25,000,000.00
CREDIT AGREEMENT
Among
3DX TECHNOLOGIES INC.
as Borrower,
THE FINANCIAL INSTITUTIONS
NAMED IN THIS CREDIT AGREEMENT
as Banks,
and
NATIONSBANK OF TEXAS, N.A.
as Agent
December 18, 1997
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . 1 Section 1.02. Computation of Time Periods . . . . . . . . . . . . . . . . 15 Section 1.03. Accounting Terms; Changes in GAAP . . . . . . . . . . . . . 15 Section 1.04. Types of Advances . . . . . . . . . . . . . . . . . . . . . 15 Section 1.05. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE II CREDIT FACILITIES
Section 2.01. Commitment for Advances . . . . . . . . . . . . . . . . . . 16 Section 2.02. Borrowing Bases . . . . . . . . . . . . . . . . . . . . . . 17 Section 2.03. Method of Borrowing . . . . . . . . . . . . . . . . . . . . 19 Section 2.04. Prepayment of Advances . . . . . . . . . . . . . . . . . . 21 Section 2.05. Repayment of Advances . . . . . . . . . . . . . . . . . . . 24 Section 2.06. Letters of Credit . . . . . . . . . . . . . . . . . . . . . 24 Section 2.07. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Section 2.08. Interest . . . . . . . . . . . . . . . . . . . . . . . . . 30 Section 2.09. Payments and Computations . . . . . . . . . . . . . . . . . 32 Section 2.10. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . 33 Section 2.11. Breakage Costs . . . . . . . . . . . . . . . . . . . . . . 33 Section 2.12. Increased Costs . . . . . . . . . . . . . . . . . . . . . . 34 Section 2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE III CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Credit Agreement . . . . . . . . . 39 Section 3.02. Conditions Precedent to All Borrowings . . . . . . . . . . 40
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence; Subsidiaries . . . . . . . . . . . . . 40 Section 4.02. Corporate Power . . . . . . . . . . . . . . . . . . . . . . 41 Section 4.03. Authorization and Approvals . . . . . . . . . . . . . . . . 41 Section 4.04. Enforceable Obligations . . . . . . . . . . . . . . . . . . 41 Section 4.05. Financial Statements . . . . . . . . . . . . . . . . . . . 42 Section 4.06. True and Complete Disclosure . . . . . . . . . . . . . . . 42 Section 4.07. Litigation . . . . . . . . . . . . . . . . . . . . . . . . 42 Section 4.08. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 43
-i- 3 Section 4.09. Investment Company Act . . . . . . . . . . . . . . . . . . 43 Section 4.10. Public Utility Holding Company Act . . . . . . . . . . . . 43 Section 4.11. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Section 4.12. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . 43 Section 4.13. Condition of Property; Casualties . . . . . . . . . . . . . 44 Section 4.14. No Burdensome Restrictions; No Defaults . . . . . . . . . . 44 Section 4.15. Environmental Condition . . . . . . . . . . . . . . . . . . 44 Section 4.16. Permits, Licenses, Etc. . . . . . . . . . . . . . . . . . . 45 Section 4.17. Gas Contracts . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE V AFFIRMATIVE COVENANTS
Section 5.01. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . 46 Section 5.02. Maintenance of Insurance . . . . . . . . . . . . . . . . . 46 Section 5.03. Preservation of Corporate Existence, Etc. . . . . . . . . . 46 Section 5.04. Payment of Taxes, Etc. . . . . . . . . . . . . . . . . . . 47 Section 5.05. Visitation Rights . . . . . . . . . . . . . . . . . . . . . 47 Section 5.06. Reporting Requirements . . . . . . . . . . . . . . . . . . 47 Section 5.07. Maintenance of Property . . . . . . . . . . . . . . . . . . 51 Section 5.08. New Subsidiaries . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VI NEGATIVE COVENANTS
