantor). | ||
Hedge Counterparty means: |
(a) | any Original Hedge Counterparty ; and | ||
(b) | any Lender which has become a Party as a Hedge Counterparty in accordance with Clause 28.9 (Accession of Hedge Counterparties and MOF Lenders) |
which, in each case, is or has become, a party to the Security Trust Agreement as a Hedge Counterparty in accordance with the provisions of the Security Trust Agreement. | ||
Hedging Agreement means any master agreement, confirmation, schedule or other agreement entered into or to be entered into by any Obligor and a Hedge Counterparty |
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including, without limitation, for the purpose of hedging interest rate and/or currency exposures under the Finance Documents or such other types of liabilities and/or risks in relation to the hedging transactions permitted under Clause 26.23 (Treasury Transactions). | ||
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary. | ||
IFRS means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements. | ||
Impaired Agent means the Agent at any time when: |
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; | ||
(b) | the Agent otherwise rescinds or repudiates a Finance Document; | ||
(c) | (if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of Defaulting Lender; or | ||
(d) | an Insolvency Event has occurred and is continuing with respect to the Agent; |
unless, in the case of paragraph (a) above: |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or | ||
(B) | a Disruption Event; and |
payment is made within three Business Days of its due date; or |
(ii) | the Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
Increase Confirmation means a confirmation substantially in the form set out in Schedule 12 (Form of Increase Confirmation). | ||
Increase Lender has the meaning given to that term in Clause 2.2 (Increase). | ||
Initial Obligors means the Original Obligors and the Acceding Obligors. | ||
Insolvency Event in relation to a Finance Party means that the Finance Party: |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); | ||
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; | ||
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; | ||
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a |
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petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official; | |||
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a petition is presented for its winding-up, or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up, or liquidation; or | ||
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009; | ||
(g) | has a resolution passed for its winding-up, official management, or liquidation (other than pursuant to a consolidation, amalgamation or merger); | ||
(h) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, manager, trustee, custodian or other similar official for it or for all or substantially all its assets; | ||
(i) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; | ||
(j) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (i) above; or | ||
(k) | takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts. |
Intellectual Property means: |
(a) | any patents, trade marks, service marks, designs, business names, copyrights, database rights, design rights, domain names, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered; and | ||
(b) | the benefit of all applications and rights to use such assets of each member of the Group. |
Interest Period means, in relation to a Loan, each period determined in accordance with Clause 14 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 13.3 (Default interest). | ||
Issuing Bank means each Lender identified above as an issuing bank and any other Lender which has notified the Agent that it has agreed to the Companys request to be an |
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Issuing Bank pursuant to the terms of this Agreement [(and if more than one Lender has so agreed, such Lenders shall be referred to, whether acting individually or together, as the Issuing Bank) provided that, in respect of a Letter of Credit issued or to be issued pursuant to the terms of this Agreement, the Issuing Bank shall be the Issuing Bank which has issued or agreed to issue that Letter of Credit. | ||
ITA means the Income Tax Act 2007. | ||
Joint Venture means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity. | ||
Joint Venture Investment has the meaning given to it in the definition of Permitted Joint Venture. | ||
L/C Proportion means in relation to a Lender in respect of any Letter of Credit, the proportion (expressed as a percentage) borne by that Lenders Available Commitment to the relevant Available Facility immediately prior to the issue of that Letter of Credit, adjusted to reflect any assignment or transfer under this Agreement to or by that Lender. | ||
Legal Opinion means any legal opinion delivered to the Agent under Clause 4.1 (Initial conditions precedent) or Clause 29 (Changes to the Obligors). | ||
Legal Reservations means: |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; | ||
(b) | the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; | ||
(c) | similar principles, rights and defences under the laws of any Relevant Jurisdiction; and | ||
(d) | any other matters which are set out as qualifications or reservations as to matters of law of general application in the Legal Opinions. |
Lender means: |
(a) | any Original Lender; and | ||
(b) | any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 2.2 (Increase) or Clause 28 (Changes to the Lenders), |
which in each case has not ceased to be a Lender in accordance with the terms of this Agreement. | ||
Letter of Credit means any letter of credit, guarantee, bond, indemnity or other instrument in the latest standard form of the Issuing Bank (if any) or a form requested by a Borrower (or the Company on its behalf) and agreed by the Agent with the prior consent of the Majority Lenders and the Issuing Bank. |
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Leverage has the meaning given to that term in Clause 25.1 (Financial Definitions). | ||
LIBOR means, in relation to any Loan: |
(a) | the applicable Screen Rate; or | ||
(b) | (if no Screen Rate is available for the currency or Interest Period of that Loan) the Base Reference Bank Rate, |
as of the Specified Time on the Quotation Day for the currency of that Loan and a period comparable to the Interest Period of that Loan. | ||
Limitation Acts means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984. | ||
Listing means a successful application being made for the admission of all or part of the share capital of any member of the Group on any recognised investment exchange (as defined in the Financial Services and Markets Act 2000) or any other public exchange or public market in any jurisdiction or country or any other sale or issue by way of flotation or public offering or any equivalent circumstances in relation to any member of the Group in any jurisdiction or country. | ||
LMA means the Loan Market Association. | ||
Loan means a Revolving Facility Loan. | ||
Majority Lenders means a Lender or Lenders whose Commitments aggregate more than 662/3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3 per cent. of the Total Commitments immediately prior to that reduction). | ||
Mandatory Cost means the percentage rate per annum calculated by the Agent in accordance with Schedule 4 (Mandatory Cost formula). | ||
Mandatory Prepayment Account means an interest-bearing account: |
(a) | held in the England by a Borrower with the Agent or Security Agent; | ||
(b) | identified in a letter between the Company and the Agent, or in the name of the account, as a Mandatory Prepayment Account; | ||
(c) | subject to Security in favour of the Security Agent which Security is in form and substance satisfactory to the Agent and Security Agent; and | ||
(d) | from which no withdrawals may be made by any members of the Group except as contemplated by this Agreement, |
(as the same may be redesignated, substituted or replaced from time to time). | ||
Margin means: |
(a) | in relation to any Loan, 1.50 per cent. per annum; and | ||
(b) | in relation to any other Unpaid Sum, the highest rate specified in the table below, |
but where Leverage in respect of the most recently completed Relevant Period (starting with the Relevant Period ending on or about 31 December 2010) is within a range in the table set |
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out below, then the Margin for each Loan will be the percentage per annum set out below in the column opposite that range: |
Margin | ||||
Leverage | % p.a. | |||
Greater than 2.00:1 |
2.50 | |||
Greater than 1.50:1 but less than or equal to 2.00:1 |
2.25 | |||
Greater than 1.00:1 but less than or equal to 1.50:1 |
2.00 | |||
Greater than 0.75:1 but less than or equal to 1.00:1 |
1.75 | |||
Less than or equal to 0.75:1 |
1.50 |
However: |
(i) | any increase or decrease in the Margin for a Loan shall take effect on the date (the reset date) which is the 5 Business Days after receipt by the Agent of the Compliance Certificate for that Relevant Period pursuant to Clause 24.2 (Provision and contents of Compliance Certificate); | ||
(ii) | if, following receipt by the Agent of the annual audited financial statements of the Group and related Compliance Certificate, those statements and Compliance Certificate do not confirm the basis for a reduced Margin, then the provisions of Clause 13.2 (Payment of interest) shall apply and the Margin for that Loan shall be the percentage per annum determined using the table above and the revised ratio of Leverage calculated using the figures in the Compliance Certificate; | ||
(iii) | while an Event of Default is continuing, the Margin for each Loan shall be the highest percentage per annum set out in the table above; and | ||
(iv) | for the purpose of determining the Margin, Leverage and Relevant Period shall be determined in accordance with Clause 25.1 (Financial definitions). |
Material Adverse Effect means a material adverse effect on: |
(a) | the business, assets or financial condition of the Group taken as a whole; or | ||
(b) | the ability of the Obligors (taken as a whole) to perform their payment obligations under the Finance Documents and/or their obligations under Clause 25.2 (Financial condition) of this Agreement; or | ||
(c) | the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents or the right or remedies of any Finance Party under any of the Finance Documents. |
Material Company means, at any time: |
(a) | the Parent; or | ||
(b) | any other Obligor; or | ||
(c) | a wholly-owned member of the Group that holds shares in an Obligor; or |
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(d) | a Subsidiary of the Parent which has earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA on an unconsolidated basis and excluding intra-group items and investments in Subsidiaries) representing 5 per cent. or more of Consolidated EBITDA, or has gross assets, net assets or turnover (calculated on an unconsolidated basis and excluding intra-group items and investments in Subsidiaries) representing 5 per cent., or more of the gross assets, net assets or turnover of the Group, calculated on a consolidated basis. |
Compliance with the conditions set out in paragraph (d) shall be determined by reference to the most recent Compliance Certificate supplied by the Parent and/or the latest audited financial statements of that Subsidiary (consolidated in the case of a Subsidiary which itself has Subsidiaries) and the latest Annual Financial Statements of the Parent. However, if a Subsidiary has been acquired since the date as at which the latest Annual Financial Statements of the Parent were prepared, those financial statements shall be deemed to be adjusted in order to take into account the acquisition of that Subsidiary (that adjustment (if requested by the Agent acting on the instructions of the Majority Lenders) shall be certified by the Groups Auditors as representing an accurate reflection of the revised Consolidated EBITDA, consolidated gross assets, consolidated net assets and/or consolidated turnover of the Group). | ||
A report by the Auditors of the Parent that a Subsidiary is or is not a Material Company shall, in the absence of manifest error, be conclusive and binding on all Parties. | ||
McJunkin Group means McJunkin Red Man Holding Corporation and its subsidiaries from time to time. | ||
McJunkin Loan Notes means the 10 year, fixed coupon loan notes issued by the McJunkin UK in favour of McJunkin Red Man Corporation pursuant to: |
(a) | a loan note instrument dated 30 October 2009 constituting loan notes with an aggregate principal amount of £24,600,000; and | ||
(b) | a loan note instrument dated 30 October 2009 constituting loan notes with an aggregate principal amount of £59,400,000. |
McJunkin UK means McJunkin Red Man UK Limited a company incorporated in England with registered number 7010190. | ||
MOF means any overdraft or other bilateral facility made available by a MOF Lender to a Debtor. | ||
MOF Agreements means the MOF Facility Agreement and each other agreement or letter pursuant to which a MOF is made available. | ||
MOF Document means all MOF Agreements and any other agreement or document entered into or pursuant to such MOF Agreement. | ||
MOF Facility Agreement means any agreement entered into by any member of the Group and HSBC Bank plc in relation to the provision of overdraft and other ancillary facilities. | ||
MOF Lender means: |
(a) | the Original MOF Lender; and | ||
(b) | any Lender which becomes a MOF Lender pursuant to Clause 28.9 (Accession of Hedge Counterparties and MOF Lenders), |
17
which, in each case is or has become a party to the Security Trust Agreement as a MOF Lender in accordance with the provisions of the Security Trust Agreement. | ||
Month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that: |
(a) | (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; | ||
(b) | if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and | ||
(c) | if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end. |
The above rules will only apply to the last Month of any period. | ||
New Lender has the meaning given to that term in Clause 28 (Changes to the Lenders). | ||
New Zealand Dollars means the lawful currency for the time being of New Zealand. | ||
New Zealand Obligor means an Obligor incorporated in New Zealand. | ||
Non-Acceptable L/C Lender means a Lender under the Revolving Facility which: |
(a) | is not an Acceptable Bank within the meaning of paragraph (a) of the definition of Acceptable Bank (other than a Lender which each Issuing Bank has agreed is acceptable to it notwithstanding that fact); or | ||
(b) | is a Defaulting Lender; or | ||
(c) | has failed to make (or has notified the Agent that it will not make) a payment to be made by it under Clause 7.3 (Indemnities) or Clause 30.10 (Lenders indemnity to the Agent) or any other payment to be made by it under the Finance Documents to or for the account of any other Finance Party in its capacity as Lender by the due date for payment unless the failure to pay falls within the description of any of those items set out at (i)-(ii) of the definition of Defaulting Lender. |
Non-Consenting Lender has the meaning given to that term in Clause 39.3 (Replacement of Lender). | ||
Obligor means a Borrower or a Guarantor. | ||
Obligors Agent means the Company, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.4 (Obligors Agent). | ||
Optional Currency means: |
(a) | Australian Dollars, New Zealand Dollars, Singapore Dollars, Sterling and US Dollars (together the Pre-Approved Currencies); and | ||
(b) | a currency (other than the Base Currency) which complies with the conditions set out in Clause 4.3 (Conditions relating to Optional Currencies). |
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Original Borrower means the company listed in Part I of Schedule 1 (The Original Parties) as the Original Borrower. | ||
Original Financial Statements means: |
(a) | in relation to each Obligor its audited financial statements (or in the case of MRC Transmark B.V., its unaudited financial statements) for its Financial Year ended 2009; | ||
(b) | the consolidated financial statements of the Parent in respect of the financial period ending on or about 30 June 2010. |
Original New Zealand Obligor means MRC Transmark Limited incorporated in New Zealand. | ||
Original Obligor means an Original Borrower or an Original Guarantor. | ||
Participating Member State means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union. | ||
Party means a party to this Agreement. | ||
Perfection Requirements means the making or the procuring of the necessary registrations, filings, endorsements, notarisations, stampings and/or notifications of the Transaction Security Documents and/or the Transaction Security created thereunder. | ||
Permitted Acquisition means: |
(a) | an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group in circumstances constituting a Permitted Disposal; | ||
(b) | an acquisition of shares or securities pursuant to a Permitted Share Issue; | ||
(c) | an acquisition of securities which are Cash Equivalent Investments so long as those Cash Equivalent Investments become subject to the Transaction Security as soon as is reasonably practicable; | ||
(d) | the incorporation of a company which on incorporation becomes a member of the Group, but only if: |
(i) | that company is incorporated in an Approved Country with limited liability; and | ||
(ii) | if the shares in the company are owned by an Obligor, Security over the shares of that company, in form and substance satisfactory to the Agent, is created in favour of the Security Agent within 30 days of the date of its incorporation if incorporated in England or within 60 days if incorporated elsewhere; |
(e) | an acquisition by way of investment permitted pursuant to Clause 26.9 (Joint Ventures); | ||
(f) | to the extent not permitted in paragraph (h) below, an acquisition by a member of the Group of shares or equity securities (the Minority Shares) in a member of the Group that is not a wholly-owned Subsidiary and/or in a Permitted Joint Venture (the Joint Venture Shares), in each case owned by any other shareholder that is not a member of the Group where: |
19
(i) | no Default is continuing at the time of that acquisition or would occur as a result of that acquisition; | ||
(ii) | subject to the Agreed Security Principles, if the Minority Shares or the Joint Venture Shares are to be owned by an Obligor, Security is given over such the Minority Shares or Joint Venture Shares acquired (as applicable) as soon as reasonably possible and in any event within 30 days if such shares are in a company incorporated in England or 60 days if in a company incorporated in another jurisdiction, after the date of their acquisition in favour of (and in form and substance satisfactory to) the Security Agent (acting reasonably) for the Finance Parties by the member of the Group that acquired those Minority Shares or Joint Venture Shares (as applicable); and | ||
(iii) | the consideration (including associated cost and expenses) for the Minority Shares or Joint Venture Shares being acquired and any Financial Indebtedness remaining in any such Joint Venture at the date of acquisition to the extent such Financial Indebtedness is not prior to such acquisition accounted for as Borrowings of a member of the Group (the Total Acquisition Price) does not exceed 15,000,000 (or its equivalent) and the Total Acquisition Price and when aggregated with the Total Acquisition Price for any other Minority Shares and Joint Venture Shares acquired by all members of the Group pursuant to this paragraph (f) in any rolling 12 month period (ending on the scheduled date of such acquisition) (together the Aggregate Total Acquisition Price) and the Aggregate Total Purchase Price for such period, does not in that rolling 12 month period exceed 30,000,000 (or its equivalent); and | ||
(iv) | in relation to the acquisition only of any Joint Venture Shares, the Parent has delivered to the Agent not later than 2 Business Days before legally completing such acquisition, a certificate signed by the CFO of the Parent (in a form reasonably acceptable to the Agent) confirming that the Parent reasonably believes (with supporting calculations) that Leverage in respect of any Relevant Period ending on the next 4 Financial Quarters following such acquisition, will be no greater than 2.0:1. |
(g) | an acquisition of (A) at least 50.1% of the issued share capital of a limited liability company or (B) (if the acquisition is made by a limited liability company whose sole purpose is to make the acquisition) a business or undertaking carried on as a going concern, but only if: |
(i) | no Default is continuing on the closing date for the acquisition or would occur as a result of the acquisition; | ||
(ii) | the acquired company, business or undertaking is engaged in a business substantially the same as that carried on by the McJunkin Group; and | ||
(iii) | the consideration (including associated costs and expenses) for the acquisition and any Financial Indebtedness remaining in the acquired company (or any such business) at the date of acquisition (the Total Purchase Price) does not exceed 15,000,000 (or its equivalent) and the Total Purchase Price when aggregated with the Total Purchase Price for all other Permitted Acquisitions by all members of the Groups pursuant to this paragraph (g) in any rolling 12 month period (ending on the scheduled date of such acquisition) (the Aggregate Total Purchase Price) and the Aggregate Total Acquisition Price for such period does not in that rolling 12 month period exceed in aggregate 30,000,000 (or its equivalent); and |
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(iv) | the Parent has delivered to the Agent not later than 2 Business Days before completing such acquisition, a certificate signed by the CFO of the Parent, (in a form reasonably acceptable to the Agent) confirming that the Parent reasonably believes (with supporting calculations) that Leverage in respect of any Relevant Period ending on the next 4 Financial Quarters following such acquisition, will be no greater than 2.0:1; and |
(h) | the acquisition by the Parent of all of the shares not owned by it in Transmark DRW GmbH provided that consideration (including associated costs and expenses) and any Financial Indebtedness (to the extent not prior to such acquisition accounted for as Borrowings of a member of the Group) remaining in such company at the date of such acquisition does not exceed 5,000,000 (or its equivalent). |
Permitted Disposal means any sale, lease, licence, transfer or other disposal which, except in the case of paragraph (b), is on arms length terms: |
(a) | of assets made by any member of the Group in the ordinary course of trading of the disposing entity; | ||
(b) | of any asset by a member of the Group (the Disposing Company) to another member of the Group (the Acquiring Company), but if: |
(i) | the Disposing Company is an Obligor, the Acquiring Company must also be an Obligor; | ||
(ii) | the Disposing Company had given Security over the asset, the Acquiring Company must give equivalent Security over that asset; and | ||
(iii) | the Disposing Company is a Guarantor, the Acquiring Company must be a Guarantor guaranteeing at all times an amount no less than that guaranteed by the Disposing Company; |
(c) | of assets (other than shares and businesses) in exchange for other assets reasonably comparable or superior as to type, value and quality; | ||
(d) | of obsolete, surplus or redundant vehicles, plant and equipment or real estate not required for the operation of the business of the Group as it is being conducted; | ||
(e) | of Cash Equivalent Investments for cash or in exchange for other Cash Equivalent Investments; | ||
(f) | constituted by a licence of intellectual property rights permitted by Clause 26.21 (Intellectual Property); | ||
(g) | to a Joint Venture, to the extent permitted by Clause 26.9 (Joint ventures); | ||
(h) | arising as a result of any Permitted Security; | ||
(i) | arising as a result of the Permitted Sale and Leaseback; | ||
(j) | of the Singapore Property substantially on the terms disclosed by the Company to the Agent prior to the Signing Date; and | ||
(k) | of assets (other than shares and businesses) for cash where the higher of market value and the net consideration receivable (when aggregated with the net consideration receivable for any other sale, lease, licence, transfer or other disposal |
21
not allowed under the preceding paragraphs) does not exceed in aggregate 2,000,000 (or its equivalent) for the Group in any Financial Year of the Parent. |
Permitted Distribution means |
(a) | the payment of a dividend to the Parent or any of its wholly-owned Subsidiaries; or | ||
(b) |
(i) | the payment of a dividend by the Parent or a reduction of share capital of the Parent; | ||
(ii) | save as otherwise permitted to be made as a Permitted Payment, the payment to any members of the McJunkin Group of fees for corporate, M&A and/or transaction advice in relation to any restructuring or reorganisation of the Group; and/or | ||
(iii) | the making of any loan by any member of the Group to McJunkin UK; |
but only if: |
(iv) | such payment is a dividend or loan to McJunkin UK to be applied by McJunkin UK in payment of interest (but not principal) due and payable on the McJunkin Loan Notes (each a Loan Notes Distribution) and: |
(A) | the amount of such Loan Notes Distribution made in any Financial Year of the Parent when aggregated with all other such Loan Notes Distributions made in such Financial Year of the Parent as permitted under this paragraph (b) (iv), does not exceed a maximum aggregate amount of £5,880,000 (or its equivalent); | ||
(B) | the Parent has delivered to the Agent not later than 2 Business Days before making or legally committing to make any such Loan Notes Distribution, a certificate signed by the CFO of the Parent confirming (i) the amount of such Loan Notes Distribution and compliance with paragraph (iv) (A) above and (ii) that the Parent reasonably believes (with supporting calculations) that it will be in compliance with the financial covenants in Clause 25.2 (Financial condition) in respect of each Relevant Period ending on the next 4 Financial Quarters following the making of such Loan Notes Distribution; | ||
(C) | on the date of payment of such Loan Notes Distribution, no Event of Default is continuing under Clause 27.2 (Financial covenants and other obligations) as a result of a breach of Clause 25 (Financial Covenants); and | ||
(D) | such Loan Notes Distribution is promptly applied by McJunkin UK in payment of interest due and payable on the McJunkin Loan Notes; |
(v) | in respect of any such payment, reduction or loan other than a Loan Notes Distribution permitted under paragraph (b) (iv) above: |
(A) | on the date of payment of such payment, reduction or loan (each a McJunkin Distribution), no Event of Default is continuing |
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under Clause 27.2 (Financial covenants and other obligations) as a result of a breach of Clause 25 (Financial Covenants); | |||
(B) | the amount of such McJunkin Distribution when aggregated with all other such McJunkin Distributions permitted under this paragraph (b) (v) and made during the 12 month period (the Payment Period) starting from the date of the delivery of the Annual Financial Statements of the Parent for a Financial Year of the Parent (the Payment Year) does not exceed an amount equal to 25% of the balance of the Distributable Net Profits for the relevant Payment Year after deducting the aggregate amount of Loan Note Distributions made during such Payment Year; | ||
(C) | the Parent has delivered to the Agent not later than 2 Business Days before making or legally committing to make any such McJunkin Distribution, a certificate signed by the CFO of the Parent confirming (i) the amount of such McJunkin Distribution, (ii) the Distributable Net Profits for relevant Payment Year and compliance with paragraph (v) (B) above and (iii) that the Parent reasonably believes (with supporting calculations) that it will be in compliance with the financial covenants in Clause 25.2 (Financial condition) in respect of each Relevant Period ending on the next 4 Financial Quarters following the making of such McJunkin Distribution; and | ||
(D) | such McJunkin Distribution is made during the relevant Payment Period. |
Permitted Financial Indebtedness means Financial Indebtedness: |
(a) | arising under any of the Finance Documents; | ||
(b) | to the extent covered by a Letter of Credit or letter of credit, bond, guarantee or indemnity issued under any MOF Agreement; | ||
(c) | arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade or in respect of Utilisations made in Optional Currencies, but not a foreign exchange transaction for investment or speculative purposes; | ||
(d) | arising under a Permitted Loan or a Permitted Guarantee or as permitted by Clause 26.23 (Treasury Transactions); | ||
(e) | arising under or relating to letters of credit, bank guarantees or other documentary credits issued in the ordinary course of trading where such Financial Indebtedness is unsecured (save in respect of the underlying assets and related rights as permitted under paragraph (j) of the definition of Permitted Security) and the aggregate outstanding principal amount does not at any time exceed 5,000,000 for the Group; | ||
(f) | arising under the Cash Pooling Agreement; | ||
(g) | of any person acquired by a member of the Group after the first Utilisation Date which is incurred under arrangements in existence at the date of acquisition, but not incurred or increased or having its maturity date extended in contemplation of, or since, that |
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acquisition, and outstanding only for a period of three months following the date of acquisition; | |||
(h) | under the Rabobank Facility Agreement and in relation to the Singapore DBS Term Loan provided that, in each case, they are repaid and irrevocably and unconditionally cancelled in full by no later than the first Utilisation Date; | ||
(i) | made available by the relevant vendor in connection with any Permitted Acquisition provided that such Financial Indebtedness is fully subordinated behind the Finance Parties on terms satisfactory to the Agent (acting reasonably); | ||
(j) | under: |
(i) | any Finance Leases; | ||
(ii) | any factoring, sale or discounting on arms length terms of receivables; or | ||
(iii) | any local facilities provided to any member of the Group by a financial institution on an unsecured basis save as permitted under paragraph (p) of the definition of Permitted Security, |
provided that the aggregate capital value of all such items so leased under outstanding leases by all members of the Group (calculated in accordance with the Accounting Principles) and/or the aggregate Financial Indebtedness so raised does not in aggregate for the Group exceed 10,000,000 (or its equivalent in other currencies) at any time; and |
(k) | not permitted by the preceding paragraphs or as a Permitted Transaction and the outstanding principal amount of which does not exceed 1,000,000 (or its equivalent) in aggregate for the Group at any time. |
Permitted Guarantee means: |
(a) | the endorsement of negotiable instruments in the ordinary course of trade; | ||
(b) | any performance or similar bond guaranteeing performance by a member of the Group under any contract entered into in the ordinary course of trade; | ||
(c) | any guarantee of a Joint Venture to the extent permitted by Clause 26.9 (Joint ventures); | ||
(d) | any guarantee of Permitted Financial Indebtedness; | ||
(e) | guarantees (not being guarantees of Financial Indebtedness) guaranteeing performance by a member of the Group under any contract entered into in the ordinary course of the trading including, without limitation, any rental payments of any member of the Group under a lease on arms length terms and in the ordinary course of business; | ||
(f) | given by an Obligor in respect of obligations of another Obligor; | ||
(g) | any guarantee or indemnity given to any liquidator or similar officer in connection with a liquidation, winding up or dissolution occurring as part of a Permitted Transaction, in a customary form; | ||
(h) | given by a non-Obligor in respect of obligations of another member of the Group; |
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(i) | any guarantee of any transaction permitted under Clause 26.23 (Treasury Transactions); | ||
(j) | any guarantee given in respect of the netting or set-off arrangements permitted pursuant to paragraph (b) of the definition of Permitted Security; | ||
(k) | any indemnity given in the ordinary course of the documentation of an acquisition or disposal transaction which is a Permitted Acquisition or Permitted Disposal which indemnity is in a customary form and subject to customary limitations; | ||
(l) | any joint and several liability arising as a result of (the establishment of) a fiscal unity (fiscale eenheid) between the Dutch Obligors; | ||
(m) | any guarantee granted pursuant to a declaration of joint and several liability used for the purpose of Section 2:403 of the Dutch Civil Code (and any residual liability under such declaration pursuant to section 2:404(2) of the Dutch Civil Code); or | ||
(n) | any guarantee not permitted by the preceding paragraphs or as a Permitted Transaction provided that the total aggregate amount permitted under this paragraph (o) may not exceed 1,000,000 (or its equivalent) in aggregate for the Group at any time. |
Permitted Joint Venture means any investment in any Joint Venture where: |
(a) | the Joint Venture is incorporated, or established, and carries on its principal business, in an Approved Country; | ||
(b) | the Joint Venture is engaged in a business substantially the same as that carried on by the Group; and | ||
(c) | the aggregate in respect of all such Joint Ventures (Joint Venture Investment) of: |
(iv) | all amounts subscribed for shares in, lent to, or invested in such Joint Ventures by all members of the Group; | ||
(v) | the contingent liabilities of all members of the Group under any guarantee given in respect of the liabilities of such Joint Ventures; and | ||
(vi) | the market value of any assets transferred by all members of the Group to such Joint Ventures, |
(including all associated costs and expenses) does not exceed 2,000,000 (or its equivalent) in any Financial Year of the Parent. |
Permitted Loan means: |
(a) | any trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities; | ||
(b) | Financial Indebtedness which is referred to in the definition of, or otherwise constitutes, Permitted Financial Indebtedness (except under paragraph (d) of that definition); | ||
(c) | a loan made to a Joint Venture to the extent permitted under Clause 26.9 (Joint ventures); |
25
(d) | a loan made by an Obligor to another Obligor or made by a member of the Group which is not an Obligor to another member of the Group; | ||
(e) | any loan made by an Obligor to a member of the Group which is not an Obligor so long as the aggregate amount of the Financial Indebtedness under all such loans does not exceed 5,000,000 (or its equivalent) for the Group at any time; | ||
(f) | a loan made by a member of the Group to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by all members of the Group does not exceed 500,000 (or its equivalent) at any time; | ||
(g) | a loan permitted as a Permitted Distribution; | ||
(h) | any loan not permitted under the preceding paragraphs so long as the aggregate amount of the Financial Indebtedness under all such loans does not exceed 1,000,000 (or its equivalent) for the Group at any time. |
Permitted Payment means: |
(a) | any payment to any member of the McJunkin Group (other than a member of the Group itself) in respect of and/or in reimbursement of costs and expenses for (i) corporate, M&A and/or transaction advice or any other advice in relation to any restructuring or reorganisation of the Group or (ii) the provision to any member of the Group of shared back office or front office services (including, but not limited to services in connection with insurance, IT, marketing, royalties), in each case on bona fide arms length commercial terms at market value (or on terms that are more favourable to the relevant member of the Group); and | ||
(b) | any payment to McJunkin UK to fund and/or reimburse its administrative costs, directors fees, tax and professional fees and any regulatory costs or in respect of any payment of a management fee and (ii) any payment to any member of the McJunkin Group (other than a member of the Group itself) to fund and/or reimburse costs and expenses incurred in connection with any other services provided to (or incurred in respect of) a member of the Group and not covered by paragraph (a)(ii) above, subject to a maximum aggregate amount in respect of all such payments of 1,000,000 (or its equivalent) in any Financial Year of the Parent |
Permitted Sale and Leaseback means the sale and lease back of the property located at Rohwedderstrasse 6, D-44369 Dortmund, Germany owned by Transmark DRW GmbH for a maximum aggregate consideration of no more than 2,000,000 (or its equivalent). | ||
Permitted Security means: |
(a) | any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group; | ||
(b) | any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of members of the Group but only so long as (i) such arrangement does not permit credit balances of Obligors to be netted or set off against debit balances of members of the Group which are not Obligors and (ii) such arrangement does not give rise to other Security over the assets of Obligors in support of liabilities of members of the Group which are not Obligors except, in the case of (i) and (ii) above, to the extent such netting, set-off or Security relates to, or is granted in support of, a loan permitted |
26
pursuant to paragraph (d) of the definition of Permitted Loan or is otherwise permitted under the Cash Pooling Agreement; | |||
(c) | any payment or close out netting or set-off arrangement pursuant to any Treasury Transaction or foreign exchange transaction entered into by a member of the Group which constitutes Permitted Financial Indebtedness excluding any Security or Quasi Security under a credit support arrangement; | ||
(d) | any Security or Quasi-Security over or affecting any asset acquired by a member of the Group after the first Signing Date if: |
(i) | the Security or Quasi-Security was not created in contemplation of the acquisition of that asset by a member of the Group; | ||
(ii) | the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a member of the Group; and | ||
(iii) | the Security or Quasi-Security is removed or discharged within three months of the date of acquisition of such asset; |
(e) | any Security or Quasi-Security over or affecting any asset of any company which becomes a member of the Group after the Signing Date, where the Security or Quasi-Security is created prior to the date on which that company becomes a member of the Group if: |
(i) | the Security or Quasi-Security was not created in contemplation of the acquisition of that company; | ||
(ii) | the principal amount secured has not increased in contemplation of or since the acquisition of that company; and | ||
(iii) | the Security or Quasi-Security is removed or discharged within three months of that company becoming a member of the Group; |
(f) | any Security or Quasi-Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a member of the Group in the ordinary course of trading and on the suppliers standard or usual terms and not arising as a result of any default or omission by any member of the Group and relating only to the goods supplied; | ||
(g) | any Security or Quasi-Security (existing as at the date of this Agreement) over assets of any member of the Group so long as the Security or Quasi-Security is irrevocably removed or discharged by no later than the first Utilisation Date; | ||
(h) | any security or Quasi-Security as a result of customary escrow arrangements using no more than 20% of the disposal proceeds arising as a result of a disposal which is a Permitted Disposal; | ||
(i) | any Security or Quasi-Security arising as a consequence of any finance or capital lease permitted pursuant to paragraph (j) of the definition of Permitted Financial Indebtedness provided such Security or Quasi-Security relates only to the assets the subject of the relevant lease; | ||
(j) | any Security over goods or documents of title to goods arising in the ordinary course of letter of credit transactions entered into in the ordinary course of trading; |
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(k) | the Transaction Security and any other Security arising under the Finance Documents; | ||
(l) | payments into court or any Security arising under any court order or injunction in relation to costs arising in connection with any litigation or court proceedings being contested by any member of the Group in good faith (which do not otherwise constitute or give rise to an Event of Default); | ||
(m) | Security by way of set-off or pledge over bank accounts (in favour of the account-holding bank) arising by operation of law in the ordinary course of its banking arrangements or under standard banking terms and conditions; | ||
(n) | any Security arising on rental deposits in connection with the occupation of leasehold premises in the ordinary course of business provided that the aggregate principal amount deposited at any time does not exceed an amount which is customary for such rental deposits provided such Security relates only to the rental deposit; | ||
(o) | any Security or Quasi-Security arising in connection with a Permitted Acquisition over any amount held under an escrow arrangement in respect of a Permitted Acquisition up to a maximum amount of 20% of the purchase price payable in respect of such acquisition; | ||
(p) | any Security or Quasi-Security granted by a member of the Group which is not an Obligor to a financial institution to support local facilities made available directly to it and which are permitted under sub-paragraph (iii) of paragraph (j) of the definition of Permitted Financial Indebtedness; | ||
(q) | all security granted in favour of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. in respect of the Rabobank Facility Agreement provided that in each case the same is unconditionally discharged and released to the satisfaction of the Agent (acting reasonably) on or before the first Utilisation Date; | ||
(r) | any Security or Quasi-Security arising over cash cover (which at no time is in an aggregate amount in excess of 350,000 (or its equivalent)) provided by MRC Transmark Pte. Ltd. to DBS Bank Ltd. in respect of facilities provided to MRC Transmark Pte. Ltd. (other than the Singapore DBS Term Loan) provided that it relates only to such cash cover; | ||
(s) | subject to Clause 26.27(b), the Singapore Mortgage; and | ||
(t) | any Security not permitted under the proceeding paragraphs securing indebtedness to the outstanding principal amount of which in aggregate for the Group does not at any time exceed 1,000,000 (or its equivalent). |
Permitted Share Issue means an issue of: |
(a) | ordinary shares by the Parent, paid for in full in cash upon issue and which by their terms are not redeemable and where (i) such shares are of the same class and on the same terms as those issued by the Parent before the Signing Date and (ii) such issue does not lead to a Change of Control of the Parent; | ||
(b) | shares by a member of the Group which is a Subsidiary to its immediate Holding Company where (if the existing shares of the Subsidiary are the subject of the Transaction Security) the newly-issued shares also become subject to the Transaction Security on the same terms, |
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and in respect of both paragraphs (a) and (b) above, which do not constitute or form part of a Listing; or | |||
(c) | any other issue of shares to which the Majority Lenders have given their consent. |
Permitted Transaction means: |
(a) | any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising, under the Finance Documents; | ||
(b) | the solvent liquidation or reorganisation (including de-registration) of any member of the Group which is not an Obligor so long as any payments or assets distributed (following settlement of all liabilities to creditors) as a result of such liquidation or reorganisation are distributed to other members of the Group (provided that if the member of the Group which is the subject of the liquidation or reorganisation (including de-registration) is not wholly owned not greater than a pro rata proportion of such payments or assets may be distributed to it minority shareholders); | ||
(c) | transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arms length terms; | ||
(d) | any payments or other transactions required, permitted and/or contemplated by any Cash Pooling Agreement; or | ||
(e) | a liquidation or re-organisation on a solvent basis of the Parent where: |
(i) | no Default has occurred and is continuing or would result from such liquidation or re-organisation; | ||
(ii) | the Agent, is given 30 days prior notice of such liquidation or re-organisation and acting reasonably, is satisfied prior to the date of such liquidation or reorganisation that the Finance Parties will enjoy at least the same or equivalent Transaction Security over the same assets of that new member of the Group and the shares in it and the same or equivalent guarantee in an amount not less than that guaranteed by the Parent, in each case as enjoyed by them prior to such liquidation or re-organisation; | ||
