Exhibit 10.3
SECOND AMENDMENT TO
CREDIT AGREEMENT
This Second Amendment to Credit Agreement (the "Second Amendment"), dated
as of December 13, 1995 is entered into by and between DRIL-QUIP, INC., a Texas
corporation ("Borrower"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION, a national
banking association ("Lender").
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Credit Agreement dated March 30, 1994 as
amended by that certain First Amendment to Credit Agreement dated December 20,
1994 (collectively, the "Credit Agreement"), Lender agreed to make available to
Borrower certain loans upon the terms and conditions and for the purposes
therein contained;
WHEREAS, Borrower has requested that its revolving line of credit be
increased up to a maximum of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00)
and extended to October 1, 1997 and Lender has agreed to such increase and
extension;
WHEREAS, Borrower has requested Lender to make available to Borrower an
additional advancing line of credit of up to TWO MILLION AND NO/100 DOLLARS
($2,000,000.00) and Lender has agreed to make such loan to Borrower;
WHEREAS, Borrower has requested Lender to consolidate certain term loans;
WHEREAS, Borrower has requested Lender to make certain other changes to the
Credit Agreement; and
WHEREAS, Borrower and Lender desire to amend the Credit Agreement so that
the Credit Agreement evidences such increase and extension of the revolving line
of credit, governs such additional advancing line of credit, consolidates
certain term loans and effects such other changes;
NOW THEREFORE, the parties hereto agree as follows:
1. Amendments to Credit Agreement. The Credit Agreement is modified as
follows:
1.1 Wherever the term "Agreement" is used in the Credit Agreement,
such term shall refer to the Credit Agreement as amended by this Second
Amendment;
1.2 Article I - Definitions. The definition of the term "Commitment"
is deleted in its entirety, and the following is substituted in place
thereof:
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"Commitment" means (i) the commitment of Lender to make
available the Revolving Credit Loan hereunder, (ii) the
commitment of Lender to make available the Third Advancing
Credit Loan hereunder, (iii) the commitment of Lender to
make available the Term Loan hereunder, and (iv) the
commitment of Lender to issue the Letters of Credit
hereunder.
1.3 Article I - Definitions. The definition of the term "Loans" is
deleted in its entirety, and the following is substituted in place thereof:
"Loans" means, collectively, the Revolving Credit Loan, the
Third Advancing Credit Loan and the Term Loan, and "Loan"
means singly, the Revolving Credit Loan, the Third Advancing
Credit Loan or the Term Loan.
1.4 Article I - Definitions. The definition of the term "Notes" is
deleted in its entirety, and the following is substituted in place thereof:
"Notes" shall mean the Revolving Credit Note, the Third
Advancing Credit Note and the Term Note and all extensions,
renewals and modifications thereof.
1.5 Article I - Definitions. The definition of the term "Revolving
Credit Committed Sum" is deleted in its entirety, and the following is
substituted in place thereof:
"Revolving Credit Committed Sum" means TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00), as such amount may be
reduced pursuant to Section 2.06.
1.6 Article I - Definitions. The definition of the term "Revolving
Credit Note" is deleted in its entirety, and the following is
substituted in place thereof:
"Revolving Credit Note" means the promissory note in favor
of Lender in substantially the form of Exhibit K hereto, and
all extensions, renewals and modifications thereof.
1.7 Article I - Definitions. The definition of the term "Revolving
Credit Termination Date" is deleted in its entirety, and the following
is substituted in place thereof:
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"Revolving Credit Termination Date" means October 1, 1997,
or such earlier date as the Revolving Credit Commitment
terminates as provided in this Agreement.
1.8 Article I - Definitions. The definition of the term "Term Note"
is deleted in its entirety, and the following is substituted in place
thereof:
"Term Note" means the promissory note described in Section
4.01 hereof in favor of Lender in substantially the form of
Exhibit L hereto, and all extensions, renewals and
modifications thereof.
1.9 Article I - Definitions. Article I-Section 1.01 of the Agreement
is hereby amended to add thereto the following definitions:
"Third Advancing Credit Commitment Fee" shall have the
meaning set forth in Section 3.21 hereof.
"Third Advancing Credit Commitment Period" means the period
commencing on December 13, 1995 and ending on the Third
Advancing Credit Termination Date.
"Third Advancing Credit Committed Sum" means TWO MILLION AND
NO/100 DOLLARS ($2,000,000.00), as such amount may be
reduced pursuant to Section 3.20 or otherwise.
"Third Advancing Credit Loan" means the Loan made by Lender
to Borrower, in one or more Advances, during the Third
Advancing Credit Commitment Period, pursuant to Section
3.15.
"Third Advancing Credit Note" means the promissory note in
favor of Lender in substantially the form of Exhibit M
hereto, and all extensions, renewals and modifications
thereof.
"Third Advancing Credit Termination Date" means 11:00 a.m.