Section 6.01. Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 52 Section 6.02. Debts, Guaranties, and Other Obligations . . . . . . . . . 54 Section 6.03. Agreements Restricting Liens and Distributions . . . . . . 54 Section 6.04. Merger or Consolidation; Asset Sales . . . . . . . . . . . 55 Section 6.05. Restricted Payments . . . . . . . . . . . . . . . . . . . . 56 Section 6.06. Investments . . . . . . . . . . . . . . . . . . . . . . . . 56 Section 6.07. Limitation on Speculative Hedging . . . . . . . . . . . . . 56 Section 6.08. Affiliate Transactions . . . . . . . . . . . . . . . . . . 56 Section 6.09. Compliance with ERISA . . . . . . . . . . . . . . . . . . . 57 Section 6.10. Maintenance of Ownership of Subsidiaries . . . . . . . . . 57 Section 6.11 Sale-and-Leaseback . . . . . . . . . . . . . . . . . . . . 57 Section 6.12. Change of Business . . . . . . . . . . . . . . . . . . . . 57 Section 6.13. Current Ratio . . . . . . . . . . . . . . . . . . . . . . . 58 Section 6.14. Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VII REMEDIES
Section 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . 58 Section 7.02. Optional Acceleration of Maturity . . . . . . . . . . . . . 61
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4 Section 7.03. Automatic Acceleration of Maturity . . . . . . . . . . . . 62 Section 7.04. Right of Set-off . . . . . . . . . . . . . . . . . . . . . 62 Section 7.05. Actions Under Credit Documents . . . . . . . . . . . . . . 62 Section 7.06. Non-exclusivity of Remedies . . . . . . . . . . . . . . . . 63
ARTICLE VIII THE AGENT AND THE ISSUING BANK
Section 8.01. Authorization and Action . . . . . . . . . . . . . . . . . 63 Section 8.02. Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . 63 Section 8.03. The Agent and Its Affiliates . . . . . . . . . . . . . . . 64 Section 8.04. Bank Credit Decision . . . . . . . . . . . . . . . . . . . 64 Section 8.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . 64 Section 8.06. Successor Agent and Issuing Bank . . . . . . . . . . . . . 65
ARTICLE IX MISCELLANEOUS
Section 9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 66 Section 9.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . 66 Section 9.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . 66 Section 9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . . . 67 Section 9.05. Binding Effect . . . . . . . . . . . . . . . . . . . . . . 67 Section 9.06. Bank Assignments and Participations . . . . . . . . . . . . 67 Section 9.07. Indemnification . . . . . . . . . . . . . . . . . . . . . . 70 Section 9.08. Execution in Counterparts . . . . . . . . . . . . . . . . . 70 Section 9.09. Survival of Representations, Etc . . . . . . . . . . . . . 70 Section 9.10. Severability . . . . . . . . . . . . . . . . . . . . . . . 71 Section 9.11. Business Loans . . . . . . . . . . . . . . . . . . . . . . 71 Section 9.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 71 Section 9.13. Confidentiality . . . . . . . . . . . . . . . . . . . . . . 71
-iii- 5 EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Guaranty
Exhibit D-1 - Form of Revolving A Note
Exhibit D-2 - Form of Revolving B Note
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Letter of Credit Application
Exhibit H - Form of Borrower's Counsel Opinion
SCHEDULES:
Schedule 1 - Borrower, Agent, and Bank Information
Schedule 4.07 - Existing Litigation
Schedule 4.15(a) - Existing Environmental Concerns
Schedule 4.15(b) - Designated Environmental Sites
Schedule 6.01 - Permitted Existing Liens
Schedule 6.02 - Permitted Existing Debt
Schedule 6.08 - Affiliated Transactions
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CREDIT AGREEMENT
This Credit Agreement dated as of December 18, 1997 is among 3DX Technologies Inc., a Delaware corporation, the Banks (as defined below), and NationsBank of Texas, N.A., as Agent for the Banks.
The Borrower, the Banks, and the Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (unless otherwise indicated, such meanings to be equally applicable to both the singular and plural forms of the terms defined):
"Acceptable Security Interest" means a Lien which (a) exists in favor of the Agent for the benefit of the Agent and the Banks and (b) is superior to all Liens or rights of any other Person in the Property encumbered thereby, except to the extent that the rights of another Person are permitted hereunder.
"Adjusted Base Rate" means, for any day, the fluctuating rate per annum of interest equal to the greater of (a) the Base Rate in effect on such day and (b) the Federal Funds Rate in effect on such day plus 1.00%.
