Exhibit 10.23

Execution Version

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CREDIT AGREEMENT

DATED AS OF

FEBRUARY 23, 2018

AMONG

DRIL-QUIP, INC.,
AS BORROWER

THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

THE LENDERS FROM TIME TO TIME PARTY HERETO

AND

JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT, AN ISSUING BANK AND SWINGLINE LENDER

___________________________

JPMORGAN CHASE BANK, N.A.,
AS SOLE BOOKRUNNER AND SOLE LEAD ARRANGER

AND

HSBC BANK USA, NATIONAL ASSOCIATION
AS SYNDICATION AGENT

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Exhibit 10.23

    
 
TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS
1

SECTION 1.01 Defined Terms    1
SECTION 1.02 Classification of Loans and Borrowings    34
SECTION 1.03 Terms Generally    34
SECTION 1.04 Accounting Terms; GAAP    35
SECTION 1.05 Pro Forma Adjustments for Acquisitions and Dispositions    35
SECTION 1.06 Status of Obligations    35
SECTION 1.07 Currency Matters    36
ARTICLE II THE CREDITS
36

SECTION 2.01 Commitments    36
SECTION 2.02 Loans and Borrowings    37
SECTION 2.03 Requests for Borrowings    37
SECTION 2.04 Protective Advances    38
SECTION 2.05 Swingline Loans and Overadvances    39
SECTION 2.06 Letters of Credit    40
SECTION 2.07 Funding of Borrowings    45
SECTION 2.08 Interest Elections    46
SECTION 2.09 Termination and Reduction of Commitments; Increase in
Commitments    47
SECTION 2.10 Repayment of Loans; Evidence of Debt    48
SECTION 2.11 Prepayment of Loans    49
SECTION 2.12 Fees    51
SECTION 2.13 Interest    52
SECTION 2.14 Alternate Rate of Interest    53
SECTION 2.15 Increased Costs    54
SECTION 2.16 Break Funding Payments    55
SECTION 2.17 Withholding of Taxes; Gross-Up    55
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of
Set-offs    59
SECTION 2.19 Mitigation Obligations; Replacement of Lenders    61
SECTION 2.20 Defaulting Lenders    62
SECTION 2.21 Returned Payments    63
SECTION 2.22 Banking Services and Swap Agreements    63
ARTICLE III REPRESENTATIONS AND WARRANTIES
64

SECTION 3.01 Organization; Powers    64
SECTION 3.02 Authorization; Enforceability    64
SECTION 3.03 Governmental Approvals; No Conflicts    64
SECTION 3.04 Financial Condition; No Material Adverse Change    64
SECTION 3.05 Properties    65
SECTION 3.06 Litigation and Environmental Matters    65
SECTION 3.07 Compliance with Laws and Agreements; No Default    65
SECTION 3.08 Investment Company Status    65
SECTION 3.09 Taxes    66
SECTION 3.10 ERISA    66
SECTION 3.11 Disclosure    66
SECTION 3.12 Solvency    66
SECTION 3.13 Insurance    67

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Exhibit 10.23

SECTION 3.14 Capitalization and Subsidiaries    67
SECTION 3.15 Security Interest in Collateral    67
SECTION 3.16 Employment Matters    67
SECTION 3.17 Federal Reserve Regulations    67
SECTION 3.18 Use of Proceeds    67
SECTION 3.19 No Burdensome Restrictions    67
SECTION 3.20 Anti-Corruption Laws and Sanctions    67
SECTION 3.21 Affiliate Transactions    68
SECTION 3.22 Common Enterprise    68
SECTION 3.23 EEA Financial Institutions    68
ARTICLE IV CONDITIONS
68

SECTION 4.01 Effective Date    68
SECTION 4.02 Each Credit Event    71
ARTICLE V AFFIRMATIVE COVENANTS
72

SECTION 5.01 Financial Statements; Borrowing Base and Other Information    72
SECTION 5.02 Notices of Material Events    75
SECTION 5.03 Existence; Conduct of Business    76
SECTION 5.04 Payment of Obligations    76
SECTION 5.05 Maintenance of Properties    76
SECTION 5.06 Books and Records; Inspection Rights    76
SECTION 5.07 Compliance with Laws and Material Contractual Obligations    77
SECTION 5.08 Use of Proceeds    77
SECTION 5.09 Accuracy of Information    77
SECTION 5.10 Insurance    78
SECTION 5.11 Casualty and Condemnation    78
SECTION 5.12 Appraisals    78
SECTION 5.13 Depository Banks    78
SECTION 5.14 Additional Collateral; Further Assurances    78
SECTION 5.15 Post-Closing Obligations    80
ARTICLE VI NEGATIVE COVENANTS
81

SECTION 6.01 Indebtedness    81
SECTION 6.02 Liens    82
SECTION 6.03 Fundamental Changes    84
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions    84
SECTION 6.05 Asset Sales    86
SECTION 6.06 Sale and Leaseback Transactions    86
SECTION 6.07 Swap Agreements    87
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness    87
SECTION 6.09 Transactions with Affiliates    87
SECTION 6.10 Restrictive Agreements    88
SECTION 6.11 Amendment of Material Documents    88
SECTION 6.12 Fixed Charge Coverage Ratio    88
ARTICLE VII EVENTS OF DEFAULT
88

ARTICLE VIII THE ADMINISTRATIVE AGENT
92

SECTION 8.01 Appointment    92
SECTION 8.02 Rights as a Lender    92
SECTION 8.03 Duties and Obligations    92
SECTION 8.04 Reliance    93
SECTION 8.05 Actions through Sub-Agents    93
SECTION 8.06 Resignation    93
SECTION 8.07 Non-Reliance    94

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Exhibit 10.23

SECTION 8.08 Other Agency Titles    95
SECTION 8.09 Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties    95
SECTION 8.10 Flood Laws    95
ARTICLE IX MISCELLANEOUS
96

SECTION 9.01 Notices    96
SECTION 9.02 Waivers; Amendments    97
SECTION 9.03 Expenses; Indemnity; Damage Waiver    100
SECTION 9.04 Successors and Assigns    101
SECTION 9.05 Survival    106
SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic
Execution    106
SECTION 9.07 Severability    107
SECTION 9.08 Right of Setoff    107
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process    107
SECTION 9.10 Waiver of Jury Trial    108
SECTION 9.11 Headings    108
SECTION 9.12 Confidentiality    108
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law    109
SECTION 9.14 USA PATRIOT Act    109
SECTION 9.15 Disclosure    109
SECTION 9.16 Appointment for Perfection    109
SECTION 9.17 Interest Rate Limitation    110
SECTION 9.18 Marketing Consent    110
SECTION 9.19 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions    110
SECTION 9.20 No Fiduciary Duty, etc    110
SECTION 9.21 Concerning Certificates    111
ARTICLE X LOAN GUARANTY
111

SECTION 10.01 Guaranty    111
SECTION 10.02 Guaranty of Payment    112
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty    112
SECTION 10.04 Defenses Waived    112
SECTION 10.05 Rights of Subrogation    113
SECTION 10.06 Reinstatement; Stay of Acceleration    113
SECTION 10.07 Information    113
SECTION 10.08 Termination    113
SECTION 10.09 Taxes    114
SECTION 10.10 Maximum Liability    114
SECTION 10.11 Contribution    114
SECTION 10.12 Liability Cumulative    115
SECTION 10.13 Keepwell    115

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Exhibit 10.23

SCHEDULES:

Commitment Schedule
Schedule 3.05 - Properties
Schedule 3.06 - Disclosed Matters
Schedule 3.13 - Insurance
Schedule 3.14 - Capitalization and Subsidiaries
Schedule 3.21 - Affiliate Transactions
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.10 - Existing Restrictions

EXHIBITS:

Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Collateral Access Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Joinder Agreement
Exhibit F-1 - U.S. Tax Certificate (For Foreign Lenders that are not
Partnerships for U.S. Federal Income Tax Purposes)
Exhibit F-2 - U.S. Tax Certificate (For Foreign Participants that are not
Partnerships for U.S. Federal Income Tax Purposes)
Exhibit F-3 - U.S. Tax Certificate (For Foreign Participants that are
Partnerships for U.S. Federal Income Tax Purposes)
Exhibit F-4 - U.S. Tax Certificate (For Foreign that are Partnerships for U.S.
Federal Income Tax Purposes)
Exhibit G - Commitment Increase Agreement
Exhibit H - Additional Lender Agreement

 

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Exhibit 10.23

CREDIT AGREEMENT dated as of February 23, 2018 (as it may be amended or modified
from time to time, this “Agreement”) among DRIL-QUIP, INC., a Delaware
corporation, as borrower (the “Borrower”), the other Loan Parties party hereto
from time to time, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”), as an Issuing Bank and
as Swingline Lender.
The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
“Account” has the meaning assigned to such term in the Security Agreement.
“Account Debtor” means any Person obligated on an Account.
“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Loan Party (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.
“Activation Period” means (a) the period commencing on the first date on which a
Default or Event of Default has occurred and continuing at all times until the
date upon which no Default or Event of Default then exists or (b) the period
commencing on the first date on which Availability is less than the greater of
(i) $10,000,000 and (ii) 15% of the lesser of the Borrowing Base and the
Aggregate Commitment and continuing at all times until the date upon which, for
the preceding thirty (30) consecutive day period, Availability has been equal to
at least the greater of (A) $10,000,000 and (B) 15% of the lesser of the
Borrowing Base and the Aggregate Commitment.
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any CBFR Borrowing, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum
equal to the sum of (a) 1.00% plus (b) the Adjusted LIBO Rate for a one-month
interest period on such day (or if such day is not a Business Day, the
immediately preceding Business Day); provided that, for the avoidance of doubt,
the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate at
approximately 11:00 a.m. London time on such day; provided further, that, if the
LIBO Screen Rate at such time shall be less than zero, such rate shall be deemed
to be zero for purposes of this Agreement.
“Administrative Agent” has the meaning assigned to such term in the preamble
hereof.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.