Houston, Texas, time on October 1, 1996, or such earlier
date as the Commitment to make Advances pursuant to Section
3.15 terminates as provided in this Agreement.
1.10 Article II. Article II is hereby amended to substitute the
following for Section 2.02 in its entirety:
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Section 2.02. Revolving Credit Note. The obligation of
Borrower to repay the Revolving Credit Loan shall be
evidenced by the Revolving Credit Note executed by Borrower,
payable to the order of Lender, in the principal amount of
the Revolving Credit Committed Sum and dated October 1,
1995. The principal of the Revolving Credit Loan shall be
due and payable on the Revolving Credit Termination Date.
Effective October 1, 1995, the Revolving Credit Loan shall
bear interest prior to maturity at a varying rate per annum
equal from day to day to the lesser of (a) the maximum rate
permitted from day to day by applicable law ("Maximum
Rate"), including as to Article 5069-1.04 Vernon's Texas
Civil Statutes (and as the same may be incorporated by
reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate
ceiling", or (b) the sum of the Bank One Texas Base Rate in
effect from day to day plus one-fourth of one percent
(1/4%), each such change in the rate of interest charged
hereunder to become effective, without notice to Borrower,
on the effective date of each change in the Bank One Texas
Base Rate; provided, however, if at any time the rate of
interest specified in clause (b) preceding shall exceed the
Maximum Rate, thereby causing the interest on the Revolving
Credit Loan to be limited to the Maximum Rate, then any
subsequent reduction in the Bank One Texas Base Rate shall
not reduce the rate of interest on the Revolving Credit Loan
below the Maximum Rate until the aggregate amount of
interest accrued on the Revolving Credit Loan equals the
aggregate amount of interest which would have accrued on the
Revolving Credit Loan if the interest rate specified in
clause (b) preceding had at all times been in effect.
Accrued and unpaid interest on the Revolving Credit Loan
shall be due and payable (a) quarterly in arrears, on the
1st day of each successive January, April, July and October
commencing on January 1, 1996, until payment in full of the
outstanding principal under the Revolving Credit Note and
(b) on the Revolving Credit Termination Date. All past due
principal and interest shall bear interest at the Maximum
Rate.
1.11 Article III. The heading of Article III is hereby amended by the
substitution of "Advancing Credit Loans" for the previous heading.
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1.12 Article III. Article III is hereby amended to delete Section
3.01 through and including Section 3.14.
1.13 Article III. Article III is hereby amended to add thereto the
following Sections:
Section 3.15. Commitment for Third Advancing Credit Loan.
Subject to the terms and conditions of this Agreement, and
provided that no Default or Event of Default has occurred or
is continuing, Lender agrees to lend to Borrower, pursuant
to this Agreement, such amounts as the Borrower may request
in one or more Advances, from time to time during the Third
Advancing Credit Commitment Period to and including the
Third Advancing Credit Termination Date; provided, however,
that such Advances shall not exceed either singularly or
cumulatively the Third Advancing Credit Committed Sum; and
further provided that Lender shall not be obligated to make
such Loans pursuant to this Section 3.15 in excess of
eighty-five percent (85%) of the cost of improvements,
eighty percent (80%) of the cost of new equipment, eighty
percent (80%) of the cost of used, refurbished equipment and
sixty percent (60%) of the cost of used, unrefurbished
equipment; provided, however, that with respect to any used,
unrefurbished equipment, if Borrower should subsequently
refurbish such equipment, then the limit shall be increased
to eighty percent (80%) and Borrower may increase the amount
borrowed hereunder on account of such equipment to bring the
total to eighty percent (80%) of the cost of such equipment
and the cost of refurbishing such equipment.
Section 3.16. Third Advancing Credit Note. The obligation
of Borrower to repay the Third Advancing Credit Loan shall
be evidenced by the Third Advancing Credit Note executed by
Borrower, payable to the order of Lender, in the principal
amount of the Third Advancing Credit Committed Sum and dated
December 13, 1995. The principal of the Third Advancing
Credit Loan outstanding on the Third Advancing Credit
Termination Date, plus accrued and unpaid interest thereon,
shall be due and payable: (a) in four (4) installments of
accrued and unpaid interest only due and payable on January
1, 1996, April 1, 1996, July 1, 1996 and October 1,
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1996; (b) in fifteen (15) installments each equal to SEVENTY
THOUSAND AND NO/100 DOLLARS ($70,000.00) of principal,
together with all accrued and unpaid interest, the first of
such installments being due and payable on or before January
1, 1997 and like installments being due and payable on the
first day of each succeeding third calendar month thereafter
through and including July 1, 2000; and (c) a final
installment shall be due on or before October 1, 2000 in an
amount equal to the remaining unpaid principal outstanding
on the Third Advancing Credit Loan together with all accrued
and unpaid interest. The Third Advancing Credit Loan shall
bear interest prior to maturity at a varying rate per annum
equal from day to day to the lesser of (a) the Maximum Rate,
or (b) the sum of the Bank One Base Rate in effect from day
to day plus one-half of one percent (1/2%), each such change
in the rate of interest charged hereunder to become
effective, without notice to Borrower, on the effective date
of each change in the Bank One Base Rate; provided, however,
if at any time the rate of interest specified in clause (b)
preceding shall exceed the Maximum Rate, thereby causing the
interest on the Third Advancing Credit Loan to be limited to
the Maximum Rate, then any subsequent reduction in the Bank
One Base Rate shall not reduce the rate of interest on the
Third Advancing Credit Loan below the Maximum Rate until the
aggregate amount of interest accrued on the Third Advancing
Credit Loan equals the aggregate amount of interest which
would have accrued on the Third Advancing Credit Loan if the
interest rate specified in clause (b) preceding had at all
times been in effect. All past due principal and interest
shall bear interest at the Maximum Rate.