(iii) | all of its business and assets are retained by a new wholly owned Subsidiary of McJunkin UK which is incorporated in England and which has become, or at the same time as such liquidation or re-organisation becomes, an Additional Guarantor and the Parent under this Agreement and the Security Trust Agreement and the Agent has received any other documents in a form acceptable to it (acting reasonably) as is required in connection with such Additional Guarantor becoming the Parent and to satisfy the Agent under paragraph (ii) above; and | ||
(iv) | to the extent required under paragraph (f) of Clause 24.3 (Requirements as to financial statements) the Agent has received 30 days prior to the date of such liquidation or reorganisation a Reconciliation Statement as required under such Clause 24.3(f) and is satisfied (acting reasonably) with its content; |
(f) | the merger of MRC Transmark France SAS and MRC Transmark France EURL where MRC Transmark France SAS is the surviving entity and: |
(i) | no Default has occurred and is continuing or would result from such merger; |
29
(ii) | the merger is completed in accordance with all applicable laws and regulations and the Agent is provided with, promptly following such merger, evidence of the completion of the merger including without limitation a K-bis extract from the Registre du Commerce et des Sociétés of Rouen showing that MRC Transmark France EURL has been deleted from such register; and | ||
(iii) | all financial instruments held by the Parent in MRC Transmark France SAS immediately following the merger of MRC Transmark France EURL into MRC Transmark France SAS are immediately credited on the financial instruments account pledged under the Share Pledge Agreement given by the Parent to the Agent under Part I of Schedule 2 (Conditions Precedent) and the Agent and the Security Agent are provided at that time with (i) a confirmation of pledge (attestation de nantissement de compte de titres financiers) issued by MRC Transmark France SAS and (ii) copies of MRC Transmark France SAS shareholder register (registre de movements de titres) and shareholders individual accounts (comptes individuels dactionnaires), evidencing the transfer of such financial instruments held by the Parent on the financial instruments account pledged under the Share Pledge Agreement. |
Qualifying Lender has the meaning given to that term in Clause 17 (Tax gross-up and indemnities). | ||
Quarter Date means the last day of a Financial Quarter. | ||
Quarterly Financial Statements has the meaning given to that term in Clause 24 (Information Undertakings). | ||
Quasi-Security has the meaning given to that term in Clause 26.12 (Negative pledge). | ||
Quotation Day means, in relation to any period for which an interest rate is to be determined: |
(a) | (if the currency is sterling) the first day of that period; | ||
(b) | (if the currency is euro) two TARGET Days before the first day of that period; or | ||
(c) | (for any other currency) two Business Days before the first day of that period, |
unless market practice differs in the Relevant Interbank Market for a currency, in which case the Quotation Day for that currency will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days). | ||
Rabobank Facility Agreement means the term and revolving credit facilities agreement dated 6 July 2005 between, among others, MRC Transmark Group B.V. and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., as amended from time to time. | ||
Receiver means a receiver or receiver and manager or administrative receiver (or its equivalent in any jurisdiction) of the whole or any part of the Charged Property. | ||
Reduction Date has the meaning given to that term in Clause 9.2 (Reduction of Revolving Facility). | ||
Reduction Installment has the meaning given to that term in Clause 9.2 (Reduction of Revolving Facility). |
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Related Fund in relation to a fund (the first fund), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund. | ||
Relevant Interbank Market means in relation to euro, the European interbank market and, in relation to any other currency, the London interbank market. | ||
Relevant Jurisdiction means, in relation to an Obligor: |
(a) | its jurisdiction of incorporation; | ||
(b) | any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated; | ||
(c) | any jurisdiction where it conducts its business; and | ||
(d) | the jurisdiction whose laws govern the perfection of any of the Transaction Security Documents entered into by it. |
Relevant Period has the meaning given to that term in Clause 25.1 (Financial definitions). | ||
Renewal Request means a written notice delivered to the Agent in accordance with Clause 6.6 (Renewal of a Letter of Credit). | ||
Repayment Date means the last day of an Interest Period for a Revolving Facility Loan. | ||
Repeating Representations means each of the representations set out in Clause 23.2 (Status) to Clause 23.7 (Governing law and enforcement), Clause 23.11 (No default), paragraph (e) and (f) of Clause 23.13 (Original Financial Statements), Clause 23.19 (Ranking) to Clause 23.21 (Shares) and Clause 23.25 (Centre of main interests and establishments). | ||
Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian. | ||
Resignation Letter means a letter substantially in the form set out in Schedule 8 (Form of Resignation Letter). | ||
Revolving Facility means the revolving credit facility made available under this Agreement as described in paragraph (a) of Clause 2.1 (The Facility). | ||
Revolving Facility Commitment means: |
(a) | in relation to an Original Lender, the amount in the Base Currency set opposite its name under the heading Revolving Facility Commitment in Part III of Schedule 1 (The Original Parties) and the amount of any other Revolving Facility Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and | ||
(b) | in relation to any other Lender, the amount in the Base Currency of any Revolving Facility Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase), |
to the extent not cancelled, reduced or transferred by it under this Agreement. |
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Revolving Facility Loan means a loan made or to be made under the Revolving Facility or the principal amount outstanding for the time being of that loan. | ||
Revolving Facility Utilisation means a Revolving Facility Loan or a Letter of Credit. | ||
Rollover Loan means one or more Revolving Facility Loans: |
(a) | made or to be made on the same day that: |
(i) | a maturing Revolving Facility Loan is due to be repaid; or | ||
(ii) | a demand by the Agent pursuant to a drawing in respect of a Letter of Credit is due to be met; |
(b) | the aggregate amount of which is equal to or less than the amount of the maturing Revolving Facility Loan or the relevant claim in respect of that Letter of Credit; | ||
(c) | in the same currency as the maturing Revolving Facility Loan (unless it arose as a result of the operation of Clause 8.2 (Unavailability of a currency)) or the relevant claim in respect of that Letter of Credit; and | ||
(d) | made or to be made to the same Borrower for the purpose of: |
(i) | refinancing that maturing Revolving Facility Loan; or | ||
(ii) | satisfying the relevant claim in respect of that Letter of Credit. |
Screen Rate means: |
(a) | in relation to LIBOR, the British Bankers Association Interest Settlement Rate for the relevant currency and period; and | ||
(b) | in relation to EURIBOR, the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period, |
displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Company and the Lenders. | ||
Secured Parties has the meaning given to it in the Security Trust Agreement. | ||
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect. | ||
Security Trust Agreement means the security trust agreement dated on or about the first Utilisation Date and made between, among others, the Original Obligors and HSBC Bank plc in various capacities. | ||
Separate Loan has the meaning given to that term in Clause 9.1 (Repayment of Revolving Facility Loans). | ||
Signing Date means the date of this Agreement. | ||
Singapore Dollars means the lawful currency for the time being of Singapore. | ||
Singapore DBS Term Loan means the term loan facility of up to SGD1,897,000 extended by DBS Bank Ltd. to MRC Transmark Pte. Ltd. pursuant to, among other things, the facility |
32
letter dated 11 June 2009 from DBS Bank Ltd. to Transmark FCX Pte. Ltd. (now known as MRC Transmark Pte. Ltd.). | |||
Singapore Mortgage means the mortgage granted by MRC Transmark Pte. Ltd. in favour of DBS Bank Ltd. (formerly known as the Development Bank of Singapore Limited) over the Singapore Property. | |||
Singapore Obligor means an Obligor incorporated in Singapore. | |||
Singapore Property means Lot 363 of Mukim 14 comprising premises known as 82 Mandai Estate, Singapore 729920 owned by MRC Transmark Pte. Ltd.. | |||
Specified Time means a time determined in accordance with Schedule 10 (Timetables). | |||
Sterling means the lawful currency for the time being of the United Kingdom. | |||
Subsidiary means a subsidiary within the meaning of section 1159 of the Companies Act 2006. | |||
TARGET2 means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007. | |||
TARGET Day means any day on which TARGET2 is open for the settlement of payments in euro. | |||
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). | |||
Term means each period determined under this Agreement for which the Issuing Bank is under a liability under a Letter of Credit. | |||
Termination Date means the date falling three years from the Signing Date. | |||
Total Commitments means the Total Revolving Facility Commitments. | |||
Total Revolving Facility Commitments means the aggregate of the Revolving Facility Commitments, being 60,000,000 at the date of this Agreement. | |||
Trade Instruments means any performance bonds, advance payment bonds or documentary letters of credit issued in respect of the obligations of any member of the Group arising in the ordinary course of trading of that member of the Group. | |||
Transaction Security means the Security created or expressed to be created in favour of the Security Agent pursuant to the Transaction Security Documents. | |||
Transaction Security Documents means each of the documents listed in Part III of Schedule 2 (Conditions Precedent) and any document required to be delivered to the Agent under paragraph 17 of Part II of Schedule 2 (Conditions Precedent) together with any other document entered into by any Obligor creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents or by its Holding Company creating or expressed to create any Security over all or any of the shares in an Obligor. | |||
Transfer Certificate means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Parent. |
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Transfer Date means, in relation to an assignment or a transfer, the later of: |
(a) | the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and | ||
(b) | the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate. |
Treasury Transactions means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price. | ||
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents. | ||
US Dollars means the lawful currency for the time being of the United States of America. | ||
Utilisation means a Loan or a Letter of Credit. | ||
Utilisation Date means the date of a Utilisation, being the date on which the relevant Loan is to be made or the relevant Letter of Credit is to be issued. | ||
Utilisation Request means: |
(a) | in respect of a Loan a notice substantially in the relevant form set out in Schedule 3 (Utilisation Request Loans); and | ||
(b) | in respect of a Letter of Credit, the relevant standard form required by the Issuing Bank in relation to the issue of guarantees, letters of credit and/or bonds or (if not appropriate) such other form as the Issuing Bank may reasonably require. |
VAT means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature imposed in any jurisdiction. | ||
Whitewash Completion Date means the date which is 14 clear days after all Whitewash Documents are lodged with the Australian Securities and Investments Commission. | ||
Whitewash Documents means the documents, in a form approved by the Agent, required to be lodged with the Australian Securities and Investments Commission under section 260B of the Corporations Act for the purposes of approving the financial assistance being given by MRC Transmark Pty Ltd under the Finance Documents to which it is proposed to be a party in accordance with section 260A(1)(b) of the Corporations Act. |
1.2 | Construction |
(a) | Unless a contrary indication appears, a reference in this Agreement to: |
(i) | the Agent, the Arranger, any Finance Party, any Hedge Counterparty any Issuing Bank, any Lender, any MOF Lender, any Obligor, any Party, any Secured Party, the Security Agent or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents; | ||
(ii) | a document in agreed form is a document which is previously agreed in writing by or on behalf of the Parent and the Agent or, if not so agreed, is in the form specified by the Agent; |
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(iii) | assets includes present and future properties, revenues and rights of every description; | ||
(iv) | a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated; | ||
(v) | guarantee means (other than in Clause 22 (Guarantee and Indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness; | ||
(vi) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; | ||
(vii) | a Lenders participation in relation to a letter of credit, shall be construed as a reference to the relevant amount that is or may be payable by a Lender in relation to that Letter of Credit; | ||
(viii) | a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality); | ||
(ix) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law being one with which it is the practice of the relevant person to comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation; | ||
(x) | a security interest includes, in the case of a New Zealand Obligor, a security interest as that term is defined in section 17(1)(a) of the Personal Property Securities Act 1999 (NZ); | ||
(xi) | a provision of law is a reference to that provision as amended or re-enacted; and | ||
(xii) | a time of day is a reference to London time. |
(b) | Section, Clause and Schedule headings are for ease of reference only. | ||
(c) | Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. | ||
(d) | A Borrower providing cash cover for a Letter of Credit means a Borrower paying an amount in the currency of the Letter of Credit to an interest-bearing account in the name of the Borrower and the following conditions being met: |
(i) | the account is with the Security Agent or with the Issuing Bank for which that cash cover is to be provided; |
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(ii) | subject to paragraph (b) of Clause 7.5 (Cash Cover by Borrower), until no amount is or may be outstanding under that Letter of Credit withdrawals from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Letter of Credit; and | ||
(iii) | the Borrower has executed a security document over that account, in form and substance satisfactory to the Security Agent or the Issuing Bank with which that account is held, creating a first ranking security interest over that account. |
(e) | An Event of Default arising under Clause 27.1 (Non-Payment), Clause 27.2 (Financial covenants and other obligations) as a result of a breach of clause 25 (Financial covenants), Clause 27.6 (Insolvency) and/or 27.7 (Insolvency proceedings) is continuing if it has not been waived and any Default or any other Event of Default is continuing if it has not been remedied or waived. | ||
(f) | A Borrower repaying or prepaying a Letter of Credit means: |
(i) | that Borrower providing cash cover for that Letter of Credit; | ||
(ii) | the maximum amount payable under the Letter of Credit being reduced or cancelled in accordance with its terms; or | ||
(iii) | the Issuing Bank being satisfied that it has no further liability under that Letter of Credit, |
and the amount by which a Letter of Credit is repaid or prepaid under paragraphs (f)(i) and (f)(ii) above is the amount of the relevant cash cover or reduction. |
(g) | A Lender funding its participation in a Utilisation includes a Lender participating in a Letter of Credit. | ||
(h) | An outstanding amount of a Letter of Credit at any time is the maximum amount that is or may be payable by the relevant Borrower in respect of that Letter of Credit at that time. |
1.3 | Belgian terms |
Insofar as it applies to a Belgian Obligor or any other member of the Group incorporated in Belgium, a reference in this Agreement to: |
(a) | a liquidator, compulsory manager, receiver, administrative receiver, administrator or similar officer includes any curator/curateur, vereffenaar/liquidateur, gedelegeerd rechter/juge délégué, gerechtsmandataris/ mandataire de justice, voorlopig bewindvoerder/administrateur provisoire, gerechtelijk bewindvoerder/administrateur judiciaire, mandataris ad hoc/mandataire ad hoc and sekwester/séquestre; | ||
(b) | Security includes a mortgage (hypotheek/hypothèque), a pledge (pand/gage), a transfer by way of security (overdracht ten titel van zekerheid/transfert à titre de garantie), any other proprietary security interest (zakelijke zekerheid/sûreté réelle), a mandate to grant a mortgage, a pledge or any other real surety, a privilege (voorrecht/privilège) and a retention of title (eigendomsvoorbehoud/réserve de propriété); | ||
(c) | a person being unable to pay its debts is that person being in a state of cessation of payments (staking van betaling/cessation de paiements); |
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(d) | commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness includes any negotiations conducted with a view to reaching a settlement agreement (minnelijk akkoord/accord amiable) with two or more of its creditors pursuant to the Belgian Act of 31 January 2009 on the continuity of enterprises; | ||
(e) | a composition includes any gerechtelijke reorganisatie/réorganisation judiciaire; | ||
(f) | winding-up, administration or dissolution includes any vereffening/liquidation, ontbinding/dissolution and faillissement/faillite; and | ||
(g) | attachment, sequestration, distress, execution or analogous procedures includes any uitvoerend beslag/saisie-exécution and bewarend beslag/saisie conservatoire. |
1.4 | Dutch Terms | |
In this Agreement, where it relates to a Dutch entity, a reference to: |
(a) | a necessary action to authorise where applicable, includes without limitation: |
(i) | any action required to comply with the Works Councils Act of the Netherlands (Wet op de ondernemingsraden); and | ||
(ii) | obtaining an unconditional positive advice (advies) from the competent works council(s); |
(b) | a security interest includes any mortgage (hypotheek), pledge (pandrecht), retention of title arrangement (eigendomsvoorbehoud), privilege (voorrecht), right of retention (recht van retentie), right to reclaim goods (recht van reclame), and, in general, any right in rem (beperkt recht), created for the purpose of granting security (goederenrechtelijk zekerheidsrecht); | ||
(c) |
(i) | a winding-up, administration or dissolution includes a Dutch entity being declared bankrupt (failliet verklaard) or dissolved (ontbonden); | ||
(ii) | a moratorium includes surseance van betaling and a moratorium is declared or occurs includes surseance verleend; | ||
(iii) | a suspension of payments includes a including emergency regulations (noodregeling) under the Dutch Financial Supervision Act (Wet op het financieel toezicht); | ||
(iv) | any step or procedure taken in connection with insolvency proceedings includes a Dutch entity having filed a notice under article 36 of the Tax Collection Act of the Netherlands (Invorderingswet 1990) or article 60 of the Social Insurance Financing Act of the Netherlands (Wet Financiering Sociale Verzekeringen) in conjunction with article 36 of the Tax Collection Act of the Netherlands (Invorderingswet 1990); | ||
(v) | a trustee in bankruptcy includes a curator; | ||
(vi) | an administrator includes a bewindvoerder; and | ||
(vii) | an attachment includes a beslag. |
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1.5 | PPS Law Australia |
If: |
(a) | a PPS Law applies, or will apply at a future date, to any of the Finance Documents or any of the transactions contemplated by them, or the Agent determines (based on legal advice) that a PPS Law applies or will apply at a future date in this manner; and | ||
(b) | in the opinion of the Agent (based on legal advice), the PPS Law: |
(i) | adversely affects or would adversely affect a Finance Partys security position or the rights or obligations of the Finance Party under or in connection with the Finance Documents; or | ||
(ii) | enables or would enable a Finance Partys security position to be improved without adversely affecting any Obligors business in a material respect, |
the Agent may give notice to each Obligor requiring each Obligor to do anything (including amending any Finance Document or executing any new Finance Document) that in the Agents opinion is necessary to ensure that, to the maximum possible extent, each Finance Partys security position, and rights and obligations, are not adversely affected as contemplated by clause 1.5(b)(i) (or that any such adverse effect is overcome), or that a Finance Partys security position is improved as contemplated in clause 1.5(b)(ii). Each Obligor must comply with the requirements of that notice within the time stipulated in the notice. |
(c) | In this clause 1.5, PPS Law means: |
(i) | the Personal Property Securities Act 2009 (Cth) (the PPS Act); and | ||
(ii) | any amendment made at any time to any other law or regulation as a consequence of the PPS Act. |
1.6 | Singapore Terms | |
Insofar as it applies to any Material Company incorporated in Singapore, a reference in Clause 27.7(a) of this Agreement to such analagous procedure or step shall include (i) any application made or petition presented for an order to place such Material Company under judicial management of a judicial manager pursuant to the Singapore Companies Act (Cap. 50) or under any other law, and (ii) such Material Company becoming insolvent or becoming unable or deemed unable to pay its debts within the meaning of Section 254(2) of the Singapore Companies Act (Cap. 50) or under any other law. |
1.7 | Effective date Australian Obligor |
(a) | Notwithstanding any other provision of this Agreement (other than clause 1.7(b)), neither this Agreement nor any Accession Deed has any force or effect against or in respect of MRC Transmark Pty Ltd ACN 080 156 378 prior to the Whitewash Completion Date to the extent that performance of the obligations under this Agreement or any such Accession Deed by MRC Transmark Pty Ltd ACN 080 156 378 would breach section 260A of the Corporations Act. | ||
(b) | On and from the Whitewash Completion Date, this Agreement and any Accession Deed is automatically in full force and effect against and in respect of MRC Transmark Pty Ltd ACN 080 156 378 without the need for any further action or notice by any person. |
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1.8 | Third party rights |
(a) | Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or enjoy the benefit of any term of this Agreement. | ||
(b) | Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time. |
2. | THE FACILITY |
2.1 | The Facility |
(a) | Subject to the terms of this Agreement, the Lenders make available a multicurrency revolving credit facility in an aggregate amount the Base Currency Amount of which is equal to the Total Revolving Facility Commitments. | ||
(b) | The Facility will be available to all the Borrowers. |
2.2 | Increase |
(a) | The Parent may by giving prior notice to the Agent by no later than the date falling three Business Days after the effective date of a cancellation of: |
(i) | the Available Commitments of a Defaulting Lender in accordance with Clause 10.6 (Right of cancellation in relation to a Defaulting Lender); or | ||
(ii) | the Commitments of a Lender in accordance with Clause 10.1 (Illegality), |
request that the Total Commitments be increased (and the Total Commitments under that Facility shall be so increased) in an aggregate amount in the Base Currency of up to the amount of the Available Commitments or Commitments so cancelled as follows: |
(iii) | the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an Increase Lender) selected by the Parent and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender; | ||
(iv) | each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender; | ||
(v) | each Increase Lender shall become a Party as a Lender and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender; | ||
(vi) | the Commitments of the other Lenders shall continue in full force and effect; and | ||
(vii) | any increase in the Total Commitments shall take effect on the date specified by the Parent in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied. |
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(b) | An increase in the Total Commitments will only be effective on: |
(i) | the execution by the Agent of an Increase Confirmation from the relevant Increase Lender; | ||
(ii) | in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase: |
(A) | the Increase Lender entering into the documentation required for it to accede as a party to the Security Trust Agreement; and | ||
(B) | the performance by the Agent of all necessary know your customer or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Parent, the Increase Lender and the Issuing Bank; and |
(iii) | in the case of an increase in the Total Revolving Facility Commitments, the Issuing Bank consenting to that increase. |
(c) | Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective. | ||
(d) | Unless the Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Parent shall, on the date upon which the increase takes effect, promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by either of them and, in the case of the Security Agent, by any Receiver or Delegate in connection with any increase in Commitments under this Clause 2.2. | ||
(e) | The Parent may pay to the Increase Lender a fee in the amount and at the times agreed between the Parent and the Increase Lender in a Fee Letter. | ||
(f) | Clause 28.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: |
(i) | an Existing Lender were references to all the Lenders immediately prior to the relevant increase; | ||
(ii) | the New Lender were references to that Increase Lender; and | ||
(iii) | a re-transfer and re-assignment were references to respectively a transfer and assignment. |
2.3 | Finance Parties rights and obligations |
(a) | The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. |
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(b) | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt. | ||
(c) | A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents. |
2.4 | Obligors Agent |
(a) | Each Obligor (other than the Company) by its execution of this Agreement or an Accession Deed irrevocably appoints the Company to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises: |
(i) | the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to execute on its behalf any Accession Deed, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and | ||
(ii) | each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company, |
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication. |
(b) | Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors Agent or given to the Obligors Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors Agent and any other Obligor, those of the Obligors Agent shall prevail. |
3. | PURPOSE |
3.1 | Purpose | |
Each Borrower shall apply all amounts borrowed by it under the Revolving Facility towards: |
(a) | refinancing any amounts payable under the Rabobank Facility Agreement in full; and | ||
(b) | otherwise each Borrower shall apply all amounts borrowed by it under the Revolving Facility, any Letter of Credit (funded out of the Revolving Facility) towards the general corporate and working capital purposes of the Group (including any Permitted Acquisition). |
3.2 | Monitoring | |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement. |
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4. | CONDITIONS OF UTILISATION |
4.1 | Initial conditions precedent | |
The Lenders will only be obliged to comply with Clause 5.4 (Lenders participation) in relation to any Utilisation if on or before the Utilisation Date for that Utilisation, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Parent and the Lenders promptly upon being so satisfied. If the Agent has not received (or waived the right to receive) such documents and evidence by the date being 90 days from the date of this Agreement, the Facility shall be automatically cancelled in full. |
4.2 | Further conditions precedent | |
Subject to Clause 4.1 (Initial Conditions Precedent), the Lenders will only be obliged to comply with Clause 5.4 (Lenders participation), if on the date of the Utilisation Request and on the proposed Utilisation Date: |
(a) | in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan, and in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; and | ||
(b) | in relation to the first Utilisation Date, all the representations and warranties in Clause 23 (Representations) or, in relation to any other Utilisation, the Repeating Representations to be made by each Obligor are true in all material respects. |
4.3 | Conditions relating to Optional Currencies |
(a) | A currency will constitute an Optional Currency in relation to a Revolving Facility Utilisation if: |
(i) | it is a Pre-Approved Currency; or | ||
(ii) | it is readily available in the amount required and freely convertible into the Base Currency in the Relevant Interbank Market on the Quotation Day and the Utilisation Date for that Utilisation and has been approved by the Agent (acting on the instructions of all the Lenders) on or prior to receipt by the Agent of the relevant Utilisation Request for that Utilisation. |
(b) | If the Agent has received a written request from the Company for a currency to be approved under paragraph (a)(ii) above, the Agent will confirm to the Company by the Specified Time: |
(i) | whether or not the Lenders have granted their approval; and | ||
(ii) | if approval has been granted, the minimum amount for any subsequent Utilisation of a Revolving Facility Loan in that currency. |
4.4 | Maximum number of Utilisations |
(a) | A Borrower (or the Company) may not deliver a Utilisation Request if as a result of the proposed Utilisation 20 or more Revolving Facility Loans would be outstanding. | ||
(b) | Any Loan made by a single Lender under Clause 8.2 (Unavailability of a currency) shall not be taken into account in this Clause 4.4. | ||
(c) | Any Separate Loan shall not be taken into account in this Clause 4.4. |
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5. | UTILISATION LOANS |
5.1 | Delivery of a Utilisation Request | |
A Borrower (or the Company on its behalf) may utilise a Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time. |
5.2 | Completion of a Utilisation Request for Loans |
(a) | Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless: |
(i) | it identifies the Facility to be utilised; | ||
(ii) | the proposed Utilisation Date is a Business Day within the Availability Period applicable to that Facility; | ||
(iii) | the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and | ||
(iv) | the proposed Interest Period complies with Clause 14 (Interest Periods). |
(b) | Only one Utilisation may be requested in each Utilisation Request. |
5.3 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be the Base Currency or an Optional Currency. | ||
(b) | The amount of the proposed Utilisation must be: |
(i) | if the currency selected is the Base Currency, a minimum of 250,000 or, if less, the Available Facility; or | ||
(ii) | if the currency selected is a Pre-Approved Currency, a minimum of USD300,000, AUD350,000, GBP200,000, NZD450,000, SGD400,000 or, if less, the Available Facility; or | ||
(iii) | if the currency selected is an Optional Currency, the minimum amount specified by the Agent pursuant to paragraph (b)(ii) of Clause 4.3 (Conditions relating to Optional Currencies) or, if less, the Available Facility. |
5.4 | Lenders participation |
(a) | If the conditions set out in this Agreement have been met, and subject to Clause 9.1 (Repayment of Revolving Facility Loans), each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office. | ||
(b) | The amount of each Lenders participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan. | ||
(c) | The Agent shall determine the Base Currency Amount of each Revolving Facility Loan which is to be made in an Optional Currency and notify each Lender of the amount, currency and the Base Currency Amount of each Loan, the amount of its participation in that Loan and, if different, the amount of that participation to be made available in cash by the Specified Time. |
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5.5 | Limitations on Utilisations | |
The maximum aggregate Base Currency Amount of all Letters of Credit shall not exceed 20,000,000. |
5.6 | Cancellation of Commitment | |
The Revolving Facility Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for the Revolving Facility. |
6. | UTILISATION LETTERS OF CREDIT |
6.1 | The Revolving Facility |
(a) | The Revolving Facility may be utilised by way of Letters of Credit. | ||
(b) | Other than Clause 5.5 (Limitations on Utilisations), Clause 5 (Utilisation Loans) does not apply to utilisations by way of Letters of Credit. |
6.2 | Delivery of a Utilisation Request for Letters of Credit | |
A Borrower (or the Company on its behalf) may request a Letter of Credit to be issued by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time. |
6.3 | Completion of a Utilisation Request for Letters of Credit | |
Each Utilisation Request for a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless: |
(a) | it identifies the Borrower of the Letter of Credit; | ||
(b) | the proposed Utilisation Date is a Business Day within the Availability Period applicable to the Revolving Facility; | ||
(c) | the currency and amount of the Letter of Credit comply with Clause 6.4 (Currency and amount); | ||
(d) | if the Letter of Credit is not in the Issuing Banks standard form, the form of Letter of Credit is attached; | ||
(e) | the Expiry Date of the Letter of Credit is no more than 3 years from the date of issue; and | ||
(f) | the identity of the beneficiary is approved by all the Lenders (acting reasonably). |
6.4 | Currency and amount |
(a) | The currency specified in a Utilisation Request must be the Base Currency or an Optional Currency. |
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(b) | Subject Clause 5.5 (Limitations on Utilisations), the amount of the proposed Letter of Credit must be an amount whose Base Currency Amount is not more than the Available Facility. |
6.5 | Issue of Letters of Credit |
(a) | If the conditions set out in this Agreement have been met, the Issuing Bank shall issue the Letter of Credit on the Utilisation Date. | ||
(b) | Subject to Clause 4.1 (Initial Conditions Precedent), the Issuing Bank will only be obliged to comply with paragraph (a) above, if on the date of the Utilisation Request or Renewal Request and on the proposed Utilisation Date: |
(i) | in the case of a Letter of Credit to be renewed in accordance with Clause 6.6 (Renewal of a Letter of Credit) no Event of Default is continuing or would result from the proposed Utilisation and, in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; and | ||
(ii) | in relation to any Utilisation on the first Utilisation Date, all the representations and warranties in Clause 23 (Representations) or, in relation to any other Utilisation, the Repeating Representations to be made by each Obligor are true in all material respects. |
(c) | The amount of each Lenders participation in each Letter of Credit will be equal to the proportion borne by its Available Commitment to the Available Facility (in each case in relation to the Revolving Facility) immediately prior to the issue of the Letter of Credit. | ||
(d) | The Agent shall determine the Base Currency Amount of each Letter of Credit which is to be issued in an Optional Currency and shall notify the Issuing Bank and each Lender of the details of the requested Letter of Credit and its participation in that Letter of Credit by the Specified Time. |
6.6 | Renewal of a Letter of Credit |
(a) | A Borrower (or the Company on its behalf) may request that any Letter of Credit issued on behalf of that Borrower be renewed by delivery to the Agent of a Renewal Request in substantially similar form to a Utilisation Request for a Letter of Credit by the Specified Time. |
(b) | The Finance Parties shall treat any Renewal Request in the same way as a Utilisation Request for a Letter of Credit except that the conditions set out in paragraph (d) of Clause 6.3 (Completion of a Utilisation Request for Letters of Credit) shall not apply. | ||
(c) | The terms of each renewed Letter of Credit shall be the same as those of the relevant Letter of Credit immediately prior to its renewal, except that: |
(i) | its amount may be less than the amount of the Letter of Credit immediately prior to its renewal; and | ||
(ii) | its Term shall start on the date which was the Expiry Date of the Letter of Credit immediately prior to its renewal, and shall end on the proposed Expiry Date specified in the Renewal Request. |
(d) | If the conditions set out in this Agreement have been met, the Issuing Bank shall amend and re-issue any Letter of Credit pursuant to a Renewal Request. |
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6.7 | Reduction of a Letter of Credit |
(a) | If, on the proposed Utilisation Date of a Letter of Credit, any of the Lenders under the Revolving Facility is a Non-Acceptable L/C Lender and: |
(i) | that Lender has failed to provide cash collateral to the Issuing Bank in accordance with Clause 7.4 (Cash collateral by Non-Acceptable L/C Lender); and | ||
(ii) | either: |
(A) | the Issuing Bank has not required the relevant Borrower to provide cash cover pursuant to Clause 7.5 (Cash cover by Borrower); or | ||
(B) | the relevant Borrower has failed to provide cash cover to the Issuing Bank in accordance with Clause 7.5 (Cash cover by Borrower), |
the Issuing Bank may reduce the amount of that Letter of Credit by an amount equal to the amount of the participation of that Non-Acceptable L/C Lender in respect of that Letter of Credit and that Non-Acceptable L/C Lender shall be deemed not to have any participation (or obligation to indemnify the Issuing Bank) in respect of that Letter of Credit for the purposes of the Finance Documents. |
(b) | The Issuing Bank shall notify the Agent of each reduction made pursuant to this Clause 6.7. | ||
(c) | This Clause 6.7 shall not affect the participation of each other Lender in that Letter of Credit. |
6.8 | Revaluation of Letters of Credit |
(a) | If any Letters of Credit are denominated in an Optional Currency, the Agent shall at six monthly intervals after the date of the Letter of Credit recalculate the Base Currency Amount of each Letter of Credit by notionally converting into the Base Currency the outstanding amount of that Letter of Credit on the basis of the Agents Spot Rate of Exchange on the date of calculation. | ||
(b) | The Parent shall, if requested by the Agent within three days of any calculation under paragraph (a) above, ensure that within three Business Days sufficient Revolving Facility Utilisations are prepaid to prevent the Base Currency Amount of the Revolving Facility Utilisations exceeding the Total Revolving Facility Commitments following any adjustment to a Base Currency Amount under paragraph (a) of this Clause 6.8. |
7. | LETTERS OF CREDIT |
7.1 | Immediately payable | |
If a Letter of Credit or any amount outstanding under a Letter of Credit is expressed to be immediately payable, the Borrower that requested (or on behalf of which the Company requested) the issue of that Letter of Credit shall repay or prepay that amount immediately. |
7.2 | Claims under a Letter of Credit |
(a) | Each Borrower irrevocably and unconditionally authorises the Issuing Bank to pay any claim made or purported to be made under a Letter of Credit requested by it (or requested by the Company on its behalf) and which appears on its face to be in order (in this Clause 7, a claim). |
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(b) | Each Borrower shall immediately on demand pay to the Agent for the Issuing Bank an amount equal to the amount of any claim. | ||
(c) | Each Borrower acknowledges that the Issuing Bank: |
(i) | is not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and | ||
(ii) | deals in documents only and will not be concerned with the legality of a claim or any underlying transaction or any available set-off, counterclaim or other defence of any person. |
(d) | The obligations of a Borrower under this Clause 7 will not be affected by: |
(i) | the sufficiency, accuracy or genuineness of any claim or any other document; or | ||
(ii) | any incapacity of, or limitation on the powers of, any person signing a claim or other document. |
7.3 | Indemnities |
(a) | Each Borrower shall immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Banks gross negligence or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit requested by (or on behalf of) that Borrower. | ||
(b) | Each Lender shall (according to its L/C Proportion) immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Banks gross negligence or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit (unless the Issuing Bank has been reimbursed by an Obligor pursuant to a Finance Document). | ||
(c) | If any Lender is not permitted (by its constitutional documents or any applicable law) to comply with paragraph (b) above, then that Lender will not be obliged to comply with paragraph (b) and shall instead be deemed to have taken, on the date the Letter of Credit is issued (or if later, on the date the Lenders participation in the Letter of Credit is transferred or assigned to the Lender in accordance with the terms of this Agreement), an undivided interest and participation in the Letter of Credit in an amount equal to its L/C Proportion of that Letter of Credit. On receipt of demand from the Agent, that Lender shall pay to the Agent (for the account of the Issuing Bank) an amount equal to its L/C Proportion of the amount demanded. | ||
(d) | The Borrower which requested (or on behalf of which the Company requested) a Letter of Credit shall immediately on demand reimburse any Lender for any payment it makes to the Issuing Bank under this Clause 7.3 in respect of that Letter of Credit. | ||
(e) | The obligations of each Lender or Borrower under this Clause are continuing obligations and will extend to the ultimate balance of sums payable by that Lender or Borrower in respect of any Letter of Credit, regardless of any intermediate payment or discharge in whole or in part. | ||
(f) | The obligations of any Lender or Borrower under this Clause will not be affected by any act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause (without limitation and whether or not known to it or any other person) including: |
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(i) | any time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under a Letter of Credit or any other person; | ||
(ii) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor or any member of the Group; | ||
(iii) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor, any beneficiary under a Letter of Credit or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; | ||
(iv) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any beneficiary under a Letter of Credit or any other person; | ||
(v) | any amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit or any other document or security; | ||
(vi) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Letter of Credit or any other document or security; or | ||
(vii) | any insolvency or similar proceedings. |
7.4 | Cash collateral by Non-Acceptable L/C Lender |
(a) | If, at any time, a Lender under the Revolving Facility is a Non-Acceptable L/C Lender, the Issuing Bank may, by notice to that Lender, request that Lender to pay and that Lender shall pay, on or prior to the date falling three Business Days after the request by the Issuing Bank, an amount equal to that Lenders L/C Proportion of the outstanding amount of a Letter of Credit and in the currency of that Letter of Credit to an interest-bearing account held in the name of that Lender with the Issuing Bank. | ||
(b) | The Non-Acceptable L/C Lender to whom a request has been made in accordance with paragraph (a) above shall enter into a security document or other form of collateral arrangement over the account, in form and substance satisfactory to the Issuing Bank, as collateral for any amounts due and payable under the Finance Documents by that Lender to the Issuing Bank in respect of that Letter of Credit. | ||
(c) | Until no amount is or may be outstanding under that Letter of Credit, withdrawals from the account may only be made to pay to the Issuing Bank amounts due and payable to the Issuing Bank by the Non-Acceptable L/C Lender under the Finance Documents in respect of that Letter of Credit. | ||
(d) | Each Lender under the Revolving Facility shall notify the Agent and the Company: |