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Exhibit 10.23

“Aggregate Commitment” means, at any time, the aggregate of the Commitments of
all of the Lenders, as increased or reduced from time to time pursuant to the
terms and conditions hereof. As of the Effective Date, the Aggregate Commitment
is $100,000,000.
“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving
Exposure of all the Lenders at such time.
“Agreement” has the meaning assigned to such term in the preamble hereof.
“Alternative Currency” means any lawful currency (other than dollars) reasonably
acceptable to the Administrative Agent and the applicable Issuing Bank and which
is freely transferable and convertible into dollars and is freely available to
the applicable Issuing Bank.
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Subsidiaries from time to
time concerning or relating to bribery or corruption.
“Applicable Percentage” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Exposure, Overadvances or Swingline Loans, a percentage
equal to a fraction, the numerator of which is such Lender’s Commitment and the
denominator of which is the Aggregate Commitment (provided that, if the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon such Lender’s share of the Aggregate Revolving Exposure at
that time), and (b) with respect to Protective Advances or with respect to the
Aggregate Revolving Exposure, a percentage based upon its share of the Aggregate
Revolving Exposure and the unused Commitments; provided that, in accordance with
Section 2.20, so long as any Lender shall be a Defaulting Lender, such
Defaulting Lender’s Commitment shall be disregarded in the calculations under
clauses (a) and (b) above.
“Applicable Period” has the meaning assigned to such term in the definition of
“Applicable Rate” hereof.
“Applicable Rate” means, for any day:
(i)    with respect to any commitment fees payable hereunder, the applicable
rate per annum set forth below under the caption “Commitment Fee Rate”, based
upon the average daily unused portion of the Aggregate Commitment of the
Borrower during the calendar month in which such day falls, as set forth below
under the caption “Unused Commitment”:

Unused Commitment
Commitment Fee Rate
Category 1
≥ 50%
0.375%
Category 2
< 50%
0.250%

and (ii) with respect to any Loan payable hereunder, the applicable rate per
annum set forth below under the caption “CBFR Spread” or “Eurodollar Spread”, as
the case may be, based upon the Leverage Ratio as of the most recent
determination date, provided that until the delivery to the Administrative
Agent, pursuant to Section 5.01, of the Borrower’s consolidated financial
information for the Borrower’s first fiscal quarter ending after the Effective
Date, the “Applicable Rate” shall be the applicable rates per annum set forth
below in Category 3:

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Exhibit 10.23

Leverage Ratio
CBFR Spread
Eurodollar Spread
Category 1
 2.0 to 1.0
1.50%
2.50%
Category 2
 2.0 to 1.0 but
 1.0 to 1.0
1.25%
2.25%
Category 3
 1.0 to 1.0
1.00%
2.00%

For purposes of the foregoing clause (ii), (a) the Applicable Rate for each
fiscal quarter of the Borrower shall be determined as of the end of the
immediately preceding fiscal quarter of the Borrower based upon the Borrower’s
quarterly consolidated financial statements delivered pursuant to Section 5.01
and (b) each change in the Applicable Rate resulting from a change in the
Leverage Ratio shall be effective during the period commencing on and including
the date of delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately preceding
the date of delivery to the Administrative Agent of such consolidated financial
statements indicating the next such change in the Leverage Ratio which would
result in a change in the Applicable Rate, provided that the Leverage Ratio
shall be deemed to be in Category 1 if the Borrower fails to deliver the annual
or quarterly consolidated financial statements required to be delivered by it
pursuant to Section 5.01 during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered.
In the event that any consolidated financial statements or compliance
certificate required to be delivered pursuant to Section 5.01 is shown to be
inaccurate, and such inaccuracy, if corrected, would have led to the application
of a higher Applicable Rate for any period (an “Applicable Period”) than the
Applicable Rate applied for such Applicable Period, and only in such case, then
the Borrower shall immediately (A) deliver to the Administrative Agent a
corrected compliance certificate for such Applicable Period, (B) determine the
Applicable Rate for such Applicable Period based upon the corrected compliance
certificate, and (C) within ten (10) Business Days of determination and demand
by the Administrative Agent, pay to the Administrative Agent the accrued
additional interest owing as a result of such increased Applicable Rate for such
Applicable Period, which payment shall be promptly applied by the Administrative
Agent in accordance with Section 2.18. The preceding sentence is in addition to
the rights of the Administrative Agent and the Lenders with respect to
Section 2.13 and Article VII and their other respective rights under this
Agreement.
“Approved Fund” has the meaning assigned to such term in Section 9.04.
“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent. The
Borrower shall be a third party beneficiary of such assumption by the assignee
of the obligations of the assigning Lender with respect to obligations owing to
the Borrower under this Agreement, as modified by such Assignment and
Assumption.
“Availability” means, at any time, an amount equal to (a) the lesser of (i) the
Aggregate Commitment and (ii) the Borrowing Base minus (b) the Aggregate
Revolving Exposure (calculated, with respect to any Defaulting Lender, as if
such Defaulting Lender had funded its Applicable Percentage of all outstanding
Borrowings) at such time.
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.
“Available Commitment” means, at any time, the Aggregate Commitment then in
effect minus the Aggregate Revolving Exposure (calculated, with respect to any
Defaulting Lender, as if such Defaulting Lender had funded its Applicable
Percentage of all outstanding Borrowings) at such time.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

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Exhibit 10.23

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.
“Banking Services” means each and any of the following bank services provided to
any Loan Party or its Subsidiaries by any Lender or any of its Affiliates:
(a) credit cards for commercial customers (including, without limitation,
“commercial credit cards” and purchasing cards), (b) stored value cards,
(c) merchant processing services, and (d) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, any direct debit scheme or arrangement, overdrafts,
cash pooling services, and interstate depository network services).
“Banking Services Obligations” means any and all obligations of the Loan Parties
or their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
“Bankruptcy Code” means 11 U.S.C. §§ 101 et seq.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business, appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, unless such ownership
interest results in or provides such Person with immunity from the jurisdiction
of courts within the U.S. or from the enforcement of judgments or writs of
attachment on its assets or permits such Person (or such Governmental Authority
or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
agreements made by such Person.
“Banking Services Reserves” means all reserves which the Administrative Agent
from time to time establishes in its Permitted Discretion for Banking Services
then provided or outstanding.
“Beneficial Owner” means, with respect to any U.S. Federal withholding Tax, the
beneficial owner, for U.S. Federal income tax purposes, to whom such Tax
relates.
“Board” means the Board of Governors of the Federal Reserve System of the U.S.
“Borrower” has the meaning assigned to such term in the preamble hereof.
“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, (b) a Swingline Loan, (c) a Protective
Advance and (d) an Overadvance.
“Borrowing Base” means, at any time, the sum of
(a)    85% of the Loan Parties’ Eligible Accounts at such time, plus
(b)    85% of the Loan Parties’ Eligible Bill-And-Hold Accounts at such time,
plus
(c)    the product of 85% multiplied by the Net Orderly Liquidation Value
percentage (by Inventory category) identified in the most recent Inventory
appraisal obtained by the Administrative Agent multiplied by the Loan Parties’
Eligible Inventory, valued at the lower of cost or market value, determined on a
first-in-first-out basis, minus
(d)    any Reserves.

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Exhibit 10.23

The amount of Inventory which may be included as part of the Borrowing Base
shall not exceed 75% of the total Borrowing Base. The Administrative Agent may,
in its Permitted Discretion, upon not less than three (3) Business Days’ prior
written notice to the Borrower, (i) establish or adjust the Reserves, or, (ii)
if an Event of Default has occurred and is continuing, (x) reduce the advance
rates set forth above, or (y) reduce one or more of the other elements used in
computing the Borrowing Base. During such three (3) Business Day period, the
Administrative Agent shall, if requested, discuss any such Reserve or change
with the Borrower and, to the extent applicable, the Borrower may take such
action as may be required so that the event, condition or matter that is the
basis for such Reserve or change no longer exists or exists in a manner that
would result in the establishment of a lower Reserve or result in a lesser
change, in each case, in a manner and to the extent satisfactory to the
Administrative Agent.
“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer, in substantially the form of
Exhibit B or another form which is acceptable to the Administrative Agent in its
sole discretion.
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
“Burdensome Restrictions” means any consensual encumbrance or restriction of the
type described in clause (a) or (b) of Section 6.10 (but subject to the proviso
following such clauses).
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for general business in London.
“Capital Expenditures” means, without duplication, any expenditure for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Balance Testing Period” means the period commencing on the Effective Date
and continuing until the date on which the DRQ Pledge is delivered in accordance
with Section 5.15(b)(ii), which period, for the avoidance of doubt, may continue
until all of the Secured Obligations have been Paid in Full, if the DRQ Pledge
is not delivered in accordance with Section 5.15(b)(ii).
“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted One Month LIBOR Rate on such day (or if
such day is not a Business Day, the immediately preceding Business Day). Any
change in the CB Floating Rate due to a change in the Prime Rate or the Adjusted
One Month LIBOR Rate shall be effective from and including the effective date of
such change in the Prime Rate or the Adjusted One Month LIBOR Rate,
respectively.
“CBFR”, when used in reference to: (a) a rate of interest, refers to the CB
Floating Rate, and (b) any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, bear interest at a rate determined by
reference to the CB Floating Rate.
“CFC” means a “controlled foreign corporation” as defined in Section 957 of the
Code.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) of Equity Interests representing
more than 35% of the aggregate ordinary voting power