Section 3.17. Expiration of Commitment to Lend Under Third
Advancing Credit. The maximum obligation of Lender to make
Advances under Section 3.15 hereof shall not at any time
exceed, either singularly or cumulatively, the Third
Advancing Credit Committed Sum, and Lender shall have no
obligation to make additional Advances under Section 3.15
hereof and Lender's Commitment to lend to Borrower pursuant
to Section 3.15 hereof shall terminate and expire at 11:00
a.m., Houston, Texas time on the Third Advancing Credit
Termination Date; provided that Borrower's Obligations and
the Rights of Lender under the Loan Papers
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shall continue in full force and effect until the
Obligations have been paid and performed in full.
Section 3.18. Procedure for Borrowing Under the Third
Advancing Credit Loan. During the Third Advancing Credit
Commitment Period, Borrower shall give Lender a written
notice executed on behalf of the Borrower by any Authorized
Financial Officer of the Borrower (the "Notice of Third
Advancing Credit Borrowing") of any proposed Borrowing under
the Third Advancing Credit Loan which shall be irrevocable.
Each Notice of Third Advancing Credit Borrowing shall be
received by Lender not later than 11:00 a.m., Houston, Texas
time, at least one (1) Business Day prior to any proposed
Borrowing requested by Borrower together with copies of
invoices for the equipment purchased or improvements
undertaken. Each such Notice of Third Advancing Credit
Borrowing shall be substantially in the form of Exhibit N
attached hereto. Lender, at its option, may from time to
time accept telephonic requests for Advances; provided that
Borrower shall promptly thereafter provide Lender with a
completed Notice of Third Advancing Credit Borrowing
together with copies of invoices for the equipment purchased
or improvements undertaken. Lender is hereby authorized to
act in reliance upon a certificate of incumbency from
Borrower's Secretary or Assistant Secretary as to the
identity of the foregoing officers and their due appointment
and authorization to issue Borrowing requests and receive
proceeds of Advances hereunder on behalf of Borrower unless
and until Lender is in actual receipt of written notice by
Borrower of revocation of said appointment and
authorization. Prior to 11:00 a.m. (Houston, Texas, time)
on each Borrowing Date and subject to the provisions of
Section 3.15, Lender shall make available to Borrower in
immediately available funds such requested Advance by
deposit to Borrower's deposit account maintained with Lender
or other reasonable disposition of such funds as Borrower
shall request in writing. Lender may, and is hereby
authorized by Borrower to, endorse on the schedule attached
to the Third Advancing Credit Note or on a continuation of
such schedule attached to and made a part of such Third
Advancing Credit Note an appropriate notation evidencing the
date and amount of each Advance and payment and prepayment
by Borrower of the principal of and interest on the Third
Advancing Credit
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Loan evidenced by such Third Advancing Credit Note, but the
failure of Lender to make any such endorsement or any
incorrect endorsement shall not subject Lender to any
liability hereunder and shall not limit or otherwise affect
the obligations of Borrower under such Third Advancing
Credit Note.
Section 3.19. Use of Proceeds of Third Advancing Credit
Loan. The proceeds of the Advances comprising the Third
Advancing Credit Loan shall be used to pay for up to eighty-
five percent (85%) of the costs of Borrower for improvements
on the realty described on Schedule 3 attached to the Credit
Agreement, up to eighty-five percent (85%) of the cost of
improvements, eighty percent (80%) of the cost of new
equipment, eighty percent (80%) of the cost of used,
refurbished equipment and sixty percent (60%) of the cost of
used, unrefurbished equipment; provided, however, that with
respect to any used, unrefurbished equipment, if Borrower
should subsequently refurbish such equipment, then the limit
shall be increased to eighty percent (80%) and Borrower may
increase the amount borrowed hereunder on account of such
equipment to bring the total to eighty percent (80%) of the
cost of such equipment and the cost of refurbishing such
equipment.