(i) | on the date of this Agreement or on any later date on which it becomes such a Lender in accordance with Clause 2.2 (Increase) or Clause 28 (Changes to the Lenders) whether it is a Non-Acceptable L/C Lender; and | ||
(ii) | as soon as practicable upon becoming aware of the same, that it has become a Non-Acceptable L/C Lender, |
and an indication in Schedule 1 (The Original Parties), in a Transfer Certificate, in an Assignment Agreement or in an Increase Confirmation to that effect will constitute a |
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notice under paragraph (d)(i) to the Agent and, upon delivery in accordance with Clause 28.8 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Parent), to the Parent. |
(e) | Any notice received by the Agent pursuant to paragraph (d) above shall constitute notice to the Issuing Bank of that Lenders status and the Agent shall, upon receiving each such notice, promptly notify the Issuing Bank of that Lenders status as specified in that notice. | ||
(f) | If a Lender who has provided cash collateral in accordance with this Clause 7.4: |
(i) | ceases to be a Non-Acceptable L/C Lender; and | ||
(ii) | no amount is due and payable by that Lender in respect of a Letter of Credit, |
that Lender may, at any time it is not a Non-Acceptable L/C Lender, by notice to the Issuing Bank request that an amount equal to the amount of the cash provided by it as collateral in respect of that Letter of Credit (together with any accrued interest) standing to the credit of the relevant account held with the Issuing Bank be returned to it and the Issuing Bank shall pay that amount to the Lender within three Business Days after the request from the Lender (and shall cooperate with the Lender in order to procure that the relevant security or collateral arrangement is released and discharged). |
7.5 | Cash cover by Borrower |
(a) | If a Lender which is a Non-Acceptable L/C Lender fails to provide cash collateral (or notifies the Issuing Bank that it will not provide cash collateral) in accordance with Clause 7.4 (Cash collateral by Non-Acceptable L/C Lender) and the Issuing Bank notifies the Obligors Agent (with a copy to the Agent) that it requires the Borrower of the relevant Letter of Credit or proposed Letter of Credit to provide cash cover to an account with the Issuing Bank in an amount equal to that Lenders L/C Proportion of the outstanding amount of that Letter of Credit and in the currency of that Letter of Credit then that Borrower shall do so within three Business Days after the notice is given. | ||
(b) | Notwithstanding paragraph (d) of Clause 1.2 (Construction), the Issuing Bank may agree to the withdrawal of amounts up to the level of that cash cover from the account if: |
(i) | it is satisfied that the relevant Lender is no longer a Non-Acceptable L/C Lender; or | ||
(ii) | the relevant Lenders obligations in respect of the relevant Letter of Credit are transferred to a New Lender in accordance with the terms of this Agreement; or | ||
(iii) | an Increase Lender has agreed to undertake the obligations in respect of the relevant Lenders L/C Proportion of the Letter of Credit. |
(c) | To the extent that a Borrower has complied with its obligations to provide cash cover in accordance with this Clause 7.5, the relevant Lenders L/C Proportion in respect of that Letter of Credit will remain (but that Lenders obligations in relation to that Letter of Credit may be satisfied in accordance with paragraph (d)(ii) of Clause 1.2 (Construction). However, the relevant Borrowers obligation to pay any Letter of Credit fee in relation to the relevant Letter of Credit to the Agent (for the account of that Lender) in accordance with paragraph (b) of Clause 16.4 (Fees payable in |
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respect of Letters of Credit) will be reduced proportionately as from the date on which it complies with that obligation to provide cash cover (and for so long as the relevant amount of cash cover continues to stand as collateral). | |||
(d) | The relevant Issuing Bank shall promptly notify the Agent of the extent to which a Borrower provides cash cover pursuant to this Clause 7.5 and of any change in the amount of cash cover so provided. |
7.6 | Rights of contribution | |
No Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this Clause 7. |
8. | OPTIONAL CURRENCIES |
8.1 | Selection of currency | |
A Borrower (or the Company on its behalf) shall select the currency of a Revolving Facility Utilisation in a Utilisation Request. |
8.2 | Unavailability of a currency | |
If before the Specified Time on any Quotation Day: |
(a) | a Lender notifies the Agent that the Optional Currency requested is not readily available to it in the amount required; or | ||
(b) | a Lender notifies the Agent that compliance with its obligation to participate in a Loan in the proposed Optional Currency would contravene a law or regulation applicable to it, |
the Agent will give notice to the relevant Borrower to that effect by the Specified Time on that day. In this event, any Lender that gives notice pursuant to this Clause 8.2 will be required to participate in the Loan in the Base Currency (in an amount equal to that Lenders proportion of the Base Currency Amount, or in respect of a Rollover Loan, an amount equal to that Lenders proportion of the Base Currency Amount of the Rollover Loan that is due to be made) and its participation will be treated as a separate Loan denominated in the Base Currency during that Interest Period. |
8.3 | Agents calculations | |
Each Lenders participation in a Loan will be determined in accordance with paragraph (b) of Clause 5.4 (Lenders participation). |
9. | REPAYMENT |
9.1 | Repayment of Revolving Facility Loans |
(a) | Subject to paragraph (c) below, each Borrower which has drawn a Revolving Facility Loan shall repay that Loan on the last day of its Interest Period. | ||
(b) | Without prejudice to each Borrowers obligation under paragraph (a) above, if one or more Revolving Facility Loans are to be made available to a Borrower: |
(i) | on the same day that a maturing Revolving Facility Loan is due to be repaid by that Borrower; |
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(ii) | in the same currency as the maturing Revolving Facility Loan (unless it arose as a result of the operation of Clause 8.2 (Unavailability of a currency)); and | ||
(iii) | in whole or in part for the purpose of refinancing the maturing Revolving Facility Loan; |
the aggregate amount of the new Revolving Facility Loans shall be treated as if applied in or towards repayment of the maturing Revolving Facility Loan so that: |
(A) | if the amount of the maturing Revolving Facility Loan exceeds the aggregate amount of the new Revolving Facility Loans: |
(aa) | the relevant Borrower will only be required to pay an amount in cash in the relevant currency equal to that excess; and | ||
(bb) | each Lenders participation (if any) in the new Revolving Facility Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lenders participation (if any) in the maturing Revolving Facility Loan and that Lender will not be required to make its participation in the new Revolving Facility Loans available in cash; and |
(B) | if the amount of the maturing Revolving Facility Loan is equal to or less than the aggregate amount of the new Revolving Facility Loans: |
(aa) | the relevant Borrower will not be required to make any payment in cash; and | ||
(bb) | each Lender will be required to make its participation in the new Revolving Facility Loans available in cash only to the extent that its participation (if any) in the new Revolving Facility Loans exceeds that Lenders participation (if any) in the maturing Revolving Facility Loan and the remainder of that Lenders participation in the new Revolving Facility Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lenders participation in the maturing Revolving Facility Loan. |
(c) | At any time when a Lender becomes a Defaulting Lender, the maturity date of each of the participations of that Lender in the Revolving Facility Loans then outstanding will be automatically extended to the Termination Date in relation to the Revolving Facility and will be treated as separate Revolving Facility Loans (the Separate Loans) denominated in the currency in which the relevant participations are outstanding. | ||
(d) | A Borrower to whom a Separate Loan is outstanding may prepay that Loan by giving three Business Days prior notice to the Agent. The Agent will forward a copy of a prepayment notice received in accordance with this paragraph (d) to the Defaulting Lender concerned as soon as practicable on receipt. | ||
(e) | Interest in respect of a Separate Loan will accrue for successive Interest Periods selected by the Borrower by the time and date specified by the Agent (acting reasonably) and will be payable by that Borrower to the Defaulting Lender on the last day of each Interest Period of that Loan. |
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(f) | The terms of this Agreement relating to Revolving Facility Loans generally shall continue to apply to Separate Loans other than to the extent inconsistent with paragraphs (c) to (e) above, in which case those paragraphs shall prevail in respect of any Separate Loan. | ||
(g) | This Clause shall be read and construed subject to the provisions of Clause 9.2 (Reduction of Revolving Facility). |
9.2 | Reduction of Revolving Facility | |
The Revolving Facility Commitments will be reduced in installments by: |
(a) | firstly, to the extent required, the cancellation of any Available Commitments under the Revolving Facility; and | ||
(b) | second, once all Available Commitments at that time have been cancelled, to the extent required, prepayment of any Revolving Utilisations, |
in each case, on each date specified in the table below (each a Reduction Date) and to the extent required to reduce the Revolving Facility Commitments by the corresponding reduction installment (each a Reduction Installment) set out in that table: |
Reduction Date | Reduction Installment () | |||
31 December 2010 |
500,000 | |||
31 March 2011 |
500,000 | |||
30 June 2011 |
500,000 | |||
30 September 2011 |
500,000 | |||
31 December 2011 |
500,000 | |||
31 March 2012 |
500,000 | |||
30 June 2012 |
500,000 | |||
30 September 2012 |
500,000 | |||
31 December 2012 |
1,500,000 | |||
31 March 2013 |
1,500,000 | |||
30 June 2013 |
1,500,000 | |||
30 September 2013 |
1,500,000 |
9.3 | Effect of cancellation and prepayment on scheduled repayments and reductions |
(a) | If the Company cancels the whole or any part of the Revolving Facility Commitments in accordance with Clause 10.5 (Right of cancellation and repayment in relation to a single Lender or Issuing Bank) or Clause 10.6 (Right of cancellation in relation to a Defaulting Lender) or if the Revolving Facility Commitment of any Lender is reduced under Clause 10.1 (Illegality) then (other than, in any relevant case, to the extent that |
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any part of the relevant Commitment(s) is subsequently increased pursuant to Clause 2.2 (Increase)) in the case of the Revolving Facility Commitments, the amount of the Reduction Installment for each Reduction Date falling after that cancellation will reduce pro rata by the amount cancelled. | |||
(b) | If the Company cancels the whole or any part of the Revolving Facility Commitments in accordance with Clause 10.3 (Voluntary cancellation) then the amount of the Reduction Installment for each Reduction Date falling after that cancellation will reduce pro rata by the amount cancelled. | ||
(c) | If any of the Revolving Facility Utilisations are prepaid in accordance with Clause 10.4 (Voluntary prepayment of Revolving Facility Utilisations), or Clause 11.2 (Disposal and Insurance Proceeds) then under Clause 11.2 (Disposal and Insurance Proceeds) only, the amount of the Reduction Installment for each Reduction Date falling after that prepayment will reduce pro rata by the amount of the Revolving Facility Loan prepaid. |
10. | ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION |
10.1 | Illegality | |
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Utilisation: |
(a) | that Lender, shall promptly notify the Agent upon becoming aware of that event; | ||
(b) | upon the Agent notifying the Company, the Commitment of that Lender will be immediately cancelled; and | ||
(c) | each Borrower shall repay that Lenders participation in the Utilisations made to that Borrower on the last day of the Interest Period for each Utilisation occurring after the Agent has notified the Company or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law). |
10.2 | Illegality in relation to Issuing Bank | |
If it becomes unlawful for an Issuing Bank to issue or leave outstanding any Letter of Credit, then: |
(a) | that Issuing Bank shall promptly notify the Agent upon becoming aware of that event; | ||
(b) | upon the Agent notifying the Company, the Issuing Bank shall not be obliged to issue any Letter of Credit; | ||
(c) | the Parent shall procure that the relevant Borrower shall use its best endeavours to procure the release of each Letter of Credit issued by that Issuing Bank and outstanding at such time; and | ||
(d) | unless any other Lender has agreed to be an Issuing Bank pursuant to the terms of this Agreement, the Revolving Facility shall cease to be available for the issue of Letters of Credit. |
10.3 | Voluntary cancellation |
(a) | The Company may, if it gives the Agent not less than five Business Days (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or |
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any part (being a minimum amount of 1,000,000 of an Available Facility). Any cancellation under this Clause 10.3 shall reduce the Commitments of the Lenders rateably under that Facility. | |||
(b) | Any notice of cancellation of the Available Commitments with respect to the Revolving Facility delivered at any time while Loans under any other Facility remain outstanding and/or other Commitments remain uncancelled must be accompanied by evidence, in form and substance satisfactory to the Majority Lenders, that the Group will have sufficient working capital facilities available to it following such cancellation. |
10.4 | Voluntary prepayment of Revolving Facility Utilisations | |
A Borrower to which a Revolving Facility Utilisation has been made may, if it or the Company gives the Agent not less than five Business Days (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Revolving Facility Utilisation (but if in part, being an amount that reduces the Base Currency Amount of the Revolving Facility Utilisation by a minimum amount of 1,000,000). |
10.5 | Right of cancellation and repayment in relation to a single Lender or Issuing Bank |
(a) | If: |
(i) | any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 17.2 (Tax gross-up); | ||
(ii) | any Lender or Issuing Bank claims indemnification from the Parent or an Obligor under Clause 17.3 (Tax indemnity) or Clause 18.1 (Increased costs), |
the Company may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice: |
(i) | (if such circumstances relate to a Lender) of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lenders participation in the Utilisations; or | ||
(iii) | (if such circumstances relate to the Issuing Bank) of repayment of any outstanding Letter of Credit issued by it and cancellation of its appointment as an Issuing Bank under this Agreement in relation to any Letters of Credit to be issued in the future. |
(b) | On receipt of a notice referred to in paragraph (a) above in relation to a Lender, the Commitment of that Lender shall immediately be reduced to zero. | ||
(c) | On the last day of each Interest Period which ends after the Company has given notice under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Company in that notice), each Borrower to which a Utilisation is outstanding shall repay that Lenders participation in that Utilisation together with all interest and other amounts accrued under the Finance Documents. |
10.6 | Right of cancellation in relation to a Defaulting Lender |
(a) | If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent three Business Days notice of cancellation of each Available Commitment of that Lender. | ||
(b) | On the notice referred to in paragraph (a) above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero. |
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(c) | The Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders. |
11. | MANDATORY PREPAYMENT |
11.1 | Exit |
Upon the occurrence of: |
(a) | any Listing; or | ||
(b) | a Change of Control; or | ||
(c) | the sale of all or substantially all of the assets of the Group whether in a single transaction or a series of related transactions, |
the Facility will be cancelled and all outstanding Utilisations together with accrued interest, and all other amounts accrued under the Finance Documents, shall become immediately due and payable. |
11.2 | Disposal and Insurance Proceeds |
(a) | For the purposes of this Clause 11.2, Clause 11.3 (Application of mandatory prepayments) and Clause 11.4 (Mandatory Prepayment Accounts): | ||
Disposal means a sale, lease, licence, transfer, loan or other disposal by a person of any asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions). | |||
Disposal Proceeds means the consideration receivable by any member of the Group (including any amount receivable in repayment of intercompany debt) for any Disposal made by any member of the Group except for Excluded Disposal Proceeds and after deducting: |
(i) | any reasonable expenses which are incurred by any member of the Group with respect to that Disposal to persons who are not members of the Group; and | ||
(i) | any Tax incurred and required to be paid by the seller in connection with that Disposal (as reasonably determined by the seller, on the basis of existing rates and taking account of any available credit, deduction or allowance). |
Excluded Disposal Proceeds means the consideration receivable by any member of the Group (including any amount receivable in repayment of intercompany debt) for any Disposal: |
(i) | to the extent that the Aggregate Net Disposal Proceeds for a Financial Year of the Parent do not exceed 1,000,000 (or its equivalent) and for the avoidance of doubt only the amount by which the Aggregate Net Disposal Proceeds exceed 1,000,000 in any such Financial Year shall not be Excluded Disposal Proceeds (where Aggregate Net Disposal Proceeds means, for any Financial Year, the Disposal Proceeds of a disposal, aggregated with the Disposal Proceeds of all other disposals made in the same Financial Year, less any Disposal Proceeds which are, or are to be, reinvested and/or are exempted pursuant to paragraphs (ii) and (iii) below); |
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(ii) | which is received from a Disposal permitted under paragraphs (c), (d), (f) or (k) of the definition of Permitted Disposal and which the Parent certifies upon receipt are to be (and subsequently are): |
(A) | reinvested within 365 days of receipt in an asset or assets of a similar type and value required for the business of the recipient member of the Group or an Obligor; or | ||
(B) | committed to be so invested by a binding contract being entered into by the recipient of the Group or an Obligor and are so invested within 18 months of receipt; or |
(ii) | which is received from a Disposal under paragraphs (a), (b), (e), (g), (h), (i) and (j) of the definition of Permitted Disposals. |
(i) | to the extent that the Aggregate Net Insurance Proceeds for a Financial Year of the Parent do not exceed 1,000,000 (or its equivalent) and for the avoidance of doubt only the amount by which the Aggregate Net Insurance Proceeds exceed 1,000,000 in any such Financial Year shall not be Excluded Insurance Proceeds (where Aggregate Net Insurance Proceeds means, for any Financial Year, the Insurance Proceeds of any claim received, aggregated with the Insurance Proceeds of all other claims received in the same Financial Year, less and Insurance Proceeds which are, or are to be, applied pursuant to paragraphs (ii) and (iii) below); | ||
(ii) |
(A) | which the Parent certifies in writing to the Agent upon receipt are to be (and subsequently are) applied to meet a third party claim; or | ||
(B) | which the Parent certifies in writing to the Agent upon receipt are to be (and subsequently are) applied to cover loss of revenue in respect of which the relevant insurance claim was made, |
in each case as soon as possible (but in any event within 180 days or such longer period as the Majority Lenders may agree) after receipt; or | |||
(iii) |
(A) | which the Parent certifies in writing to the Agent upon receipt are to be (and subsequently are) applied to the replacement, reinstatement and/or repair of the assets or otherwise in amelioration of the loss in respect of which the relevant insurance claim was made within 365 days of receipt of such proceeds; or | ||
(B) | which the Parent certifies in writing to the Agent upon receipt are to be (and subsequently are) committed to be so applied by a binding contract being entered into by the recipient member of the Group or an Obligor and so applied within 18 months of receipt. |
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(b) | The Parent shall ensure that the Borrowers prepay Utilisations in the following amounts at the times and in the order of application contemplated by Clause 11.3 (Application of mandatory prepayments): |
(i) | the amount of Disposal Proceeds; and | ||
(ii) | the amount of Insurance Proceeds. |
11.3 | Application of mandatory prepayments |
(a) | A prepayment made under Clause 11.2 (Disposal and Insurance Proceeds) shall be applied in the following order: |
(i) | first, in cancellation of Available Commitments under the Revolving Facility (and the Available Commitment of the Lenders under the Revolving Facility will be cancelled rateably); and | ||
(ii) | secondly, in prepayment of Revolving Facility Utilisations (such that outstanding Revolving Facility Loans shall be prepaid before outstanding Letters of Credit) and cancellation of Revolving Facility Commitments. |
(b) | Unless the Company makes an election under paragraph (c) below, the Borrowers shall prepay Loans promptly upon receipt of those proceeds. | ||
(c) | Subject to paragraph (d) below, the Company may elect that any prepayment under Clause 11.2 (Disposal and Insurance Proceeds) be applied in prepayment of a Loan on the last day of the Interest Period relating to that Loan. If the Company makes that election then a proportion of the Loan equal to the amount of the relevant prepayment will be due and payable on the last day of its Interest Period. | ||
(d) | If the Company has made an election under paragraph (c) above but a Default has occurred and is continuing, that election shall no longer apply and a proportion of the Loan in respect of which the election was made equal to the amount of the relevant prepayment shall be immediately due and payable (unless the Majority Lenders otherwise agree in writing). |
11.4 | Mandatory Prepayment Accounts |
(a) | The Parent shall ensure that (i) Disposal Proceeds and Insurance Proceeds in respect of which the Company has made an election under paragraph (c) of Clause 11.3 (Application of mandatory prepayments) are paid into a Mandatory Prepayment Account as soon as reasonably possible after receipt by a member of the Group. | ||
(b) | The Company and each Borrower irrevocably authorise the Agent to apply amounts credited to the Mandatory Prepayment Account to pay amounts due and payable under Clause 11.3 (Application of mandatory prepayments) and otherwise under the Finance Documents. | ||
(c) | A Lender, Security Agent or Agent with which a Mandatory Prepayment Account or Holding Account is held acknowledges and agrees that (i) interest shall accrue at normal commercial rates on amounts credited to those accounts and that the account holder shall be entitled to receive such interest (which shall be paid in accordance with the mandate relating to such account) unless a Default is continuing and (ii) each such account is subject to the Transaction Security. |
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11.5 | Excluded proceeds |
(a) | Where Excluded Disposal Proceeds and Excluded Insurance Proceeds include amounts which are intended to be used for a specific purpose within a specified period (as set out in the relevant definition of Excluded Disposal Proceeds or Excluded Insurance Proceeds), the Parent shall ensure that those amounts are used for that purpose and, if requested to do so by the Agent, shall promptly deliver a certificate to the Agent at the time of such application and at the end of such period confirming the amount (if any) which has been so applied within the requisite time periods provided for in the relevant definition. | ||
(b) | Excluded Disposal Proceeds and Excluded Insurance Proceeds must be held in bank accounts that are subject to the Transaction Security. | ||
(c) | If: |
(i) | monies are required to be applied in prepayment or repayment of the Facility under this Clause 11 but in order to be so applied need to be upstreamed or otherwise transferred from one member of the Group to another member of the Group to effect such prepayment or repayment; and | ||
(ii) | such monies cannot be so upstreamed or transferred without breaching a financial assistance prohibition or without breaching some other applicable law or without the Group incurring a material cost (whether as a result of paying additional Taxes or otherwise), |
12. | RESTRICTIONS | |
12.1 | Notices of Cancellation or Prepayment | |
Any notice of cancellation, prepayment, authorisation or other election given by any Party under Clause 10 (Illegality, voluntary prepayment and cancellation), paragraph (c) of Clause 11.3 (Application of mandatory prepayments) or Clause 11.4 (Mandatory Prepayment Accounts) shall (subject to the terms of those Clauses) be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. | ||
12.2 | Interest and other amounts | |
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty. | ||
12.3 | Reborrowing of Facilities | |
Unless a contrary indication appears in this Agreement, any part of the Revolving Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement. |
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12.4 | Prepayment in accordance with Agreement | |
No Borrower shall repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. | ||
12.5 | No reinstatement of Commitments | |
Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated. | ||
12.6 | Agents receipt of Notices | |
If the Agent receives a notice under Clause 10 (Illegality, voluntary prepayment and cancellation) or an election under paragraph (c) of Clause 11.3 (Application of mandatory prepayments), it shall promptly forward a copy of that notice or election to either the Company or the affected Lender, as appropriate. | ||
12.7 | Effect of Repayment and Prepayment on Commitments | |
If all or part of a Utilisation under a Facility is repaid or prepaid and is not available for redrawing (other than by operation of Clause 4.2 (Further conditions precedent)), an amount of the Commitments (equal to the Base Currency Amount of the amount of the Utilisation which is repaid or prepaid) in respect of that Facility will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this Clause 12.7 shall reduce the Commitments of the Lenders rateably under that Facility. | ||
13. | INTEREST | |
13.1 | Calculation of interest | |
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: |
(a) | Margin; | ||
(b) | LIBOR or, in relation to any Loan in euro, EURIBOR; and | ||
(c) | Mandatory Cost, if any. |
13.2 | Payment of interest |
(a) | The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six Monthly intervals after the first day of the Interest Period). | ||
(b) | If the annual audited financial statements of the Group and related Compliance Certificate received by the Agent show that a higher Margin should have applied during a certain period, then the Parent shall (or shall ensure the relevant Borrower shall) promptly pay to the Agent any amounts necessary to put the Agent and the Lenders in the position they would have been in had the appropriate rate of the Margin applied during such period. |
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13.3 | Default interest |
(a) | If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 1.00 per cent. higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 13.3 shall be immediately payable by the Obligor on demand by the Agent. | ||
(b) | If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan: |
(i) | the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and | ||
(ii) | the rate of interest applying to the overdue amount during that first Interest Period shall be 1.00 per cent. higher than the rate which would have applied if the overdue amount had not become due. |
(c) | Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
13.4 | Notification of rates of interest |
The Agent shall promptly notify the Lenders and the relevant Borrower (or the Company) of the determination of a rate of interest under this Agreement. |
14. | INTEREST PERIODS |
14.1 | Selection of Interest Periods and Terms |
(a) | A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan. |
(b) | Subject to this Clause 14, a Borrower (or the Company) may select an Interest Period of one, two, three or six Months or any other period agreed between the Company and the Agent (acting on the instructions of all the Lenders in relation to the relevant Loan). In addition a Borrower (or the Company on its behalf) may select an Interest Period of a period of less than one Month, if necessary to ensure that (when aggregated with the Available Facility) there are Revolving Facility Loans (with an aggregate Base Currency Amount equal to or greater than the Reduction Installment) which have an Interest Period ending on a Reduction Date for the scheduled reduction to occur. |
(c) | An Interest Period for a Loan shall not extend beyond the Termination Date applicable to its Facility. |
(d) | A Revolving Facility Loan has one Interest Period only. |
14.2 | Changes to Interest Periods |
(a) | Prior to determining the interest rate for a Revolving Facility Loan, the Agent may shorten the Interest Period for any Revolving Facility Loan to ensure that, when aggregated with the Available Facility for the Revolving Facility, there are sufficient |
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Revolving Facility Loans (with an aggregate Base Currency Amount equal to or greater than the Reduction Installment) which have an Interest Period ending on a Reduction Date for the scheduled reduction to occur. |
(b) | If the Agent makes any of the changes to an Interest Period referred to in this Clause 14.2, it shall promptly notify the Company and the Lenders. |
14.3 | Non-Business Days |
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). |
15. | CHANGES TO THE CALCULATION OF INTEREST |
15.1 | Absence of quotations |
Subject to Clause 15.2 (Market disruption), if LIBOR or, if applicable, EURIBOR is to be determined by reference to the Base Reference Banks but a Base Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR or EURIBOR shall be determined on the basis of the quotations of the remaining Base Reference Banks. |
15.2 | Market disruption |
(a) | If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lenders share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of: |
(i) | the Margin; |
(ii) | the rate notified to the Agent by that Lender as soon as practicable and in any event by close of business on the date falling three Business Days after the Quotation Day (or, if earlier, on the date falling three Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and |
(iii) | the Mandatory Cost, if any, applicable to that Lenders participation in the Loan. |
(b) | If: |
(i) | the percentage rate per annum notified by a Lender pursuant to paragraph (a)(ii) above is less than LIBOR or, in relation to any Loan in euro, EURIBOR; or |
(ii) | a Lender has not notified the Agent of a percentage rate per annum pursuant to paragraph (a)(ii) above, |
the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be LIBOR or in relation to a loan in euro, EURIBOR. |
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(c) | In this Agreement: | ||
Market Disruption Event means: |
(i) | at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Base Reference Banks supplies a rate to the Agent to determine LIBOR or, if applicable, EURIBOR for the relevant currency and Interest Period; or |
(i) | before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 40 per cent. of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR or, if applicable, EURIBOR. |
15.3 | Alternative basis of interest or funding |
(a) | If a Market Disruption Event occurs and the Agent or the Company so requires, the Agent and the Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. |
(b) | Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties. |
15.4 | Break Costs |
(a) | Each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum. |
(b) | Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue. |
16. | FEES |
16.1 | Commitment fee |
(a) | The Company shall pay to the Agent (for the account of each Lender) a fee in the Base Currency computed at the rate of 40 per cent. of the applicable Margin subject to a minimum at any time of 0.70% per annum, on that Lenders Available Commitment for the Availability Period. |
(b) | The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the relevant Availability Period, on the last day of the relevant Availability Period and on the cancelled amount of the relevant Lenders Commitment at the time the cancellation is effective. |
(c) | No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender. |
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16.2 | Arrangement fee | |
The Company shall pay to the Arranger an arrangement fee of 600,000 (in respect of the Facility) on the first Utilisation Date. | ||
16.3 | Agency and Security Agent fee | |
In the event that there is more than one Lender at any time, the Agent and Security Agent reserve the right to charge an agency fee and security agency fee respectively (for their own account) in amounts and at times required by the Agent and Security Agent (acting reasonably within the range of normal rates at that time of UK and European clearing banks for borrowers and facilities of a similar size and nature) as set out in a separate fee letter entered into between the Agent and/or Security Agent and the Company at that time. |
16.4 | Fees payable in respect of Letters of Credit |
(a) | The Company or each Borrower shall pay to the Issuing Bank a fronting fee at the rate of 0.125 per cent. per annum (or such other rate as the Issuing Bank may require by written notice to the Company within 10 Business Days of the first person other than the Original Lender becoming a Lender, provided that such rate is within the range of normal rates at that time of UK and European clearing banks for borrowers and facilities of a similar size and nature) on the outstanding amount which is counter-indemnified by the other Lenders of each Letter of Credit requested by it for the period from the issue of that Letter of Credit until its Expiry Date. |
(b) | The Company or each Borrower shall pay to the Agent (for the account of each Lender) a Letter of Credit fee in the Base Currency (computed at the rate equal to the Margin applicable to a Loan) on the outstanding amount of each Letter of Credit requested by it for the period from the issue of that Letter of Credit until its Expiry Date. This fee shall be distributed according to each Lenders L/C Proportion of that Letter of Credit. |
(c) | The accrued fronting fee and Letter of Credit fee on a Letter of Credit shall be payable on the last day of each successive period of three Months (or such shorter period as shall end on the Expiry Date for that Letter of Credit) starting on the date of issue of that Letter of Credit. The accrued fronting fee and Letter of Credit fee is also payable to the Agent on the cancelled amount of any Lenders Revolving Facility Commitment at the time the cancellation is effective if that Commitment is cancelled in full and the Letter of Credit is prepaid or repaid in full. |
17. | TAX GROSS UP AND INDEMNITIES |
17.1 | Definitions | |
In this Agreement: | ||
Protected Party means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document. | ||
Qualifying Lender means: |
(a) | a Lender (other than a Lender within paragraph (b) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is: |
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(i) | a Lender: |
(A) | which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document; or |
(B) | in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made, |
and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; |
(ii) | a Lender which is: |
(A) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(B) | a partnership each member of which is: |
(aa) | a company so resident in the United Kingdom; or |
(bb) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; |
(C) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or |
(iii) | a Treaty Lender; or |
(b) | a building society (as defined for the purposes of section 880 of the ITA) making an advance under a Finance Document). |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; | ||
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account |
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interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company. |
Tax Credit means a credit against, relief or remission for, or repayment of, any Tax. | ||
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document. | ||
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under Clause 17.2 (Tax gross-up) or a payment under Clause 17.3 (Tax indemnity). | ||
Treaty Lender means a Lender which: |
(a) | is treated as a resident of a Treaty State for the purposes of the Treaty; |
(b) | does not carry on a business in the United Kingdom through a permanent establishment with which that Lenders participation in the Loan is effectively connected; and |
(c) | to whom a payment of interest by an Obligor under a Finance Document may be made without deduction or withholding of United Kingdom income tax subject only to the completion of the relevant procedural formalities. |
Treaty State means a jurisdiction having a double taxation agreement (a Treaty) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest. |
UK Non-Bank Lender means: |
(a) | where a Lender becomes a Party on the day on which this Agreement is entered into, a Lender listed in Part III of Schedule 1 (The Original Parties); and |
(b) | where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a Tax Confirmation in the Assignment Agreement or Transfer Certificate which it executes on becoming a Party. |
Unless a contrary indication appears, in this Clause 17 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination. |
17.2 | Tax gross-up |
(a) | Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. |
(b) | The Parent shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender or Issuing Bank shall notify the Agent on becoming so aware in respect of a payment payable to that Lender or Issuing Bank. If the Agent receives such notification from a Lender or Issuing Bank it shall notify the Parent and that Obligor. |
(c) | If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. |
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(d) | A payment shall not be increased under paragraph (c) above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due: |
(i) | the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or |
(ii) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (i)(B) of the definition of Qualifying Lender and: |
(A) | an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a Direction) under section 931 of the ITA which relates to the payment and that Lender has received from the Obligor making the payment or from the Parent a certified copy of that Direction; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
(iii) | the relevant Lender is a Qualifying Lender solely by virtue of paragraph (i)(B) of the definition of Qualifying Lender and: |
(A) | the relevant Lender has not given a Tax Confirmation to the Parent; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Parent, on the basis that the Tax Confirmation would have enabled the Parent to have formed a reasonable belief that the payment was an excepted payment for the purpose of section 930 of the ITA; or |
(iv) | the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) below. |
(e) | If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law. | ||
(f) | Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority. | ||
(g) | A Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction. | ||
(h) | A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Parent by entering into this Agreement. |
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(i) | A UK Non-Bank Lender shall promptly notify the Parent and the Agent if there is any change in the position from that set out in the Tax Confirmation. |
17.3 | Tax indemnity |
(a) | The Parent shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines (acting reasonably) will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. |
(b) | Paragraph (a) above shall not apply: |
(i) | with respect to any Tax assessed on a Finance Party: |
(A) | under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(B) | under the law of the jurisdiction in which that Finance Partys Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or |
(ii) | to the extent a loss, liability or cost: |
(A) | is compensated for by an increased payment under Clause 17.2 (Tax gross-up); or |
(B) | would have been compensated for by an increased payment under Clause 17.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 17.2 (Tax gross-up) applied. |
(c) | A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Parent. |
(d) | A Protected Party shall, on receiving a payment from an Obligor under this Clause 17.3, notify the Agent. |
17.4 | Tax Credit |
If an Obligor makes a Tax Payment and the relevant Finance Party determines that: |
(a) | a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part or to that Tax Payment; and |
(b) | that Finance Party has obtained, utilised and retained that Tax Credit, |
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor. |
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17.5 | Lender Status Confirmation | |
Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate, Assignment Agreement or Increase Confirmation which it executes on becoming a Party, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in: |
(a) | not a Qualifying Lender; |
(b) | a Qualifying Lender (other than a Treaty Lender); or |
(c) | a Treaty Lender. |
If a New Lender fails to indicate its status in accordance with this Clause 17.5 then such New Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Agent which category applies (and the Agent, upon receipt of such notification, shall inform the Company). For the avoidance of doubt, a Transfer Certificate, Assignment Agreement or Increase Confirmation shall not be invalidated by any failure of a Lender to comply with this Clause 17.5. |
17.6 | Stamp taxes |
The Parent shall pay and, within three Business Days of demand, indemnify each Secured Party and Arranger against any cost, loss or liability that Secured Party or Arranger incurs in relation to all stamp duty, registration and other similar Taxes in any jurisdiction payable in respect of any Finance Document. |
17.7 | VAT |
(a) | All amounts set out or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party). |
(b) | If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance Document, and any Party other than the Recipient (the Subject Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT. |
(c) | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
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(d) | Any reference in this Clause 17.7 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term representative member to have the same meaning as in the Value Added Tax Act 1994) (or (if applicable) any other comparable meaning in any relevant legislation in any other jurisdiction). |
18. | INCREASED COSTS |
18.1 | Increased costs |
(a) | Subject to Clause 18.3 (Exceptions) the Parent shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement. |
(b) | In this Agreement Increased Costs means: |
(i) | a reduction in the rate of return from a Facility or on a Finance Partys (or its Affiliates) overall capital; |
(ii) | an additional or increased cost; or |
(iii) | a reduction of any amount due and payable under any Finance Document, |
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment -or funding or performing its obligations under any Finance Document or Letter of Credit. |
18.2 | Increased cost claims |
(a) | A Finance Party intending to make a claim pursuant to Clause 18.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Parent. |
(b) | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. |
18.3 | Exceptions |
(a) | Clause 18.1 (Increased Costs) does not apply to the extent any Increased Cost is: |
(i) | attributable to a Tax Deduction required by law to be made by an Obligor; |
(ii) | compensated for by Clause 17.3 (Tax indemnity) (or would have been compensated for under Clause 17.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 17.3 (Tax indemnity) applied); |
(iii) | compensated for by the payment of the Mandatory Cost; or |
(iv) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or |