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Exhibit 10.23

represented by the issued and outstanding Equity Interests of the Borrower;
(b) occupation at any time of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were not (i) directors
of the Borrower on the date of this Agreement, (ii) nominated or appointed by
the board of directors of the Borrower, or (iii) approved by the board of
directors of the Borrower as director candidates prior to their election.
“Change in Law” means the occurrence after the date of this Agreement (or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement) of any of the following: (a) the adoption of or taking effect of
any law, rule, regulation or treaty; (b) any change in any law, rule, regulation
or treaty or in the administration, interpretation or application thereof by any
Governmental Authority; or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline, requirement or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement;
provided that, notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements or directives thereunder or issued in connection
therewith or in the implementation thereof, and (y) all requests, rules,
guidelines, requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted, issued or implemented.
“Charges” has the meaning assigned to such term in Section 9.17.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline
Loans or Protective Advances or Overadvances.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be, become or be
required to be, subject to a security interest or Lien in favor of the
Administrative Agent, on behalf of itself and the Lenders and other Secured
Parties, to secure the Secured Obligations.
“Collateral Access Agreement” means any landlord waiver or other agreement,
substantially in the form of Exhibit C or in such other form that is in form and
substance reasonably satisfactory to the Administrative Agent, between the
Administrative Agent and any third party (including any bailee, consignee,
customs broker or other similar Person) in possession of any Collateral or any
landlord of any real property where any Collateral is located, as such landlord
waiver or other agreement may be amended, restated, supplemented or otherwise
modified from time to time.
“Collateral Documents” means, collectively, the Security Agreement, the Deposit
Account Control Agreements, the Commodity Account Control Agreements, the
Securities Account Control Agreements and any other agreements, instruments and
documents executed in connection with this Agreement that are intended to
create, perfect or evidence Liens to secure the Secured Obligations, including,
without limitation, all other security agreements, control agreements, pledge
agreements, loan agreements, notes, guarantees, subordination agreements,
pledges, powers of attorney, consents, assignments, contracts, fee letters,
notices, leases, financing statements and all other written matter whether
theretofore, now or hereafter executed by any Loan Party and delivered to the
Administrative Agent.
“Collection Account” has the meaning assigned to such term in the Security
Agreement.
“Commercial LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding commercial Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements relating to commercial Letters
of Credit that have not yet been reimbursed by or on behalf of the Borrower at
such time. The Commercial LC Exposure of any Lender at any time shall be its
Applicable Percentage of the aggregate Commercial LC Exposure at such time.

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Exhibit 10.23

“Commitment” means, with respect to each Lender, the commitment, of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit,
Overadvances, Swingline Loans and Protective Advances hereunder, expressed as an
amount representing the maximum aggregate permitted amount of such Lender’s
Revolving Exposure hereunder, as such commitment may be reduced or increased
from time to time pursuant to Section 2.09 and assignment by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set
forth on the Commitment Schedule, or in the Assignment and Assumption pursuant
to which such Lender shall have assumed its Commitment, as applicable.
“Commitment Schedule” means the Schedule attached hereto identified as such.
“Commodity Account Control Agreement” has the meaning assigned to such term in
the Security Agreement.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.
“Communications” has the meaning assigned to such term in Section 9.01(d).
“Competitor” means any Person that is a bona fide direct competitor of the
Borrower or any Subsidiary in the same industry or a substantially similar
industry which offers a substantially similar product or service as the Borrower
or any Subsidiary.
“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise, provided
that in no event shall any natural person that serves as a director or manager
of, or holds any office or other position in, any Person be deemed to Control
such Person solely as a result of serving in such capacity or holding such
office or other position. “Controlling” and “Controlled” have meanings
correlative thereto.
“Controlled Disbursement Account” one or more accounts of the Borrower
maintained with the Administrative Agent as a zero balance, cash management
account pursuant to and under any agreement between the Borrower and the
Administrative Agent, as modified and amended from time to time, and through
which all disbursements of the Borrower, any other Loan Party and any designated
Subsidiary of the Borrower are made and settled on a daily basis with no
uninvested balance remaining overnight.
“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.
“DDA Access Product” means the bank service provided to any Loan Party by JPMCB
in its sole discretion consisting of direct access to schedule payments from the
Funding Account by electronic, internet or other access mechanisms that may be
agreed upon from time to time by JPMCB and the Borrower and the funding of such
payments under the Loan Borrowing Option in the DDA Access Product Agreement.
“DDA Access Product Agreement” means JPMCB’s Treasury Services End of Day
Investment & Loan Sweep Service Terms, as in effect on the date of this
Agreement, as the same may be amended from time to time.
“Debtor Relief Laws” means the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

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Exhibit 10.23

“Defaulting Lender” means any Lender that (a) has failed, within two (2)
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Loans, (ii) fund any portion of its participations in Letters of Credit
or Swingline Loans or (iii) pay over to any Credit Party any other amount
required to be paid by it hereunder, (b) has notified the Borrower or any Credit
Party in writing, or has made a public statement, to the effect that it does not
intend or expect to comply with any of its funding obligations under this
Agreement or generally under other agreements in which it commits to extend
credit, (c) has failed, within three (3) Business Days after request by a Credit
Party, acting in good faith, to provide a certification in writing from an
authorized officer of such Lender that it will comply with its obligations (and
is financially able to meet such obligations) to fund prospective Loans and
participations in then outstanding Letters of Credit and Swingline Loans under
this Agreement, provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon such Credit Party’s receipt of such
certification in form and substance satisfactory to it and the Administrative
Agent, or (d) has become, or has a direct or indirect parent company that has
become, the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.
“Deposit Account Control Agreement” has the meaning assigned to such term in the
Security Agreement.
“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.
“Disqualified Institution” means, as of any date, (a) any Competitor which has
been designated by the Borrower as a “Disqualified Institution” by written
notice to the Administrative Agent in accordance with Section 9.01(a)(ii) (which
such notice shall specify such Person by exact legal name) and the Lenders
(including by posting such notice to the Platform) and (b) any Affiliate (other
than any Person described in subclause (iii) below) of any Competitor described
in clause (a) that is (x) designated by the Borrower as specified in clause (a)
or (y) clearly identifiable as an Affiliate of such Competitor solely on the
basis of the similarity of its name; provided, that (i) no designation of a
Competitor as a “Disqualified Institution” pursuant hereto shall be effective
until five (5) Business Days following the receipt of such written notice by the
Administrative Agent and the Lenders, (ii) “Disqualified Institutions” shall
exclude any Person that the Borrower has designated as no longer being a
“Disqualified Institution” by written notice delivered to the Administrative
Agent from time to time and (iii) any bona fide debt fund or investment vehicle
that is engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
business which is managed, sponsored or advised by any Person Controlling,
Controlled by or under common Control with such Competitor or its Controlling
owner shall be deemed not to be a Competitor.
“Document” has the meaning assigned to such term in the Security Agreement.
“Dollar Equivalent” of any amount means, at the time of determination thereof,
(a) if such amount is expressed in dollars, such amount, (b) if such amount is
expressed in an Alternative Currency, the equivalent of such amount in dollars
determined by using the rate of exchange for the purchase of the dollars with
such Alternative Currency in the London foreign exchange market at or about
11:00 a.m. London time (or New York time, as applicable) on a particular day as
displayed by ICE Data Services as the “ask price”, or as displayed on such other
information service which publishes that rate of exchange from time to time in
place of ICE Data Services (or if such service ceases to be available, the
equivalent of such amount in dollars as determined by the Administrative Agent
using any method of determination it deems appropriate in its sole discretion)
and (c) if such amount is denominated in any other currency, the equivalent of
such amount in dollars as determined by the Administrative Agent using any
method of determination it deems appropriate in its sole discretion.
“dollars” or “$” refers to lawful money of the U.S.
“Domestic Subsidiary” means a Subsidiary organized or created under the laws of
a jurisdiction located in the U.S.
“DQ List” has the meaning assigned to such term in the definition of “Ineligible
Institution”.
“Dril-Quip Brazil” means Dril-Quip do Brasil Ltda., a limited liability company
(sociedade limitada) formed under the laws of Brazil.