Section 3.20. Reduction or Termination of Third Advancing
Committed Sum. Borrower may at any time by giving at least
three (3) Business Days' notice in writing to Lender
terminate or reduce the Third Advancing Credit Committed
Sum; provided, however, that no such reduction of the Third
Advancing Credit Committed Sum shall be effective unless the
amount by which the Third Advancing Credit Committed Sum is
reduced shall be ONE HUNDRED THOUSAND AND NO/100
($100,000.00) or an integral multiple thereof. Once reduced
or terminated, the Third Advancing Credit Committed Sum may
not be increased or reinstated without the prior written
consent of Lender.
Section 3.21. Third Advancing Credit Commitment Fee.
Borrower agrees to pay to Lender a fee (the "Third Advancing
Credit Commitment Fee") on the average daily unused portion
of the Third Advancing Credit Commitment, from December 13,
1995 to and including the Third Advancing
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Credit Termination Date, at the rate of one-half of one
percent (1/2%) per annum based on a 365 day year and the
actual number of days elapsed payable in arrears, on January
1, 1996, April 1, 1996, July 1, 1996 and on the Third
Advancing Credit Termination Date.
1.14 Article IV. Article IV is hereby amended to substitute the
following for Article IV in its entirety:
Term Loan
Section 4.01. Commitment for Term Loan. Subject to the
terms and conditions of this Agreement, and provided that no
Default or Event of Default has occurred and is continuing
on the Closing Date, Lender agrees to make the Term Loan to
Borrower under the Term Note, in the amount of ELEVEN
MILLION SIX HUNDRED TWENTY-TWO THOUSAND AND NO/100 DOLLARS
($11,622,000.00) to be effective October 1, 1995, which
amount represents a renewal and rearrangement in whole or in
part, of the principal indebtedness evidenced by:
(a) that certain Promissory Note dated March 30, 1994
in the principal amount of $12,175,000.00 executed by
Borrower and payable to the order of Lender;
(b) that certain Promissory Note dated March 30, 1994
in the principal amount of $1,500,000.00 executed by
Borrower and payable to the order of Lender; and
(c) that certain Promissory Note dated December 20,
1994 in the principal amount of $1,500,000.00 executed by
Borrower and payable to the order of Lender.
Section 4.02. Term Note. The obligation of Borrower to
repay the Term Loan shall be evidenced by the Term Note
executed by Borrower, payable to the order of Lender, in the
principal amount of the Term Loan and dated October 1, 1995.
The principal of the Term Loan, plus accrued and unpaid
interest thereon, shall be due and payable in:
(a) seven (7) consecutive installments each equal to
FIVE HUNDRED SEVENTY-NINE THOUSAND AND
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NO/100 DOLLARS ($579,000.00) of principal, together with all
accrued and unpaid interest, the first of such installments
being due and payable on or before January 1, 1996 and like
installments being due and payable on the first day of each
succeeding third calendar month thereafter through and
including July 1, 1997; and
(b) a final installment due and payable on October 1,
1997 in an amount equal to the remaining unpaid principal
amount outstanding on the Term Loan, together with all
accrued and unpaid interest.
Effective October 1, 1995, the Term Loan shall bear interest
prior to maturity at a varying rate per annum equal from day
to day to the lesser of (a) the Maximum Rate or (b) the sum
of the Bank One Texas Base Rate in effect from day to day
plus one-half of one percent (1/2%), each such change in the
rate of interest charged hereunder to become effective,
without notice to Borrower, on the effective date of each
change in the Bank One Texas Base Rate; provided, however,
if at any time the rate of interest specified in clause (b)
preceding shall exceed the Maximum Rate, thereby causing the
interest on the Term Loan to be limited to the Maximum Rate,
then any subsequent reduction in the Bank One Texas Base
Rate shall not reduce the rate of interest on the Term Loan
below the Maximum Rate until the aggregate amount of
interest accrued on the Term Loan equals the aggregate
amount of interest which would have accrued on the Term Loan
if the interest rate specified in clause (b) preceding had
at all times been in effect. All past due principal and
interest shall bear interest at the Maximum Rate.
1.15 Section 6.01. Section 6.01 is hereby amended to delete
Subsection (d) thereof.