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(v) | attributable to the implementation or application of or compliance with the International Convergence of Capital Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates). |
(b) | In this Clause 18.3 reference to a Tax Deduction has the same meaning given to the term in Clause 17.1 (Definitions). |
19. | OTHER INDEMNITIES |
19.1 | Currency indemnity |
(a) | If any sum due from an Obligor under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of: |
(i) | making or filing a claim or proof against that Obligor; or |
(ii) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify the Arranger and each other Secured Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum. |
(b) | Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. |
19.2 | Other indemnities |
(a) | The Parent shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify the Arranger and each other Secured Party against any cost, loss or liability incurred by it as a result of: |
(i) | the occurrence of any Event of Default; |
(ii) | a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties); |
(iii) | funding, or making arrangements to fund, its participation in a Utilisation requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); |
(iv) | issuing or making arrangements to issue a Letter of Credit requested by the Parent or a Borrower in a Utilisation Request but not issued by reason of the operation of any one or more of the provisions of this Agreement; or |
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(v) | a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Parent. |
(b) | The Parent shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or liability incurred by that Finance Party or its Affiliate (or officer or employee of that Finance Party or Affiliate) in connection with or arising out of the Acquisition or the funding of the Acquisition (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the Acquisition), unless such loss or liability is caused by the gross negligence or wilful misconduct of that Finance Party or its Affiliate (or employee or officer of that Finance Party or Affiliate). Any Affiliate or any officer or employee of a Finance Party or its Affiliate may rely on this Clause 19.2 subject to Clause 1.8 (Third party rights) and the provisions of the Third Parties Act. |
19.3 | Indemnity to the Agent | |
The Parent shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of: |
(a) | investigating any event which it reasonably believes is a Default; or |
(b) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. |
19.4 | Indemnity to the Security Agent |
(a) | Each Obligor shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of: |
(i) | the taking, holding, protection or enforcement of the Transaction Security, |
(ii) | the exercise of any of the rights, powers, discretions and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law; or |
(iii) | any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents. |
(b) | The Security Agent may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 19.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it. |
20. | MITIGATION BY THE LENDERS |
20.1 | Mitigation |
(a) | Each Finance Party shall, in consultation with the Parent, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 10.1 (Illegality) (or, in respect of the Issuing Bank, Clause 10.2 (Illegality in relation to Issuing Bank)), Clause 17 (Tax gross-up and indemnities) or Clause 18 (Increased Costs) or paragraph 3 of Schedule 4 (Mandatory Cost formula) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. |
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(b) | Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents. |
20.2 | Limitation of liability |
(a) | The Parent shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 20.1 (Mitigation). |
(b) | A Finance Party is not obliged to take any steps under Clause 20.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
21. | COSTS AND EXPENSES |
21.1 | Transaction expenses |
The Parent shall promptly on demand pay the Agent, the Arranger, the Issuing Bank and the Security Agent the amount of all costs and expenses (including legal fees and related VAT and disbursements as (i) set out in paragraph 1 of the Eversheds Fee Estimate emailed to Hugh Brown and John Wilkinson on 3 September 2010 by Paul Castle and (ii) otherwise as agreed by the Company and the Agent) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, syndication and perfection of: |
(a) | this Agreement and any other documents referred to in this Agreement and the Transaction Security; and |
(b) | any other Finance Documents executed after the date of this Agreement. |
21.2 | Amendment costs |
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 33.10 (Change of currency), the Parent shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement. |
21.3 | Security Agents ongoing costs |
(a) | In the event of (i) a Default or (ii) the Security Agent considering it necessary or expedient or (iii) the Security Agent being requested by an Obligor or the Majority Lenders to undertake duties which the Security Agent and the Parent agree to be of an exceptional nature and/or outside the scope of the normal duties of the Security Agent under the Finance Documents, the Parent shall pay to the Security Agent any additional remuneration that may be agreed between them. |
(b) | If the Security Agent and the Parent fail to agree upon the nature of the duties or upon any additional remuneration, that dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Parent or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Parent) and the determination of any investment bank shall be final and binding upon the parties to this Agreement. |
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21.4 | Enforcement and preservation costs | |
The Parent shall, within three Business Days of demand, pay to the Arranger and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights. |
22. | GUARANTEE AND INDEMNITY |
22.1 | Guarantee and indemnity | |
Each Guarantor irrevocably and unconditionally jointly and severally: |
(a) | guarantees to each Finance Party punctual performance by each other Obligor of all that Obligors obligations under the Finance Documents; |
(b) | undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and |
(c) | agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 22 if the amount claimed had been recoverable on the basis of a guarantee. |
22.2 | Continuing Guarantee |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. |
22.3 | Reinstatement |
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 22 will continue or be reinstated as if the discharge, release or arrangement had not occurred. |
22.4 | Waiver of defences |
The obligations of each Guarantor under this Clause 22 will not be affected by an act, omission, matter or thing which, but for this Clause 22, would reduce, release or prejudice any of its obligations under this Clause 22 (without limitation and whether or not known to it or any Finance Party) including: |
(a) | any time, waiver or consent granted to, or composition with, any Obligor or other person; |
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(b) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; |
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; |
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person; |
(e) | any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security; |
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or |
(g) | any insolvency or similar proceedings. |
22.5 | Guarantor Intent | |
Without prejudice to the generality of Clause 22.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing. |
22.6 | Immediate recourse | |
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 22. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary. |
22.7 | Appropriations | |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may: |
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and |
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(b) | hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantors liability under this Clause 22. |
22.8 | Deferral of Guarantors rights | |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 22: |
(a) | to be indemnified by an Obligor; |
(b) | to claim any contribution from any other guarantor of any Obligors obligations under the Finance Documents; |
(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; |
(d) | to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 22.1 (Guarantee and Indemnity); |
(e) | to exercise any right of set-off against any Obligor; and/or |
(f) | to claim or prove as a creditor of any Obligor in competition with any Finance Party. |
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 33 (Payment mechanics). |
22.9 | Release of Guarantors right of contribution |
If any Guarantor (a Retiring Guarantor) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor: |
(a) | that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and |
(b) | each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
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22.10 | Additional security | |
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party. |
22.11 | Guarantee Limitations France |
(a) | In respect of the obligations of any French Guarantor, the joint and several liability of such French Guarantor expressed to be assumed by it in its capacity as joint and several guarantor shall be limited to, only with respect to obligations of any Obligor which is not a Subsidiary of such French Guarantor, a maximum amount equal to the aggregate of all amounts borrowed by the relevant French Guarantor and, if any, its subsidiaries (i) directly under this Agreement and (ii) indirectly by way of intra group loans made available directly or indirectly by any member of the Group, provided at all times that any French Guarantors liability under this Agreement shall not in any event exceed 80% of its net assets (capitaux propres). |
(b) | In accordance with Article L.225-216 of the French Commercial Code, the joint and several liability of any French Guarantor expressed to be assumed by it in its capacity as joint and several guarantor shall not cover any obligation or liability under this Agreement incurred for the purpose of (i) advancing funds, granting loans or consenting to a security interest for the benefit of a third party with an intent to subscribe or purchase the shares of the relevant French Guarantor or (ii) engaging the relevant French Guarantors assets in an operation bearing on their own capital. |
22.12 | Guarantee Limitations The Netherlands |
Notwithstanding any other provision of this Clause 22 the guarantee, indemnity and other obligations of any Obligor expressed to be assumed in this Clause 22 shall be deemed not to be assumed by such Obligor to the extent that the same would constitute unlawful financial assistance within the meaning of Article 2:207(c) or 2:98(c) of the Dutch Civil Code or any other applicable financial assistance rules under any relevant jurisdiction (the Netherlands Prohibition) and the provisions of this Agreement and the other Finance Documents shall be construed accordingly. For the avoidance of doubt it is expressly acknowledged that the relevant Obligors will continue to guarantee all such obligations which, if included, do not constitute a violation of the Netherlands Prohibition. |
22.13 | Guarantee Limitations Singapore |
This guarantee does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance under any applicable provisions under the laws of Singapore (the Singapore Prohibition). For the avoidance of doubt it is expressly acknowledged that the relevant Obligors who are providing a guarantee under this Clause 22 will continue to guarantee all such obligations which, if included, do not constitute a violation of the Singapore Prohibition. |
22.14 | Guarantee limitation Belgian Guarantor |
The total liability of each Belgian Guarantor under this Clause 22, shall at times be limited to an aggregate amount (without double counting) not exceeding the sum of: |
(a) | any amounts owed by it or its direct or indirect Subsidiaries, if any, to the Finance Parties under the Finance Documents and the Belgian Guarantor shall guarantee such amounts in full; |
(b) | the aggregate of all amounts borrowed by a Belgian Guarantor (or its direct or indirect Subsidiaries) under any intra-group arrangement (regardless of the form thereof) that |
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have been financed directly or indirectly by borrowing under the Finance Documens (without any reduction for any repayment thereof); and |
(c) | the higher of: |
(i) | 9,000,000 (or its equivalent); or |
(ii) | the aggregate of: |
(A) | ninety per cent (90%) of such Belgian Guarantors own funds (eigen vermogen/capitauc propres) as referred to in section 88 of the Belgian Royal Decreee of 30 January 2001 implementing the Belgian Companies Code, as shown by its most recent audited annual financial statements at the time the relevant demand is made; and |
(B) | an amount equal to any subordinated debt it may owe at the time a demand for payment under this Clause 22 is made. |
The result of the calculation as described in (a), (b) and (c) above shall in relation to any relevant Belgian Guarantor be referred to as the Guaranteed Belgian Amount. | ||
Each Belgian Guarantor shall provide the Agent with an update on the relevant Guaranteed Belgian Amount upon the request of the Agent, with such information as the Agent may reasonably require, provided that the own funds (eigen vermorgen/capitaux propres) as specified under (ii) above may be derived from the latest audited financial statements of the respective Belgian Guarantor. | ||
23. | REPRESENTATIONS | |
23.1 | General | |
Each Obligor (or, where indicated, the Parent or specified Obligor alone) makes the representations and warranties set out in this Clause 23 to each Finance Party. | ||
23.2 | Status |
(a) | It and each of its Subsidiaries is a limited liability corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation. |
(b) | It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted. |
(c) | Neither it nor any of its Subsidiaries has filed a settlement agreement (minnelijk akkoord/accord amiable) with two or more of its creditors pursuant to the Belgian Act of 31 January 2009 on the continuity of enterprises. |
23.3 | Binding obligations | |
Subject to the Legal Reservations and, in the case of any Transaction Security Document, the Perfection Requirements: |
(a) | the obligations expressed to be assumed by it in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations; and |
(b) | (without limiting the generality of paragraph (a) above), each Transaction Security Document to which it is a party creates the security interests which that Transaction |
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Security Document purports to create and those security interests are valid and effective. |
23.4 | Non-conflict with other obligations | |
The entry into and performance by it of, and the transactions contemplated by, the Finance Documents to which it is party and the granting of the Transaction Security does not and will not conflict with: |
(a) | any law or regulation applicable to it; |
(b) | its constitutional documents; or |
(c) | except as disclosed to the Agent prior to the Signing Date as regards facilities owed by MRC Transmark Pte. Ltd. to DBS Bank Ltd.,_ any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries assets or constitute a default or termination event (however described) under any such agreement or instrument where such conflict in any such case would, or could reasonably be expected to, have a Material Adverse Effect. |
23.5 | Power and authority |
(a) | It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents. |
(b) | No limit on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Finance Documents to which it is a party. |
(c) | In respect of an Australian Obligor only, it is not a trustee of any trust or settlement, and it is not entering into the Finance Documents in its capacity as trustee of any trust or settlement, other than as disclosed to the Agent in writing prior to the date it became an Obligor. |
23.6 | Validity and admissibility in evidence |
(a) | All Authorisations required: |
(i) | to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and |
(ii) | subject to the Legal Reservations and (in relation to the Transaction Security Documents) Perfection Requirements, to make the Finance Documents to which it is a party admissible in evidence in its Relevant Jurisdictions, |
have been obtained or effected and are in full force and effect except any Authorisation referred to in paragraphs (a)-(c) of Clause 23.9 (No filing or stamp taxes), which Authorisations will be promptly obtained or effected after the first Utilisation Date. |
(b) | All Authorisations necessary for the conduct of its and its Subsidiaries, business, trade and ordinary activities have been obtained or effected and are in full force and effect if failure to obtain or effect those Authorisations has or is reasonably likely to have a Material Adverse Effect. |
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23.7 | Governing law and enforcement |
(a) | Subject to the Legal Reservations, the choice of governing law of the Finance Documents to which it is party will be recognised and enforced in its Relevant Jurisdictions. |
(b) | Subject to the Legal Reservations, any judgment obtained in relation to a Finance Document to which it is party in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in its Relevant Jurisdictions. |
23.8 | Insolvency | |
No: |
(a) | corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 27.7 (Insolvency proceedings); or |
(b) | creditors process described in Clause 27.8 (Creditors process), |
has been taken or, to its knowledge, threatened in relation to it; and none of the circumstances described in Clause 27.6 (Insolvency) applies to it. | ||
23.9 | No filing or stamp taxes | |
Under the laws of its Relevant Jurisdiction and subject to the Perfection Requirements, it is not necessary that the Finance Documents to which it is party be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is party or the transactions contemplated by such Finance Documents except: |
(a) | in respect of the English Obligors, registration of particulars of certain of the Transaction Security Documents at the Companies Registration Office in England and Wales under section 860 of the Companies Act 2006 and payment of associated fees; |
(b) | in respect of the Non-English Obligors, any similar or equivalent registrations required to be made in their respective Relevant Jurisdictions; and |
(c) | any other filing, recording or enrolling or any tax or fee which is referred to in any Legal Opinion, |
each of which will be made or paid promptly and in any event within the period allowed by applicable law or the relevant Finance Document. | ||
23.10 | Deduction of Tax | |
To the extent an Obligor is an Original Borrower under this Agreement it is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is party to a Lender which is a Qualifying Lender: |
(a) | except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (i)(B) of the definition of Qualifying Lender ; or |
(b) | subject in the case of a Treaty Lender to the completion of the relevant procedural formalities and, where applicable, the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488). |
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23.11 | No default |
(a) | No Event of Default and, on the date of this Agreement and on the first Utilisation Date, no Default has occurred and is continuing. | ||
(b) | No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries) assets are subject which has or is reasonably likely to have a Material Adverse Effect. |
23.12 | No misleading information | |
In respect of the Parent only: |
(a) | any factual information contained in the Financial Assistance Memo is true and accurate in all material respects; and | ||
(b) | no event or circumstance has occurred or arisen and no information has been omitted from the Financial Assistance Memo and no information has been given or withheld that results in the material factual information contained in the Financial Assistance Memo being untrue or misleading in any material respect. |
23.13 | Original Financial Statements |
(a) | Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied unless expressly disclosed to the Agent in writing to the contrary. | ||
(b) | The unaudited Original Financial Statements of the Parent fairly represent the financial condition and results of operations of the Group for the relevant month unless expressly disclosed to the Agent in writing to the contrary prior to the date of this Agreement. | ||
(c) | Its audited Original Financial Statements give a true and fair view of its financial condition and results of operations during the relevant financial year unless expressly disclosed to the Agent in writing to the contrary prior to the date of this Agreement. | ||
(d) | There has been no material adverse change in its assets, business or financial conditions or, in respect of the Parent only, the assets, business or financial condition of the Group, since the date of the Original Financial Statements. | ||
(e) | Its most recent financial statements delivered pursuant to Clause 24.1 (Financial Statements): |
(i) | have been prepared in accordance with the Accounting Principles as applied in the Original Financial Statements, save to the extent dealt with in accordance with Clause 24.3(c); and | ||
(ii) | give a true and fair view of (if audited) or fairly present (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate. |
(f) | In respect of the Parent only, the budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in |
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good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied. |
23.14 | No proceedings pending or threatened | |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any of its Subsidiaries. | ||
23.15 | No breach of laws |
(a) | It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect. | ||
(b) | No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against it or any of its Subsidiaries which have or are reasonably likely to have a Material Adverse Effect. | ||
(c) | In respect of an Australian Obligor only, the execution and performance by it of its obligations under the Finance Documents to which it is expressed to be a party does not breach or directly or indirectly result in a breach of the Corporations Act (including Part 2E or Part 2J of the Corporations Act). |
23.16 | Environmental laws |
(a) | It and each of its Subsidiaries is in compliance with Clause 26.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance, in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. | ||
(b) | No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against it or any of its Subsidiaries where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect. | ||
(c) | The cost to it or any of its Subsidiaries of compliance with Environmental Laws (including Environmental Permits) as to the first Utilisation Date is (to the best of its knowledge and belief, having made due and careful enquiry) is adequately provided for in the Budget 2010. |
23.17 | Taxation |
(a) | It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax of in excess of 1,000,000 (or its equivalent in any other currency) or more. | ||
(b) | No claims or investigations are being made or conducted against it (or any of its Subsidiaries) where such claim or investigation has or is reasonably likely to have a Material Adverse Effect. | ||
(c) | It is resident for Tax purposes only in the jurisdiction of its incorporation. |
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23.18 | Security and Financial Indebtedness |
(a) | No Security or Quasi-Security exists over all or any of its or its Subsidiaries present or future assets other than as permitted by this Agreement. | ||
(b) | Neither it nor its Subsidiaries have any Financial Indebtedness outstanding other than as permitted by this Agreement. | ||
(c) | It and each of its Subsidiaries is the sole legal and beneficial owner of the respective assets over which it purports to grant Security. |
23.19 | Ranking | |
Subject to the Legal Reservation and the Perfection Requirements, the Transaction Security granted by it (or to be granted by it) has or will have the ranking in priority which it is expressed to have in the Transaction Security Documents to which it is a party and it is not subject to any prior ranking or pari passu ranking Security. | ||
23.20 | Good title to assets | |
It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted, save where failure to do so could not, or could not reasonably be expected to have, a Material Adverse Effect. | ||
23.21 | Shares |
(a) | The shares of it and any of its Subsidiaries which are subject to the Transaction Security are fully paid and not subject to any option to purchase or similar rights. | ||
(b) | In respect of: |
(i) | all Obligors other than MRC Transmark Pty Ltd ACN 080 156 378, the constitutional documents of it and any of its Subsidiaries do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security; and | ||
(ii) | MRC Transmark Pty Ltd ACN 080 156 378, its constitutional documents do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security unless any applicable stamp duty or other taxes of a similar nature on the transfer are payable but unpaid. |
23.22 | Intellectual Property | |
It and each of its Subsidiaries: |
(a) | is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted; | ||
(b) | does not in carrying on its businesses, infringe any Intellectual Property of any third party in any respect which has or is reasonably likely to have a Material Adverse Effect; and | ||
(c) | there has been no material infringement or (so far as it is aware) threatened or suspected infringement of or challenge to the validity of any material Intellectual |
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Property owned by or licensed to it or any of its Subsidiaries, where such infringement would, or would reasonably be expected to, have a Material Adverse Effect. |
23.23 | Group Structure Chart | |
In respect of the Parent only the Group Structure Chart delivered to the Agent pursuant to Part I of Schedule 2 (Conditions Precedent) is true, complete and accurate in all material respects and shows the following information |
(a) | each member of the Group, including current name and company registration number, its jurisdiction of incorporation and/or establishment and indicating whether a company is a Dormant Subsidiary or is not a company with limited liability; and | ||
(b) | all minority interests in any member of the Group and any person in which any member of the Group holds shares in its issued share capital or equivalent ownership interest of such person. |
23.24 | Accounting reference date | |
The Accounting Reference Date of it and its Subsidiaries is 31 December. | ||
23.25 | Centre of main interests and establishments | |
In respect of Obligors incorporated in the European Union only, for the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the Regulation), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no establishment (as that term is used in Article 2(h) of the Regulations) in any other jurisdiction. | ||
23.26 | No adverse consequences |
(a) | It is not necessary under the laws of its Relevant Jurisdictions: |
(i) | in order to enable any Finance Party to enforce its rights under any Finance Document to which that Obligor is a party; or | ||
(ii) | by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document to which that Obligor is party, |
that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions. | |||
(b) | No Finance Party is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of any Finance Document to which that Obligor is party. |
23.27 | Dormant Companies | |
In respect of the Parent only, each company referred to in the definition of Dormant Subsidiary is a Dormant Subsidiary. | ||
23.28 | Pensions | |
Except for the pension schemes in Belgium and the Netherlands disclosed to the Agent by the Company prior to the Signing Date, neither it nor any of its Subsidiaries is or has at any time been liable in whatever capacity for liabilities under or in respect of a defined benefit pension scheme (or its equivalent in other jurisdictions). |
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23.29 | Times when representations made |
(a) | All the representations and warranties in this Clause 23 are made by each Original Obligor on the date of this Agreement and on the first Utilisation Date. | ||
(b) | The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each other Utilisation Date and on the first day of each Interest Period. | ||
(c) | All the representations and warranties in this Clause 23 except Clause 23.12 (No misleading information), Clause 23.23 (Group Structure Chart) and Clause 23.27 (Dormant Companies) are deemed to be made by each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an Additional Obligor. | ||
(d) | Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made. |
24. | INFORMATION UNDERTAKINGS | |
The undertakings in this Clause 24 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force. | ||
In this Clause 24: | ||
Annual Financial Statements means the financial statements for a Financial Year delivered pursuant to paragraph (a) of Clause 24.1 (Financial statements). | ||
Quarterly Financial Statements means the financial statements delivered pursuant to paragraph (b) of Clause 24.1 (Financial statements). | ||
24.1 | Financial statements | |
The Parent shall supply to the Agent in sufficient copies for all the Lenders: |
(a) | as soon as they are available, but in any event within 180 days after the end of each of its Financial Years: |
(i) | its audited consolidated financial statements for that Financial Year; | ||
(ii) | the audited financial statements (consolidated if appropriate) of each Obligor for that Financial Year; | ||
(iii) | if requested by the Agent, a year end stock and debtor report for the Group prepared by the Auditors on terms acceptable to the Agent (acting reasonably). |
(b) | as soon as they are available, but in any event within 30 days after the end of each Financial Quarter of each of its Financial Years its consolidated financial statements for that Financial Quarter (including cumulative management accounts for the year to date); and | ||
(c) | promptly following the end of each month, a current asset (broken down for debtors by ageing) and stock report for the Group (in the agreed form), in each case, on a country by country basis. |
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24.2 | Provision and contents of Compliance Certificate |
(a) | The Parent shall supply a Compliance Certificate to the Agent with each set of its audited consolidated Annual Financial Statements and each set of the Quarterly Financial Statements. | ||
(b) | The Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with Clause 25 (Financial Covenants). | ||
(c) | Each Compliance Certificate shall be signed by two directors of the Parent and, if required to be delivered with the audited consolidated Annual Financial Statements of the Parent and if requested by the Agent shall be reported on by the Auditors, in the form agreed by the Parent and the Agent acting reasonably and in good faith. |
24.3 | Requirements as to financial statements |
(a) | The Parent shall procure that each set of Annual Financial Statements and Quarterly Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition the Parent shall procure that: |
(i) | each set of Annual Financial Statements shall be audited by the Auditors; and | ||
(ii) | each set of Quarterly Financial Statements includes a cashflow forecast in respect of the Group in respect of the remainder of that Financial Year. |
(b) | The Parent shall procure that each set of financial statements delivered pursuant to Clause 24.1 (Financial statements): |
(i) | shall give a true and fair view of (in the case of Annual Financial Statements for any Financial Year), or fairly representing (in other cases), the financial condition and operations of the relevant Obligor as at the date as at which those financial statements were drawn up and, in the case of the Annual Financial Statements, shall be accompanied by any letter addressed to the management of the relevant company by the Auditors and accompanying those Annual Financial Statements; | ||
(ii) | in the case of consolidated financial statements of the Group, shall be accompanied by a statement by the Chief Financial Officer of the Parent comparing actual performance for the period to which the financial statements relate to: |
(A) | the projected performance for that period set out in the Budget; and | ||
(B) | the actual performance for the corresponding period in the preceding Financial Year of the Group; and |
(iii) | in the case of the Quarterly Financial Statements shall be accompanied by a statement by the Chief Financial Officer commenting on the performance of the Group for the month to which the financial statements relate and the Financial Year to date and any material developments or proposals affecting the Group or its business. |
(c) | The Parent shall procure that each set of financial statements delivered under Clause 24.1 (Financial statements), in the case of any member of the Group (other than an Obligor), shall be prepared in accordance with the Accounting Principles and, in the case of any Obligor, shall be prepared using the Accounting Principles, accounting practices and financial reference periods consistent with those applied in the |
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preparation of the Original Financial Statements of that Obligor, unless, in relation to any set of financial statements of an Obligor, the Parent notifies the Agent that there has been a change in the Accounting Principles or the accounting practices and delivers to the Agent (together the Reconciliation Statement): |
(i) | a description of any change necessary for those financial statements to reflect the Accounting Principles or accounting practices upon which that Obligors Original Financial Statements were prepared; and | ||
(ii) | sufficient information, in such a form and substance as may be reasonably required by the Agent, to enable the Lenders: | ||
(A) | to determine whether Clause 25 (Financial covenants) has been complied with; | ||
(B) | to determine the Margin as set out in the definition of Margin; | ||
(C) | to make an accurate comparison between the financial position indicated in those financial statements and that Obligors Original Financial Statements; and | ||
(D) | to verify the calculation of Distributable Net Profits is correct in any certificate delivered under paragraph (v) of the definition of Permitted Distribution. |
(d) | If the Parent notifies the Agent of any change pursuant to paragraph (c) above the Parent and the Agent (acting on the instructions of the Majority Lenders) shall consult together for not more than 30 days in good faith to agree the changes referred to in paragraph (c) and any other amendments to this Agreement which are necessary as a result of the change so notified. Any changes or amendments so agreed in writing will take effect and be binding on the Parties but until such changes are agreed any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared. | ||
(e) | The Parent will procure that, if requested by the Agent, the Auditors shall as soon as reasonably possible confirm to the Finance Parties that any Reconciliation Statement complies with the requirements of this Clause 24.3. | ||
(f) | The Parties agree that in the event of a reorganisation or liquidation permitted under paragraph (e) of the definition of Permitted Transaction, the Parent will provide a Reconciliation Statement in relation to the Accounting Principles and accounting practices used in preparing the Original Financial Statements of the Parent and any financial statements of the new Obligor: |
(i) | between UK GAAP, IFRS and Dutch GAAP, if at that time in the reasonable opinion of the Agent: | ||
(A) | there are material differences between those accounting principles and/or accounting practices or their application or interpretation (and the Parent will procure, if requested by the Agent, the Auditors promptly confirm at that time whether or not such material differences exist); or | ||
(B) | it is needed to determine Distributable Net Profits of the new Obligor; and |
(ii) | between Dutch GAAP and any other relevant accounting principles other than UK GAAP or IFRS. |
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(g) | In the event that there is a change in the Accounting Principles used by any member of the Group in relation to the accounting of leases, which has the effect that any lease (each a Non-Finance Lease) which before such change is not accounted for by a member of the Group under the Accounting Principles as a Finance Lease will, following such change, be accounted for by such member of the Group under the Accounting Principles as a Finance Lease, without prejudice to the obligations of the Obligors under paragraphs (c) and (d) above and subject to any changes as may be agreed (if any) under paragraph (d) above, to the extent that and for so long as such Non-Finance Leases are accounted for under the Accounting Principles at that time as Finance Leases, references in this Agreement to Finance Leases shall exclude any such Non-Finance Leases. |
24.4 | Budget |
(a) | The Parent shall supply to the Agent in sufficient copies for all the Lenders, as soon as the same become available but in any event within 15 days before the start of each of its Financial Years, an annual Budget for that financial year. | ||
(b) | The Parent shall ensure that each Budget: |
(i) | is in a form reasonably acceptable to the Agent and includes a projected consolidated profit and loss, balance sheet and cashflow statement for the Group and projected financial covenant calculations; | ||
(ii) | is prepared in accordance with the Accounting Principles and the accounting practices and financial reference periods applied to financial statements under Clause 24.1 (Financial statements); and | ||
(iii) | has been approved by the board of directors of the Parent. |
(c) | If the Company updates or changes the Budget, it shall promptly deliver to the Agent, in sufficient copies for each of the Lenders, such updated or changed Budget together with a written explanation of the main changes in that Budget. |
24.5 | Group companies | |
The Parent shall, in each Compliance Certificate delivered with the financial statements required to be provided under Clause 24.1(a)(i) (Financial statements), report on which of its Subsidiaries are Material Companies and confirm that the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 25 (Financial Covenants)) and that the aggregate gross assets, aggregate net assets and aggregate turnover of the Guarantors (calculated on an unconsolidated basis and excluding all intra-group items) exceeds 80% of Consolidated EBITDA (as defined in Clause 25 (Financial Covenants)) and the consolidated gross assets, net assets and turnover of the Group. | ||
24.6 | Presentations | |
Once in every Financial Year, at least two officers of the Parent and the Company (one of whom shall be the chief financial officer) must give a presentation to the Finance Parties about the on-going business and financial performance of the Group. | ||
24.7 | Year-end | |
The Parent shall procure that each Financial Year-end of each member of the Group falls on 31 December. |
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24.8 | Information: miscellaneous | |
The Parent shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests): |
(a) | at the same time as they are dispatched, copies of all documents dispatched by the Parent to its shareholders generally (or any class of them) or dispatched by the Parent or any Obligors to its creditors generally (or any class of them); | ||
(b) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding 1,000,000 (or its equivalent in other currencies); | ||
(c) | promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Transaction Security Documents; and | ||
(d) | promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group as any Finance Party through the Agent may reasonably request including, without limitation, any actuarial report prepared in respect of any pension scheme of a Belgian Obligor as soon as the same is available. |
24.9 | Notification of default |
(a) | Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor). | ||
(b) | Promptly upon a request by the Agent, the Parent shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). |
24.10 | Know your customer checks |
(a) | If: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; | ||
(ii) | any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or | ||
(iii) | a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any |
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prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
(b) | Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. | ||
(c) | The Parent shall, by not less than 10 Business Days prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 29 (Changes to the Obligors). | ||
(d) | Following the giving of any notice pursuant to paragraph (c) above or at any other time that a person is to become an Additional Obligor, if the accession of such Additional Obligor obliges the Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Parent shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor. |
25. | FINANCIAL COVENANTS | |
25.1 | Financial definitions | |
In this Agreement: | ||
Adjusted EBITDA means, in relation to a Relevant Period, Consolidated EBITDA for that Relevant Period adjusted by: |
(a) | including the operating profit before interest, tax, depreciation, amortisation and impairment charges (calculated on the same basis as Consolidated EBITDA) of a member of the Group for the Relevant Period (or attributable to a business or assets acquired during the Relevant Period) prior to its becoming a member of the Group or (as the case may be) prior to the acquisition of the business or assets; and | ||
(b) | excluding operating profit before interest, tax, depreciation, amortisation and impairment charges (calculated on the same basis as Consolidated EBITDA) attributable to any member of the Group (or to any business or assets) disposed of during the Relevant Period. |
Borrowings means, at any time, the aggregate outstanding principal, capital or nominal amount (and any fixed or minimum premium payable on prepayment or redemption) of any indebtedness of members of the Group for or in respect of: |
(a) | moneys borrowed and debit balances at banks or other financial institutions; |
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(b) | any acceptances under any acceptance credit or bill discount facility (or dematerialised equivalent); | ||
(c) | any note purchase facility or the issue of bonds (but not Trade Instruments), notes, debentures, loan stock or any similar instrument; | ||
(d) | any Finance Lease; | ||
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); | ||
(f) | any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument (but not, in any case, Trade Instruments) issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a member of the Group which liability would fall within one of the other paragraphs of this definition or (ii) any liabilities of any member of the Group relating to any post-retirement benefit scheme; | ||
(g) | any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under the Accounting Principles; | ||
(h) | any amount of any liability under an advance or deferred purchase agreement if the primary reasons behind the entry into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question and payment is due more than 180 days after the date of supply or is deferred by more than 180 days; | ||
(i) | any amount raised under any other transaction (including any forward sale or purchase agreement, sale and sale back or sale and leaseback agreement) which is classified as borrowings under the Accounting Principles; and | ||
(j) | (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above, |
but excluding for the avoidance of doubt all pension-related liabilities. | ||
Consolidated EBITDA means, in respect of any Relevant Period, EBIT for that Relevant Period after adding back any amount attributable to amortisation, depreciation or impairment of assets of members of the Group (and taking no account of the reversal of any previous impairment charge made in the Relevant Period). | ||
EBIT means, in respect of any Relevant Period, the consolidated operating profit of the Group before taxation (including the results from discontinued operations): |
(a) | before deducting any Finance Charges; | ||
(b) | not including any accrued interest owing to any member of the Group; | ||
(c) | before taking into account any Exceptional Items; | ||
(d) | plus or minus the Groups share of the profits or losses of Non-Group Entities; | ||
(e) | before taking into account any unrealised gains or losses on any financial instrument; | ||
(f) | before taking into account any gain or loss arising from an upward or downward revaluation of any other asset; |
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(g) | before taking into account any Pension Items; and | ||
(h) | before deducting any Transaction Costs, |
in each case, to the extent added, deducted or taken into account, as the case may be, for the purposes of determining operating profits of the Group before taxation. | ||
Exceptional Items means any exceptional, one off, non-recurring or extraordinary items. | ||