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Exhibit 10.23

“DRQ” means DRQ Holdings C.V., a limited liability partnership (commanditaire
vennootschap) formed under the laws of the Netherlands.
“DRQ Pledge” has the meaning assigned to such term in Section 5.15(b)(ii).
“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such
period, the sum of (i) Interest Expense for such period, (ii) income tax expense
for such period net of tax refunds received during such period, (iii) all
amounts attributable to depreciation and amortization expense for such period,
(iv) any extraordinary non-cash charges for such period and (v) any other
non-cash charges for such period (but excluding any non-cash charge in respect
of an item that was included in Net Income in a prior period and any non-cash
charge that relates to the write-down or write-off of inventory), minus
(b) without duplication and to the extent included in Net Income for such
period, (i) any cash payments made during such period in respect of non-cash
charges described in clause (a)(v) above taken in a prior period and (ii) any
extraordinary gains and any non-cash items of income for such period, all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of
the Commodity Exchange Act or any regulations promulgated thereunder and the
applicable rules issued by the Commodity Futures Trading Commission and/or the
SEC.
“EEA Financial Institution” means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a Person with
the intent to sign, authenticate or accept such contract or record.
“Electronic System” means any electronic system, including e-mail, e-fax, web
portal access for the Borrower, Intralinks®, ClearPar®, Debt Domain, Syndtrak
and any other Internet or extranet-based site, whether such electronic system is
owned, operated or hosted by the Administrative Agent or the Issuing Bank and
any of its respective Related Parties or any other Person, providing for access
to data protected by passcodes or other security system.
“Eligible Accounts” means, at any time, the Accounts of the Loan Parties, other
than any Account:
(a)    which is not subject to a first priority perfected security interest in
favor of the Administrative Agent;
(b)    which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Encumbrance which does not have
priority over the Lien in favor of the Administrative Agent;
(c)    (i) with respect to which the scheduled due date is more than ninety (90)
days after the date of the original invoice therefor, (ii) which is unpaid more
than ninety (90) days after the date of the original

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Exhibit 10.23

invoice therefor or more than sixty (60) days after the original due date
therefor (“Overage”) (when calculating the amount under this clause (ii), for
the same Account Debtor, the Administrative Agent shall include the net amount
of such Overage and add back any credits, but only to the extent that such
credits do not exceed the total gross receivables from such Account Debtor, or
(iii) which has been written off the books of the Loan Parties or otherwise
designated as uncollectible;
(d)    which is owing by an Account Debtor for which more than 50% of the
Accounts owing from such Account Debtor and its Affiliates are ineligible
pursuant to clause (c) above;
(e)    which is owing by (i) an Investment Grade Account Debtor to the extent
the aggregate amount of Accounts owing from such Investment Grade Account Debtor
and its Affiliates to the Loan Parties exceeds 50% of the aggregate Eligible
Accounts or which are owing by any other Account Debtor to the extent the
aggregate amount of Accounts owing from such Account Debtor and its Affiliates
to the Loan Parties exceeds 20% of the aggregate Eligible Accounts, but, in each
case, only to the extent of such excess;
(f)    with respect to which any covenant, representation or warranty contained
in this Agreement or in the Security Agreement has been breached in any material
respect or is not true in any material respect (in each case, without
duplication of any materiality qualifier contained therein);
(g)    which (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation satisfactory to the Administrative Agent in its Permitted
Discretion which has been sent to the Account Debtor, (iii) represents a
progress billing, (iv) is contingent upon any Loan Party’s completion of any
further performance, (v) represents a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, cash-on-delivery or any other
repurchase or return basis or (vi) relates to payments of interest;
(h)    (i) for which the goods giving rise to such Account have not been shipped
to the Account Debtor, (ii) for which the services giving rise to such Account
have not been performed by any Loan Party or (iii) if such Account was invoiced
more than once;
(i)    with respect to which any check or other instrument of payment has been
returned uncollected for any reason;
(j)    which is owed by an Account Debtor which has (i) applied for, suffered,
or consented to the appointment of any receiver, custodian, trustee, or
liquidator of its assets, (ii) had possession of all or a material part of its
property taken by any receiver, custodian, trustee or liquidator, (iii) filed,
or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as bankrupt,
winding-up, or voluntary or involuntary case under any state or federal
bankruptcy laws (other than post-petition accounts payable of an Account Debtor
that is a debtor-in-possession under the Bankruptcy Code and reasonably
acceptable to the Administrative Agent), (iv) admitted in writing its inability,
or is generally unable to, pay its debts as they become due, (v) become
insolvent, or (vi) ceased operation of its business;
(k)    which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. or Canada or (ii) is not organized under applicable
law of the U.S., any state of the U.S., or the District of Columbia, or Canada,
or any province of Canada unless, in any such case, such Account is backed by a
Letter of Credit acceptable to the Administrative Agent which is in the
possession of, and is directly drawable by, the Administrative Agent; provided
that, up to $15,000,000 in the aggregate of Accounts owing by Account Debtors
which (x) do not maintain their chief executive offices in the U.S. (including
any territory thereof) or Canada or (y) are not organized under applicable law
of the U.S. or Canada, may be included as Eligible Accounts despite the
foregoing provisions of this clause (k), so long as each such Account Debtor is,
or is a Subsidiary of, an Investment Grade Account Debtor;
(l)    which is owed in any currency other than dollars;

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Exhibit 10.23

(m)    which is owed by (i) any Governmental Authority of any country other than
the U.S. unless such Account is backed by a Letter of Credit acceptable to the
Administrative Agent which is in the possession of, and is directly drawable by,
the Administrative Agent, or (ii) any Governmental Authority of the U.S., or any
department, agency, public corporation, or instrumentality thereof, unless the
Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.
and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien
of the Administrative Agent in such Account have been complied with to the
Administrative Agent’s satisfaction;
(n)    which is owed by any Affiliate of any Loan Party or any employee,
officer, director, agent or stockholder of any Loan Party or any of its
Affiliates;
(o)    which is owed by an Account Debtor or any Affiliate of such Account
Debtor to which any Loan Party is indebted, but only to the extent of such
indebtedness, or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;
(p)    which is subject to any counterclaim, deduction, defense, setoff or
dispute but only to the extent of any such counterclaim, deduction, defense,
setoff or dispute;
(q)    which is evidenced by any promissory note, chattel paper or instrument;
(r)    which is owed by an Account Debtor (i) located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the applicable Loan Party to seek judicial enforcement
in such jurisdiction of payment of such Account, unless the applicable Loan
Party has filed such report or qualified to do business in such jurisdiction or
(ii) which is a Sanctioned Person;
(s)    with respect to which any Loan Party has made any agreement with the
Account Debtor for any reduction thereof, other than discounts and adjustments
given in the ordinary course of business but only to the extent of any such
reduction, or any Account which was partially paid and any Loan Party created a
new receivable for the unpaid portion of such Account;
(t)    which does not comply in all material respects with the requirements of
all applicable laws and regulations, whether Federal, state or local, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board;
(u)    which is for goods that have been sold under a purchase order or pursuant
to the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than the applicable Loan Party
has or has had an ownership interest in such goods, or which indicates any party
other than the applicable Loan Party as payee or remittance party;
(v)    which was created on cash on delivery terms; or
(w)    which the Administrative Agent otherwise determines in its Permitted
Discretion is unacceptable.
In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, the Borrower shall notify the Administrative
Agent thereof on and at the time of submission to the Administrative Agent of
the next Borrowing Base Certificate. In determining the amount of an Eligible
Account, the face amount of an Account may, in the Administrative Agent’s
Permitted Discretion, be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that any applicable Loan Party may be obligated to rebate to an Account Debtor
pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but
not yet applied by the applicable Loan Party to reduce the amount of such
Account.

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Exhibit 10.23

“Eligible Bill-And-Hold Accounts” means, at any time, the Accounts of the Loan
Parties (a) which are specifically identifiable as bill-and-hold accounts on the
aging of the Loan Parties’ Accounts, (b) for which the goods giving rise to such
Account (i) are fully covered by insurance paid for by the applicable Account
Debtor and which insurance policies name the applicable Loan Party as an
additional insured and loss payee, (ii) are segregated from other goods and are
clearly identifiable as goods of such Account Debtor, and (iii) whose physical
location is tracked at all times, (c) with respect to which the applicable Loan
Party and the Account Debtor have agreed, pursuant to a binding written
agreement that, (A) title in the goods giving rise to such Accounts has
transferred to the Account Debtor, (B) such goods will be billed and paid for by
the Account Debtor prior to delivery of such goods to the Account Debtor, and
(C) such goods are not subject to inspection and/or acceptance by such Account
Debtor, or such right of inspection and/or acceptance by such Account Debtor has
been waived or otherwise satisfied, and (d) which would otherwise constitute an
“Eligible Account” under this Agreement, but for clauses (g)(v) and (h)(i) of
the definition thereof.
“Eligible Inventory” means, at any time, the Inventory of the Loan Parties,
other than any Inventory:
(a)    which is not subject to a first priority perfected Lien in favor of the
Administrative Agent;
(b)    which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Encumbrance which does not have
priority over the Lien in favor of the Administrative Agent;
(c)    which is, in the Administrative Agent’s Permitted Discretion, obsolete,
unmerchantable, defective, used, unfit for use or sale, not salable at prices
approximating at least the cost of such Inventory in the ordinary course of
business or unacceptable due to age, type, category and/or quantity;
(d)    with respect to which any covenant, representation or warranty contained
in this Agreement or in the Security Agreement has been breached in any material
respect or is not true in any material respect in each case, without duplication
of any materiality qualifier contained therein) and which does not conform to
all standards imposed by any Governmental Authority having authority over such
Inventory or the use or sale thereof;
(e)    in which any Person other than the applicable Loan Party shall (i) have
any direct or indirect ownership, interest or title or (ii) be indicated on any
purchase order or invoice with respect to such Inventory as having or purporting
to have an interest therein;
(f)    which (i) is not finished goods or which constitutes raw materials, or
(ii) constitutes subassemblies, packaging and shipping material, manufacturing
supplies, samples, prototypes, displays or display items, bill-and-hold or
ship-in-place goods, goods that are returned or marked for return, repossessed
goods, defective or damaged goods, goods held on consignment, or goods which are
not of a type held for sale in the ordinary course of business;
(g)    which is not located in the U.S. or is in transit with a common carrier
from vendors and suppliers;
(h)    which is located in any location leased by any Loan Party unless (i) the
lessor has delivered to the Administrative Agent a Collateral Access Agreement
or (ii) a Rent Reserve for rent, charges and other amounts due or to become due
with respect to such facility has been established by the Administrative Agent
in its Permitted Discretion;
(i)    which is located in any third party warehouse or is in the possession of
a bailee (other than a third party processor) and is not evidenced by a Document
unless (i) such warehouseman or bailee has delivered to the Administrative Agent
a Collateral Access Agreement and such other documentation as the Administrative
Agent may require or (ii) an appropriate Rent Reserve has been established by
the Administrative Agent in its Permitted Discretion;