1.16 Section 9.17. Section 9.17 is hereby amended to delete the first
sentence thereof
2. Condition Precedent. The obligation of Lender to make any Advances
pursuant to Sections 2.01 or 3.15 of the Agreement is subject to the condition
precedent that the Lender shall have received all of the following, each duly
executed and in form and substance satisfactory to Lender:
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(a) Promissory Note dated October 1, 1995 in the principal amount of
$20,000,000.00 executed by Borrower to the order of Lender, after
execution and delivery being the Revolving Credit Note;
(b) Promissory Note dated October 1, 1995 in the principal amount of
$11,622,000.00 executed by Borrower to the order of Lender, after
execution and delivery being the Term Note;
(c) Promissory Note dated December 13, 1995 in the principal amount of
$2,000,000.00 executed by Borrower to the order of Lender, after
execution and delivery being the Third Advancing Credit Note;
(d) Ratifications or amendments of existing Security Documents and/or
new Security Documents as may be requested by Lender to continue
or establish a Lien in favor or for the benefit of Lender in or
against (i) all of Borrower's accounts, accounts receivable,
equipment, machinery, fixtures, raw materials, work-in-process,
inventory, chattel paper, documents, instruments and general
intangibles, whether now owned or hereafter acquired, and all
products and proceeds thereof, and (ii) the realty described in
Schedule 3 of the Credit Agreement, the appurtenances thereto and
improvements thereon;
(e) Certified copies of resolutions of the Board of Directors of
Borrower authorizing or ratifying the execution, delivery and
performance, respectively, of those of this First Amendment, the
Revolving Credit Note, the Third Advancing Credit Note, the Term
Note and all other documents provided for in this Second
Amendment to which each is a party;
(f) The articles of incorporation of Borrower certified by the
Secretary of State of the State of incorporation, and dated
reasonably near the date of this Second Amendment;
(g) Certificates of the appropriate government officials of the
jurisdiction of incorporation of Borrower as to its existence and
good standing, dated reasonably near the date of this Second
Amendment; and
(h) A favorable opinion of legal counsel to Borrower.
3. Representations and Warranties. The representations and warranties
made in Article VIII of the Credit Agreement by Borrower to Lender are true and
correct as of the date of execution of this Second Amendment.
4. Defined Terms. Words and terms used herein which are defined in the
Credit Agreement are used herein as defined in the Credit Agreement, except as
specifically modified by
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the terms of this Second Amendment. Any of the terms used in this Second
Amendment which are not defined in the Credit Agreement shall be used therein as
herein defined.
5. Preservation of the Credit Agreement. Except as specifically modified
by the terms of this Second Amendment, all of the terms, provisions, covenants,
warranties and agreements contained in the Credit Agreement shall remain in full
force and effect.
6. Applicable Law. This Second Amendment shall be deemed to be a
contract made under, and shall be construed in accordance with, the laws of the
State of Texas.
7. Entire Agreement. The Credit Agreement as amended by this Second
Amendment and the other Loan Papers contain the entire agreement between the
parties relating to the transactions contemplated hereby. All prior or
contemporaneous understandings, representations, statements and agreements,
whether written or oral, are merged herein and superseded by the Credit
Agreement as amended by this Second Amendment. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties have executed this Second Amendment as of
the date first above written.
BORROWER:
DRIL-QUIP, INC.
By:
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J. Mike Walker
Vice President
LENDER:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION
By:
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Gary L. Stone
Senior Vice President
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EXHIBIT K
PROMISSORY NOTE
$20,000,000.00 Houston, Texas October 1, 1995
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP, INC., a Texas
corporation ("Maker"), hereby promises to pay to the order of BANK ONE, TEXAS,
NATIONAL ASSOCIATION, a national banking association ("Payee"), at its offices
at 910 Travis, Houston, Harris County, Texas, on October 1, 1997, in lawful
money of the United States of America, the principal sum of TWENTY MILLION AND
NO/100 DOLLARS ($20,000,000.00), or so much thereof as may be advanced and
outstanding hereunder, together with interest on the outstanding principal
balance hereof, at a varying rate per annum which shall from day to day be equal
to the lesser of (a) the maximum rate permitted by applicable law as the same
exists from day to day during the term hereof ("Maximum Rate"), including, as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling" or (b) the sum of
the Bank One Base Rate (hereinafter defined) of Payee in effect from day to day
plus one-fourth of one percent (1/4%), each such change in the rate of interest
charged hereunder to become effective, without notice to Maker, on the effective
date of each change in the Bank One Base Rate; provided however, if at any time
the rate of interest specified in clause (b) preceding shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the Maximum
Rate, then any subsequent reduction in the Bank One Base Rate will not reduce
the rate of interest hereon below the Maximum Rate until the total amount of
interest accrued hereon equals the amount of interest which would have accrued
hereon if the rate specified in clause (b) preceding had at all times been in
effect.
Accrued and unpaid interest shall be due and payable quarterly in
arrears during the term hereof, on the 1st day of each successive January,
April, July and October commencing on January 1, 1996, until payment in full of
the outstanding principal hereunder. All principal hereof, together with all
accrued and unpaid interest thereon, shall be due and payable on maturity. All
past due principal and interest shall bear interest at the Maximum Rate.
Whenever any payment hereunder shall be stated to be due on a day that
is not a day Payee is open for business, such payment may be made on the next
succeeding day Payee is open for business and interest shall continue to accrue
during such extension.