"Adjusted Net Income" means, for any Person and for any period of its determination, the Adjusted Net Income of such Person determined in accordance with GAAP consistently applied, but excluding any gains and losses on sales and retirements of assets and any noncash write-down of assets.
"Advances" means any Revolving A Advance or Revolving B Advance.
"Affiliate" means, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person. The term "control" (including the terms "controlled by" or "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract, or otherwise.
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"Agent" means NationsBank of Texas, N.A., in its capacity as an agent pursuant to Article VIII and any successor agent pursuant to Section 8.06.
"Agent's Fee Letter" has the meaning specified in Section 2.07(b).
"Agreement" means this Credit Agreement, as the same may be amended, supplemented, and otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Bank, such Bank's Domestic Lending Office in the case of a Base Rate Advance and such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means the following percentages for the following Classes and Types of Advances:
Applicable Margin Applicable Margin
Base Rate Advances Eurodollar Rate Advances
------------------ ------------------------ Revolving A Advances 0.00% 2.00%
Revolving B Advances 2.00% 4.00%
"Assignment and Acceptance" means an assignment and acceptance entered into by a Bank and an Eligible Assignee, and accepted by the Agent, in substantially the form of the attached Exhibit A.
"Banks" means the lenders listed on the signature pages of this Agreement and each Eligible Assignee that shall become a party to this Agreement pursuant to Section 9.06.
"Base Rate" means a fluctuating interest rate per annum as shall be in effect from time to time equal to the rate of interest publicly announced by NationsBank of Texas, N.A., as its base rate, whether or not the Borrower has notice thereof.
"Base Rate Advance" means an Advance which bears interest as provided in Section 2.08(a).
"Borrower" means 3DX Technologies Inc., a Delaware corporation.
"Borrowing" means any Revolving A Borrowing or Revolving B Borrowing.
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"Borrowing Bases" means the Revolving A Borrowing Base and the Revolving B Borrowing Base.
"Business Day" means a day of the year on which banks are not required or authorized to close in Dallas, Texas and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on by banks in the London interbank market.
"Capital Leases" means, as applied to any Person, any lease of any Property by such Person as lessee which would, in accordance with GAAP, be required to be classified and accounted for as a capital lease on the balance sheet of such Person.
"Cash Collateral Account" means a special interest bearing cash collateral account pledged to the Agent for the ratable benefit of the Banks containing cash deposited pursuant to Section 2.04(b) or (c), 2.05(b), 7.02(b), or 7.03(b) to be maintained at the Agent's office in accordance with Section 2.06(h) and bear interest or be invested in the Agent's reasonable discretion.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.
"Class" has the meaning set forth in Section 1.04.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.
"Commitments" means, as to any Bank, its Revolving A Commitment and its Revolving B Commitment.
"Compliance Certificate" means a compliance certificate in the form of the attached Exhibit B signed by a Responsible Officer of the Borrower.
"Controlled Group" means all members of a controlled group of corporations and all trades (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code.
"Convert," "Conversion," and "Converted" each refers to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.03(b).
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"Credit Documents" means this Agreement, the Notes, the Letter of Credit Documents, the Guaranties, the Security Documents, any Hedge Agreements entered into with a Bank, and each other agreement, instrument, or document executed at any time in connection with this Agreement.
"Debt," for any Person, means without duplication:
(a) indebtedness of such Person for borrowed money, including, without limitation, obligations under letters of credit and agreements relating to the issuance of letters of credit or acceptance financing;
(b) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(c) obligations of such Person to pay the deferred purchase price of property or services;
(d) obligations of such Person as lessee under Capital Leases;
(e) obligations of such Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) of such Person to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (d) above;
(f) indebtedness or obligations of others of the kinds referred to in clauses (a) through (e) secured by any Lien on or in respect of any Property of such Person; and
(g) all liabilities of such Person in respect of unfunded vested benefits under any Plan.
"Default" means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.
"Dollar Equivalent" means for all purposes of this Agreement, the equivalent in another currency of an amount in Dollars to be determined by reference to the rate of exchange quoted by NationsBank of Texas, N.A., at 10:00 a.m. (Dallas, Texas, time) on the date of determination, for the spot purchase in the foreign exchange market of such amount of Dollars with such other currency.