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Exhibit 10.23

(j)    which is being processed offsite at a third party location or outside
processor, or is in-transit to or from such third party location or outside
processor;
(k)    which is the subject of a consignment by any Loan Party as consignor;
(l)    which is perishable;
(m)    which contains or bears any intellectual property rights licensed to the
applicable Loan Party unless the Administrative Agent is satisfied in its
Permitted Discretion that it may sell or otherwise dispose of such Inventory
without (i) infringing the rights of such licensor, (ii) violating any contract
with such licensor, or (iii) incurring any liability with respect to payment of
royalties other than royalties incurred pursuant to sale of such Inventory under
the current licensing agreement;
(n)    which is not reflected in a current perpetual inventory report of the
Loan Parties;
(o)    for which reclamation rights have been asserted by the seller;
(p)    which has been acquired from a Sanctioned Person; or
(q)    which the Administrative Agent otherwise determines in its Permitted
Discretion is unacceptable.
In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, the Borrower shall notify the Administrative Agent
thereof on and at the time of submission to the Administrative Agent of the next
Borrowing Base Certificate.
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or
occupational health and workplace safety.
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
“ERISA Event” means(a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30‑day notice period is waived); (b) the failure to
satisfy the “minimum funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention

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Exhibit 10.23

to terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by the Borrower or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal of the Borrower or any ERISA
Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent, in critical status or in reorganization, within the meaning of
Title IV of ERISA.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bears interest at a rate
determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article VII.
“Excluded Assets” has the meaning assigned to such term in the Security
Agreement.
“Excluded Deposit Accounts” means any deposit accounts used solely for trust,
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of any Loan Party or any of its Subsidiaries.
“Excluded Domestic Subsidiary” means any Domestic Subsidiary that is (a) a FSHCO
or (b) is owned directly or indirectly by a CFC.
“Excluded Subsidiary” has the meaning assigned to such term in Section 5.14(c).
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
ECP at the time the Guarantee of such Guarantor or the grant of such security
interest becomes or would become effective with respect to such Swap Obligation.
If a Swap Obligation arises under a master agreement governing more than one
swap, such exclusion shall apply only to the portion of such Swap Obligation
that is attributable to swaps for which such Guarantee or security interest is
or becomes illegal.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, Letter of Credit or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan, Letter of Credit or Commitment (other than
pursuant to an assignment request by the Borrower under Section 2.19(b)) or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.17, amounts with respect to such Taxes were payable
either to such Lender’s assignor immediately before such Lender acquired the
applicable interest in a Loan, Letter of Credit or Commitment or to such Lender
immediately before it changed its lending office; (c) Taxes attributable to such
Recipient’s failure to comply with Section 2.17(f); and (d) any U.S. Federal
withholding Taxes imposed under FATCA.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.

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Exhibit 10.23

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depositary institutions
(as determined in such manner as the NYFRB shall set forth on its public website
from time to time) and published on the next succeeding Business Day by the
NYFRB as the federal funds effective rate, provided that, if the Federal Funds
Effective Rate shall be less than zero, such rate shall be deemed to zero for
the purposes of this Agreement.
“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
“First-Tier Foreign Subsidiary” means a Foreign Subsidiary that is a direct
Subsidiary of the Borrower or any Domestic Subsidiary (other than any Excluded
Domestic Subsidiary).
“Fixed Charge Coverage Ratio” means, at any date, the ratio of (a) EBITDA minus
Unfinanced Capital Expenditures to (b) Fixed Charges, all calculated for the
period of four (4) consecutive fiscal quarters ended on such date (or, if such
date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter most recently ended prior to such date).
“Fixed Charges” means, for any period, without duplication, cash Interest
Expense, plus prepayments and scheduled principal payments on Indebtedness
actually made, plus expenses for taxes paid in cash, plus Restricted Payments
paid in cash, plus Capital Lease Obligation payments actually made, plus, to the
extent not deducted in the calculation of EBITDA for such period, cash
contributions to any Plan (if any), all calculated for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.
“Flood Laws” has the meaning assigned to such term in Section 8.10.
“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.
“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.
“FSHCO” means any Domestic Subsidiary with no material assets or business
activities other than the ownership or management of Equity Interests in one or
more CFCs.
“Funding Account” has the meaning assigned to such term in Section 4.01(h).
“GAAP” means generally accepted accounting principles in the U.S.
“Governmental Authority” means the government of the U.S., any other nation or
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

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Exhibit 10.23

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.
“Guarantors” means all of the Loan Guarantors and any other Person who becomes a
party to this Agreement as a Loan Guarantor pursuant to a Joinder Agreement and
all non-Loan Parties who have delivered an Obligation Guaranty, and, in each
case, their successors and assigns, and the term “Guarantor” means each or any
one of them individually.
“Hazardous Materials” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos
or asbestos-containing material, polychlorinated biphenyls, flammable,
explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.
“Honing” means Honing, Inc., a Texas corporation.
“IFRS” means the body of pronouncements issued by the International Accounting
Standards Board (IASB), including International Financial Reporting Standards
and interpretations approved by the IASB, International Accounting Standards and
Standing Interpretations Committee interpretations approved by the predecessor
International Accounting Standards Committee and adapted for use in the European
Union.
“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate.”
“Indebtedness” of any Person means, without duplication as to such Person or any
group of Persons, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid on
or prior to the due date of such obligations, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current trade
accounts and other accounts payable, in each case, incurred in the ordinary
course of business), (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (j) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances, (k) obligations under any earn-out (which shall be valued in
accordance with GAAP), (l) any other Off-Balance Sheet Liability and
(m) obligations, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Swap
Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction. The Indebtedness
of any Person shall include, without duplication as to such Persons, the
Indebtedness of any other Person (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such Person,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by, or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
the foregoing clause (a) hereof, Other Taxes.
“Indemnitee” has the meaning assigned to such term in Section 9.03(b).
“Ineligible Institution” has the meaning assigned to such term in
Section 9.04(b).

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Exhibit 10.23

“Information” has the meaning assigned to such term in Section 9.12.
“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.08.
“Interest Expense” means, for any period, total interest expense (including that
attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries
for such period with respect to all outstanding Indebtedness of the Borrower and
its Subsidiaries (including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers’ acceptances and net
costs under Swap Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP), calculated on a
consolidated basis for the Borrower and its Subsidiaries for such period in
accordance with GAAP.
“Interest Payment Date” means (a) with respect to any CBFR Loan (other than a
Swingline Loan), the first Business Day of each calendar month, upon any
prepayment due to acceleration and the Maturity Date, and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part (and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three (3) months’ duration, each
day prior to the last day of such Interest Period that occurs at intervals of
three (3) months’ duration after the first day of such Interest Period), upon
any prepayment and the Maturity Date.
“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one (1), two (2),
three (3) or six (6) months thereafter, as the Borrower may elect; provided,
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period (for which the LIBO Screen Rate is available) that is shorter
than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest
period (for which the LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time; provided, that, if any Interpolated
Rate shall be less than zero, such rate shall be deemed to be zero for purposes
of this Agreement.
“Inventory” has the meaning assigned to such term in the Security Agreement.
“Investment” has the meaning assigned to such term in Section 6.04.
“Investment Grade Account Debtor” means, any Account Debtor whose securities are
rated BBB- (or then equivalent grade) or better by S&P or Baa3 (or then
equivalent grade) or better by Moody’s.
“IRS” means the United States Internal Revenue Service.
“Issuing Bank” means, individually and collectively, each of JPMCB, in its
capacity as the issuer of Letters of Credit hereunder, and any other Lender from
time to time designated by the Borrower as an Issuing Bank, with the consent of
such Lender and the Administrative Agent, and their respective successors in
such capacity as provided in Section 2.06(i). Any Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by its
Affiliates, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate (it being
agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply
with the requirements of Section 2.06 with respect to such Letters of Credit).
At any time there is more than one (1) Issuing

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Exhibit 10.23

Bank, all singular references to the Issuing Bank shall mean any Issuing Bank,
either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the
applicable Letter of Credit, or both (or all) Issuing Banks, as the context may
require.
“Issuing Bank Sublimit” means, as of the Effective Date, (i) $10,000,000, in the
case of JPMCB, and (ii) in the case of another Issuing bank, such amount as
shall be designated to the Administrative Agent and the Borrower in writing by
such Issuing Bank; provided that any Issuing Bank shall be permitted at any time
to increase its Issuing Bank Sublimit upon providing five (5) days’ prior
written notice thereof to the Administrative Agent and the Borrower, provided.
however, that no increase to any Issuing Bank’s Issuing Bank Sublimit shall
result in the aggregate LC Exposure to exceed the maximum amount provided
therefor in Section 2.06(b).
“Joinder Agreement” means a Joinder Agreement in substantially the form of
Exhibit E.
“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.
“Knowledge” means, with respect to any Person, the actual knowledge of any
Responsible Officer of such Person. “Know” and “Known” have meanings correlative
thereto.
“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).
“LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter
of Credit.
“LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the
Standby LC Exposure at such time. The LC Exposure of any Lender at any time
shall be its Applicable Percentage of the aggregate LC Exposure at such time.
“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a Lender hereunder pursuant to Section 2.09 or an
Assignment and Assumption, other than any such Person that ceases to be a Lender
hereunder pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.
“Letters of Credit” means letters of credit (or bank guarantees in Alternative
Currencies that the applicable Issuing Bank may permit to be issued in its
discretion and in accordance with Sections 1.07 and 2.06, as applicable) issued
pursuant to this Agreement, and the term “Letter of Credit” means any one of
them or each of them singularly, as the context may require.
“Leverage Ratio” means, as of the last day of each fiscal quarter of the
Borrower, the ratio of (a) Total Indebtedness on such date to (b) EBITDA for the
period of four (4) consecutive fiscal quarters ended on such date.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period or for any CBFR Borrowing, the LIBO Screen Rate at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period; provided that, if the LIBO Screen Rate shall not be available
at such time for such Interest Period (an “Impacted Interest Period”), then the
LIBO Rate shall be the Interpolated Rate, subject to Section 2.14 in the event
that the Administrative Agent shall conclude that it shall not be possible to
determine such Interpolated Rate (which conclusion shall be conclusive and
binding absent manifest error). Notwithstanding the above, to the extent that
“LIBO Rate” or “Adjusted LIBO Rate” is used in connection with a CBFR Borrowing,
such rate shall be determined as modified by the definition of Adjusted One
Month LIBOR Rate.
“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar
Borrowing for any applicable Interest Period or for any CBFR Borrowing, the
London interbank offered rate as administered by ICE Benchmark Administration
(or any other Person that takes over the administration of such rate for
Dollars) for a period equal in length to such Interest Period as displayed on
such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that
displays such rate (or, in the event such rate does not appear on a Reuters page
or screen, on any successor or