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As used herein, the term "Bank One Base Rate" means, at any time the
lesser of (i) the rate of interest per annum then most recently established by
Payee as its Bank One Base Rate in effect from day to day, with each change in
the rate of interest charged as the Bank One Base Rate to become effective,
without notice to Maker, on the effective date of each change in the Bank One
Base Rate, such Bank One Base Rate to be computed on the basis of a year
composed of 365 days for the actual number of days elapsed (including the first
day but excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Revolving Credit Note provided for and as defined in
that certain Credit Agreement dated March 30, 1994 as amended by First Amendment
to Credit Agreement dated December 20, 1994 and Second Amendment to Credit
Agreement dated December 13, 1995 by and among Maker and Payee (such instruments
as the same may be amended or modified from time to time, are hereinafter
referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and
conditions specified in the Agreement. Maker may borrow, repay and reborrow
hereunder upon the terms and conditions specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no
provisions of this note shall require the payment or permit the collection of
interest in excess of the Maximum Rate. If any excess of interest in such
respect is herein provided for, or shall be adjudicated to be so provided, in
this note or otherwise in connection with this loan transaction the provisions
of this paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker.
If default be made in the payment of principal or interest under this
note and such default shall continue for three (3) Business Days after notice
thereof to Maker pursuant to the Agreement, as defined in the Agreement, or upon
the occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
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If the holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
This note is performable in Houston, Harris County, Texas, and Maker
and each surety, guarantor, endorser and other party ever liable for payment of
any sums of money payable on this note, jointly and severally waive the right to
be sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable
for payment of any sums of money payable on this note jointly and severally
waive presentment and demand for payment, protest, notice of protest and non-
payment of dishonor, notice of acceleration, notice of intent to accelerate,
notice of intent to demand, diligence in collecting, and grace, and consent to
all extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other indulgences or forbearances whatsoever, without
notice to any other party and without in any way affecting the personal
liability of any party hereunder.
This note is executed in renewal and extension, but not in novation or
discharge, of that certain Promissory Note dated December 20, 1994, in the
original principal amount of $17,000,000.00, executed by Maker for the benefit
of Payee.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof, all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to make
endorsement shall not limit or otherwise affect the obligations of Maker under
the Agreement or this note.
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DRIL-QUIP, INC.
By:
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J. Mike Walker, Vice President
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EXHIBIT L
PROMISSORY NOTE
$11,622,000.00 Houston, Texas October 1, 1995
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP, INC., a Texas corporation
("Maker"), hereby promises to pay to the order of BANK ONE, TEXAS, NATIONAL
ASSOCIATION, a national banking association ("Payee"), at its offices at 910
Travis, Houston, Harris County, Texas, in lawful money of the United States of
America, the principal sum of ELEVEN MILLION SIX HUNDRED TWENTY-TWO THOUSAND AND
NO/100 DOLLARS ($11,622,000.00), plus accrued and unpaid interest thereon as
hereinafter calculated, as follows:
(a) seven (7) quarterly installments each in the principal amount of
FIVE HUNDRED SEVENTY-NINE THOUSAND AND NO/100 DOLLARS ($579,000.00),
together with all accrued and unpaid interest, with the first of such
installments due and payable on January 1, 1996, and like successive
installments of principal plus accrued and unpaid interest due and payable
on the 1st day of each succeeding April, July, October and January
thereafter, through and including July 1, 1997; and
(b) an eighth (8th) and final installment in the amount of all
outstanding principal plus accrued and unpaid interest, due and payable on
the maturity of this note, October 1, 1997.
The outstanding principal balance hereof shall bear interest prior to
maturity at a varying rate per annum which shall from day to day be equal to the
lesser of (a) the maximum rate permitted by applicable law as the same exists
from day to day during the term hereof ("Maximum Rate"), including, as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling" or (b) the sum of
the Bank One Base Rate (hereinafter defined) of Payee in effect from day to day
plus one-half of one percent (1/2%), each such change in the rate of interest
charged hereunder to become effective, without notice to Maker, on the effective
date of each change in the Bank One Base Rate; provided however, if at any time
the rate of interest specified in clause (b) preceding shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the Maximum
Rate, then any subsequent reduction in the Bank One Base Rate will not reduce
the rate of interest hereon below the Maximum Rate until the total amount of
interest accrued hereon equals the amount of interest which would have accrued
hereon if the rate specified in clause (b) preceding had at all times been in
effect. All past due principal and interest shall bear interest at the Maximum
Rate.