Finance Charges means, for any Relevant Period, the aggregate amount of the accrued interest, commission, fees, discounts, prepayment fees, premiums or charges and other finance payments in respect of Borrowings whether paid, payable by any member of the Group (calculated on a consolidated basis) in respect of that Relevant Period: |
(a) | excluding any upfront fees or costs which are included as part of the effective interest rate adjustments; | ||
(b) | including the interest (but not the capital) element of payments in respect of Finance Leases; | ||
(c) | including any commission, fees, discounts and other finance payments payable by (and deducting any such amounts payable to) any member of the Group under any interest rate hedging arrangement except upon the close out of any interest rate hedging arrangement, in which case any payments or receipts by members of the Group in relation to such hedging arrangements arising only on such close out will be amortised over the period that the interest rate hedging arrangement related to and will constitute Finance Charges in the Relevant Period only to the extent amortised in such Relevant Period; | ||
(d) | excluding any Transaction Costs; | ||
(e) | excluding any interest cost in relation to any post-employment benefit schemes; | ||
(f) | if a Joint Venture is accounted for on a proportionate consolidation basis, after adding the Groups share of the finance costs or interest receivable of the Joint Venture; | ||
(g) | taking no account of any unrealised gains or losses on any financial instruments; and | ||
(h) | excluding any capitalised interest, |
and so that no amount shall be added (or deducted) more than once. | ||
Finance Lease means any lease or hire purchase contract which would, in accordance with the Accounting Principles, be treated as a finance or capital lease. |
Financial Quarter means the period commencing on the day after one Quarter Date and ending on the next Quarter Date. | ||
Financial Year means the annual accounting period of the Group ending on or about 31 December in each year. | ||
Interest Cover means the ratio of Consolidated EBITDA to Net Finance Charges in respect of any Relevant Period. | ||
Leverage means, in respect of any Relevant Period, the ratio of Total Net Debt on the last day of that Relevant Period to Adjusted EBITDA in respect of that Relevant Period. |
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Net Finance Charges means, for any Relevant Period, the Finance Charges for that Relevant Period after deducting any interest payable in that Relevant Period to any member of the Group on any Cash or Cash Equivalent Investment. | ||
Non-Group Entity means any investment or entity (which is not itself a member of the Group (including associates and Joint Ventures)) in which any member of the Group has an ownership interest. | ||
Pension Items means any income or charge attributable to a post-employment benefit scheme other than the current service costs and any past service costs and curtailments and settlements attributable to the scheme. | ||
Quarter Date means each of 31 March, 30 June, 30 September and 31 December. | ||
Relevant Period means each period of twelve months ending on or about the last day of the Financial Year and each period of twelve months ending on or about the last day of each Financial Quarter. | ||
Total Net Debt means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Borrowings at that time but: |
(a) | excluding any such obligations to any other member of the Group; | ||
(b) | excluding the principal outstanding amount of any Permitted Financial Indebtedness permitted under paragraph (b) of the definition of Permitted Financial Indebtedness; | ||
(c) | including, in the case of Finance Leases only, their capitalised value; and | ||
(d) | deducting the aggregate amount of Cash and Cash Equivalent Investments held by any member of the Group at that time, |
and so that no amount shall be included or excluded more than once. | ||
Transaction Costs means the costs, fees and expenses incurred by the Group in connection with the refinancing of the Existing Facilities and documentation, implementation and funding of the Revolving Facility and the MOF Facility Agreement in the amount specified in the certificate delivered to the Agent under paragraph 5 of Part I of Schedule 2 (Conditions Precedent). | ||
25.2 | Financial condition | |
The Parent shall ensure that: |
(a) | Interest Cover: Interest Cover in respect of any Relevant Period shall not be less than 3.5:1. | ||
(b) | Leverage: Leverage in respect of any Relevant Period shall not exceed 2.50:1. |
25.3 | Financial testing |
(a) | The financial covenants set out in Clause 25.2 (Financial condition) shall be calculated in accordance with the Accounting Principles and tested by reference to each of the financial statements delivered pursuant to paragraphs (a)(i) and (b) of Clause 24.1 (Financial Statements) and/or each Compliance Certificate delivered pursuant to Clause 24.2 (Provision and contents of Compliance Certificate). |
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(b) | For the purpose of any calculation in respect of this Clause 25, the exchange rate used to translate any amount not in the Base Currency into the Base Currency for the purpose of calculating: |
(i) | EBIT, Adjusted EBITDA, Consolidated EBITDA and Net Finance Charges shall be, in respect of any component of EBIT, Consolidated EBITDA, Adjusted EBITDA and Net Finance Charges arising in any Relevant Period: (A) subject to paragraph (B) below, the average of the relevant ECB Rates on the last Business Day of each month during the Relevant Period (or if such ECB Rates are not available on that day, on the next Business Day on which such rates are available) and (B) to the extent that the Relevant Period includes any period of a prior Financial Year of the Parent (the Preceding Period), in respect of any component of EBIT, Consolidated EBITDA, Adjusted EBITDA and Net Finance Charges arising in such Preceding Period, the average of the relevant ECB rates for that Financial Year, as will be or have been used (on a basis consistent with exchange rate calculations in the Original Financial Statements of the Parent) for the purposes of exchange rate calculations in the Annual Financial Statements of the Parent for such Financial Year; and | ||
(ii) | in respect of any component of Total Net Debt, the relevant ECB Rates on the last Business Day of the Relevant Period, or if such ECB Rates are not available on that day, on the next Business Day on which such rates are available. |
26. | GENERAL UNDERTAKINGS | |
The undertakings in this Clause 26 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force. | ||
26.1 | Authorisations | |
Each Obligor shall promptly: |
(a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and | ||
(b) | supply, if requested by the Agent in writing, certified copies to the Agent of, |
any Authorisation required under any law or regulation of a Relevant Jurisdiction to: |
(i) | enable it to perform its obligations under the Finance Documents; |
(ii) | ensure (subject to the Legal Reservations and the Perfection Requirements) the legality, validity, enforceability or admissibility in evidence of any Finance Document; and | ||
(iii) | carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect. |
26.2 | Compliance with laws | |
Each Obligor shall (and the Parent shall ensure that each member of the Group will) comply in all respects with all laws to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect. |
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26.3 | Environmental compliance | |
Each Obligor shall (and the Parent shall ensure that each member of the Group will): |
(a) | comply with all Environmental Law; | ||
(b) | obtain, maintain and ensure compliance with all Environmental Permits required in connection with its business; | ||
(c) | implement procedures to monitor compliance with and to prevent liability under any Environmental Law, |
where failure to do so has or is reasonably likely to have a Material Adverse Effect. | ||
26.4 | Environmental claims | |
Each Obligor shall (through the Parent), promptly upon becoming aware of the same, inform the Agent in writing of: |
(a) | any Environmental Claim against any member of the Group which is current, pending or threatened; and | ||
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group, |
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect. | ||
26.5 | Taxation |
(a) | Each Obligor shall (and the Parent shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that: |
(i) | such payment is being contested in good faith; | ||
(ii) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 24.1 (Financial statements); and | ||
(iii) | such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect. |
(b) | No member of the Group may change its residence for Tax purposes without the consent of the Majority Lenders (not to be unreasonably withheld or delayed). |
26.6 | Merger | |
No Obligor shall (and the Parent shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Transaction or with the prior consent of the Majority Lenders (not to be unreasonably withheld or delayed provided that it shall be reasonable for the Majority Lenders not to give their consent to any such step in the event that they are not satisfied that the Finance Parties will enjoy at least the same or equivalent Transaction Security over the same assets and the same or equivalent guarantee in an amount not less than any guarantee provided before such steps, in each case enjoyed by them prior to such steps). |
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26.7 | Change of business | |
The Parent shall procure that no substantial change is made to the general nature of the business of the Group taken as a whole from that carried on by the McJunkin Group at the date of this Agreement. | ||
26.8 | Acquisitions |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no other member of the Group will): |
(i) | acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them); or | ||
(ii) | incorporate a company. |
(b) | Paragraph (a) above does not apply to an acquisition of a company, of shares, securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company which is: |
(i) | a Permitted Acquisition; or | ||
(ii) | a Permitted Transaction. |
26.9 | Joint ventures |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will): |
(i) | enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or | ||
(ii) | transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing). |
(b) | Paragraph (a) above does not apply to any acquisition of (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture: |
(i) | if such transaction has occurred before the date of this Agreement; | ||
(ii) | in relation to any transfer of assets to a Joint Venture in the ordinary course of trading on arms length terms for full market value; | ||
(iii) | if such transaction is a Permitted Acquisition, a Permitted Disposal, a Permitted Loan or a Permitted Joint Venture; or | ||
(iv) | if such Joint Venture is acquired as part of Permitted Acquisition (save under paragraph (f) of that definition) provided that such Joint Venture is a limited liability entity or held via a limited liability entity. |
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26.10 | Preservation of assets | |
Each Obligor shall (and the Parent shall ensure that each member of the Group will) maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary in the conduct of its business from time to time. | ||
26.11 | Pari passu ranking | |
Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party or Hedge Counterparty or MOF Lender against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies. | ||
26.12 | Negative pledge | |
In this Clause 26.12, Quasi-Security means an arrangement or transaction described in paragraph (b) below. | ||
Except as permitted under paragraph (c) below: |
(a) | No Obligor shall (and the Parent shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets. | ||
(b) | No Obligor shall (and the Parent shall ensure that no other member of the Group will): |
(i) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group; | ||
(ii) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; | ||
(iii) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or | ||
(iv) | enter into any other preferential arrangement having a similar effect, |
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset. | |||
(c) | Paragraphs (a) and (b) above do not apply to any Security or (as the case may be) Quasi-Security, which is: |
(i) | Permitted Security; or | ||
(ii) | a Permitted Transaction. |
26.13 | Disposals |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. |
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(b) | Paragraph (a) above does not apply to any sale, lease, transfer or other disposal which is: |
(i) | a Permitted Disposal; or | ||
(ii) | a Permitted Transaction. |
26.14 | Arms length basis |
(a) | Except as permitted by paragraph (b) below, no Obligor shall (and the Parent shall ensure no member of the Group will) enter into any transaction with any person except on arms length terms and for market value (or on terms that are more favourable to the relevant member of the Group). | ||
(b) | The following transactions shall not be a breach of this Clause 26.14: |
(i) | intra-group loans permitted under Clause 26.15 (Loans or credit); | ||
(ii) | fees, costs and expenses payable under the Finance Documents in the amounts set out in the Finance Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent; | ||
(iii) | any arrangement in respect of, or the making of, a Permitted Payment under paragraph (b) of that definition or Permitted Distribution under paragraph (c)(ii) of that definition or any transaction to facilitate the making of the same; | ||
(iv) | transactions between Obligors or loans by Obligors to members of the Group which are not Obligors to the extent permitted by paragraph (e) of the definition of Permitted Loan or guarantees given by Obligors in respect of the liabilities of non-Obligors to the extent permitted by the definition of Permitted Guarantee; | ||
(v) | transactions between non-Obligors; | ||
(vi) | any transaction with any employee or member of management of any member of the Group pursuant to an employee or management participation or incentive scheme; and | ||
(vii) | loans to or guarantees of indebtedness of directors or employees of members of the Group to the extent permitted under paragraph (f) of the definition of Permitted Loan; and | ||
(viii) | any Permitted Transaction. |
26.15 | Loans or credit |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) be a creditor in respect of any Financial Indebtedness. | ||
(b) | Paragraph (a) above does not apply to: |
(i) | a Permitted Loan; or | ||
(ii) | a Permitted Transaction. |
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(c) | No Obligor shall (and the Parent shall procure that no member of the Group will): |
(i) | repay or pay any principal amount (or capitalised interest) outstanding under any Dormant Subsidiary Loan; or | ||
(ii) | pay any interest or other amount in connection with any Dormant Subsidiary Loan; or | ||
(iii) | purchase, redeem, defease or discharge any amount outstanding with respect of any Dormant Subsidiary Loan, |
save as part of a solvent liquidation or reorganisation of such a Dormant Subsidiary permitted under paragraph (b) of the definition of Permitted Transaction provided that all of the proceeds of such payment are distributed from the Dormant Subsidiary to an Obligor on such liquidation or reorganisation occurring. |
26.16 | No Guarantees or indemnities |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person. | ||
(b) | Paragraph (a) above does not apply to a guarantee which is: |
(i) | a Permitted Guarantee; or | ||
(ii) | a Permitted Transaction. |
26.17 | Dividends and share redemption |
(a) | Except as permitted under paragraph (b) below, the Parent shall not (and will ensure that no other member of the Group will): |
(i) | declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); | ||
(ii) | pay or allow any member of the Group to pay any management, advisory or other fee to, or to the order of, or reimburse or indemnify any costs or expenses of any Holding Company of the Parent or any of its officers or directors; | ||
(iii) | repay or distribute any dividend or share premium reserve; or | ||
(iv) | redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so. |
(b) | Paragraph (a) above does not apply to: |
(i) | a Permitted Distribution or; | ||
(ii) | a Permitted Transaction (other than one referred to in paragraph (c) of the definition of that term); or | ||
(iii) | a Permitted Payment. |
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26.18 | Financial Indebtedness |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness. | ||
(b) | Paragraph (a) above does not apply to Financial Indebtedness which is: |
(i) | Permitted Financial Indebtedness; or | ||
(ii) | a Permitted Transaction. |
26.19 | Share capital | |
No Obligor shall (and the Parent shall ensure no member of the Group will) issue any shares except pursuant to: |
(a) | a Permitted Share Issue; or | ||
(b) | a Permitted Transaction. |
26.20 | Insurance |
(a) | Each Obligor shall (and the Parent shall ensure that each member of the Group will) maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business. | ||
(b) | All insurances must be with reputable independent insurance companies or underwriters. |
26.21 | Intellectual Property | |
Each Obligor shall (and the Parent shall procure that each Group member will): |
(a) | preserve and maintain the subsistence and validity of the Intellectual Property necessary for the business of the relevant Group member; | ||
(b) | use reasonable endeavours to prevent any infringement in any material respect of the Intellectual Property; | ||
(c) | make registrations and pay all registration fees and taxes necessary to maintain the Intellectual Property in full force and effect and record its interest in that Intellectual Property; | ||
(d) | not use or permit the Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil the right of any member of the Group to use such property; and | ||
(e) | not discontinue the use of the Intellectual Property, |
where failure to do so, in the case of paragraphs (a) and (b) above, or, in the case of paragraphs (d) and (e) above, such use, permission to use, omission or discontinuation, is reasonably likely to have a Material Adverse Effect. |
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26.22 | Group bank accounts | |
The Parent shall ensure that: |
(a) | within 6 months of the first Utilisation Date all bank accounts held by members of the Group incorporated in England, Australia, New Zealand and Singapore shall be maintained with HSBC Bank plc or one of its Affiliates and (subject to the Agreed Security Principles) are subject to valid Security under the Transaction Security Documents; | ||
(b) | the balances of the bank accounts of MRC Transmark France EURL shall not at any time in aggregate exceed 200,000 (or its equivalent); and | ||
(c) | all bank accounts of MRC Transmark France EURL are closed: |
(i) | within 90 days of the merger permitted under paragraph (f) of the definition of Permitted Transaction; or | ||
(ii) | if such merger does not occur by 30 November 2010, within 90 days of such date. |
26.23 | Treasury Transactions | |
No Obligor shall (and the Parent will procure that no members of the Group will) enter into any Treasury Transaction, other than: |
(a) | any hedging transactions documented by the Hedging Agreements; | ||
(b) | spot and forward delivery foreign exchange contracts entered into in the ordinary course of business and not for speculative purposes; and | ||
(c) | any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group and not for speculative purposes. |
26.24 | Guarantors |
(a) | In this Agreement Guarantor Coverage Test means the test of whether (and which is passed if): |
(i) | the aggregate earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA) of the members of the Group which are Guarantors (calculated on an unconsolidated basis and excluding all intra-group items and investments in Subsidiaries of any member of the Group) equals or exceeds 80 per cent. of Consolidated EBITDA; and | ||
(ii) | the aggregate of the turnover of the members of the Group which are Guarantors (calculated on an unconsolidated basis and excluding all intra-group items and investments in Subsidiaries of any member of the Group) equals or exceeds 80 per cent. of the consolidated turnover of the Group; and | ||
(iii) | the aggregate of the gross assets and net assets of the members of the Group which are Guarantors (calculated on an unconsolidated basis and excluding all intra-group items and investments in Subsidiaries of any member of the Group) equals or exceeds 80 per cent. of the consolidated gross assets and consolidated net assets of the Group. |
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(b) | The Parent shall ensure that, subject to paragraphs (c), (d) and (e) below the Guarantor Coverage Test is satisfied on the last day of each Financial Year. The Parent shall confirm in each Compliance Certificate delivered under Clause 24.2 (Provision and contents of Compliance Certificate) in respect of each set of Annual Financial Statements of the Parent whether on the last day of the relevant Financial Year the Guarantor Coverage Test is satisfied. If any such Compliance Certificate confirms that the Guarantor Coverage Test has not been met then the Parent shall identify in such Compliance Certificate (together with supporting calculations) one or more additional Subsidiaries which will become Additional Guarantor(s) in order to satisfy the Guarantor Coverage Test. The Parent shall ensure that each such additional Subsidiary becomes an Additional Guarantor within (i) 30 days of the delivery of the Agent of the relevant Compliance Certificate if such Subsidiary is incorporated in England and Wales or (ii) 60 days of delivery to the Agent of the relevant Compliance Certificate if such Subsidiary is incorporated in another jurisdiction. | ||
(c) | The Parent shall ensure that each member of the Group which becomes a Material Company will become an Additional Guarantor within (i) 30 days of it becoming a Material Company if it is incorporated in England or within 60 days of it becoming a Material Company if it is incorporated in another jurisdiction. | ||
(d) | The Parent shall ensure that within 30 days of the acquisition of a Subsidiary incorporated in England or the acquisition of a business or undertaking by a Subsidiary incorporated in England which is not a Guarantor and within 60 days of the acquisition of a Subsidiary incorporated in any other jurisdiction or the acquisition of a business or undertaking by a Subsidiary incorporated in another jurisdiction, either: |
(i) | deliver to the Agent a certificate signed by the Chief Financial Officer of the Parent, confirming (together with supporting calculations) that based on the most recent Annual Financial Statements of the Parent (adjusted to include on a proforma basis) the earnings before interest, tax, depreciation and amortisation calculated on the same basis as Consolidated EBITDA of such new Subsidiary or of such acquired business or undertaking, following such acquisition, the Guarantor Coverage Test continues to be met by the existing Guarantors; or | ||
(ii) | deliver to the Agent a certificate signed by the Chief Financial Officer of the Parent (together with supporting calculations on the basis in paragraph (d)(i) above), identifying one or more additional Subsidiaries which will become Additional Guarantor(s) in order to comply with the Guarantor Coverage Test and ensure that such additional Subsidiaries each become an Additional Guarantor within such period. |
(e) | In relation to any calculation of the Guarantor Coverage Test: |
(i) | the aggregate earnings before interest, tax, depreciation and amortisation of all French Guarantors and the aggregate turnover and the aggregate gross assets and net assets of all French Guarantors notwithstanding its actual amount, shall form no more than a maximum of 10% of the aggregate earnings before interest, tax, depreciation and amortisation or aggregate turnover of aggregate gross assets or the aggregate net assets of the Guarantors; and | ||
(ii) | the aggregate earnings before interest, tax, depreciation and amortisation of all Restricted Obligors and the French Guarantors and the aggregate turnover and the aggregate gross assets and net assets of all Restricted |
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Obligors and the French Guarantors notwithstanding its actual amount, shall in aggregate form no more than a maximum of 15% of the aggregate earnings before interest, tax, depreciation and amortisation or the aggregate turnover or the aggregate gross assets or the aggregate net assets of the Guarantors. | |||
Where Restricted Obligors means an Additional Guarantor (other than an Acceding Obligor) in respect of which in the opinion of the Majority Lenders (acting reasonably and ignoring for this purpose the Agreed Security Principles) any guarantee given to the Finance Parties by such Additional Guarantor or any Security under the Transaction Security Documents entered into by such Additional Guarantor is materially limited in relation to its nature, extent, scope or enforceability. |
26.25 | Pensions | |
Except for the pension schemes in Belgium and The Netherlands disclosed to the Agent by the Company prior to the Signing Date, neither it nor any of its Subsidiaries shall become liable for or have any obligations under or in respect of a defined benefit pension scheme (or its equivalent in any jurisdiction), save in respect of any such scheme where any unfunded obligations or liabilities at the time it becomes liable for the same (the Relevant Time) are less than (i) 2,500,000 (or its equivalent) in respect of any such scheme and (ii) 5,000,000 (or its equivalent) when aggregated with all unfunded liabilities and obligations of all members of the Group in respect of any such schemes permitted under this Clause 26.25. | ||
26.26 | Further assurance |
(a) | Subject to the Agreed Security Principles, each Obligor shall (and the Parent shall procure that each member of the Group shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)): |
(i) | to perfect the Security created or intended to be created under or evidenced by the Transaction Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law; and/or | ||
(ii) | to confer on the Security Agent or on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Transaction Security Documents; and/or | ||
(iii) | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security. |
(b) | If any Obligor which has entered into one or more Transaction Security Documents acquires an asset (including any right, account, investment or otherwise) which is either not subject to any such Transaction Security Document, or in relation to which a perfection requirement or other step must be taken in relation to that asset in connection with an existing Transaction Security Document, that Obligor shall (in all cases subject to the Agreed Security Principles) ensure that a Transaction Security |
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Document is entered into, or as required by the applicable Transaction Security Document that a similar perfection requirement or other step is taken, in each case, in connection with that asset. | |||
(c) | Subject to the Agreed Security Principles each Obligor shall (and the Parent shall procure that each member of the Group shall) take all such action as is reasonably requested of it by the Security Agent (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents. |
26.27 | Conditions subsequent | |
The Parent shall procure that |
(a) | by no later than 31 December 2010, in the event that the merger of MRC Transmark France SAS and MRC Transmark France EURL as permitted under paragraph (f) of the definition of Permitted Transaction does not unconditionally complete by 30 November 2010 to the satisfaction of the Agent (acting reasonably), there is delivered to the Agent in a form satisfactory to it (acting reasonably): |
(i) | a financial securities account pledge agreement executed by MRC Transmark France EURL over the financial securities it holds in MRC Transmark France SAS; | ||
(ii) | a share pledge agreement executed by the Parent over the shares it holds in MRC Transmark France EURL; | ||
(iii) | such other notices, evidence, authorisations, documents, opinions or assurances as the Agent considers necessary (acting reasonably based on legal advice) in connection with the entry into and performance of the obligations under such documents in (i) and (ii) above or for their validity, enforceability and perfection; |
(b) | by no later than the date being 90 days from the first Utilisation Date, there is delivered to the Agent in a form satisfactory to the Agent (acting reasonably): |
(i) | a certified copy of the duly executed discharge relating to the discharge of the Singapore Property from the the Singapore Mortgage by the relevant party thereto (the Singapore Mortgage Discharge Document); | ||
(ii) | a duly signed letter from a Director/Attorney of each chargee/mortgagee of the Singapore Mortgage authorising MRC Transmark Pte. Ltd. and/or its legal advisers to file the relevant statement of satisfaction of charge containing particulars relating to the Singapore Mortgage Discharge Document with the relevant government authority; and |
(c) | by no later than the date being 28 days from the first Utilisation Date, there is delivered to the Agent in a form satisfactory to the Agent (acting reasonably) a statutory declaration by a duly authorised officer of each Australian Obligor as to the location and value of Charged Property located or taken for stamp duty purposes to be located in Australia. |
27. | EVENTS OF DEFAULT | |
Each of the events or circumstances set out in this Clause 27 is an Event of Default (save for Clause 27.17 (Acceleration)). |
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27.1 | Non-payment | |
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless: |
(a) | its failure to pay is caused by: |
(i) | administrative or technical error; or | ||
(ii) | a Disruption Event; and |
(b) | payment is made within five Business Days of its due date. |
27.2 | Financial covenants and other obligations |
(a) | Any requirement of Clause 25 (Financial covenants) is not satisfied or an Obligor does not comply with the provisions of Clause 24 (Information Undertakings). | ||
(b) | An Obligor does not comply with any material provision of any Transaction Security Document. |
27.3 | Other obligations |
(a) | An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.1 (Non-payment) and Clause 27.2 (Financial covenants and other obligations)). | ||
(b) | No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 21 days of the earlier of (i) the Agent giving notice to the Parent or relevant Obligor and (ii) the Parent or an Obligor becoming aware of the failure to comply. |
27.4 | Misrepresentation | |
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made unless the circumstances giving rise to that misrepresentation are capable of remedy and are remedied within 21 days of the earlier of the Agent giving notice to the Obligors Agent or any relevant Obligor becoming aware of the failure to comply. | ||
27.5 | Cross default |
(a) | Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period. | ||
(b) | Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). | ||
(c) | Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described). |
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(d) | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). | ||
(e) | No Event of Default will occur under this Clause 27.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than 5,000,000 (or its equivalent in any other currency or currencies). |
27.6 | Insolvency |
(a) | Any Material Company is unable or admits inability to pay its debts as they fall due, suspends or threatens to suspend making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. | ||
(b) | A moratorium is declared in respect of any indebtedness of any Material Company. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium. |
27.7 | Insolvency proceedings |
(a) | Any corporate action, legal proceedings or other procedure or step is taken in relation to: |
(i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Material Company; | ||
(ii) | a composition, compromise, assignment or arrangement with any creditor of any Material Company; | ||
(iii) | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of any Material Company or any of its assets; or | ||
(iv) | enforcement of any Security over any assets of any Material Company, |
or any analogous procedure or step is taken in any jurisdiction. | |||
(b) | Paragraph (a) shall not apply to: |
(i) | any winding-up petition which is frivolous or vexatious or which is being contested in good faith and, in each case, is discharged, stayed or dismissed within 21 days of commencement; or | ||
(ii) | any step or procedure contemplated by paragraph (b) or (e) of the definition of Permitted Transaction. |
27.8 | Creditors process | |
Any expropriation, attachment, sequestration, distress or execution (including by way of executory attachment (executioriaal beslag) or interlocutory attachment (conservatoir beslag) or any analogous process in any jurisdiction affects any asset or assets of any Material Company having an aggregate value of 1,000,000 (or its equivalent in any other currency or currencies) and is not discharged within 21 days. |
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27.9 | Unlawfulness and invalidity |
(a) | It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Transaction Security Documents ceases to be effective or is or becomes unlawful. | ||
(b) | Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. | ||
(c) | Any Finance Document ceases to be in full force and effect or any Transaction Security ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective. |
27.10 | Cessation of business | |
Any Material Company suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business except as a result of a Permitted Disposal or a Permitted Transaction. | ||
27.11 | Change of ownership |
(a) | After the Signing Date, an Obligor (other than the Parent) ceases to be a wholly-owned Subsidiary of the Parent; or | ||
(b) | An Obligor ceases to own at least the same percentage of shares in a Material Company as on the Signing Date, |
except, in either case, as a result of a disposal which is a Permitted Disposal or a Permitted Transaction. | ||
27.12 | Audit qualification | |
The Auditors of the Group qualify the audited annual consolidated financial statements of the Parent on the basis of non disclosure or an inability to prepare accounts on a going concern basis or otherwise in a manner or to an extent which is materially prejudicial to the interests of the Finance Parties under the Finance Documents. | ||
27.13 | Expropriation | |
The authority or ability of any Material Company or any of its Subsidiaries to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Material Company or any of its assets or any of its Subsidiaries or any of their assets, which limitation or curtailment (taking into consideration any compensation or payment received in respect thereof) has, or could reasonably be expected to have, a Material Adverse Effect. | ||
27.14 | Repudiation and rescission of agreements | |
An Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security. |
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27.15 | Litigation |
(a) | Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to or against any Material Company or its assets or any of its Subsidiaries or their assets, which has or if adversely determined is reasonably likely to have, a Material Adverse Effect. | ||
(b) | Any final judgement or decree is awarded against any Material Company or its assets or any of its Subsidiaries or their assets or any Material Company or any of its Subsidiary agrees a settlement in respect of any litigation, arbitration, governmental, regulatory or other investigations, proceedings or dispute against it or its assets in an amount in excess of 10,000,000. |
27.16 | Material adverse change | |
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect. | ||
27.17 | Acceleration | |
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Parent: |
(a) | cancel the Total Commitments at which time they shall immediately be cancelled; | ||
(b) | declare that all or part of the Utilisations, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; | ||
(c) | declare that all or part of the Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; | ||
(d) | declare that cash cover in respect of each Letter of Credit is immediately due and payable at which time it shall become immediately due and payable; | ||
(e) | declare that cash cover in respect of each Letter of Credit is payable on demand at which time it shall immediately become due and payable on demand by the Agent on the instructions of the Majority Lenders; | ||
(f) | exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
28. | CHANGES TO THE LENDERS | |
28.1 | Assignments and transfers by the Lenders | |
Subject to this Clause 28, a Lender (the Existing Lender) may: |
(a) | assign any of its rights; or | ||
(b) | transfer by novation any of its rights and obligations, |
under any Finance Document to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the New Lender). |
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28.2 | Conditions of assignment or transfer |
(a) | Unless the assignment or transfer in accordance with Clause 28.1 (Assignments and transfers by the Lenders) is: |
(i) | to another Lender or an Affiliate of a Lender; | ||
(ii) | if the Existing Lender is a fund, to a fund which is a Related Fund of the Existing Lender; or | ||
(iii) | made at a time when an Event of Default is continuing, |
an Existing Lender must consult with the Parent for no more than 5 Business Days before it may make an assignment or transfer and such assignment or transfer may only be to a New Lender which: |
(iv) | has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poors Rating Services or Fitch Ratings Ltd or A3 or higher by Moodys Investor Services Limited or a comparable rating from an internationally recognised credit rating agency; and | ||
(v) | is not any person that is (or is an Affiliate or person that is) a competitor of the McJunkin Group in its core activities and which is named on a list of Competitors (if any) agreed from time to time between the Agent and the Company (or each acting reasonable). |
(b) | The consent of the Issuing Bank is required for any assignment or transfer by an Existing Lender of any of its rights and/or obligations under the Revolving Facility. | ||
(c) | An assignment will only be effective on: |
(i) | receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties and the other Secured Parties as it would have been under if it was an Original Lender; and | ||
(ii) | the New Lender entering into the documentation required for it to accede as a party to the Security Trust Agreement; and | ||
(iii) | the performance by the Agent of all necessary know your customer or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender. |
(d) | A transfer will only be effective if the New Lender enters into the documentation required for it to accede as a party to the Security Trust Agreement and if the procedure set out in Clause 28.6 (Procedure for transfer) is complied with. | ||
(e) | If: |
(i) | a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and | ||
(ii) | as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New |
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Lender or Lender acting through its new Facility Office under Clause 17 (Tax Gross Up and Indemnities) or Clause 18 (Increased Costs), |
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under that Clause to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. | |||
(f) | Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender. | ||
(g) | In order to comply with the Dutch Financial Supervision Act (Wet op het financieel toezicht) and/or the decrees and regulations prologated thereunder (as amended from time to time), the amount transferred under this Clause 28.2 shall include an outstanding portion of at least 50,000 (or its equivalent in other currencies) per Lender or such other amount as may be required from time to time by the Dutch Financial Supervision Act and decrees or regulations prologated threunder (as amended or restated from time to time) or if less, the New Lender shall confirm in writing to the Borrowers that it is a professional market party within the meaning of the Dutch Financial Supervision Act. |
28.3 | Assignment or transfer fee | |
Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a Lender, (ii) to a Related Fund or (iii) made in connection with primary syndication of the Facility, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of 2,000. | ||
28.4 | Preservation of Security | |
The benefit of the Transaction Security and of the Transaction Security Documents shall automatically transfer to any transferee of part or all of the obligations expressed to be secured by the Transaction Security. Insofar as necessary, the Security Agent, the other Finance Parties and the Obligors hereby expressly reserve for the purpose of Article 1278 and Article 1281 of the Belgian Civil Code (and, to the extent applicable, any similar provisions of foreign law) the preservation of the Transaction Security and of the Transaction Security Documents in case of assignment, novation, amendment or any other transfer or change of the obligations expressed to be secured by the Transaction Security (including, without limitation, an extension of the term or an increase of the amount of such obligations or the granting of additional credit) or of any change of any of the parties to this Agreement or any other Finance Document. | ||
28.5 | Limitation of responsibility of Existing Lenders |
(a) | Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: |
(i) | the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents; | ||
(ii) | the financial condition of any Obligor; |
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(iii) | the performance and observance by any Obligor or any other member of the Group of its obligations under the Finance Documents or any other documents; or | ||
(iv) | the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document, |
and any representations or warranties implied by law are excluded. | |||
(b) | Each New Lender confirms to the Existing Lender, the other Finance Parties and the Secured Parties that it: |
(i) | has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document or the Transaction Security; and | ||
(ii) | will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force. |
(c) | Nothing in any Finance Document obliges an Existing Lender to: |
(i) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 28; or | ||
(ii) | support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise. |
28.6 | Procedure for transfer |
(a) | Subject to the conditions set out in Clause 28.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. | ||
(b) | The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary know your customer or similar checks under all applicable laws and regulations in relation to the transfer to such New Lender. | ||
(c) | Subject to Clause 28.11 (Pro rata interest settlement), on the Transfer Date: |
(i) | to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and |
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in respect of the Transaction Security shall be cancelled (being the Discharged Rights and Obligations); | |||
(ii) | each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor or other member of the Group and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender; | ||
(iii) | the Agent, the Arranger, the Security Agent, the New Lender, the other Lenders and the Issuing Bank shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights, and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arranger, the Security Agent and the Issuing Bank and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and | ||
(iv) | the New Lender shall become a Party as a Lender. |
28.7 | Procedure for assignment |
(a) | Subject to the conditions set out in Clause 28.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph (c) below when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement. | ||
(b) | The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary know your customer or similar checks under all applicable laws and regulations in relation to the assignment to such New Lender. | ||
(c) | Subject to Clause 28.11 (Pro rata interest settlement), on the Transfer Date: |
(i) | the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement; | ||
(ii) | the Existing Lender will be released from the obligations (the Relevant Obligations) expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and | ||
(iii) | the New Lender shall become a Party as a Lender and will be bound by obligations equivalent to the Relevant Obligations. |
(d) | Lenders may utilise procedures other than those set out in this Clause 28.7 to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with Clause 28.6 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they |
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comply with the conditions set out in Clause 28.2 (Conditions of assignment or transfer). |
28.8 | Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Parent | |