--------------------------------------------------------------------------------

Exhibit 10.23

substitute page on such screen that displays such rate, or on the appropriate
page of such other information service that publishes such rate from time to
time as selected by the Administrative Agent in its reasonable discretion);
provided that if the LIBO Screen Rate shall be less than zero, such rate shall
be deemed to zero for the purposes of this Agreement.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
“Loan Borrowing Option” has the meaning assigned to such term in the DDA Access
Product Agreement.
“Loan Documents” means, collectively, this Agreement, any promissory notes
issued pursuant to this Agreement, any Letter of Credit applications, the
Collateral Documents, the Loan Guaranty, any Obligation Guaranty, and all other
agreements, instruments, documents and certificates identified in Section 4.01
executed and delivered to, or in favor of, the Administrative Agent or any
Lender and including all other pledges, powers of attorney, consents,
assignments, fee letters, contracts, letter of credit agreements, letter of
credit applications and any agreements between the Borrower and the Issuing Bank
regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and
obligations between the Borrower and the Issuing Bank in connection with the
issuance of Letters of Credit, and all other agreements, instruments and
documents whether heretofore, now or hereafter executed by or on behalf of any
Loan Party, or any employee of any Loan Party in such capacity, and delivered to
the Administrative Agent or any Lender in connection with this Agreement or the
transactions contemplated hereby. Any reference in this Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to this Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes
operative.
“Loan Guarantor” means each Loan Party.
“Loan Guaranty” means Article X of this Agreement.
“Loan Parties” means, collectively, (a) the Borrower, (b) each Significant
Domestic Subsidiary that is a party to the Loan Guaranty and (c) any other
Person who becomes a party to this Agreement pursuant to a Joinder Agreement and
their respective successors and assigns, and the term “Loan Party” means any one
of them or all of them individually, as the context may require.
“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Swingline Loans, Overadvances and Protective Advances.
“Material Adverse Effect” means any event, development or circumstance that has
had or would reasonably be expected to have a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Loan
Parties, taken as a whole, to perform their obligations under the Loan
Documents, (c)  the Administrative Agent’s Liens (on behalf of itself and other
Secured Parties) on the Collateral or the priority of such Liens, or (d) the
rights of or benefits available to the Administrative Agent, the Issuing Bank or
the Lenders under any of the Loan Documents; provided, however, in no event
shall “Material Adverse Effect” include any event, development or circumstance
directly or indirectly arising out of or attributable to  any failure by the
Borrower and its Subsidiaries to meet any projections, forecasts or revenue or
earnings predictions (provided that the underlying causes of such failure
(subject to the other provisions of this definition) shall not be excluded).
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $10,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum

--------------------------------------------------------------------------------

Exhibit 10.23

aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time.
“Maturity Date” means February 23, 2023 or any earlier date on which the
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.
“Maximum Rate” has the meaning assigned to such term in Section 9.17.
“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net Income” means, for any period, the consolidated net income (or loss) of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the income (or deficit) of
any Person accrued prior to the date it becomes a Subsidiary or is merged into
or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary) in which the Borrower or any of
its Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
“Net Orderly Liquidation Value” means, with respect to Inventory or intangibles
of any Person, the orderly liquidation value thereof as determined in a manner
acceptable to the Administrative Agent by an appraiser acceptable to the
Administrative Agent, net of all costs of liquidation thereof.
“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, minus (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) and the amount of any reserves established
to fund contingent liabilities reasonably estimated to be payable, in each case
during the fiscal year that such event occurred or the next succeeding fiscal
year and that are directly attributable to such event (as determined reasonably
and in good faith by a Financial Officer).
“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).
“Non-Loan Party Cash Balance” means, as of any date of determination, the
aggregate amount of cash and cash equivalents (including any Permitted
Investments) of the Subsidiaries of the Borrower that are not Loan Parties.
“NYFRB” means the Federal Reserve Bank of New York.
“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day(or for any day that is not a Banking Day, for the immediately preceding
Banking Day); provided that if none of such rates are published for any day that
is a Business Day, the term “NYFRB Rate” means the rate for a federal funds
transaction quoted at 11:00 a.m. on such day received by the Administrative
Agent from a Federal funds broker of recognized standing selected by it;
provided, further, that if any of the aforesaid rates shall be less than zero,
such rate shall be deemed to be zero for purposes of this Agreement.

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Exhibit 10.23

“Obligated Party” has the meaning assigned to such term in Section 10.02.
“Obligation Guaranty” means any Guarantee of all or any portion of the Secured
Obligations executed and delivered to the Administrative Agent for the benefit
of the Secured Parties by a guarantor who is not a Loan Party.
“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations and indebtedness (including
interest and fees accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), obligations and liabilities of any of the Loan
Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any
other Indemnitee, individually or collectively, existing on the Effective Date
or arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any of the other Loan Documents or in respect
of any of the Loans made or reimbursement or other obligations incurred or any
of the Letters of Credit or other instruments at any time evidencing any
thereof.
“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).
“Original Indebtedness” has the meaning assigned to such term in
Section 6.01(g).
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Taxes (other than a connection arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to, or enforced, any
Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or
any Loan Document).
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.19).
“Overadvances” has the meaning assigned to such term in Section 2.05(b).
“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.-managed
banking offices of depository institutions (as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time)
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate (from and after such date as the NYFRB shall commence to
publish such composite rate).
“Paid in Full” or “Payment in Full” means, (a) the indefeasible payment in full
in cash of all outstanding Loans and LC Disbursements, together with accrued and
unpaid interest thereon, (b) the termination, expiration, or cancellation and
return of all outstanding Letters of Credit (or alternatively, with respect to
each such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit, or at the discretion of the Administrative Agent a backup standby
letter of credit satisfactory to the Administrative Agent and the Issuing Bank,
in an amount equal to 105% of the LC Exposure as of the date of such payment),
(c) the indefeasible payment in full in cash of the accrued and unpaid fees, if
any, (d) the indefeasible payment in full in cash of all reimbursable expenses
and other Secured Obligations (other than Unliquidated Obligations for which no
claim has been made and other obligations expressly stated to

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Exhibit 10.23

survive such payment and termination of this Agreement), together with accrued
and unpaid interest thereon, (e) the termination of all Commitments, and (f) the
termination of the Swap Agreement Obligations and the Banking Services
Obligations or entering into other arrangements satisfactory to the Secured
Parties counterparties thereto.
“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.
“Participant” has the meaning assigned to such term in Section 9.04(c).
“Participant Register” has the meaning assigned to such term in Section 9.04(c).
“Payment Condition” shall be deemed to be satisfied in connection with a
Restricted Payment, Investment, Permitted Acquisition or asset disposition if:
(a)    no Default or Event of Default has occurred and is continuing or would
result immediately after giving effect to such Restricted Payment, Investment,
Permitted Acquisition or asset disposition;
(b)    immediately after giving effect to and at all times during the 30
consecutive day period immediately prior to such Restricted Payment, Investment,
Permitted Acquisition or asset disposition, the Borrower shall have (i)
(A) Availability calculated on a pro forma basis after giving effect to such
Restricted Payment, Investment, Permitted Acquisition or asset disposition of
not less than the greater of (1) 20% of the Commitment or (2) $15,000,000, and
(B) a Fixed Charge Coverage Ratio for the trailing four (4) fiscal quarters
calculated on a pro forma basis after giving effect to such Restricted Payment,
Investment, Permitted Acquisition or asset disposition, of not less than 1.10 to
1.00 or (ii) Availability calculated on a pro forma basis after giving effect to
such Restricted Payment, Investment, Permitted Acquisition or asset disposition
of not less than $50,000,000; and
(c)    the Borrower shall have delivered to the Administrative Agent a
certificate in form and substance reasonably satisfactory to the Administrative
Agent certifying as to the items described in (A) and (B) above and attaching
calculations for item (B).
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction
that satisfies each of the following requirements:
(a)    such Acquisition is not a hostile or contested acquisition;
(b)    the business acquired in connection with such Acquisition is not engaged,
directly or indirectly, in any line of business other than the businesses in
which the Loan Parties are engaged on the Effective Date and any business
activities that are substantially similar, related, or incidental thereto;
(c)    both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct (except (i) any such
representation or warranty which relates to a specified prior date and (ii) to
the extent the Lenders have been notified in writing by the Loan Parties that
any representation or warranty is not correct and the Lenders have explicitly
waived in writing compliance with such representation or warranty) and no
Default exists, will exist, or would result therefrom;
(d)    as soon as available, but not less than ten (10) days prior to such
Acquisition (or such shorter period prior to such Acquisition as the
Administrative Agent may permit in its sole discretion), the Borrower has
provided the Administrative Agent (i) notice of such Acquisition and (ii) a copy
of all business and financial