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As used herein, the term "Bank One Base Rate" means, at any time the lesser
of (i) the rate of interest per annum then most recently established by Payee as
its Bank One Base Rate in effect from day to day, with each change in the rate
of interest charged as the Bank One Base Rate to become effective, without
notice to Maker, on the effective date of each change in the Bank One Base Rate,
such Bank One Base Rate to be computed on the basis of a year composed of 365
days for the actual number of days elapsed (including the first day but
excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Term Note provided for and as defined in that certain
Amended and Restated Credit Agreement dated March 30, 1994 as amended by that
certain First Amendment to Credit Agreement dated December 20, 1994 and that
certain Second Amendment to Credit Agreement dated December 13, 1995 by and
among Maker and Payee (such instrument as the same may be amended or modified
from time to time, is hereinafter referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and conditions
specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no provisions of
this note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this note or
otherwise in connection with this loan transaction the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent jurisdiction, any such excess shall be applied as a payment
and reduction of the principal of indebtedness evidenced by this note; and, if
the principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Maker.
If default be made in the payment of principal or interest under this note
and such default shall continue for three (3) Business Days after notice thereof
to Maker pursuant to the Agreement, as defined in the Agreement, or upon the
occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
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If the holder hereof expends any effort in any attempt to enforce payment
of all or any part or installment of any sum due the holder hereunder, or if
this note is placed in the hands of an attorney for collection, or if it is
collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
This note is performable in Houston, Harris County, Texas, and Maker and
each surety, guarantor, endorser and other party ever liable for payment of any
sums of money payable on this note, jointly and severally waive the right to be
sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this note jointly and severally waive
presentment and demand for payment, protest, notice of protest and non-payment
of dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, and grace, and consent to all
extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other indulgences or forbearances whatsoever, without
notice to any other party and without in any way affecting the personal
liability of any party hereunder.
This note is executed in renewal and rearrangement but not in novation or
discharge, of (i) that certain Promissory Note dated March 30, 1994 in the
original principal amount of $12,175,000.00, executed by Maker for the benefit
of Payee, (ii) that certain Promissory Note dated March 30, 1994 in the original
principal amount of $1,500,000.00, executed by Maker for the benefit of Payee,
and (iii) that certain Promissory Note dated December 20, 1994 in the original
principal amount of $1,500,000.00, executed by Maker for the benefit of Payee.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof, all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to
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make endorsement shall not limit or otherwise affect the obligations of Maker
under the Agreement or this note.
DRIL-QUIP, INC.
By:
---------------------------------
J. Mike Walker, Vice President
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EXHIBIT M
PROMISSORY NOTE
$2,000,000.00 Houston, Texas December 13, 1995
FOR VALUE RECEIVED, the undersigned, DRIL-QUIP, INC., a Texas corporation
("Maker"), hereby promises to pay to the order of BANK ONE, TEXAS, NATIONAL
ASSOCIATION, a national banking association ("Payee"), at its offices at 910
Travis, Houston, Harris County, Texas, on October 1, 1996, in lawful money of
the United States of America, the principal sum of TWO MILLION AND NO/100
DOLLARS ($2,000,000.00), or so much thereof as may be advanced and outstanding
hereunder, together with accrued and unpaid interest thereon as hereinafter
calculated, as follows:
(a) in four (4) installments of accrued and unpaid interest due and
payable on January 1, 1996, April 1, 1996, July 1, 1996 and October 1,
1996;
(b) fifteen (15) quarterly installments each in the amount of SEVENTY
THOUSAND AND NO/100 DOLLARS ($70,000.00) of principal, together with all
accrued and unpaid interest, with the first of such installments due and
payable on January 1, 1997, and like successive installments of principal
plus accrued and unpaid interest due and payable on the 1st day of each
succeeding April, July, October and January thereafter, through and
including July 1, 2000; and
(c) a final installment in the amount of all outstanding principal,
plus accrued and unpaid interest, due and payable on the maturity of this
note, October 1, 2000.
Whenever any payment hereunder shall be stated to be due on a day that is
not a day Payee is open for business, such payment may be made on the next
succeeding day Payee is open for business and interest shall continue to accrue
during such extension.
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The outstanding principal balance hereof shall bear interest prior to
maturity at a varying rate per annum which shall from day to day be equal to the
lesser of (a) the maximum rate permitted by applicable law as the same exists
from day to day during the term hereof ("Maximum Rate"), including, as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise without
limitation, that rate based upon the "indicated rate ceiling" or (b) the sum of
the Bank One Base Rate (hereinafter defined) of Payee in effect from day to day
plus one-half of one percent (1/2%), each such change in the rate of interest
charged hereunder to become effective, without notice to Maker, on the effective
date of each change in the Bank One Base Rate; provided however, if at any time
the rate of interest specified in clause (b) preceding shall exceed the Maximum
Rate, thereby causing the interest rate hereon to be limited to the Maximum Rate
, then any subsequent reduction in the Bank One Base Rate will not reduce the
rate of interest hereon below the Maximum Rate until the total amount of
interest accrued hereon equals the amount of interest which would have accrued
hereon if the rate specified in clause (b) preceding had at all times been in
effect. All past due principal and interest shall bear interest at the Maximum
Rate.