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, an Assignment Agreement or an Increase Confirmation, send to the Parent a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation. | ||
28.9 | Accession of Hedge Counterparties and MOF Lenders | |
Any person which becomes a party to the Security Trust Agreement as a Hedge Counterparty or MOF Lender shall, at the same time, become a Party to this Agreement as a Hedge Counterparty and MOF Lender in accordance with Clause 13.5 (Creditor/Agent Accession Undertaking) of the Security Trust Agreement. | ||
28.10 | Security over Lenders rights | |
In addition to the other rights provided to Lenders under this Clause 28, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation: |
(a) | any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and | ||
(b) | in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities, |
except that no such charge, assignment or Security shall: |
(i) | release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other Security for the Lender as a party to any of the Finance Documents; or | ||
(ii) | require any payments to be made by an Obligor or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents. |
28.11 | Pro rata interest settlement | |
If the Agent has notified the Lenders that it is able to distribute interest payments on a pro rata basis to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.6 (Procedure for transfer) or any assignment pursuant to Clause 28.7 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period): |
(a) | any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and |
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(b) | the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts so that, for the avoidance of doubt: |
(i) | when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and | ||
(ii) | the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.11, have been payable to it on that date, but after deduction of the Accrued Amounts. |
29. | CHANGES TO THE OBLIGORS | |
29.1 | Assignment and transfers by Obligors | |
No Obligor or any other member of the Group may assign any of its rights or transfer any of its rights or obligations under the Finance Documents. | ||
29.2 | Additional Borrowers |
(a) | Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 24.10 (Know your customer checks), the Parent may request that any of its wholly owned Subsidiaries which is not a Dormant Subsidiary becomes a Borrower. That Subsidiary shall become a Borrower if: |
(i) | it is incorporated in the same jurisdiction as an existing Borrower or in a European Union country and the Majority Lenders approve (acting reasonably) the addition of that Subsidiary or otherwise if all the Lenders approve (acting reasonably) the addition of that Subsidiary; | ||
(ii) | the Parent and that Subsidiary deliver to the Agent a duly completed and executed Accession Deed; | ||
(iii) | the Subsidiary is (or becomes) a Guarantor prior to becoming a Borrower; | ||
(iv) | the Parent confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and | ||
(v) | the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent. |
(b) | The Agent shall notify the Parent and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent). |
29.3 | Resignation of a Borrower |
(a) | In this Clause 29.3 (Resignation of a Borrower), Clause 29.5 (Resignation of a Guarantor) and Clause 29.7 (Resignation and release of Security on disposal), Third Party Disposal means the disposal of an Obligor to a person which is not a member of the Group where that disposal is permitted under Clause 26.13 (Disposals) or made with the approval of the Majority Lenders (and the Parent has confirmed this is the case). | ||
(b) | If a Borrower is the subject of a Third Party Disposal, the Parent may request that such Borrower (other than the Parent or the Company) ceases to be a Borrower by delivering to the Agent a Resignation Letter. |
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(c) | The Agent shall accept a Resignation Letter and notify the Parent and the other Finance Parties of its acceptance if: |
(i) | the Parent has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter; | ||
(ii) | the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents; | ||
(iii) | where the Borrower is also a Guarantor (unless its resignation has been accepted in accordance with Clause 29.5 (Resignation of a Guarantor)), its obligations in its capacity as Guarantor continue to be legal, valid, binding and enforceable and in full force and effect (subject to the Legal Reservations) and the amount guaranteed by it as a Guarantor is not decreased (and the Parent has confirmed this is the case); and | ||
(iv) | the Parent has confirmed that it shall ensure that any relevant Disposal Proceeds will be applied in accordance with Clause 11.2 (Disposal and Insurance Proceeds). |
(d) | Upon notification by the Agent to the Parent of its acceptance of the resignation of a Borrower, that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents as a Borrower except that the resignation shall not take effect (and the Borrower will continue to have rights and obligations under the Finance Documents) until the date on which the Third Party Disposal takes effect. | ||
(e) | The Agent may, at the cost and expense of the Parent, require a legal opinion from counsel to the Agent confirming the matters set out in paragraph (c)(iii) above and the Agent shall be under no obligation to accept a Resignation Letter until it has obtained such opinion in form and substance satisfactory to it. |
29.4 | Additional Guarantors |
(a) | Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 24.10 (Know your customer checks), the Parent may request that any of its wholly owned Subsidiaries become a Guarantor. | ||
(b) | A member of the Group shall become an Additional Guarantor if (subject to the Agreed Security Principles): |
(i) | the Parent and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Deed; and | ||
(ii) | other than in respect of an Acceding Obligor, the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent. |
(c) | The Agent shall notify the Parent and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 (Conditions Precedent). |
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29.5 | Resignation of a Guarantor |
(a) | The Parent may request that a Guarantor (other than the Parent or the Company) ceases to be a Guarantor by delivering to the Agent a Resignation Letter if: |
(i) | that Guarantor is being disposed of by way of a Third Party Disposal (as defined in Clause 29.3 (Resignation of a Borrower)) and the Parent has confirmed this is the case; or | ||
(ii) | all the Lenders have consented to the resignation of that Guarantor. |
(b) | The Agent shall accept a Resignation Letter and notify the Parent and the Lenders of its acceptance if: |
(i) | the Parent has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter; | ||
(ii) | no payment is due from the Guarantor under Clause 22.1 (Guarantee and indemnity); | ||
(iii) | where the Guarantor is also a Borrower, it is under no actual or contingent obligations as a Borrower and has resigned and ceased to be a Borrower under Clause 29.3 (Resignation of a Borrower); and | ||
(iv) | the Parent has confirmed that it shall ensure that the Disposal Proceeds will be applied in accordance with Clause 11.2 (Disposal and Insurance Proceeds). |
(c) | The resignation of that Guarantor shall not be effective until the date of the relevant Third Party Disposal at which time that company shall cease to be a Guarantor and shall have no further rights or obligations under the Finance Documents as a Guarantor. |
29.6 | Repetition of Representations |
Delivery of an Accession Deed constitutes confirmation by the relevant Subsidiary that the representations and warranties referred to in paragraph (c) of Clause 23.29 (Times when representations made) are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing. |
29.7 | Resignation and release of security on disposal | |
If a Borrower or Guarantor is or is proposed to be the subject of a Third Party Disposal then: |
(a) | where that Borrower or Guarantor created Transaction Security over any of its assets or business in favour of the Security Agent, or Transaction Security in favour of the Security Agent was created over the shares (or equivalent) of that Borrower or Guarantor, the Security Agent may, at the cost and request of the Parent, release those assets, business or shares (or equivalent) and issue certificates of non-crystallisation; | ||
(b) | the resignation of that Borrower or Guarantor and related release of Transaction Security referred to in paragraph (a) above shall not become effective until the date of that disposal; and | ||
(c) | if the disposal of that Borrower or Guarantor is not made, the Resignation Letter of that Borrower or Guarantor and the related release of Transaction Security referred to in paragraph (a) above shall have no effect and the obligations of the Borrower or |
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Guarantor and the Transaction Security created or intended to be created by or over that Borrower or Guarantor shall continue in such force and effect as if that release had not been effected. |
30. | ROLE OF THE AGENT, THE ARRANGER, THE ISSUING BANK AND OTHERS |
30.1 | Appointment of the Agent |
(a) | Each of the Arranger, the Lenders and the Issuing Bank appoints the Agent to act as its agent under and in connection with the Finance Documents. | ||
(b) | Each of the Arranger, the Lenders and the Issuing Bank authorises the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. |
30.2 | Duties of the Agent |
(a) | Subject to paragraph (b) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. | ||
(b) | Without prejudice to Clause 28.8 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Parent) and paragraph (e) of Clause 7.4 (Cash Collateral by Non-Acceptable L/C Lender), paragraph (a) above shall not apply to any Transfer Certificate, any Assignment Agreement or any Increase Confirmation. | ||
(c) | Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. | ||
(d) | If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties. | ||
(e) | If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties. | ||
(f) | The Agent shall provide to the Parent, within ten Business Days of a request by the Parent (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents. | ||
(g) | The Agents duties under the Finance Documents are solely mechanical and administrative in nature. |
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30.3 | Role of the Arranger | |
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document. |
30.4 | No fiduciary duties |
(a) | Nothing in this Agreement constitutes the Agent, the Arranger and/or the Issuing Bank as a trustee or fiduciary of any other person. | ||
(b) | None of the Agent, the Security Agent, the Arranger or the Issuing Bank shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. |
30.5 | Business with the Group | |
The Agent, the Security Agent, the Arranger and the Issuing Bank may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group. |
30.6 | Rights and discretions |
(a) | The Agent and the Issuing Bank may rely on: |
(i) | any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and | ||
(ii) | any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify. |
(b) | The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that: |
(i) | no Default has occurred (unless it has actual knowledge of a Default arising under Clause 27.1 (Non-payment)); | ||
(ii) | any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and | ||
(iii) | any notice or request made by the Parent (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors. |
(c) | The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts. | ||
(d) | The Agent may act in relation to the Finance Documents through its personnel and agents. | ||
(e) | The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. | ||
(f) | Without prejudice to the generality of paragraph (e) above, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Parent and shall disclose the same upon the written request of the Parent or the Majority Lenders. |
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(g) | Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent, the Arranger or the Issuing Bank is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. | ||
(h) | The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of paragraph (a)(ii) of Clause 15.2 (Market Disruption). |
30.7 | Majority Lenders instructions |
(a) | Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders. | ||
(b) | Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties other than the Security Agent. | ||
(c) | The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions. | ||
(d) | In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders. | ||
(e) | The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lenders consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (e) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Transaction Security Documents or enforcement of the Transaction Security or Transaction Security Documents. |
30.8 | Responsibility for documentation | |
None of the Agent, the Arranger or the Issuing Bank: |
(a) | is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, the Issuing Bank, an Obligor or any other person given in or in connection with any Finance Document or the Information Memorandum or the Reports or the transactions contemplated in the Finance Documents; | ||
(b) | is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document or the Transaction Security; or | ||
(c) | is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise. |
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30.9 | Exclusion of liability |
(a) | Without limiting paragraph (b) below (and without prejudice to the provisions of paragraph (e) of Clause 33.11 (Disruption to Payment Systems etc.)), none of the Agent, the Issuing Bank will be liable including, without limitation, for negligence or any other category of liability whatsoever for any action taken by it under or in connection with any Finance Document or the Transaction Security, unless directly caused by its gross negligence or wilful misconduct. | ||
(b) | No Party (other than the Agent or the Issuing Bank (as applicable)) may take any proceedings against any officer, employee or agent of the Agent or the Issuing Bank in respect of any claim it might have against the Agent or the Issuing Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Finance Document and any officer, employee or agent of the Agent or the Issuing Bank may rely on this Clause subject to Clause 1.8 (Third party rights) and the provisions of the Third Parties Act. | ||
(c) | The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. | ||
(d) | Nothing in this Agreement shall oblige the Agent or the Arranger to carry out any know your customer or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger. |
30.10 | Lenders indemnity to the Agent | |
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability including, without limitation, for negligence or any other category of liability whatsoever incurred by the Agent (otherwise than by reason of the Agents gross negligence or wilful misconduct or, in the case of any cost, loss or liability pursuant to Clause 33.11 (Disruption to Payment Systems etc.), notwithstanding the Agents negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent in acting as Agent under the Finance Documents), unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document. |
30.11 | Resignation of the Agent |
(a) | The Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and the Parent. | ||
(b) | Alternatively the Agent may resign by giving 30 days notice to the Lenders and the Parent, in which case the Majority Lenders (after consultation with the Parent) may appoint a successor Agent. | ||
(c) | If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Parent) may appoint a successor Agent (acting through an office in the United Kingdom). |
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(d) | If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under paragraph (c) above, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 30 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the normal range of fee rates of UK and European clearing banks in relation to borrower and facilities of a similar size and nature and those amendments will bind the Parties. | ||
(e) | The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. | ||
(f) | The Agents resignation notice shall only take effect upon the appointment of a successor. | ||
(g) | Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 30. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
30.12 | Replacement of the Agent |
(a) | After consultation with the Parent, the Majority Lenders may, by giving 30 days notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Agent by appointing a successor Agent (acting through an office in the United Kingdom). | ||
(b) | The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. | ||
(c) | The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 30 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). | ||
(d) | Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
30.13 | Confidentiality |
(a) | In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. |
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(b) | If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. | ||
(c) | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty. |
30.14 | Relationship with the Lenders |
(a) | Subject to Clause 28.11 (Pro rata interest settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agents principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office: |
(i) | entitled to or liable for any payment due under any Finance Document on that day; and | ||
(ii) | entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, |
unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement. | |||
(b) | Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost Formula). | ||
(c) | Each Lender shall supply the Agent with any information that the Security Agent may reasonably specify (through the Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent. | ||
(d) | Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 35.6 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 35.2 (Addresses) and paragraph (a)(iii) of Clause 35.6 (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender. |
30.15 | Credit appraisal by the Lenders and Issuing Bank | |
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender and Issuing Bank confirms to the Agent, the Arranger and the Issuing Bank that it has been, and will continue to be, solely |
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responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to: |
(a) | the financial condition, status and nature of each member of the Group; | ||
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security; | ||
(c) | whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Transaction Security, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; | ||
(d) | the adequacy, accuracy and/or completeness of the Information Memorandum, the Reports and any other information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and | ||
(e) | the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property. |
30.16 | Base Reference Banks | |
If a Base Reference Bank (or, if a Base Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Parent) appoint another Lender or an Affiliate of a Lender to replace that Base Reference Bank. |
30.17 | Agents management time | |
Any amount payable to the Agent under Clause 19.3 (Indemnity to the Agent), Clause 21 (Costs and expenses) and Clause 30.10 (Lenders indemnity to the Agent) shall include the cost of utilising the Agents management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Parent and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 16 (Fees). | ||
30.18 | Deduction from amounts payable by the Agent | |
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted. |
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31. | CONDUCT OF BUSINESS BY THE FINANCE PARTIES | |
No provision of this Agreement will: |
(a) | interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; | ||
(b) | oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or | ||
(c) | oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
32. | SHARING AMONG THE FINANCE PARTIES | |
32.1 | Payments to Finance Parties |
(a) | Subject to paragraph (b) below, if a Finance Party (a Recovering Finance Party) receives or recovers any amount from an Obligor other than in accordance with Clause 33 (Payment mechanics) (a Recovered Amount) and applies that amount to a payment due under the Finance Documents then: |
(i) | the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent; | ||
(ii) | the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 33 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and | ||
(iii) | the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 33.6 (Partial payments). |
(b) | Paragraph (a) above shall not apply to any amount received or recovered by an Issuing Bank in respect of any cash cover provided for the benefit of that Issuing Bank. |
32.2 | Redistribution of payments | |
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the Sharing Finance Parties) in accordance with Clause 33.6 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties. | ||
32.3 | Recovering Finance Partys rights | |
On a distribution by the Agent under Clause 32.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor. |
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32.4 | Reversal of redistribution | |
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then: |
(a) | each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount); and | ||
(b) | as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor. |
32.5 | Exceptions |
(a) | This Clause 32 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause 32, have a valid and enforceable claim against the relevant Obligor. | ||
(b) | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if: |
(i) | it notified the other Finance Party of the legal or arbitration proceedings; and | ||
(ii) | the other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings. |
33. | PAYMENT MECHANICS | |
33.1 | Payments to the Agent |
(a) | On each date on which an Obligor or a Lender is required to make a payment under a Finance Document that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment. | ||
(b) | Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Agent specifies. |
33.2 | Distributions by the Agent | |
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 33.3 (Distributions to an Obligor) and Clause 33.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London). |
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33.3 | Distributions to an Obligor | |
The Agent may (with the consent of the Obligor or in accordance with Clause 34 (Set-Off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied. |
33.4 | Clawback |
(a) | Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum. | ||
(b) | If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. |
33.5 | Impaired Agent |
(a) | If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 33.1 (Payments to the Agent) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph (a) of the definition of Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents. | ||
(b) | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements. | ||
(c) | A Party which has made a payment in accordance with this Clause 33.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. | ||
(d) | Promptly upon the appointment of a successor Agent in accordance with Clause 30.12 (Replacement of the Agent), each Party which has made a payment to a trust account in accordance with this Clause 33.5 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution in accordance with Clause 33.2 (Distributions by the Agent). |
33.6 | Partial payments |
(a) | If the Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that |
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payment towards the obligations of that Obligor under those Finance Documents in the following order: |
(i) | first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent, the Issuing Bank and the Security Agent under those Finance Documents; | ||
(ii) | secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under those Finance Documents; | ||
(iii) | thirdly, in or towards payment pro rata of any principal due but unpaid under those Finance Documents and any amount due but unpaid under Clause 7.2 (Claims under a Letter of Credit) and Clause 7.3 (Indemnities); and | ||
(iv) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
(b) | The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above. | ||
(c) | Paragraphs (a) and (b) above will override any appropriation made by an Obligor. |
33.7 | Set-off by Obligors | |
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim. | ||
33.8 | Business Days |
(a) | Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not). | ||
(b) | During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date. |
33.9 | Currency of account |
(a) | Subject to paragraphs (b) to (e) below, the Base Currency is the currency of account and payment for any sum due from an Obligor under any Finance Document. | ||
(b) | A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum shall be made in the currency in which that Utilisation or Unpaid Sum is denominated on its due date. | ||
(c) | Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued. | ||
(d) | Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. | ||
(e) | Any amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency. |
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33.10 | Change of currency |
(a) | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(i) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Parent); and | ||
(ii) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably). |
(b) | If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Parent) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency. |
33.11 | Disruption to Payment Systems etc. | |
If either the Agent determines (in its discretion) that a Disruption Event has occurred or the Agent is notified by the Parent that a Disruption Event has occurred: |
(a) | the Agent may, and shall if requested to do so by the Parent, consult with the Parent with a view to agreeing with the Parent such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances; | ||
(b) | the Agent shall not be obliged to consult with the Parent in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes; | ||
(c) | the Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances; | ||
(d) | any such changes agreed upon by the Agent and the Parent shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 39 (Amendments and Waivers); | ||
(e) | the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 33.11; and | ||
(f) | the Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above. |
34. | SET-OFF | |
Following the occurrence of an Event of Default which is continuing a Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent |
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beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. |
35. | NOTICES | |
35.1 | Communications in writing | |
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter. | ||
35.2 | Addresses | |
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is in the case of any Party which is party to this Agreement on the Signing Date, that identified with its name below or in the case of each person becoming a Party after the Signing Date, that notified in writing to the Agent on or prior to the date on which it becomes a Party and any substitute address, fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days notice. | ||
35.3 | Delivery |
(a) | Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective: |
(i) | if by way of fax, when received in legible form; or | ||
(ii) | if by way of letter, when it has been left at the relevant address or [five] Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address, |
and, if a particular department or officer is specified as part of its address details provided under Clause 35.2 (Addresses), if addressed to that department or officer. | |||
(b) | Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agents or Security Agents signature below (or any substitute department or officer as the Agent or Security Agent shall specify for this purpose). | ||
(c) | All notices from or to an Obligor shall be sent through the Agent. | ||
(d) | Any communication or document made or delivered to the Parent in accordance with this Clause 35.3 will be deemed to have been made or delivered to each of the Obligors. |
35.4 | Notification of address and fax number | |
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 35.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties. |
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35.5 | Communication when Agent is Impaired Agent | |
If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed. | ||
35.6 | Electronic communication |
(a) | Any communication to be made between the Agent or the Security Agent and a Lender or the Agent, the Security Agent and the Obligors Agent, under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the relevant Parties: |
(i) | agree that, unless and until notified to the contrary, this is to be an accepted form of communication; | ||
(ii) | notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and | ||
(iii) | notify each other of any change to their address or any other such information supplied by them. |
Any such communication from the Obligors Agent to the Agent or the Security Agent under the Finance Documents will only be treated as being received on receipt by the Obligors Agent of an e-mail from the Agent or the Security Agent (as applicable) confirming receipt of such email from the Obligors Agent. |
(b) | Any electronic communication made between the Parties noted above will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or Security Agent shall specify for this purpose. |
35.7 | Use of websites |
(a) | The Parent may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the Website Lenders) who accept this method of communication by posting this information onto an electronic website designated by the Parent and the Agent (the Designated Website) if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; | ||
(ii) | both the Parent and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and | ||
(iii) | the information is in a format previously agreed between the Parent and the Agent. |
If any Lender (a Paper Form Lender) does not agree to the delivery of information electronically then the Agent shall notify the Parent accordingly and the Parent shall at its own cost supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Parent shall at its own cost supply the |
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Agent with at least one copy in paper form of any information required to be provided by it. | |||
(b) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Parent and the Agent. | ||
(c) | The Parent shall promptly upon becoming aware of its occurrence notify the Agent if: |
(i) | the Designated Website cannot be accessed due to technical failure; | ||
(ii) | the password specifications for the Designated Website change; | ||
(iii) | any new information which is required to be provided under this Agreement is posted onto the Designated Website; | ||
(iv) | any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or | ||
(v) | the Parent becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. |
If the Parent notifies the Agent under paragraph (c)(i) or paragraph (c)(v) above, all information to be provided by the Parent under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing. |
(d) | Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Parent shall at its own cost comply with any such request within ten Business Days. |
35.8 | English language |
(a) | Any notice given under or in connection with any Finance Document must be in English. |
(b) | All other documents provided under or in connection with any Finance Document must be: |
(i) | in English; or | ||
(ii) | if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
36. | CALCULATIONS AND CERTIFICATES | |
36.1 | Accounts | |
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate. |
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36.2 | Certificates and determinations | |
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates. | ||
36.3 | Day count convention | |
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice. | ||
37. | PARTIAL INVALIDITY | |
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired. | ||
38. | REMEDIES AND WAIVERS | |
No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law. | ||
39. | AMENDMENTS AND WAIVERS | |
39.1 | Required consents |
(a) | Subject to Clause 39.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Parent and any such amendment or waiver will be binding on all Parties. | ||
(b) | The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 39. | ||
(c) | Each Obligor agrees to any such amendment or waiver permitted by this Clause 39 which is agreed to by the Parent. This includes any amendment or waiver which would, but for this paragraph (c), require the consent of all of the Guarantors. |
39.2 | Exceptions |
(a) | An amendment or waiver that has the effect of changing or which relates to: |
(i) | the definition of Majority Lenders in Clause 1.1 (Definitions); | ||
(ii) | an extension to the date of payment of any amount under the Finance Documents (other than in relation to Clause 11 (Mandatory Prepayment)); | ||
(iii) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable; | ||
(iv) | a change in currency of payment of any amount under the Finance Documents; |
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(v) | an increase in or an extension of any Commitment or the Total Commitments; | ||
(vi) | a change to the Borrowers or Guarantors other than in accordance with Clause 29 (Changes to the Obligors); | ||
(vii) | any provision which expressly requires the consent of all the Lenders; | ||
(viii) | Clause 2.3 (Finance Parties rights and obligations), Clause 28 (Changes to the Lenders) or this Clause 39; | ||
(ix) | (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of: |
(A) | the guarantee and indemnity granted under Clause 22 (Guarantee and Indemnity); | ||
(B) | the Charged Property; or | ||
(C) | the manner in which the proceeds of enforcement of the Transaction Security are distributed, |
(except in the case of paragraph (B) and paragraph (C) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document); | |||
(x) | the release of any guarantee and indemnity granted under Clause 22 (Guarantee and Indemnity) or of any Transaction Security unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document, |
shall not be made without the prior consent of all the Lenders. | |||
(b) | An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger, the Issuing Bank, the Security Agent or any Hedge Counterparty or any MOF Lender (each in their capacity as such) may not be effected without the consent of the Agent, the Arranger, the Issuing Bank, the Security Agent, that Hedge Counterparty and that MOF Lender. | ||
(c) | If any Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any of the terms of any Finance Document or other vote of Lenders under the terms of this Agreement within 15 Business Days (unless the Parent and the Agent agree to a longer time period in relation to any request) of that request being made, its Commitment and/or participation shall not be included for the purpose of calculating the Total Commitments or participations under the relevant Facility/ies when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments and/or participations has been obtained to approve that request. |
39.3 | Replacement of Lender |
(a) | If at any time: |
(i) | any Lender becomes a Non-Consenting Lender (as defined in paragraph (c) below); or |
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(ii) | an Obligor becomes obliged to repay any amount in accordance with Clause 10.1 (Illegality) or to pay additional amounts pursuant to Clause 18.1 (Increased Costs) or Clause 17.2 (Tax gross-up) to any Lender in excess of amounts payable to the other Lenders generally, |
then the Parent may, on 14 Business Days prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 28 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender) selected by the Parent, and which is acceptable to the Agent (acting reasonably) and (in the case of any transfer of a Revolving Facility Commitment), the Issuing Bank, which confirms its willingness to assume and does assume all the obligations of the transferring Lender (including the assumption of the transferring Lenders participations on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lenders participation in the outstanding Utilisations and all accrued interest and/or Letter of Credit fees, Break Costs and other amounts payable in relation thereto under the Finance Documents. | |||
(b) | The replacement of a Lender pursuant to this Clause shall be subject to the following conditions: |
(i) | the Parent shall have no right to replace the Agent or Security Agent; | ||
(ii) | neither the Agent nor the Lender shall have any obligation to the Parent to find a Replacement Lender; | ||
(iii) | in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 45 days after the date the Non-Consenting Lender notifies the Parent and the Agent of its failure or refusal to give a consent in relation to, or agree to any waiver or amendment to the Finance Documents requested by the Parent; and | ||
(iv) | in no event shall the Lender replaced under this paragraph (b) be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents. |
(c) | In the event that: |
(i) | the Parent or the Agent (at the request of the Parent) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents; | ||
(ii) | the consent, waiver or amendment in question requires the approval of all the Lenders; and | ||
(iii) | the Majority Lenders have consented or agreed to such waiver or amendment, |
then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a Non-Consenting Lender. | ||
39.4 | Disenfranchisement of Defaulting Lenders |
(a) | For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments or Total Revolving Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote |
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under the Finance Documents, that Defaulting Lenders Commitments will be reduced by the amount of its Available Commitments. | |||
(b) | For the purposes of this Clause 39.4, the Agent may assume that the following Lenders are Defaulting Lenders: |
(i) | any Lender which has notified the Agent that it has become a Defaulting Lender; | ||
(ii) | any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of Defaulting Lender has occurred, |
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender. | ||
39.5 | Replacement of a Defaulting Lender |
(a) | The Parent may, at any time a Lender has become and continues to be a Defaulting Lender, by giving five Business Days prior written notice to the Agent and such Lender: |
(i) | replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 28 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement; | ||
(ii) | require such Lender to (and such Lender shall) transfer pursuant to Clause 28 (Changes to the Lenders) all (and not part only) of the undrawn Revolving Commitment of the Lender; or | ||
(iii) | require such Lender to (and such Lender shall) transfer pursuant to Clause 28 (Changes to the Lenders) all (and not part only) of its rights and obligations in respect of the Revolving Facility, |
to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender) selected by the Parent, and which (unless the Agent is an Impaired Agent) is acceptable to the Agent (acting reasonably) and (in the case of any transfer of a Revolving Facility Commitment) to the Issuing Bank, which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lenders participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lenders participation in the outstanding Utilisations and all accrued interest and/or Letter of Credit fees, Break Costs and other amounts payable in relation thereto under the Finance Documents. |
(b) | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause 39 shall be subject to the following conditions: |
(i) | the Parent shall have no right to replace the Agent or Security Agent; | ||
(ii) | neither the Agent nor the Defaulting Lender shall have any obligation to the Parent to find a Replacement Lender; | ||
(iii) | the transfer must take place no later than 90 days after the notice referred to in paragraph (a) above; and |
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(iv) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents. |
40. | CONFIDENTIALITY | |
40.1 | Confidential Information | |
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 40.2 (Disclosure of Confidential Information), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information. | ||
40.2 | Disclosure of Confidential Information | |
Any Finance Party may disclose: |
(a) | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
(b) | to any person: |
(i) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that persons Affiliates, Related Funds, Representatives and professional advisers; | ||
(ii) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that persons Affiliates, Related Funds, Representatives and professional advisers; | ||
(iii) | appointed by any Finance Party or by a person to whom paragraph (b)(i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (d) of Clause 30.14 (Relationship with the Lenders)); | ||
(iv) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph (b)(i) or (b)(ii) above; | ||
(v) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
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(vi) | to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.10 (Security over Lenders rights); | ||
(vii) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; | ||
(viii) | who is a Party; or | ||
(ix) | with the consent of the Parent; |
in each case, such Confidential Information as that Finance Party shall consider appropriate if: |
(A) | in relation to paragraphs (b)(i), (b)(ii) and (b)(iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; | ||
(B) | in relation to paragraph (b)(iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; | ||
(C) | in relation to paragraphs (b)(v), (b)(vi) and (b)(vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; |
(c) | to any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or (b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Parent and the relevant Finance Party; |
(d) | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information. |
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40.3 | Entire agreement | |
This Clause 40 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information. | ||
40.4 | Inside information | |
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose. | ||
40.5 | Notification of disclosure | |
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Parent: |
(a) | of the circumstances of any disclosure of Confidential Information made pursuant to paragraph (b)(v) of Clause 40.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that Confidential Information has been disclosed in breach of this Clause 40 (Confidentiality). |
40.6 | Continuing obligations | |
The obligations in this Clause 40 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of: |
(a) | the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and |
(b) | the date on which such Finance Party otherwise ceases to be a Finance Party. |
41. | COUNTERPARTS | |
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document. | ||
42. | GOVERNING LAW | |
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. | ||
43. | ENFORCEMENT | |
43.1 | Jurisdiction of English courts |
(a) | The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, |
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validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a Dispute). | |||
(b) | The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. | ||
(c) | This Clause 43.1 is for the benefit of the Finance Parties and Secured Parties only. As a result, no Finance Party or Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties and Secured Parties may take concurrent proceedings in any number of jurisdictions. |
43.2 | Service of process |
(a) | Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales): |
(i) | irrevocably appoints the Company as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document (and the Company by its execution of this Agreement, accepts that appointment); and | ||
(ii) | agrees that failure by an agent for service of process to notify the relevant Obligor of the process will not invalidate the proceedings concerned. |
(b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Parent (on behalf of all the Obligors) must immediately (and in any event within 2 Business Days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose. |
(c) | The Parent expressly agrees and consents to the provisions of this Clause 43 and Clause 42 (Governing law). |
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THE PARENT | ||||
MRC TRANSMARK GROUP B.V. | ||||
By:
|
/s/ Neil P. Wagstaff | |||
Address:
|
Heaton House, Riverside Drive, Hunsworth Lane, Bradford, BD19 4DH | |||
Fax:
|
+44 (0)1274 700166 | |||
THE COMPANY | ||||
MRC TRANSMARK HOLDINGS UK LIMITED | ||||
By:
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/s/ Neil P. Wagstaff | |||
Address:
|