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Exhibit 10.23

information reasonably requested by the Administrative Agent including pro forma
financial statements, statements of cash flow, and Availability projections;
(e)    if the Accounts and Inventory acquired in connection with such
Acquisition are proposed to be included in the determination of the Borrowing
Base, the Administrative Agent shall have conducted an audit and field
examination of such Accounts and Inventory, the results of which shall be
satisfactory to the Administrative Agent and the Lenders;
(f)    if such Acquisition is an acquisition of the Equity Interests of a
Person, such Acquisition is structured so that the acquired Person shall become
a Subsidiary of the Borrower and, if the acquired Person is a domestic entity
and the Acquisition is structured so that the acquired Person shall become a
Wholly-Owned Subsidiary of the Borrower, then the acquired Person shall become a
Loan Party pursuant to the terms of this Agreement;
(g)    if such Acquisition is an acquisition of assets located in the U.S., then
such Acquisition is structured so that the Borrower or another Loan Party shall
acquire such assets;
(h)    if such Acquisition is an acquisition of Equity Interests, such
Acquisition will not result in any violation of Regulation U;
(i)    if such Acquisition involves a merger or a consolidation involving the
Borrower or any other Loan Party, the Borrower or such Loan Party, as
applicable, shall be the surviving entity;
(j)    no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that would
reasonably be expected to have a Material Adverse Effect;
(k)    in connection with an Acquisition of the Equity Interests of any Person,
all Liens on property of such Person (other than any Lien permitted under
Section 6.02) shall be terminated unless the Administrative Agent and the
Required Lenders in their sole discretion consent otherwise, and in connection
with an Acquisition of the assets of any Person, all Liens on such assets shall
be terminated;
(l)    the Payment Condition shall be satisfied on a pro forma basis after
giving effect to such Acquisition;
(m)    all actions required to be taken with respect to any newly acquired or
formed Wholly-Owned Subsidiary of the Borrower or a Loan Party, as applicable,
required under Section 5.14 shall have been taken; and
(n)    the Borrower shall have delivered to the Administrative Agent the final
executed material documentation relating to such Acquisition within five (5)
Business Days following the consummation thereof.
“Permitted Acquisition Debt” has the meaning assigned to such term in
Section 6.01(f).
“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
“Permitted Encumbrances” means:
(a)    Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than sixty (60) days or are
being contested in compliance with Section 5.04;

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Exhibit 10.23

(c)    pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance, pension and other
social security laws or regulations;
(d)    deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
(e)    judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII; and
(f)    outstanding mineral interests, easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of the Borrower or
any Subsidiary.
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (e) above.
“Permitted Investments” means:
(a)    direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the U.S. (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the
U.S.), in each case maturing within one (1) year from the date of acquisition
thereof;
(b)    investments in commercial paper maturing within two hundred seventy (270)
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody’s;
(c)    investments in certificates of deposit, bankers’ acceptances and time
deposits maturing within one (1) year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any Lender or any other commercial bank which (i) has a combined
capital and surplus and undivided profits of not less than $500,000,000 and (ii)
in the case of any such commercial bank that is not organized under the laws of
the U.S. or any State thereof, whose long term debt is rated no lower than A or
the equivalent thereof by Moody’s or S&P;
(d)    fully collateralized repurchase agreements with a term of not more than
thirty (30) days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause (c)
above; and
(e)    money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $1,000,000,000.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar
electronic transmission system.
“Prepayment Event” means:

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Exhibit 10.23

(a)    any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of any Loan Party, other than
dispositions described in Section 6.05(a), which results in Net Proceeds in
excess of $2,000,000, individually or in the aggregate; or
(b)    any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party, which results in Net Proceeds in excess of $2,000,000,
individually or in the aggregate; or
(c)    the incurrence by any Loan Party or any Subsidiary of any Indebtedness
described in clause (a) or (b) of the definition thereof, other than
Indebtedness permitted under Section 6.01.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMCB as its prime rate in effect at its principal offices in New
York City. Each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
“Projections” has the meaning assigned to such term in Section 5.01(d).
“Protective Advance” has the meaning assigned to such term in Section 2.04.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan
Party that has total assets exceeding $10,000,000 at the time the relevant Loan
Guaranty or grant of the relevant security interest becomes or would become
effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
or any regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) any Issuing Bank, or any combination thereof (as the context requires).
“Refinance Indebtedness” has the meaning assigned to such term in
Section 6.01(g).
“Register” has the meaning assigned to such term in Section 9.04(b).
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, partners, members, trustees,
employees, agents, administrators, managers, representatives and advisors of
such Person and such Person’s Affiliates.
“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing or
dumping of any Hazardous Materials into the environment.
“Rent Reserve” means, with respect to any store, warehouse distribution center,
regional distribution center or depot where any Inventory subject to Liens
arising by operation of law is located, a reserve equal to three (3) months’
rent at such store, warehouse distribution center, regional distribution center
or depot.
“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the assets of the Loan Parties from information furnished by or on behalf of the
Loan Parties, after the Administrative Agent has exercised its rights of
inspection pursuant to this Agreement, which Reports may be distributed to the
Lenders by the Administrative Agent.
“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Revolving Exposures and unused Commitments representing at least 66 2/3%
of the sum of the Aggregate Revolving Exposure and unused Commitments at such
time; provided that, as long as there are only two (2) Lenders, Required Lenders
shall mean both Lenders.

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Exhibit 10.23

“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person and (b) any statute, law
(including common law), treaty, rule, regulation, code, ordinance, order,
decree, writ, judgment, injunction or determination of any arbitrator or court
or other Governmental Authority (including Environmental Laws), in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
“Reserves” means any and all reserves which the Administrative Agent deems
necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for past due interest on the Secured Obligations, Banking
Services Reserves, Rent Reserves, volatility reserves, reserves for fluctuation
of currency exchange rates, reserves for rent at locations leased by any Loan
Party and for consignee’s, warehousemen’s and bailee’s charges, reserves for
dilution of Accounts, reserves for Inventory shrinkage, reserves for customs
charges and shipping charges related to any Inventory in transit, reserves for
Swap Agreement Obligations, reserves for contingent liabilities of any Loan
Party, reserves for uninsured losses of any Loan Party, reserves for uninsured,
undersinsured, unindemnified or under indemnified liabilities or potential
liabilities with respect to any litigation and reserves for taxes, fees,
assessments and other governmental charges) with respect to the Collateral.
“Responsible Officer” means, with respect to any Person, any chief executive
officer, president, Financial Officer or general counsel of such Person.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Borrower or any option, warrant or other right
to acquire any such Equity Interests in the Borrower.
“Revolving Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans, its LC
Exposure and its Swingline Exposure at such time, plus an amount equal to its
Applicable Percentage of the aggregate principal amount of Protective Advances
outstanding at such time, plus an amount equal to its Applicable Percentage of
the aggregate principal amount of Overadvances outstanding at such time.
“Revolving Loan” means a Loan made pursuant to Section 2.01.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.
“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.06.
“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the United Nations Security Council, the European Union,
any European Union member state, Her Majesty’s Treasury of the United Kingdom or
other relevant sanctions authority, (b) any Person operating, organized or
resident in a Sanctioned Country or (c) any Person owned or controlled by any
such Person or Persons described in the foregoing clauses (a) or (b).
“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by the U.S. government,
including those administered by OFAC or the U.S. Department of State, or the
United Nations Security Council, the European Union, any European Union member
state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions
authority.
“SEC” means the Securities and Exchange Commission of the U.S.