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"Dollars" and "$" mean lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office of such Bank specified as its "Domestic Lending Office" opposite its name on Schedule 1 or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Agent.
"Effective Date" means the date on which each of the conditions precedent in Section 3.01 have been met or waived.
"Eligible Assignee" means any commercial bank organized under the laws of any country which is a member of the Organization for Economic Cooperation and Development and having primary capital (or its equivalent) of not less than $250,000,000.00 (or its Dollar Equivalent) and approved by the Agent in its sole discretion and the Borrower, which approval by the Borrower will not be unreasonably withheld.
"Environment" shall have the meanings set forth in 43 U.S.C. Section 9601(8).
"Environmental Claim" means any third party (including governmental agencies and employees) action, lawsuit, claim, demand, regulatory action or proceeding, order, decree, consent agreement or notice of potential or actual responsibility or violation (including claims or proceedings under the Occupational Safety and Health Acts or similar laws or requirements relating to health or safety of employees) which seeks to impose liability under any Environmental Law.
"Environmental Law" means all Legal Requirements arising from, relating to, or in connection with the Environment, health, or safety, including without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or restoration of the Environment or other natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants, contaminants, hazardous, or toxic substances, materials or wastes; (d) the safety or health of employees; or (e) the manufacture, processing, handling, transportation, distribution in commerce, use, storage or disposal of hazardous, or toxic substances, materials or wastes.
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"Environmental Permit" means any permit, license, order, approval or other authorization issued under an Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Federal Reserve Board (or any successor), as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office of such Bank specified as its "Eurodollar Lending Office" opposite its name on Schedule 1 (or, if no such office is specified, its Domestic Lending Office) or such other office of such Bank as such Bank may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate Advance, the interest rate per annum (rounded upward to the nearest 1/100 of 1% per annum) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days before the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Eurodollar Rate" shall mean, for the Interest Period for each Eurodollar Rate Advance, the interest rate per annum (rounded upward to the nearest 1/100 of 1% per annum) appearing on Reuters Screen LIBO page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days before the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO page, the applicable rate shall be the arithmetic mean of all such rates.
"Eurodollar Rate Advance" means an Advance which bears interest as provided in Section 2.08(b).
"Eurodollar Rate Reserve Percentage" of any Bank for the Interest Period for any Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Bank with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.
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"Event of Default" has the meaning specified in Section 7.01.
"Expiration Date" means, with respect to any Letter of Credit, the date on which such Letter of Credit will expire or terminate in accordance with its terms.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for any such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve System or any of its successors.
"Financial Statements" means the balance sheet and statements of income, retained earnings and cash flow dated December 31, 1996 referred to in Section 4.05, copies of which have been delivered to the Agent and the Banks.
"GAAP" means United States generally accepted accounting principles as in effect from time to time, applied on a basis consistent with the requirements of Section 1.03.
"Governmental Authority" means any foreign governmental authority, the United States of America, any state of the United States of America and any subdivision of any of the foregoing, and any agency, department, commission, board, authority or instrumentality, bureau or court having jurisdiction over any Bank, the Borrower, or the Borrower's Subsidiaries or any of their respective Properties.
"Guaranties" means each Guaranty in favor of the Agent for the ratable benefit of the Banks in the form of the attached Exhibit C executed by a Guarantor as required by Section 5.08, as the same may be amended, supplemented, or otherwise modified from time to time.
"Guarantors" means each of the Borrower's Subsidiaries who hereafter executes a Guaranty under Section 5.08.
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"Hazardous Substance" means the substances identified as such pursuant to CERCLA and those regulated as such under any other Environmental Law, including without limitation pollutants, contaminants, petroleum, petroleum products, radionuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any Environmental Law.
"Hedge Agreement" means (a) an interest hedge, rate swap, or cap, or similar arrangement between the Borrower or any of its Subsidiaries and a financial institution providing for the exchange of nominal interest obligations or the cap of the interest rate on the Advances made under this Agreement or (b) any forward sales arrangement, call, option, price swap, or other similar transaction entered into by the Borrower or any of its Subsidiaries to protect against fluctuations in prices or rates.
"Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Advance or the date of the Conversion of ...
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