Heaton House, Riverside Drive, Hunsworth Lane, Bradford, BD19 4DH | |||
Fax:
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+44 (0)1274 700166 | |||
THE ORIGINAL BORROWER | ||||
MRC TRANSMARK HOLDINGS UK LIMITED | ||||
By:
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/s/ Neil P. Wagstaff | |||
Address:
|
Heaton House, Riverside Drive, Hunsworth Lane, Bradford, BD19 4DH | |||
Fax:
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+44 (0)1274 700166 | |||
THE ORIGINAL GUARANTORS | ||||
MRC TRANSMARK GROUP B.V. | ||||
By:
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/s/ Neil P. Wagstaff | |||
Address:
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Heaton House, Riverside Drive, Hunsworth Lane, Bradford, BD19 4DH | |||
Fax:
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+44 (0)1274 700166 |
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MRC TRANSMARK HOLDINGS UK LIMITED | ||||
By:
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/s/ Neil P. Wagstaff | |||
Address:
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Heaton House, Riverside Drive, Hunsworth Lane, Bradford, BD19 4DH | |||
Fax:
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+44 (0)1274 700166 | |||
THE ARRANGER | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
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4th Floor, City Point, 29 King Street, Leeds LS1 2HL | |||
Fax:
|
0845 879 452 | |||
Attention:
|
Peter Helliwell | |||
THE AGENT | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
|
4th Floor, City Point, 29 King Street, Leeds LS1 2HL | |||
Fax:
|
0845 879 452 | |||
Attention:
|
Peter Helliwell | |||
THE SECURITY AGENT | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
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4th Floor, City Point, 29 King Street, Leeds LS1 2HL | |||
Fax:
|
0845 879 452 | |||
Attention:
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Peter Helliwell |
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THE ISSUING BANK | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
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4th Floor, City Point, 29 King Street, Leeds LS1 2HL | |||
Fax:
|
0845 879 452 | |||
Attention:
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Peter Helliwell | |||
THE ORIGINAL LENDER | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
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4th Floor, City Point, 29 King Street, Leeds LS1 2HL | |||
Fax:
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0845 879 452 | |||
Attention:
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Peter Helliwell | |||
THE ORIGINAL MOF LENDER | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
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4th Floor, City Point, 29 King Street, Leeds LS1 2HL | |||
Fax:
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0845 879 452 | |||
Attention:
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Peter Helliwell | |||
THE ORIGINAL HEDGE COUNTERPARTY | ||||
HSBC BANK PLC | ||||
By:
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/s/ Peter Helliwell | |||
Address:
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4th Floor, City Point, 29 King Street, Leeds LS1 2HL |
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Fax:
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0845 879 452 | |||
Attention:
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Peter Helliwell |
4
1. | Annual Bonus. For the fiscal year commencing on January 1, 2011, your target annual bonus shall be sixty-seven percent (67%) of your base salary as in effect at the beginning of such fiscal year with the actual annual bonus to be based upon such individual and/or Company performance criteria established for each such fiscal year by the board of directors of the Company in consultation with you. | |
2. | Good Reason Consent. You hereby agree that the decrease in your target annual bonus for 2011 as set forth in this letter agreement does not constitute Good Reason pursuant to the Employment Agreement. | |
3. | Governing Law. This letter agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. | |
4. | Confirmation of Employment Agreement. In all other respects the Employment Agreement shall remain in effect and is hereby confirmed by the parties. |
Very truly yours, McJUNKIN RED MAN HOLDING CORPORATION |
||||
/s/ Stephen W. Lake | ||||
By: | Stephen W. Lake | |||
Title: | Executive Vice President and General Counsel | |||
ACCEPTED AND AGREED: |
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/s/ Andrew Lane
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If to the Company: | McJunkin Corporation | |||
8023 E. 63rd Place, Suite 800 | ||||
Tulsa, OK 74133 | ||||
Attention: General Counsel | ||||
Facsimile: 866- 815-5063 | ||||
with a copy to: | GS Capital Partners V Fund, L.P. | |||
85 Broad Street | ||||
New York, NY 10004 | ||||
Attention: Henry Cornell | ||||
Facsimile: 212-357-5505 | ||||
and | ||||
Fried, Frank, Harris, Shriver & Jacobson LLP | ||||
One New York Plaza | ||||
New York, NY 10004 | ||||
Attention: Robert C. Schwenkel, Esq. | ||||
Facsimile: 212-859-4000 | ||||
If to the Executive: | James Underhill, at his principal office at the Company (during the Term), and |
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at all times to his principal residence as reflected in the records of the Company. |
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McJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Andrew R. Lane | |||
Name: | Andrew R. Lane | |||
Title: | Chairman, President & CEO | |||
/s/ James Underhill | ||||
James Underhill | ||||
1. | Annual Bonus. For the fiscal year commencing on January 1, 2011, your target annual bonus shall be sixty-seven percent (67%) of your base salary as in effect at the beginning of such fiscal year with the actual annual bonus to be based upon such individual and/or Company performance criteria established for each such fiscal year by the board of directors of the Company in consultation with the chief executive officer. | |
2. | Change in Duties. Effective as of January 1, 2011, your responsibilities shall be limited to finance and accounting, and shall no longer include information technology or corporate services. | |
3. | Good Reason Consent. You hereby agree that the neither (a) the change in your duties nor (b) the decrease in your target annual bonus for 2011, each as set forth in this letter agreement, constitutes Good Reason pursuant to the Employment Agreement. | |
4. | Governing Law. This letter agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. | |
5. | Confirmation of Employment Agreement. In all other respects the Employment Agreement shall remain in effect and is hereby confirmed by the parties. |
Very truly yours, McJUNKIN RED MAN HOLDING CORPORATION |
||||
/s/ Andrew R. Lane | ||||
By: | Andrew R. Lane | |||
Title: | Chairman, President and Chief Executive Officer | |||
ACCEPTED AND AGREED: |
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/s/ James F. Underhill
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o | Your individual net worth, or joint net worth with your spouse, as of the date hereof, exceeds $1,000,000; | ||
o | You had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of those years, and have a reasonable expectation of reaching the same income level in the current year; or | ||
o | None of the statements above apply. |
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MCJUNKIN RED MAN HOLDING CORPORATION |
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By: | ||||
Name: | ||||
Title: | ||||
PVF HOLDINGS LLC (for purposes of Section 16 only) |
||||
By: | ||||
Name: | ||||
Title: | ||||
PARTICIPANT |
||||
By: | ||||
Name: | ||||
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3
4
o | Your individual net worth, or joint net worth with your spouse, as of the date hereof, exceeds $1,000,000; | |
o | You had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of those years, and have a reasonable expectation of reaching the same income level in the current year; or | |
o | None of the statements above apply. |
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MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | ||||
Name: | ||||
Title: | ||||
PVF HOLDINGS LLC (for purposes of Section 15 only) |
||||
By: | ||||
Name: | ||||
Title: | ||||
PARTICIPANT |
||||
By: | ||||
Name: | ||||
1. | Employment |
1.1. | Term. The Employer agrees to employ the Executive, and the Executive agrees to be employed by the Employer pursuant to this Agreement, for a period commencing on the Closing Date (such date, the Effective Date) and ending on the earlier of (i) the fifth (5th) anniversary of the Effective Date and (ii) the termination of the Executives employment in accordance with Section 3 hereof (the Term). | ||
1.2. | Duties. During the Term, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall hold the title of Executive Vice President of McJunkin Red Man Holding Corporation, a Delaware corporation (Holdco) and such other positions as an officer or director of the Employer, PVF Holdings LLC, a Delaware limited liability company (PVF), or their respective subsidiaries (the Employer, PVF and each of their subsidiaries, shall be referred to as the Group) as the Executive and the Chief Executive Officer of McJunkin Red Man Corporation, a Delaware corporation, (the CEO), or such other person designated by the CEO (the CEOs Designee), shall mutually agree from time to time. From the Effective Date through December 31, 2010, the Executive shall also retain the title of Chief Executive Office of the Employer. The Executive shall perform such duties, functions and responsibilities commensurate with the Executives positions as reasonably directed by the CEO or the CEOs Designee. |
1.3. | Exclusivity. During the Term, the Executive shall devote his full time and attention to the business and affairs of the Group, shall faithfully serve the Group, and shall in all material respects conform to and comply with the lawful and reasonable directions and instructions given to him by the CEO or the CEOs Designee, consistent with Section 1.2 hereof. During the Term, the Executive shall use his best efforts to promote and serve the interests of the Group and shall not engage in any other business activity, whether or not such activity shall be engaged in for pecuniary profit, except that the Executive may sit on the boards of other companies with the consent of the CEO or the CEOs Designee, which shall not be unreasonably withheld. | ||
1.4. | Compliance with Group Policies and Restrictions on Interests. During the Term, the Executive (i) shall comply with Group policies in force from time to time including those in relation to the disclosure of interests and (ii) shall not, directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of, or be connected in any manner with, including, without limitation, holding any position as a stockholder, director, officer, consultant, independent contractor, employee, partner, or investor in, any Restricted Enterprise (as defined in Section 8.4); provided, that in no event shall ownership of one percent (1%) or less of the outstanding securities of any class of any issuer whose securities are registered under the United States Securities Exchange Act of 1934, as amended (the Exchange Act), or traded on the London Stock Exchange or any other internationally recognized stock exchange, standing alone, be prohibited by this Section 1.4 so long as the Executive does not have, or exercise, any rights to manage or operate the business of such issuer other than rights as a stockholder thereof. |
2. | Compensation |
2.1. | Salary. As compensation for the performance of the Executives services hereunder, during the Term, the Employer shall pay to the Executive a salary at an annual rate of £212,500 (the Base Salary), payable in monthly instalments on or about the last Thursday of each month. The Base Salary shall be reviewed annually and may be adjusted upward by the Board of Directors of Holdco (the Board) (or a committee thereof), in its discretion, based on competitive data and the Executives performance. No increase in Base Salary shall limit or reduce any other right or obligation to the Executive under this Agreement and the Base Salary shall not be reduced at any time (including after any such increase). | ||
2.2. | Annual Bonus. Beginning with the fiscal year that commences on January 1, 2010, for each completed fiscal year during the Term, the Executive shall be eligible to receive additional cash incentive compensation pursuant to the annual bonus plan of Holdco in effect at such time (the Annual Bonus). The target Annual Bonus shall be one hundred percent (100%) of the Executives Base Salary as in effect at the beginning of such fiscal year with the actual Annual Bonus to be based upon such individual and/or Employer and/or Group performance criteria established for each such fiscal year by the Board. In respect |
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of fiscal year 2009, the Executive shall be entitled to receive a bonus on the basis determined by the Employer prior to the Effective Time and as set forth in Exhibit A. |
2.3. | Equity. The Executive shall be granted stock options to purchase shares of common stock of Holdco as determined by the Board from time to time, with the terms of such stock options to be determined by the Board in its discretion. | ||
2.4. | Employee Benefits. From the Effective Date through December 31, 2011, the Executive shall participate in the same employee benefit plans and programs in which he participates as of the Effective Date. Thereafter during the Term, the Executive shall be eligible to participate in such health and other group insurance and other employee benefit plans and programs of the Employer as in effect from time to time on a substantially similar basis as other senior executives of Holdco. | ||
2.5. | Vacation. During the Term, the Executive shall be entitled to paid vacation in accordance with the Employers vacation policy as in effect from time to time. Notwithstanding the foregoing, the Executive shall be entitled to all statutory and other customary holidays in England and Wales, and to twenty five (25) days holiday per calendar year to be taken at such times as may be approved by the CEO or the CEOs Designee. Such entitlement shall accrue from day to day. No more than five (5) days of holiday to which the Executive was entitled in the previous year but which he did not take during such previous year may be carried forward to any subsequent year without the consent of the CEO or the CEOs Designee. If the Executive has on the termination of his employment hereunder, howsoever caused, any unused holiday entitlement, he shall be entitled to payment in lieu thereof. If, on termination, he has taken holiday in excess of such entitlement, there shall be deducted from any final payment due to him a sum in respect of each such day taken. For the purpose of this section, the formula for calculating any payment or repayment will be 1/260 of the Executives basic annual salary for each relevant holiday day. | ||
2.6. | Business Expenses. The Employer shall pay or reimburse the Executive for all commercially reasonable business out-of-pocket expenses that the Executive incurs during the Term in performing his duties under this Agreement upon presentation of documentation and in accordance with the expense reimbursement policy of the Employer as approved by the CEO or the CEOs Designee and in effect from time to time. |
3. | Termination of Employment |
3.1. | Generally. The Employer may terminate the Executives employment for any reason during the Term, and the Executive may voluntarily terminate his employment for any reason during the Term, in each case (other than a termination by the Employer for Cause (as defined in Section 8.1)) at any time upon not less than thirty (30) days notice to the other Party or in the case of notice to be given by the Employer, such longer period as may be required to be |
3
given under the provisions of the Employment Rights Act 1996. Upon the termination of the Executives employment with the Employer for any reason, the Executive shall be entitled to any Base Salary earned but unpaid through the date of termination, any earned but unpaid Annual Bonus for completed fiscal years, any unreimbursed expenses in accordance with Section 2.6 hereof and, to the extent not theretofore paid or provided, any other amounts or benefits required to be paid or provided under any plan, program, policy or practice or other contract or agreement of the Employer and its affiliates through the date of termination of employment (collectively, the Accrued Amounts). |
3.2. | Certain Terminations |
a) | Termination by the Employer other than for Cause or Disability; Termination by the Executive for Good Reason. If the Executives employment is terminated during the Term by the Employer other than for Cause or Disability (as defined in Section 8.2), or by the Executive for Good Reason (as defined in Section 8.3), the Executive shall be entitled to: (i) the Accrued Amounts, (ii) a pro-rata bonus for the fiscal year of termination, based on actual performance through the end of the applicable fiscal year and the number of days that have elapsed in the fiscal year through the date of termination (a Pro-Rata Bonus), (iii) payment of an amount equal to the sum of one-twelfth (1/12) of Base Salary and one-twelfth (1/12) of the target Annual Bonus each month for eighteen (18) months following termination (the Severance Payments) and (iv) continuation of private medical benefits on the same terms as active senior executives for eighteen (18) months following termination (Medical Continuation). The Severance Payments and Medical Continuation shall be reduced by any period of notice given to the Executive that exceeds thirty (30) days where that additional period of notice is served by the Executive. The Employers obligations to make the Severance Payments and to provide Medical Continuation shall be conditioned on: (i) the Executives continued compliance with his obligations under Section 4 of this Agreement and (ii) the Executives execution, delivery and non-revocation of a valid and enforceable general release of claims (the Release) in substantially the form attached hereto as Exhibit B. In the event that the Executive breaches any of the covenants set forth in Section 4 of this Agreement, the Executive shall immediately return to the Employer any portion of the Severance Payments that have been paid to the Executive pursuant to this Section 3.2(a), and the Medical Continuation shall immediately terminate. Subject to Section 3.2(c), the Employer will commence payment of the Severance Payments as soon as practicable following the effectiveness of the Release. Any Pro-Rata Bonus will be paid at the time Holdco ordinarily pays incentive bonuses to its executives with respect to the fiscal year in which the termination occurs. |
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b) | Termination upon Death or Disability. If the Executives employment is terminated due to the Executives death or Disability, the Executive (or the Executives estate, if applicable) will receive (i) the Accrued Amounts, and (ii) a Pro-Rata Bonus. | ||
c) | Exclusive Remedy. The foregoing payments upon termination of the Executives employment shall constitute the exclusive severance payments due the Executive upon a termination of his employment under this Agreement. |
3.3. | Resignation from All Positions. Upon the termination of the Executives employment with the Employer for any reason, the Executive shall be deemed to have resigned, as of the date of such termination, from all positions he then holds as an officer, director, employee and member of the Board (and any committee thereof) and the board of directors (and any committee thereof) of any member of the Group or from any officer or directorship which he holds by virtue of the employment. The Executive shall cooperate with the Employer in effecting any removal or resignation and shall execute any document or do anything which is necessary to give effect thereto. By entering into this Agreement the Executive irrevocably appoints the Employer as his attorney to act on his behalf to execute any document or do anything in his name necessary to effect his resignation in accordance with this Section 3.3. If there is any doubt as to whether such execution (or other thing) has been carried out within the authority conferred by this Section 3.3 a certificate in writing (signed by any director of the Employer) will be sufficient to prove that the act or thing falls within that authority. | ||
3.4. | Cooperation. Following the termination of the Executives employment with the Employer for any reason, the Executive agrees to reasonably cooperate with the Group upon reasonable request of the CEO or the CEOs Designee and to be reasonably available to the Group with respect to matters arising out of the Executives services to the Employer and other members of the Group. The Employer shall pay the Executive a reasonable fee for any such services and promptly reimburse the Executive for expenses reasonably incurred in connection with such matters. |
4. | Unauthorized Disclosure; Non-Competition; Non-Solicitation; Interference with Business Relationships; Proprietary Rights |
4.1. | Unauthorized Disclosure. The Executive agrees and understands that in the Executives position with the Employer, the Executive will be exposed to and will receive information relating to the confidential affairs of the Group, including, without limitation, technical information, intellectual property, business and marketing plans, strategies, customer information, software, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Employer and other members of the Group and other forms of information considered by the Group to be confidential or in the nature of trade secrets (including, without limitation, ideas, research and |
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development, know-how, formulas, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals) (collectively, the Confidential Information). The Executive agrees that at all times during the Executives employment with the Employer and thereafter, the Executive shall not disclose such Confidential Information, either directly or indirectly, to any individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof (each a Person) other than in connection with the Executives employment with the Employer without the prior written consent of the Employer and shall not use or attempt to use any such information in any manner other than in connection with his employment with the Employer, unless required by law to disclose such information, in which case the Executive shall provide the Employer with written notice of such requirement as far in advance of such anticipated disclosure as possible. This confidentiality covenant has no temporal, geographical or territorial restriction. |
No provision of this Section 4.1 shall prevent the Executive from making a protected disclosure in accordance with the provisions of the Employment Rights Act 1996. | |||
Upon termination of the Executives employment with the Employer, the Executive shall promptly supply to the Employer all property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other tangible product or document which has been produced by, received by or otherwise submitted to the Executive during the Executives employment with the Employer, and any copies thereof in his (or capable of being reduced to his) possession; provided, however, that the Executive may retain his full rolodex or similar address and telephone directories. | |||
4.2. | Non-Competition. By and in consideration of the Employer entering into this Agreement and the payments made and the benefits provided hereunder, and in further consideration of the Executives exposure to the Confidential Information of the Employer and other members of the Group, the Executive agrees that the Executive shall not for eighteen (18) months after termination of his employment (the Restriction Period), directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of, or be connected in any manner with, including, without limitation, holding any position as a stockholder, director, officer, consultant, independent contractor, employee, partner, or investor in, any Restricted Enterprise (as defined in Section 8.5); provided, that in no event shall ownership of one percent (1%) or less of the outstanding securities of any class of any issuer whose securities are registered under the Exchange Act or traded on the London Stock Exchange or any other internationally recognized stock exchange, standing alone, be prohibited by this Section 4.2, so long as the Executive does not have, or exercise, any rights to manage or operate the business of such issuer other than rights as a stockholder |
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thereof. During the Restriction Period, upon request of the Employer, the Executive shall notify the Employer of the Executives then-current employment status. |
4.3. | Non-Solicitation of Employees. During the Restriction Period, the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) for employment any person who is, or within twelve (12) months prior to the date of such solicitation was, an employee or consultant of the Employer or any other member of the Group where such employee or consultant was a person who immediately prior to the end of the Executives employment (the Termination Date) or in the six (6) months prior thereto reported directly to the Executive or to a person who reported directly to the Executive or with whom the Executive worked closely at any time during the period of six (6) months prior to the Termination Date. | ||
4.4. | Interference with Business Relationships. During the Restriction Period the Executive shall not directly or indirectly contact, induce or solicit (or assist any Person to contact, induce or solicit) any customer or client of the Employer or any other member of the Group, in respect of whom the Executive had access to confidential information or with whose custom or business the Executive or employees reporting to him were personally concerned, to terminate its relationship or otherwise cease doing business in whole or in part with the Employer or its subsidiaries or affiliates, or directly or indirectly interfere with (or assist any Person to interfere with) any material relationship between the Employer or any other member of the Group and any of its or their customers or clients so as to cause harm to the Employer or the relevant member of the Group. | ||
4.5. | Intellectual Property Rights. |
a) | The Executive may make or create Intellectual Property Rights (as defined in Section 8.4) in the course of his duties performed pursuant to the Agreement and he agrees that he has a special obligation to further the interests of the Employer and those of other members of the Group in relation to their business in this respect. | ||
b) | Where the Executive makes or creates any Intellectual Property Rights which may be of benefit to the Employer or any other member of the Group, he shall inform the Employer in writing and such Intellectual Property Rights shall be owned absolutely by the Employer to the extent permitted by law. The Executive shall enter into all documents and do all things necessary to ensure such ownership. The Executive waives all moral rights therein. | ||
c) | Rights and obligations under this Section 4.5 will continue after the termination of this Agreement in respect of all Intellectual Property Rights made or obtained during the Executives employment with the Employer and will be binding on the personal representatives of the Executive. |
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d) | The Executive agrees that he will not by his acts or omissions do anything which would or might prejudice the rights of the Employer under this Section 4.5. | ||
e) | By entering into this Agreement the Executive irrevocably appoints the Employer to act on his behalf to execute any document and do anything in his name for the purpose of giving the Employer (or its nominee) the full benefit of the provisions of this Section 4.5 or the Employers entitlement under statute. If there is any doubt as to whether such execution (or other thing) has been carried out within the authority conferred by this Section 4.5, a certificate in writing (signed by any director or the secretary of the Employer) will be sufficient to prove that the act or thing falls within that authority. |
4.6. | Confidentiality of Agreement. Other than with respect to information required to be disclosed by applicable law, the Parties agree not to disclose the terms of this Agreement to any Person; provided that the Executive may disclose this Agreement and/or any of its terms to the Executives immediate family, financial advisors and attorneys, so long as the Executive instructs every such Person to whom the Executive makes such disclosure not to disclose the terms of this Agreement further. | ||
4.7. | Remedies. The Executive agrees that any breach of the terms of this Section 4 would result in irreparable injury and damage to the Employer for which the Employer would have no adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any threat of breach, the Employer shall be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all Persons acting for and/or with the Executive, without having to prove damages, in addition to any other remedies to which the Employer may be entitled at law or in equity, including, without limitation, the obligation of the Executive to return any Severance Payments made by the Employer to the Executive. The terms of this Section 4.7 shall not prevent the Employer from pursuing any other available remedies for any breach or threatened breach hereof, including, without limitation, the recovery of damages from the Executive. The Executive and the Employer further agree that the provisions of the covenants contained in this Section 4 are reasonable and necessary to protect the businesses of the Employer and its affiliates because of the Executives access to Confidential Information and his material participation in the operation of such businesses. |
5. | Representation. The Executive and the Employer each represents and warrants that (i) he or it is not subject to any contract, arrangement, policy or understanding, or to any statute, governmental rule or regulation, that in any way limits his or its ability to enter into and fully perform his or its obligations under this Agreement and (ii) he or it is not otherwise unable to enter into and fully perform his or its obligations under this Agreement. |
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6. | Non-Disparagement. From and after the Effective Date and following termination of the Executives employment with the Employer, the Executive agrees not to make any statement (other than statements made in connection with carrying out his responsibilities for the Employer and its subsidiaries and affiliates) that is intended to become public, or that should reasonably be expected to become public, and that criticizes, ridicules, disparages or is otherwise derogatory of the Employer or any of its subsidiaries, affiliates, employees, officers, directors or stockholders. | |
7. | Withholding and Deductions. The Employer will withhold from any amounts payable under this Agreement such deductions as it is required to make pursuant to any applicable law or regulation and any amount which the Executive owes to the Employer or any other member of the Group and the Executive hereby consents to such deduction. | |
8. | Definitions. For purposes of this Agreement, the following terms shall have the following meanings: |
8.1. | Cause shall mean the Executives (i) continuing failure, for more than ten (10) days after the Employers written notice to the Executive thereof, to perform such duties as are reasonably requested by the Employer; (ii) failure to observe material policies generally applicable to officers or employees of the Employer unless such failure is capable of being cured and is cured within ten (10) days of the Executive receiving written notice of such failure; (iii) failure to cooperate with any internal investigation of the Employer or any other member of the Group; (iv) commission of any act of fraud, theft or financial dishonesty with respect to the Employer or any other member of the Group or being charged with or convicted of any arrestable criminal offence (other than an offence under road traffic legislation for which a fine or non-custodial penalty is imposed); or (v) material violation of the provisions of this Agreement unless such violation is capable of being cured and is cured within ten (10) days of the Executive receiving written notice of such violation. | ||
8.2. | Disability shall mean the Executive is entitled to receive long-term disability benefits under the long-term disability plan of the Employer or its affiliates in which Executive participates, or, if there is no such plan, the Executives inability, due to physical or mental ill health, to perform the essential functions of the Executives job, with or without a reasonable accommodation, for 180 days during any 365-day period irrespective of whether such days are consecutive. | ||
8.3. | Good Reason shall mean (i) a material and adverse change in the Executives duties or responsibilities; (ii) a reduction in the Executives Base Salary or target Annual Bonus; or (iii) breach by the Employer of any material provision of this Agreement; provided, that the Executive must give notice of termination for Good Reason within sixty (60) days of the occurrence of the first event giving rise to Good Reason. | ||
8.4. | Intellectual Property Rights means patents, copyrights, database rights, registered and unregistered design rights, utility models, trade marks, and any |
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other intellectual property rights throughout the world, applications for registration of any of the same, confidential information and knowhow, whether in each case registered or unregistered. |
8.5. | Restricted Enterprise shall mean any Person that is actively engaged in any geographic area in any business which is either (i) in competition with the business of the Employer or any other member of the Group or (ii) proposed to be conducted by the Employer or any other member of the Group in their respective business plans as in effect at that time. |
9. | Miscellaneous. |
9.1. | Indemnification. The Employer shall indemnify the Executive to the fullest extent provided under the Employers Articles of Association. The Employer and other members of the Group shall also maintain director and officer liability insurance in such amounts and subject to such limitations as the CEO, CEOs Designee or Board shall, in good faith, deem appropriate for coverage of directors and officers of the Employer and Group. | ||
9.2. | Amendments and Waivers. This Agreement and any of the provisions hereof may be amended, waived (either generally or in a particular instance and either retroactively or prospectively), modified or supplemented, in whole or in part, only by written agreement signed by the Parties; provided, that, the observance of any provision of this Agreement may be waived in writing by the Party that will lose the benefit of such provision as a result of such waiver. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach, except as otherwise explicitly provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. | ||
9.3. | Assignment; No Third-Party Beneficiaries. This Agreement, and the Executives rights and obligations hereunder, may not be assigned by the Executive, and any purported assignment by the Executive in violation hereof shall be null and void. To the extent permitted by law, no person other than the Parties and other members of the Group shall have the right to enforce any term of this Agreement under the Contracts (Rights of Third Parties) Act 1999 although this does not affect any other right or remedy of any third party which exists or is available other than under that Act. | ||
9.4. | UK Statutory Information. Exhibit C to this Agreement contains the information required to be given for the purposes of the Employment Rights Act 1996. |
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9.5. | Data Protection Act 1998. For the purposes of the Data Protection Act 1998 (the DPA) the Executive gives his consent to the holding, processing and disclosure of personal data (including sensitive data within the meaning of the DPA) provided by the Executive to the Employer and Group for all purposes relating to the performance of this Agreement including, but not limited to: |
a) | administering and maintaining personnel records; | ||
b) | administering and maintaining personnel records; | ||
c) | paying and reviewing salary and other remuneration and benefits; | ||
d) | providing and administering benefits (including if relevant, pension, life assurance, permanent health insurance and medical insurance); | ||
e) | undertaking performance appraisals and reviews; | ||
f) | maintaining sickness and other absence records; | ||
g) | taking decisions as to the Executives fitness for work; | ||
h) | providing references and information to future employers, and if necessary, governmental and quasi-governmental bodies for social security and other purposes, the Inland Revenue and the Contributions Agency; | ||
i) | providing information to future purchasers of the Employer or of the business in which the Executive works; and | ||
j) | transferring information concerning the Executive to a country or territory outside the European Economic Area. |
The Executive will comply with the Employers policies on data protection matters. | |||
9.6. | Notices. Unless otherwise provided herein, all notices, requests, demands, claims and other communications provided for under the terms of this Agreement shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by (i) personal delivery (including receipted courier service) or overnight delivery service, (ii) facsimile during normal business hours, with confirmation of receipt, to the number indicated, (iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below: |
If to the Employer:
|
Transmark Fcx Limited | |
Heaton House | ||
Riverside Drive | ||
Cleckheaton | ||
West Yorkshire BD19 4DH |
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copy to:
|
McJunkin Red Man Holding Corporation | |
8023 E. 63rd Place | ||
Tulsa, OK 74133 | ||
Attention: General Counsel | ||
Facsimile: 001 866-815-5063 | ||
and | ||
Fried, Frank, Harris, Shriver & Jacobson LLP | ||
One New York Plaza | ||
New York, NY 10004 | ||
Attention: Robert C. Schwenkel, Esq. | ||
Facsimile: 001 212-859-4000 | ||
If to the Executive:
|
at his principal office at the Employer | |
(during the Term), and at all times to his | ||
principal residence as reflected in the records | ||
of the Employer. |
All such notices, requests, consents and other communications shall be deemed to have been given when received. Either Party may change its facsimile number or its address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Party notice in the manner then set forth. | |||
9.7. | Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights and obligations of the Parties shall be governed by, the laws of England. | ||
9.8. | Power of Attorney. The Executive hereby appoints the Employer to act as his attorney with authority in his name and on his behalf to execute any deed or instrument and generally to use his name for the purposes set out in Sections 3.3 and 4.5. The Executive hereby declares that this power of attorney is given to secure his obligations under Sections 3.3 and 4.5 of this Agreement and shall be irrevocable in accordance with Section 4 of the Powers of Attorney Act 1971. | ||
9.9. | Severability. Whenever possible, each provision or portion of any provision of this Agreement, including those contained in Section 4 hereof, will be interpreted in such manner as to be effective and valid under applicable law but the invalidity or unenforceability of any provision or portion of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this |
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Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court or arbitrator determine that any provision or portion of any provision of this Agreement, including those contained in Section 4 hereof, is not reasonable or valid, either in period of time, geographical area, or otherwise, the Parties agree that such provision should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable or valid. |
9.10. | Entire Agreement. From and after the Effective Date this Agreement shall constitute the entire agreement between the Parties, and supersede all prior representations, agreements and understandings (including any prior course of dealings), both written and oral, between the Parties with respect to the subject matter hereof. | ||
9.11. | Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. | ||
9.12. | Binding Effect. This Agreement shall inure to the benefit of, and be binding on, the successors of each of the Parties, including, without limitation, the Executives heirs and the personal representatives of the Executives estate and any successor to all or substantially all of the business and/or assets of the Employer. | ||
9.13. | General Interpretive Principles. The name assigned this Agreement and headings of the sections, paragraphs, subparagraphs, clauses and subclauses of this Agreement are for convenience of reference only and shall not in any way affect the meaning or interpretation of any of the provisions hereof. Words of inclusion shall not be construed as terms of limitation herein, so that references to include, includes and including shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations. | ||
9.14. | Mitigation. Notwithstanding any other provision of this Agreement, (i) the Executive will have no obligation to mitigate damages for any breach or termination of this Agreement by the Employer, whether by seeking employment or otherwise and (ii) the amount of any payment or benefit due the Executive after the date of such breach or termination will not be reduced or offset by any payment or benefit that the Executive may receive from any other source. |
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TRANSMARK FCX LIMITED | ||||||||||
By: | /s/ G.P. Krans | |||||||||
Name: G.P. Krans | ||||||||||
Title: Authorized Representative | ||||||||||
Executed as a Deed | ||||||||||
EXECUTIVE | ||||||||||
/s/ Neil Philip Wagstaff | ||||||||||
Neil Philip Wagstaff | ||||||||||
in the presence of | ||||||||||
/s/ W.A. Harrison | ||||||||||
Witness signature | ||||||||||
Name: | W.A. Harrison | |||||||||
Occupation: | Solicitor | |||||||||
1. | Annual Bonus. For the fiscal year commencing on January 1, 2011, your target annual bonus shall be sixty-seven percent (67%) of your base salary as in effect at the beginning of such fiscal year with the actual annual bonus to be based upon such individual and/or Employer and/or Group performance criteria established for each such fiscal year by the Board. |
2. | Good Reason Consent. You hereby agree that notwithstanding the terms of the Employment Agreement the decrease in your target annual bonus for 2011 as set forth in this letter agreement does not constitute Good Reason pursuant to the Employment Agreement. |
3. | Governing Law. This letter agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of England. |
4. | Confirmation of Employment Agreement. In all other respects the Employment Agreement shall remain in effect and is hereby confirmed by the parties. |
Very truly yours, | ||
MRC TRANSMARK LIMITED | ||
/s/ Andrew R. Lane | ||
By: Andrew R. Lane | ||
Title: | ||
ACCEPTED AND AGREED: |
||
/s/ Neil Philip Wagstaff |
||
Neil Philip Wagstaff |
1. | Payment. In consideration of the termination of the Employment Agreement and of the covenants set forth below, you shall be paid a lump sum payment equal to $2,442,752.61 (the Agreed Amount). This payment represents the value of all amounts to which you would have become entitled during the remaining term of the Employment Agreement pursuant to Sections 2.1. 2.2 and 2.4 thereof, based on your continued service during such remaining term. The Agreed Amount (subject to all required withholdings) shall be paid to you in a lump sum on January 5, 2009, provided that the release attached hereto as Appendix A has been executed, delivered and has become irrevocable. It is understood and agreed that the Agreed Amount does not include any amounts accrued prior to the date hereof and payable pursuant to the terms of any of the companys employee benefit plans, any such amounts to be paid in accordance with the terms of such plans and, if applicable, in compliance with Section 409A of the Internal Revenue Code and the regulations issued thereunder. Upon payment of the Agreed Amount, the Employment Agreement shall terminate and be of no further force and effect. | |
2. | Profits Units. On December 21, 2007, pursuant to the Limited Liability Company Agreement of McJ Holding LLC dated as of December 4, 2006 (the LLC Agreement), you were granted 381.3098 Profits Units (as defined in the LLC Agreement). Notwithstanding Section 7.2(a) of the LLC Agreement, in the event of the termination of your service as chairman of the board of directors of the Company and as a member of the board of directors of the Company at any time for any reason, zero percent (0%) of your Profits Units shall be subject to forfeiture. | |