As used herein, the term "Bank One Base Rate" means, at any time the lesser
of (i) the rate of interest per annum, then most recently established by Payee
as its Bank One Base Rate in effect from day to day, with each change in the
rate of interest charged as the Bank One Base Rate to become effective, without
notice to Maker, on the effective date of each change in the Bank One Base Rate,
such Bank One Base Rate to be computed on the basis of a year composed of 365
days for the actual number of days elapsed (including the first day but
excluding the last day) or (ii) the Maximum Rate (as herein defined).
This note is the Third Advancing Credit Note provided for and as defined in
that certain Credit Agreement dated March 30, 1994 as amended by that certain
First Amendment to Credit Agreement dated December 20, 1994 and that certain
Second Amendment to Credit Agreement dated of even date herewith by and between
Maker and Payee (such instruments as the same may be amended or modified from
time to time, are hereinafter referred to as the "Agreement").
Maker may prepay the principal of this note upon the terms and conditions
specified in the Agreement.
Notwithstanding anything to the contrary contained herein, no provisions of
this note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is herein
provided for, or shall be adjudicated to be so provided, in this note or
otherwise in connection with this loan transaction the provisions of this
paragraph shall govern and prevail, and neither Maker nor the sureties,
guarantors, successors or assigns of Maker shall be obligated to pay the excess
amount of such interest, or any other excess sum paid for the use, forbearance
or detention of sums loaned pursuant hereto. If for any reason interest in
excess of the Maximum Rate shall be deemed charged, required or permitted by any
court of competent
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jurisdiction, any such excess shall be applied as a payment and reduction of the
principal of indebtedness evidenced by this note; and, if the principal amount
hereof has been paid in full, any remaining excess shall forthwith be paid to
Maker.
If default be made in the payment of principal or interest under this note
and such default shall continue for three (3) Business Days after notice thereof
to Maker pursuant to the Agreement, as defined in the Agreement, or upon the
occurrence of any other Event of Default, as such term is defined in the
Agreement, the holder hereof may, at its option, declare the entire unpaid
principal of and accrued interest on this note immediately due and payable
without additional notice, demand or presentment, all of which are hereby
waived, and upon such declaration, the same shall become and shall be
immediately due and payable, and the holder hereof shall have the right to
foreclose or otherwise enforce all liens or security interests securing any sum
or sums owed by the holder hereof to Maker. Failure of the holder hereof to
exercise this option shall not constitute a waiver of the right to exercise the
same upon the occurrence of a subsequent Event of Default.
If the holder hereof expends any effort in any attempt to enforce payment
of all or any part or installment of any sum due the holder hereunder, or if
this note is placed in the hands of an attorney for collection, or if it is
collected through any legal proceedings, Maker agrees to pay all collection
costs and fees incurred by the holder, including reasonable attorneys' fees.
This note is performable in Houston, Harris County, Texas, and Maker and
each surety, guarantor, endorser and other party ever liable for payment of any
sums of money payable on this note, jointly and severally waive the right to be
sued hereon elsewhere. This note shall be governed by and construed in
accordance with the laws of the state of Texas and the applicable laws of the
United States of America.
Maker and each surety, guarantor, endorser and other party ever liable for
payment of any sums of money payable on this note jointly and severally waive
presentment and demand for payment, protest, notice of protest and non-payment
of dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, and grace, and consent to all
extensions without notice for any period or periods of time and partial
payments, before or after maturity, without prejudice to the holder. Maker
acknowledges and understands that under the laws of the State of Texas, unless
waived, Maker has the right to notice of Payee's intent to accelerate the
indebtedness evidenced by this note, the right to notice of the actual
acceleration of the indebtedness evidenced by this note, and the right to
presentment of this note by Payee's demand for payment. Maker acknowledges that
it understands that it can waive these rights and by Maker's execution of this
note it agrees to waive its right to notice of intent to accelerate, its right
to notice of acceleration, and its right to presentment or other demand for
payment. The holder shall similarly have the right to deal in any way, at any
time, without one or more of the foregoing parties without notice to any other
party, and to grant any such party and extensions of time for payment of any of
said indebtedness, or to release part or all of the collateral securing this
note, or to grant any other
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indulgences or forbearances whatsoever, without notice to any other party and
without in any way affecting the personal liability of any party hereunder.
Maker hereby authorizes the holder hereof to endorse on the Schedule
attached to this note or any continuation thereof, all advances made to Maker
hereunder and all payments made on account of the principal thereof, which
endorsements shall be prima facie evidence as to the outstanding principal
amount of this note; provided, however, any failure by the holder hereof to make
endorsement shall not limit or otherwise affect the obligations of Maker under
the Agreement or this note.
DRIL-QUIP, INC.
By:
--------------------------------
J. Mike Walker, Vice President
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