3. | Unauthorized Disclosure; Non-Competition; Non-Solicitation; Interference with Business Relationships. In consideration of your receipt of the Agreed Amount and other such |
consideration provided for herein, you agree to be bound by the covenants set forth in Appendix B to this letter agreement, which Appendix B shall be deemed to be incorporated in, and be a part of, this letter agreement. | ||
4. | Governing Law. This letter agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of New York, without giving effect to the conflicts of law principles thereof. |
Very truly yours, | ||||||||
McJUNKIN RED MAN HOLDING CORPORATION | ||||||||
/s/ Stephen W. Lake | ||||||||
By: | Stephen W. Lake | |||||||
Title: | Executive Vice President, General | |||||||
Counsel & Corporate Secretary | ||||||||
ACCEPTED AND AGREED: |
||||||||
/s/ Craig Ketchum |
||||||||
(a) | Affiliate: With respect to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. | ||
(b) | Board: The Board of Directors of the Company. | ||
(c) | Cause: With respect to a Participants termination of Employment, (a) if the Participant is at the time of termination a party to an employment or retention agreement that defines such term, the meaning given therein, and (b) in all other cases, the Participants (i) continuing failure, for more than 10 days after the Companys written notice to the Participant thereof, to perform such duties as are reasonably requested by the Company; (ii) failure to observe material policies generally applicable to officers or employees of the Company unless such failure is capable of being cured and is cured within 10 days of the Participant receiving written notice of such failure; (iii) failure to cooperate with any internal investigation of the Company; (iv) commission of any act of fraud, theft or financial dishonesty with |
respect to the Company or indictment or conviction of any felony; (v) chronic absenteeism; or (vi) abuse of alcohol or another controlled substance. | |||
(d) | Code: The Internal Revenue Code of 1986, as amended, or any successor thereto. | ||
(e) | Committee: The Board or such committee of the Board as may be designated from time to time to administer the Plan. | ||
(f) | Company: McJ Holding Corporation, a Delaware corporation, and any successor thereto by merger, consolidation or otherwise. | ||
(g) | Company Group: Collectively, the Company, its subsidiaries and its or their respective successors and assigns. | ||
(h) | Disability: (a) if the Participant is at the time of termination a party to an employment or retention agreement that defines such term, the meaning given therein, and (b) in all other cases, the Participant is unable to perform his duties or obligations to the Company by reason of physical or mental incapacity for a period of one hundred twenty (120) consecutive calendar days or a total period of two hundred ten (210) calendar days in any three hundred sixty (360) calendar day period. | ||
(i) | Effective Date: March 27, 2007. | ||
(j) | Employment: The term Employment as used herein shall be deemed to refer to (i) a Participants employment if the Participant is an employee of the Company Group, (ii) a Participants services as a consultant, if the Participant is a consultant to the Company Group and (iii) a Participants services as a non-employee director, if the Participant is a non-employee member of the Board. | ||
(k) | Fair Market Value: On a given date, (i) if there should be a public market for the Shares on such date, the arithmetic mean of the high and low prices of the Shares as reported on such date on the |
composite tape of the principal national securities exchange on which such Shares are listed or admitted to trading, or, if the Shares are not listed or admitted on any national securities exchange, the arithmetic mean of the per-Share closing bid price and per-Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System (or such market in which such prices are regularly quoted) (the Nasdaq), or, if no sale of Shares shall have been reported on the composite tape of any national securities exchange or quoted on the Nasdaq on such date, the arithmetic mean of the per-Share closing bid price and per-Share closing asked price on the immediately preceding date on which sales of the Shares have been so reported or quoted, and (ii) if there is not a public market for the Shares on such date, the value established by the Committee in good faith, which in the context of a Transaction shall be the price paid per Share. |
(l) | McJ Holding LLC: McJ Holding LLC, a Delaware limited liability company. | ||
(m) | McJ Holding LLC Agreement: The limited liability company agreement of McJ Holding LLC, dated as of December 4, 2006. | ||
(n) | McJunkin: McJunkin Corporation, a West Virginia corporation and wholly owned subsidiary of the Company. | ||
(o) | Option: A stock option granted pursuant to Section 6 of the Plan. | ||
(p) | Option Price: The purchase price per Share of an Option, as determined pursuant to Section 6(a) of the Plan. | ||
(q) | Participant: An employee, director or consultant who is selected by the Committee to participate in the Plan. | ||
(r) | Person: Any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government, or any agency or political subdivisions thereof. |
(s) | Plan: This McJ Holding Corporation 2007 Stock Option Plan. | ||
(t) | Shares: Shares of common stock of the Company and any other securities into which such shares of common stock are changed or for which such shares of common stock are exchanged. | ||
(u) | Stockholders Agreement: The Management Stockholders Agreement dated as of March 27, 2007 (as amended and restated from time to time) by and among the Company, McJ Holding LLC and such other Persons who are or become parties thereto. | ||
(v) | Transaction: (i) Any event which results in the GSCP Members (as defined in the McJ Holding LLC Agreement) and its or their Affiliates ceasing to directly or indirectly beneficially own, in the aggregate, at least 35% of the equity interests of McJunkin that they beneficially owned directly or indirectly as of the Effective Time (as defined in the McJ Holding LLC Agreement); or (ii) in a single transaction or a series of related transactions, the occurrence of the following event: a majority of the outstanding voting power of McJ Holding LLC, the Company or McJunkin, or substantially all of the assets of McJunkin, shall have been acquired or otherwise become beneficially owned, directly or indirectly, by any Person (other than any Member (as defined in the McJ Holding LLC Agreement) as of December 4, 2006 or any of its or their Affiliates, or the McJ Holding LLC or any of its Affiliates) or any two or more Persons (other than any Member as of December 4, 2006 or any of its or their Affiliates, or McJ Holding LLC or any of its Affiliates) acting as a partnership, limited partnership, syndicate or other group, entity or association acting in concert for the purpose of voting, acquiring, holding or disposing of the voting power of the McJ Holding LLC, the Company, or McJunkin; it being understood that, for this purpose, the acquisition or beneficial ownership of voting securities by the public shall not be an acquisition or constitute beneficial ownership by any Person or Persons acting in concert. For purposes of this definition, neither McJ Holding LLC nor any Person controlled by McJ Holding LLC shall deemed to be an Affiliate of any Member. |
(a) | Option Price. The Option Price shall be determined by the Committee, provided that the Option Price may not be less than the Fair Market Value of a Share on the date the Option is granted. | ||
(b) | Exercisability. Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted. | ||
(c) | Exercise of Options. Except as otherwise provided in the Plan or in an Option agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable. For purposes of this Section 6 of the Plan, the exercise date of an Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date payment is received by the Company pursuant to the following sentence. The Option Price for the Shares as to which an Option is exercised and any applicable withholding taxes shall be paid to the Company in full at the time of exercise at the election of the Participant, in cash or by check or wire transfer, or by such other means as are permitted by the Committee. No Participant shall have any rights to dividends or other rights of a stockholder with respect to Shares subject to an Option until the |
Participant has given written notice of exercise of the Option, has paid in full for such Shares, satisfied any applicable withholding requirements and, if applicable, has satisfied any other conditions imposed by the Committee or pursuant to the Plan or the applicable Option agreement. | |||
(d) | Unless the Committee determines otherwise, exercise of an Option shall be conditioned upon the execution by the Participant of the Stockholders Agreement, if such agreement remains in effect at the time of such exercise. |
(a) | Generally. In the event of any extraordinary cash or Share dividend, or Share split, reverse split, reorganization, reclassification, recapitalization, repurchase, issuance of warrants, rights or debentures, merger, consolidation, spin-off, split-up, combination or exchange of Shares or other corporate exchange, or any distribution to shareholders of Shares or any transaction similar to the foregoing, the Committee, without liability to any person, shall take such equitable actions as are appropriate in its reasonable judgment to preserve the economic rights of the Participant, whether by adjusting the terms of the Option or such other means as the Committee shall determine. | ||
(b) | Transaction. The Committee may provide in the applicable Option agreement or otherwise that, in the event of a Transaction, (i) any outstanding Options then held by Participants which are unexercisable or otherwise unvested shall automatically be deemed exercisable or otherwise vested upon the consummation of such Transaction, and (ii) the Committee may either (A) cancel all Options and make payment in connection with such cancellation equal to the excess, if any, of the Fair Market Value of the Shares subject to such Options over the aggregate Option Price of such Options or (B) provide for the issuance of substitute options or other awards that will preserve, as |
nearly as practicable, the economic terms of Options previously granted hereunder, in each case as determined by the Committee in good faith. |
a. | Affiliate: With respect to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. | ||
b. | Agreement: The written agreement setting forth the terms and conditions of Restricted Stock. | ||
c. | Board: The Board of Directors of the Company. | ||
d. | Cause: With respect to the Grantees termination of employment, (a) if the Grantee is at the time of termination a party to an employment or retention agreement that defines such term, the meaning given therein, and (b) in all other cases, the Grantees (i) continuing failure, for more than 10 days after the Companys written notice to the Grantee thereof, to perform such duties as are reasonably requested by the Company; (ii) failure to observe material policies generally applicable to officers or employees of the Company unless such failure is capable of being cured and is cured within 10 days of the Grantee receiving written notice of such failure; (iii) failure to cooperate with any internal investigation of the Company; (iv) commission of any act of fraud, theft or financial dishonesty with respect to the Company or indictment or conviction of any felony; (v) chronic absenteeism; or (vi) abuse of alcohol or another controlled substance. | ||
e. | Committee: The Board or such committee of the Board as may be designated from time to time to administer the Plan. | ||
f. | Company: McJ Holding Corporation, a Delaware corporation, and any successor thereto by merger, consolidation or otherwise. | ||
g. | Disability: (a) if the Grantee is at the time of termination a party to an employment or retention agreement that defines such term, the meaning given therein, and (b) in all other cases, the Grantee is unable to perform his duties or obligations to the Company by reason of physical or mental incapacity for a |
period of one hundred twenty (120) consecutive calendar days or a total period of two hundred ten (210) calendar days in any three hundred sixty (360) calendar day period. | |||
h. | Effective Date: March 27, 2007. | ||
i. | Grantee: An employee, director or consultant who is selected by the Committee to participate in the Plan. | ||
j. | LLC Agreement: The Limited Liability Company Agreement of McJ Holding LLC, dated as of December 4, 2006 (as amended and restated from time to time). | ||
k. | McJ Holding LLC: McJ Holding LLC, a Delaware limited liability company and parent of the Company. | ||
l. | McJunkin: McJunkin Corporation, a West Virginia corporation and wholly owned subsidiary of the Company. | ||
m. | Person: Any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government, or any agency or political subdivisions thereof. | ||
n. | Plan: This McJunkin Corporation 2007 Restricted Stock Plan. | ||
o. | Restricted Stock: Restricted common stock of the Company, granted on the terms and conditions as set forth in an Agreement. | ||
p. | Shares: Shares of common stock of the Company and any other securities into which such shares of common stock are changed or for which such shares of common stock are exchanged. | ||
q. | Stockholders Agreement: The Management Stockholders Agreement dated as of March 27, 2007 (as amended and restated from time to time) by and among the Company, McJ Holding LLC and such other Persons who are or become parties thereto. | ||
r. | Transaction: (i) Any event which results in the GSCP Members (as defined in the LLC Agreement) and its or their Affiliates ceasing to directly or indirectly beneficially own, in the aggregate, at least 35% of the equity interests of McJunkin that they beneficially owned directly or indirectly as of the Effective Time (as defined in the LLC Agreement); or (ii) in a single transaction or a series of related transactions, the occurrence of the following event: a majority of the outstanding voting power of McJ Holding LLC, the Company or McJunkin, or substantially all of the assets of McJunkin, shall have been acquired or otherwise become beneficially owned, directly or indirectly, by any Person (other than any Member (as defined in the LLC Agreement) as of December 4, 2006 or any of its or their Affiliates, or the McJ Holding LLC or any of its Affiliates) or any two or more Persons (other than any Member as of December 4, 2006 or any of its or |
-2-
their Affiliates, or McJ Holding LLC or any of its Affiliates) acting as a partnership, limited partnership, syndicate or other group, entity or association acting in concert for the purpose of voting, acquiring, holding or disposing of the voting power of the McJ Holding LLC, the Company, or McJunkin; it being understood that, for this purpose, the acquisition or beneficial ownership of voting securities by the public shall not be an acquisition or constitute beneficial ownership by any Person or Persons acting in concert. For purposes of this definition, neither McJ Holding LLC nor any Person controlled by McJ Holding LLC shall deemed to be an Affiliate of any Member. |
-3-
Page | ||||||
ARTICLE I |
||||||
FORMATION OF THE COMPANY |
||||||
Section 1.1 | Formation |
2 | ||||
Section 1.2 | Company Name |
2 | ||||
Section 1.3 | The Certificate, etc |
2 | ||||
Section 1.4 | Term of Company |
2 | ||||
Section 1.5 | Registered Agent and Office |
2 | ||||
Section 1.6 | Principal Places of Business |
2 | ||||
Section 1.7 | Qualification in Other Jurisdictions |
2 | ||||
Section 1.8 | Fiscal Year |
3 | ||||
ARTICLE II |
||||||
PURPOSE AND POWERS OF THE COMPANY |
||||||
Section 2.1 | Purpose |
3 | ||||
Section 2.2 | Powers of the Company |
3 | ||||
Section 2.3 | Certain Tax Matters |
3 | ||||
ARTICLE III |
||||||
MEMBERS AND INTERESTS GENERALLY |
||||||
Section 3.1 | Powers of Members |
3 | ||||
Section 3.2 | Interests Generally |
3 | ||||
Section 3.3 | Meetings of Members |
4 | ||||
Section 3.4 | Business Transactions of a Member with the Company |
5 | ||||
Section 3.5 | No Cessation of Membership upon Bankruptcy |
5 | ||||
Section 3.6 | Confidentiality |
6 | ||||
Section 3.7 | [Intentionally Omitted] |
6 | ||||
Section 3.8 | Other Business for GSCP Members |
6 | ||||
Section 3.9 | Additional Members |
7 | ||||
Section 3.10 | Preemptive Rights |
7 | ||||
ARTICLE IV |
||||||
MANAGEMENT |
||||||
Section 4.1 | Board |
10 |
Page | ||||||
Section 4.2 | Directors as Agents |
13 | ||||
Section 4.3 | Officers |
13 | ||||
ARTICLE V |
||||||
INVESTMENT REPRESENTATIONS, WARRANTIES AND COVENANTS |
||||||
Section 5.1 | Representations, Warranties and Covenants of Members |
14 | ||||
Section 5.2 | Covenants |
15 | ||||
Section 5.3 | Additional Covenants of Management Members |
15 | ||||
ARTICLE VI |
||||||
CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS |
||||||
Section 6.1 | Capital Accounts |
16 | ||||
Section 6.2 | Adjustments |
16 | ||||
Section 6.3 | Additional Capital Contributions |
16 | ||||
Section 6.4 | Negative Capital Accounts |
17 | ||||
ARTICLE VII | ||||||
ADDITIONAL TERMS APPLICABLE TO RESTRICTED COMMON UNITS AND PROFITS UNITS |
||||||
Section 7.1 | Forfeiture of Profits Units |
17 | ||||
Section 7.2 | Effects of Termination of Employment on Restricted Common Units and Profits Units |
17 | ||||
ARTICLE VIII |
||||||
ALLOCATIONS |
||||||
Section 8.1 | Book Allocations of Income and Loss |
19 | ||||
Section 8.2 | Special Book Allocations |
19 | ||||
Section 8.3 | Tax Allocations |
19 | ||||
ARTICLE IX |
||||||
DISTRIBUTIONS |
||||||
Section 9.1 | Distributions Generally |
20 | ||||
Section 9.2 | Distributions In Kind |
21 |
Page | ||||||
Section 9.3 | No Withdrawal of Capital |
21 | ||||
Section 9.4 | Withholding |
21 | ||||
Section 9.5 | Restricted Distributions |
22 | ||||
Section 9.6 | Tax Distributions |
22 | ||||
Section 9.7 | Mandatory Distributions of Cash |
22 | ||||
ARTICLE X | ||||||
BOOKS AND RECORDS | ||||||
Section 10.1 | Books, Records and Financial Statements |
22 | ||||
Section 10.2 | Filings of Returns and Other Writings; Tax Matters Partner |
23 | ||||
Section 10.3 | Code Section 83 Safe Harbor Election |
23 | ||||
Section 10.4 | Accounting Method |
24 | ||||
ARTICLE XI | ||||||
LIABILITY, EXCULPATION AND INDEMNIFICATION | ||||||
Section 11.1 | Liability |
24 | ||||
Section 11.2 | Exculpation |
25 | ||||
Section 11.3 | Fiduciary Duty |
25 | ||||
Section 11.4 | Indemnification |
25 | ||||
Section 11.5 | Expenses |
25 | ||||
Section 11.6 | Severability |
25 | ||||
ARTICLE XII | ||||||
TRANSFERS OF INTERESTS | ||||||
Section 12.1 | Restrictions on Transfers of Interests by Investor Members |
26 | ||||
Section 12.2 | Overriding Provisions |
26 | ||||
Section 12.3 | Involuntary Transfers |
27 | ||||
Section 12.4 | Successors and Assigns |
27 | ||||
Section 12.5 | Substitute Members |
28 | ||||
Section 12.6 | Release of Liability |
28 | ||||
Section 12.7 | Tag-Along Rights |
28 | ||||
Section 12.8 | Drag-Along Rights |
30 | ||||
Section 12.9 | Qualified IPO |
32 | ||||
Section 12.10 | Redemption Rights |
33 | ||||
Section 12.11 | Certain Call Rights Upon Termination of Employment |
34 |
Page | ||||||
ARTICLE XIII |
||||||
DISSOLUTION, LIQUIDATION AND TERMINATION |
||||||
Section 13.1 | Dissolving Events |
35 | ||||
Section 13.2 | Dissolution and Winding-Up |
35 | ||||
Section 13.3 | Distributions in Cash or in Kind |
36 | ||||
Section 13.4 | Termination |
36 | ||||
Section 13.5 | Claims of the Members |
36 | ||||
ARTICLE XIV |
||||||
MISCELLANEOUS |
||||||
Section 14.1 | Notices |
36 | ||||
Section 14.2 | Interpretation, Construction |
38 | ||||
Section 14.3 | Entire Agreement |
38 | ||||
Section 14.4 | Counterparts |
38 | ||||
Section 14.5 | Governing Law; Waiver of Jury Trial |
38 | ||||
Section 14.6 | Specific Performance |
39 | ||||
Section 14.7 | Invalidity of Provision |
39 | ||||
Section 14.8 | Further Actions |
39 | ||||
Section 14.9 | Legend |
40 | ||||
Section 14.10 | Further Assurances; Company Logo |
40 | ||||
Section 14.11 | Expenses |
41 | ||||
Section 14.12 | Amendment and Waiver |
41 | ||||
Section 14.13 | Effectiveness |
41 | ||||
Section 14.14 | Severability |
42 | ||||
Section 14.15 | No Third Party Beneficiaries |
42 | ||||
Section 14.16 | Survival of Representations and Warranties |
42 | ||||
Section 14.17 | Conflicting Agreements |
42 | ||||
Section 14.18 | Power of Attorney |
42 | ||||
Section 14.19 | Each Interest in the Company is a Security |
43 | ||||
ARTICLE XV |
||||||
DEFINED TERMS |
||||||
Section 15.1 | Definitions |
43 | ||||
Schedule A | Members |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Percentage of such | ||||
Management Members | ||||
Restricted Common Units/ | ||||
Profits Units | ||||
If the termination occurs | to be Forfeited | |||
Before the third anniversary of the
grant of such Management Members
Restricted Common Units/ Profits
Units |
100 | % | ||
On or after the third anniversary,
but before the fourth anniversary,
of the grant of such Management
Members Restricted Common Units/
Profits Units |
66.67 | % |
17
Percentage of such | ||||
Management Members | ||||
Restricted Common Units/ | ||||
Profits Units | ||||
If the termination occurs | to be Forfeited | |||
On or after the fourth anniversary,
but before the fifth anniversary,
of the grant of such Management
Members Restricted Common Units/
Profits Units |
33.33 | % | ||
On or after the fifth anniversary
of the grant of such Management
Members Restricted Common Units/
Profits Units |
0 | % |
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
(a) | involving the sale, transfer or other disposition by the Investor Members to one or more Persons that are not, immediately prior to such sale, transfer or other disposition Affiliates of any GSCP Member, of all or substantially all of the Interests of the Company or any of its Subsidiaries beneficially owned by the Investor Members as of the date of such transaction; or | ||
(b) | involving the sale, transfer or other disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to one or more Persons that are not, immediately prior to such sale, transfer or other disposition, Affiliates of any GSCP Member. |
46
(a) | for purposes of determining the value of any property owned by, contributed to or distributed by the Company, (i) in the case of publicly traded securities, the average of their last sales prices on the applicable trading exchange or quotation system on each trading day during the five trading-day period ending on such date and (ii) in the case of any other property, the fair market value of such property, as determined in good faith by the Board, or | ||
(b) | for purposes of determining the value of any Members Interest in connection with Section 12.3 (Involuntary Transfers), (i) the fair market value of such Interest as reflected in the most recent appraisal report prepared, at the request of the Board, by an independent valuation consultant or appraiser of recognized national standing, reasonably satisfactory to the Board, or (ii) in the event no such appraisal exists or the date of such report is more than one year prior to the date of determination, the fair market value of such Interest as determined in good faith by the Board. |
47
48
49
50
51
2
3
4
5
6
GS Capital Partners V Fund, L.P. | ||||||||
By: | GSCP V Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President | ||||||||
GS Capital Partners V Offshore Fund, L.P. | ||||||||
By: | GSCP V Offshore Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President | ||||||||
GS Capital Partners V Institutional, L.P. | ||||||||
By: | GS Advisors V, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President | ||||||||
GS Capital Partners V GmbH & Co. KG | ||||||||
By: | GS Advisors V, L.L.C., | |||||||
its managing limited partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President |
7
GS Capital Partners VI Fund, L.P. | ||||||||
By: | GSCP VI Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President | ||||||||
GS Capital Partners VI Offshore Fund, L.P. | ||||||||
By: | GSCP VI Offshore Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President | ||||||||
GS Capital Partners VI Parallel, L.P. | ||||||||
By: | GS Advisors VI, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President | ||||||||
GS Capital Partners VI GmbH & Co. KG | ||||||||
By: | GS Advisors VI, L.L.C., | |||||||
its managing limited partner | ||||||||
By: | /s/ Christine Vollertsen
|
|||||||
Title: Vice President |
8
2
3
4
5
6
7
8
9
THE COMPANY: | ||||||||
PVF HOLDINGS LLC | ||||||||
By: | /s/ Stephen W. Lake | |||||||
Name: | Stephen W. Lake | |||||||
Title: | Executive Vice President, General Counsel and | |||||||
Corporate Secretary | ||||||||
GSCP MEMBERS: | ||||||||
GS Capital Partners V Fund, L.P. | ||||||||
By: | GSCP V Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director | ||||||||
GS Capital Partners V Offshore Fund, L.P. | ||||||||
By: | GSCP V Offshore Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director | ||||||||
GS Capital Partners V Institutional, L.P. | ||||||||
By: | GS Advisors V, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director | ||||||||
GS Capital Partners V GmbH & Co. KG | ||||||||
By: | GS Advisors V, L.L.C., | |||||||
its managing limited partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director |
GS Capital Partners VI Fund, L.P. | ||||||||
By: | GSCP VI Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director | ||||||||
GS Capital Partners VI Offshore Fund, L.P. | ||||||||
By: | GSCP VI Offshore Advisors, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director | ||||||||
GS Capital Partners VI Parallel, L.P. | ||||||||
By: | GS Advisors VI, L.L.C., | |||||||
its general partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director | ||||||||
GS Capital Partners VI GmbH & Co. KG | ||||||||
By: | GS Advisors VI, L.L.C., | |||||||
its managing limited partner | ||||||||
By: | /s/ John E. Bowman
|
|||||||
Title: Managing Director |
Page | ||||
1. Certain Definitions |
2 | |||
2. Registration Rights |
5 | |||
2.1. Demand Registrations |
5 | |||
2.2. Piggyback Registrations |
7 | |||
2.3. Allocation of Securities Included in Registration Statement |
9 | |||
2.4. Registration Procedures |
11 | |||
2.5. Registration Expenses |
17 | |||
2.6. Certain Limitations on Registration Rights |
17 | |||
2.7. Limitations on Sale or Distribution of Other Securities |
18 | |||
2.8. No Required Sale |
19 | |||
2.9. Indemnification |
19 | |||
3. Underwritten Offerings |
22 | |||
3.1. Requested Underwritten Offerings |
22 | |||
3.2. Piggyback Underwritten Offerings |
23 | |||
4. General |
23 | |||
4.1. Adjustments Affecting Registrable Securities |
23 | |||
4.2. Rule 144 and Rule 144A |
24 | |||
4.3. Nominees for Beneficial Owners |
24 | |||
4.4. Amendments and Waivers |
24 | |||
4.5. Notices |
25 | |||
4.6. Successors and Assigns |
26 | |||
4.7. Entire Agreement |
26 | |||
4.8. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial |
27 | |||
4.9. Interpretation; Construction |
27 | |||
4.10. Counterparts |
28 | |||
4.11. Severability |
28 | |||
4.12. Specific Performance |
28 | |||
4.13. Further Assurances |
28 |
2
3
4
THE COMPANY: PVF HOLDINGS LLC |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Executive Vice President, General
Counsel and Corporate Secretary |
|||
GSCP MEMBERS: |
||||
GS Capital Partners V Fund, L.P. |
||||
By: | GSCP V Advisors, L.L.C., | |||
its general partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners V Offshore Fund, L.P. |
||||
By: | GSCP V Offshore Advisors, L.L.C., | |||
its general partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners V Institutional, L.P. |
||||
By: | GS Advisors V, L.L.C., | |||
its general partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners V GmbH & Co. KG |
||||
By: | GS Advisors V, L.L.C., | |||
its managing limited partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners VI Fund, L.P. |
||||
By: | GSCP VI Advisors, L.L.C., | |||
its general partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners VI Offshore Fund, L.P. |
||||
By: | GSCP VI Offshore Advisors, L.L.C., | |||
its general partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners VI Parallel, L.P. |
||||
By: | GS Advisors VI, L.L.C., | |||
its general partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
GS Capital Partners VI GmbH & Co. KG |
||||
By: | GS Advisors VI, L.L.C., | |||
its managing limited partner | |
|||
By: | /s/ John E. Bowman | |||
Name: | John E. Bowman | |||
Title: | Managing Director | |||
1. | Permitted Transfers. The provisions of Section 6 of the Stock Option Agreement are hereby deleted in their entirety and replaced with the following new Section 6. |
6. | Transferability. Unless otherwise determined by the Committee, the Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided, that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof. If the requirements of the preceding sentence have been satisfied, such heir or legatee of the Participant shall be deemed a Permitted Transferee. Notwithstanding the foregoing, the Participant may transfer the Option, in whole or in part, to Andy & Cindy Lane Family, L.P. (a Permitted Transferee), on terms and conditions satisfactory to the Company. During the Participants lifetime, the Option is exercisable only by the Participant or a Permitted Transferee. |
2. | Confirmation of Stock Option Agreement. In all other respects the Stock Option Agreement shall remain in effect and is hereby confirmed by the parties. |
MCJUNKIN RED MAN HOLDING CORPORATION | ||||||
By: | /s/ Stephen W. Lake
|
|||||
Title: Executive Vice President, General Counsel and Corporate Secretary |
||||||
PVF HOLDINGS LLC | ||||||
By: | /s/ Stephen W. Lake | |||||
Name: Stephen W. Lake | ||||||
Title: Executive Vice President, General Counsel and Corporate Secretary |
||||||
PARTICIPANT | ||||||
By: | /s/ Andrew Lane | |||||
Name: Andrew Lane |
1. | Option Price. The Option Price shall hereby be reduced from $17.63 to $12.50, which the Company and the Holder agree is not less than the Fair Market Value of the Companys common stock as of the date of this Agreement. | |
2. | Confirmation of Stock Option Agreement and First Amendment. In all other respects the Stock Option Agreement and the First Amendment shall remain in effect and are hereby confirmed by the parties. |
MCJUNKIN RED MAN HOLDING CORPORATION | ||||||
By: | /s/ Stephen W. Lake
|
|||||
Name: Stephen W. Lake | ||||||
Title: Executive Vice-President, General | ||||||
Counsel and Corporate Secretary | ||||||
PVF HOLDINGS LLC | ||||||
By: | /s/ Stephen W. Lake
|
|||||
Name: Stephen W. Lake | ||||||
Title: Executive Vice-President, General | ||||||
Counsel and Corporate Secretary | ||||||
ANDY & CINDY LANE FAMILY, L.P. | ||||||
By: Andy & Cindy Lane Management GP, L.L.C. | ||||||
its general partner | ||||||
By: | /s/ Andrew R. Lane
|
|||||
Name: Andrew R. Lane | ||||||
Title: Manager |
-2-
-3-
o | Your individual net worth, or joint net worth with your spouse, as of the date hereof, exceeds $1,000,000; | |
o | You had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of those years, and have a reasonable expectation of reaching the same income level in the current year; or | |
o | None of the statements above apply. |
-4-
-5-
MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Exec Vice-President, General Counsel & Corporate Secretary |
|||
PVF HOLDINGS LLC (for purposes of Section 20 only) |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Exec Vice-President, General Counsel & Corporate Secretary |
|||
GRANTEE |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
1. | Permitted Transfers. The provisions of Section 2 of the Restricted Stock Agreement are hereby deleted in their entirety and replaced with the following new Section 2. |
2. | Restrictions on Transfer. The shares of Restricted Stock issued under this Agreement may not be sold, transferred, assigned or otherwise disposed of, may not be pledged or otherwise hypothecated, and shall be subject to the terms of the Stockholders Agreement. Notwithstanding the foregoing, the Participant may transfer the Award, in whole or in part, to Andy & Cindy Lane Family, L.P., on terms and conditions satisfactory to the Company. |
3. | Confirmation of Restricted Stock Agreement. In all other respects the Restricted Stock Agreement shall remain in effect and is hereby confirmed by the parties. |
MCJUNKIN RED MAN HOLDING CORPORATION | ||||||
By: | /s/ Stephen W. Lake
|
|||||
Title: Executive Vice President, General Counsel and Corporate Secretary |
||||||
PVF HOLDINGS LLC | ||||||
By: | /s/ Stephen W. Lake | |||||
Name: Stephen W. Lake | ||||||
Title: Executive Vice President, General Counsel and Corporate Secretary |
||||||
PARTICIPANT | ||||||
By: | /s/ Andrew Lane | |||||
Name: Andrew Lane |
2
3
4
If to the Company:
|
McJunkin Red Man Holding Corporation | |
835 Hillcrest Drive | ||
Charleston, WV 25311 | ||
Attention: General Counsel | ||
Facsimile: 304-348-1557 | ||
with a copy to:
|
GS Capital Partners | |
85 Broad Street | ||
New York, NY 10004 | ||
Attention: Jack Daly | ||
Facsimile: 212-357-5505 | ||
and | ||
Fried, Frank, Harris, Shriver & Jacobson LLP | ||
One New York Plaza | ||
New York, NY 10004 | ||
Attention: Robert C. Schwenkel, Esq. | ||
Facsimile: 212-859-4000 | ||
If to the Subscriber:
|
Len Anthony, to his principal residence as reflected | |
in the records of the Company. |
5
6
SUBSCRIBER | ||||||
/s/ Leonard M. Anthony | ||||||
Leonard M. Anthony | ||||||
MCJUNKIN RED MAN HOLDING CORPORATION | ||||||
By: | /s/ Andrew R. Lane | |||||
Name: Andrew R. Lane | ||||||
Title: CEO | ||||||
For purposes of Section 7 only: | ||||||
PVF HOLDINGS LLC | ||||||
By: | /s/ Stephen W. Lake | |||||
Name: Stephen W. Lake | ||||||
Title: Sr. Vice President, General Counsel & Corp Secretary |
7
2
3
4
o | Your individual net worth, or joint net worth with your spouse, as of the date hereof, exceeds $1,000,000; | ||
o | You had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of those years, and have a reasonable expectation of reaching the same income level in the current year; or | ||
o | None of the statements above apply. |
5
6
MCJUNKIN RED MAN HOLDING
CORPORATION |
||||
By: | /s/ Andrew R. Lane | |||
Name: | Andrew R. Lane | |||
Title: | CEO | |||
PVF HOLDINGS LLC (for purposes of Section 15 only) |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: Sr. Vice President, General Counsel & Corporate Secretary | ||||
PARTICIPANT |
||||
By: | /s/ Leonard M. Anthony | |||
Name: | Leonard M. Anthony | |||
1. | Option Price. The Option Price shall hereby be reduced from $17.63 to $12.50, which the Company and the Participant agree is not less than the Fair Market Value of the Companys common stock as of the date of this Agreement. | |
2. | Confirmation of Stock Option Agreement. In all other respects the Stock Option Agreement shall remain in effect and is hereby confirmed by the parties. |
MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Stephen W. Lake | |||
Name: Stephen W. Lake | ||||
Title: Executive Vice President, General Counsel and Corporate Secretary | ||||
PVF HOLDINGS LLC |
||||
By: | /s/ Stephen W. Lake | |||
Name: Stephen W. Lake | ||||
Title: Executive Vice President, General Counsel and Corporate Secretary | ||||
LEN ANTHONY |
||||
/s/ Leonard M. Anthony | ||||
-2-
-3-
þ | Your individual net worth, or joint net worth with your spouse, as of the date hereof, exceeds $1,000,000; | |
þ | You had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of those years, and have a reasonable expectation of reaching the same income level in the current year; or | |
o | None of the statements above apply. |
-4-
-5-
MCJUNKIN RED MAN HOLDING
CORPORATION |
|||||
By: | /s/ Stephen W. Lake | ||||
Name: | Stephen W. Lake | ||||
Title: Executive Vice-President, General Counsel and Corporate Secretary | |||||
PVF HOLDINGS LLC (for purposes of Section 20
only) |
|||||
By: | /s/ Stephen W. Lake | ||||
Name: | Stephen W. Lake | ||||
Title: Executive Vice-President, General Counsel and Corporate Secretary | |||||
GRANTEE |
|||||
By: | /s/ Leonard M. Anthony | ||||
Name: | Len Anthony | ||||
2
3
4
If to the Company: | McJunkin Red Man Holding Corporation 8023 E. 63rd Place Tulsa, OK 74133 Attention: General Counsel Facsimile: |
|
with a copy to: | GS Capital Partners 85 Broad Street New York, NY 10004 Attention: Jack Daly Facsimile: 212-357-5505 and |
|
Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, NY 10004 Attention: Robert C. Schwenkel, Esq. Facsimile: 212-859-4000 |
||
If to the Subscriber: | John Perkins to his principal residence as reflected in the records of the Company. |
5
6
SUBSCRIBER |
||||
/s/ John Perkins | ||||
John Perkins | ||||
MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Executive VP & General Counsel | |||
For purposes of Section 7 only: |
||||
PVF HOLDINGS LLC |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Executive VP & General Counsel | |||
2
3
4
þ | Your individual net worth, or joint net worth with your spouse, as of the date hereof, exceeds $1,000,000; | ||
o | You had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of those years, and have a reasonable expectation of reaching the same income level in the current year; or | ||
o | None of the statements above apply. |
5
6
MCJUNKIN RED MAN HOLDING CORPORATION |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Executive Vice President, General Counsel and Corporate Secretary | |||
PVF HOLDINGS LLC (for purposes of Section 15 only) |
||||
By: | /s/ Stephen W. Lake | |||
Name: | Stephen W. Lake | |||
Title: | Executive Vice President, General Counsel and Corporate Secretary | |||
PARTICIPANT |
||||
By: | /s/ John A. Perkins | |||
Name: | John A. Perkins | |||
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
COMPANY: McJunkin Red Man Holding Corporation |
||||
By: | /s/ Andrew Lane | |||
Name: | Andrew Lane | |||
Title: | Chairman, President and Chief Executive Officer | |||
INDEMNITEE: |
||||
By: | /s/ Peter C. Boylan, III | |||
Name: | Peter C. Boylan, III | |||
-14-
Predecessor | Successor | |||||||||||||||||||||||
Eleven |
||||||||||||||||||||||||
One Month |
Months |
|||||||||||||||||||||||
Year Ended |
Ended |
Ended |
||||||||||||||||||||||
December 31, |
January |
December 31, |
Year Ended December 31, | |||||||||||||||||||||
2006 | 2007 | 2007 | 2008 | 2009(1) | 2010(2) | |||||||||||||||||||
Earnings |
||||||||||||||||||||||||
Pretax
income (loss) from continuing operations |
$ | 117.9 | $ | 11.2 | $ | 82.0 | $ | 406.7 | $ | (278.6 | ) | $ | (75.2 | ) | ||||||||||
Fixed Charges |
3.2 | 0.1 | 62.1 | 85.2 | 117.0 | 140.3 | ||||||||||||||||||
Earnings |
$ | 121.1 | $ | 11.3 | $ | 144.1 | $ | 491.9 | $ | (161.6 | ) | $ | 65.0 | |||||||||||
Fixed charges: |
Interest expense (3) |
$ | 2.8 | $ | 0.1 | $ | 61.7 | $ | 84.5 | $ | 116.5 | $ | 139.6 | |||||||||||
Interest
component of rental expense |
0.4 | | 0.4 | 0.7 | 0.5 | 0.7 | ||||||||||||||||||
Total fixed charges |
3.2 | 0.1 | 62.1 | 85.2 | 117.0 | 140.3 | ||||||||||||||||||
Ratio of earning to fixed charges (4) |
38.2 | x | 107.7 | x | 2.3 | x | 5.8 | x | | | ||||||||||||||
(1) | Earnings were insufficient to cover fixed charges by $279 million for the year ended December 31, 2009. | |
(2) | Earnings were insufficient to cover fixed charges by $75 million for the year ended December 31, 2010. | |
(3) | Interest expense includes original issue discount and amortization charges associated with debt issuance costs. | |
(4) | Certain ratios may not recompute due to rounding differences. |
800 Nicollet Mall | ||
Minneapolis, Minnesota | 55402 | |
(Address of principal executive offices) | (Zip Code) |
Delaware | 55-0229830 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2 Houston Center | ||
909 Fannin, Suite 3100 | ||
Houston, Texas | 77010 | |
(Address of Principal Executive Offices) | (Zip Code) |
Primary Standard | ||||||||
State or Other Jurisdiction of | Industrial | I.R.S. Employer | ||||||
Exact Name of Registrant Guarantor as | Incorporation or | Classification Code | Identification | |||||
Specified in its Charter (1) | Organization | Number | Number | |||||
GREENBRIER PETROLEUM CORPORATION
|
West Virginia | 1311 | 55-0566559 | |||||
MCJUNKIN NIGERIA LIMITED
|
Delaware | 1311 | 55-0758030 | |||||
MCJUNKIN-PUERTO RICO CORPORATION
|
Delaware | 1311 | 27-0094172 | |||||
MCJUNKIN RED MAN DEVELOPMENT CORPORATION
|
Delaware | 1311 | 55-0825430 | |||||
MCJUNKIN RED MAN HOLDING CORPORATION
|
Delaware | 1311 | 20-5956993 | |||||
MCJUNKIN-WEST AFRICA CORPORATION
|
Delaware | 1311 | 20-4303835 | |||||
MIDWAY-TRISTATE CORPORATION
|
New York | 1311 | 13-3503059 | |||||
MILTON OIL & GAS COMPANY
|
West Virginia | 1311 | 55-0547779 | |||||
MRC MANAGEMENT COMPANY
|
Delaware | 1311 | 26-1570465 | |||||
RUFFNER REALTY COMPANY
|
West Virginia | 1311 | 55-0547777 | |||||
THE SOUTH TEXAS SUPPLY
COMPANY, INC.
|
Texas | 1311 | 74-2804317 |
(1) | The address for each of the additional registrant guarantors is c/o McJunkin Red Man Corporation, 2 Houston Center, 909 Fannin, Suite 3100, Houston, Texas 77010. |
2
Item 1. | GENERAL INFORMATION. Furnish the following information as to the Trustee. |
a) | Name and address of each examining or supervising authority to which it is subject. |
Comptroller of the Currency Washington, D.C. |
b) | Whether it is authorized to exercise corporate trust powers. |
Yes |
Item 2. | AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. |
None |
Items 3-15 | Items 3-15 are not applicable because to the best of the Trustees knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee. |
Item 16. | LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification. |
1. | A copy of the Articles of Association of the Trustee.* | ||
2. | A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2. | ||
3. | A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3. | ||
4. | A copy of the existing bylaws of the Trustee.** | ||
5. | A copy of each Indenture referred to in Item 4. Not applicable. | ||
6. | The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6. | ||
7. | Report of Condition of the Trustee as of December 31, 2010 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7. |
* | Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005. | |
** | Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-166527 filed on May 5, 2010. |
3
By: | /s/ Raymond S. Haverstock | |||
Raymond S. Haverstock | ||||
Vice President | ||||
4
DESCRIPTION OF OUTSTANDING NOTES | |||||||||
Certificate or |
Aggregate |
||||||||
Registration |
Principal |
||||||||
Name(s) and Address(es) of Registered Holder(s) |
Numbers(s) of |
Amount |
Aggregate Principal Amount |
||||||
(Please Fill in, if Blank, Exactly as |
Outstanding |
Represented by |
of Outstanding Notes Being |
||||||
Name(s) Appear(s) on Certificate(s)) | Notes* | Outstanding Notes | Tendered (if less than all)** | ||||||
Total Principal Amount of Outstanding Notes |
$ | ||||||||
* Need not be completed by Holders tendering by book-entry
transfer.
|
|||||||||
** Unless otherwise indicated in this column, the holder
will be deemed to have tendered all Outstanding Notes held by
the Registered Holder(s) listed in the previous column. See
instruction 2.
|
|||||||||
2
o | CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY DTC, EUROCLEAR OR CLEARSTREAM TO THE EXCHANGE AGENTS ACCOUNT AT DTC, EUROCLEAR OR CLEARSTREAM AND COMPLETE THE FOLLOWING: |
Name of Tendering Institution: |
DTC, Euroclear or Clearstream Book-Entry
Account: |
Transaction Code No.: |
o | CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: |
Name(s) of Holder(s) of Outstanding Notes: |
Window Ticket No. (If Any): |
Date of Execution of Notice of Guaranteed Delivery: |
|
Name of Eligible Institution that Guaranteed
Delivery: |
DTC, Euroclear or Clearstream Book-Entry Account
No.: |
If Delivered by Book-Entry Transfer: |
Name of Tendering Institution: |
Transaction Code: |
o | CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO: |
Name: |
|
Address: |
|
3
4
5
X
|
Date: | |
X
|
Date: | |
Signature(s) of Registered
Holder(s) or Authorized Signatory
|
||
Names:
|
Address: | |
(Please Print)
|
(Including ZIP Code) | |
Area Code and | ||
Capacity(ies):
|
Telephone No.: |
Social Security No(s).: |
6
Name: |
Address: |
Zip Code: |
Taxpayer Identification or Social Security Number: |
Name: |
Address: |
Zip Code: |
Taxpayer Identification or Social Security Number: |
7
8
9
IMPORTANT: | THIS LETTER OF TRANSMITTAL (TOGETHER WITH CERTIFICATES FOR OUTSTANDING NOTES AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO 5:00 P.M., NEW YORK CITY TIME ON THE EXPIRATION DATE. |
Certificate Surrendered | Outstanding Notes Tendered | Outstanding Notes Accepted | ||
Delivery Prepared by:
|
Checked by: | Date: |
10
Signature(s) of Registered Holder(s) or Authorized Signatory: |
Name(s) of Registered Holder(s): | |
Principal Amount of Outstanding Notes Tendered:
|
Address: | |
Area Code and Telephone No.: | ||
Certificate No(s). of Outstanding Notes (if available): |
If Outstanding Notes will be delivered by book-entry transfer at The Depository Trust Company (DTC), Euroclear Bank S.A./N.V., as operator of the Euroclear system (Euroclear), or Clearstream Banking S.A. (Clearstream), insert DTC, Euroclear or Clearstream Account No.: | |
Date:
|
2
Name(s): |
Capacity: |
Address(es): |
Name of Firm:
|
Authorized Signature | |
Address:
|
Name: | |
|
Title: | |
Area Code and Telephone No.
|
Date: | |
|
3
o | To TENDER the following Outstanding Notes held by you for the account of the undersigned (insert principal amount of Outstanding Notes to be tendered (if any)): |
o | NOT to TENDER any Outstanding Notes held by you for the account of the undersigned. |
2
2
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end
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