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Exhibit 10.23

“Secured Obligations” means all Obligations, together with all (a) Banking
Services Obligations and (b) Swap Agreement Obligations owing to one or more
Lenders or their respective Affiliates; provided, however, that the definition
of “Secured Obligations” shall not create any guarantee by any Guarantor of (or
grant of security interest by any Guarantor to support, as applicable) any
Excluded Swap Obligations of such Guarantor for purposes of determining any
obligations of any Guarantor.
“Secured Parties” means (a) the Administrative Agent, (b) the Lenders, (c) the
Issuing Bank, (d) each provider of Banking Services, to the extent the Banking
Services Obligations in respect thereof constitute Secured Obligations, (e) each
counterparty to any Swap Agreement, to the extent the obligations thereunder
constitute Secured Obligations, (f) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document, and (g) the
successors and assigns of each of the foregoing.
“Security Agreement” means that certain Pledge and Security Agreement (including
any and all supplements thereto), dated as of the date hereof, among the Loan
Parties and the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, and any other pledge or security agreement
entered into, after the date of this Agreement by any other Loan Party (as
required by this Agreement or any other Loan Document) or any other Person for
the benefit of the Administrative Agent and the other Secured Parties, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
“Securities Account Control Agreement” has the meaning assigned to such term in
the Security Agreement.
“Settlement” has the meaning assigned to such term in Section 2.05(d).
“Settlement Date” has the meaning assigned to such term in Section 2.05(d).
“Significant Domestic Subsidiary” means (a) Honing, (b) TIW, (c) each Domestic
Subsidiary that Guarantees any Permitted Acquisition Debt or any Material
Indebtedness and (d) each Domestic Subsidiary whose (i) Total Assets (when
combined with the assets of its subsidiaries, after eliminating intercompany
obligations) as of the last day of the most recently ended fiscal quarter of the
Borrower were equal to or greater than 5% of the Total Assets of the Borrower
and its Subsidiaries on such date or (ii) EBITDA (determined as if references to
the Borrower and its Subsidiaries in the definitions of “EBITDA”, “Interest
Expense” and “Net Income” were references to such Domestic Subsidiary and its
subsidiaries) as of the last day of the most recently ended fiscal quarter of
the Borrower was equal to or greater than 5% of EBITDA; provided that EBITDA for
all purposes under this definition shall be calculated for the most recently
ended period of four (4) consecutive fiscal quarters of the Borrower.
“Significant Foreign Subsidiary” means (a) Dril-Quip Brazil, (b) DRQ, (c) each
Foreign Subsidiary, all or a portion of the issued and outstanding Equity
Interests of which secure any Permitted Acquisition Debt or any Material
Indebtedness and (d) each First-Tier Foreign Subsidiary whose (i) Total Assets
(when combined with the assets of its subsidiaries, after eliminating
intercompany obligations) as of the last day of the most recently ended fiscal
quarter of the Borrower were equal to or greater than 5% of the Total Assets of
the Borrower and its Subsidiaries on such date or (ii) EBITDA (determined as if
references to the Borrower and its Subsidiaries in the definitions of “EBITDA”,
“Interest Expense” and “Net Income” were references to such First-Tier Foreign
Subsidiary and its subsidiaries) as of the last day of the most recently ended
fiscal quarter of the Borrower was equal to or greater than 5% of EBITDA;
provided that EBITDA for all purposes under this definition shall be calculated
for the most recently ended period of four (4) consecutive fiscal quarters of
the Borrower.
“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all standby Letters of Credit outstanding at such time plus (b) the
aggregate amount of all LC Disbursements relating to standby Letters of Credit
that have not yet been reimbursed by or on behalf of the Borrower at such time.
The Standby LC Exposure of any Lender at any time shall be its Applicable
Percentage of the aggregate Standby LC Exposure at such time.
“Statements” has the meaning assigned to such term in Section 2.18(g).

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Exhibit 10.23

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) established by the Board
to which the Administrative Agent is subject with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D of the Board. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D of the Board or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Administrative Agent in its Permitted
Discretion.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
“Subsidiary” means any direct or indirect subsidiary of the Borrower or a Loan
Party, as applicable.
“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
“Swap Agreement Obligations” means any and all obligations of the Loan Parties
and their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all Swap Agreements permitted hereunder with a Lender or an Affiliate of a
Lender, and (b) any and all cancellations, buy backs, reversals, terminations or
assignments of any such Swap Agreement transaction.
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act or any rules
or regulations promulgated thereunder.
“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.
“Swingline Lender” means JPMCB in its capacity as lender of Swingline Loans
hereunder. Any consent required of the Administrative Agent or the Issuing Bank
shall be deemed to be required of the Swingline Lender and any consent given by
JPMCB in its capacity as Administrative Agent or Issuing Bank shall be deemed
given by JPMCB in its capacity as Swingline Lender.
“Swingline Loan” has the meaning assigned to such term in Section 2.05(a).

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Exhibit 10.23

“Target Balance” has the meaning assigned to such term in the DDA Access Product
Agreement.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), value added taxes, or
any other goods and services, use or sales taxes, assessments, fees or other
charges imposed by any Governmental Authority, including any interest, additions
to tax or penalties applicable thereto.
“TIW” means TIW Corporation, a Texas corporation.
“Total Assets” means, as of any date of determination with respect to any
Person, the amount that would, in conformity with GAAP, be set forth opposite
the caption “total assets” (or any like caption) on a balance sheet of such
Person at such date.
“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date, determined on a
consolidated basis.
“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the CBFR.
“UCC” has the meaning assigned to such term in the Security Agreement.
“Unfinanced Capital Expenditures” means, for any period, Capital Expenditures
made during such period which are not financed from the proceeds of any
Indebtedness (other than the Revolving Loans; it being understood and agreed
that, to the extent any Capital Expenditures are financed with Revolving Loans,
such Capital Expenditures shall be deemed Unfinanced Capital Expenditures), all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
“United States” and “U.S.” mean the United States of America.
“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (a) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (b) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (c) an obligation to provide collateral to secure any of the foregoing types
of obligations.
“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(B)(3).
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” means any Loan Party and the Administrative Agent.
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

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Exhibit 10.23

SECTION 1.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).
SECTION 1.03 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws),
(c) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to any restrictions on assignments set
forth herein) and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all functions
thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (e) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in
any definition to the phrase “at any time” or “for any period” shall refer to
the same time or period for all calculations or determinations within such
definition, and (g) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof the Borrower migrates to IFRS or there occurs any change in GAAP
or in the application thereof on the operation of any provision hereof and the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of such migration to
IFRS or change in GAAP or in the application thereof (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such migration to IFRS or change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such migration or change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith. Notwithstanding any other provision
contained herein, all terms of an accounting or financial nature used herein
shall be construed, and all computations of amounts and ratios referred to
herein shall be made (a) without giving effect to any election under Financial
Accounting Standards Board Accounting Standards Codification 825-10-25 (or any
other Accounting Standards Codification or Financial Accounting Standard having
a similar result or effect) to value any Indebtedness or other liabilities of
any Loan Party, the Borrower or any Subsidiary at “fair value”, as defined
therein and (b) without giving effect to any treatment of Indebtedness in
respect of convertible debt instruments under Financial Accounting Standards
Board Accounting Standards Codification 470-20 (or any other Accounting
Standards Codification or Financial Accounting Standard having a similar result
or effect) to value any such Indebtedness in a reduced or bifurcated manner as
described therein, and such Indebtedness shall at all times be valued at the
full stated principal amount thereof.
SECTION 1.05 Pro Forma Adjustments for Acquisitions and Dispositions. To the
extent the Borrower or any Subsidiary makes any Acquisition permitted pursuant
to Section 6.04 or disposition of assets outside the ordinary course of business
permitted by Section 6.05 or to the extent the Leverage Ratio or the Fixed
Charge Coverage Ratio of the Borrower and its Subsidiaries are otherwise
required under this Agreement to be calculated on a pro forma basis, then in
each case for purposes of making any calculation with respect to financial
ratios required by this Agreement, such calculation shall be made for the period
of four (4) consecutive fiscal quarters of the Borrower most recently

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Exhibit 10.23

ended for which financial statements have been delivered in accordance with
Section 5.01(a) or Section 5.01(b), as applicable; provided, for the avoidance
of doubt, that any calculation of Indebtedness with respect to such financial
ratios shall be made as of the date of such transaction and shall include any
incurrence and repayment of Indebtedness as of such date, each of the Leverage
Ratio and the Fixed Charge Coverage Ratio, as applicable, shall be calculated
after giving pro forma effect thereto (including pro forma adjustments arising
out of events which (a) are directly attributable to the applicable event,
including, without limitation, the Acquisition or the disposition of assets, (b)
are factually supportable and (c) are expected to have a continuing impact, in
each case as determined on a basis consistent with Article 11 of Regulation S X
of the Securities Act of 1933, as amended, as interpreted by the SEC, and as
certified by a Financial Officer to the Administrative Agent), as if such event,
including such Acquisition or such disposition (and any related incurrence,
repayment or assumption of Indebtedness) had occurred in the first day of such
four (4)-fiscal quarter period, and approved by the Administrative Agent in its
Permitted Discretion.
SECTION 1.06 Status of Obligations. In the event that the Borrower or any other
Loan Party shall at any time issue or have outstanding any Subordinated
Indebtedness, the Borrower shall take or cause such other Loan Party to take all
such actions as shall be necessary to cause the Secured Obligations to
constitute senior indebtedness (however denominated) in respect of such
Subordinated Indebtedness and to enable the Administrative Agent and the Lenders
to have and exercise any payment blockage or other remedies available or
potentially available to holders of senior indebtedness under the terms of such
Subordinated Indebtedness. Without limiting the foregoing, the Secured
Obligations are hereby designated as “senior indebtedness” and as “designated
senior indebtedness” and words of similar import under and in respect of any
indenture or other agreement or instrument under which such Subordinated
Indebtedness is outstanding and are further given all such other designations as
shall be required under the terms of any such Subordinated Indebtedness in order
that the Lenders may have and exercise any payment blockage or other remedies
available or potentially available to holders of senior indebtedness under the
terms of such Subordinated Indebtedness.
SECTION 1.07 Currency Matters.
(a)Principal, interest, reimbursement obligations, fees, and all other amounts
payable under this Agreement and the other Loan Documents to the Administrative
Agent and the Lenders shall be payable in dollars. Unless stated otherwise, all
calculations, comparisons, measurements or determinations under this Agreement
shall be made in dollars. For purposes of such calculations, comparisons,
measurements and determinations, amounts denominated in any Alternative Currency
shall be converted to the Dollar Equivalent thereof on the date of such
calculation, comparison, measurement or determination.
(b)If at any time following one or more fluctuations in the exchange rate of an
Alternative Currency against the dollar, the Dollar Equivalent of the Aggregate
Revolving Exposure exceeds the lesser of (i) the Aggregate Commitment and (ii)
the Borrowing Base, the Borrower shall within three (3) Business Days of written
notice of same from the Administrative Agent or, if an Event of Default has
occurred and is continuing, within one (1) Business Day after written notice of
the same from the Administrative Agent make the necessary payments or repayments
to reduce the Aggregate Revolving Exposure to an amount necessary to eliminate
such excess.
(c)The Borrower may from time to time request that Letters of Credit be issued
in an Alternative Currency. In the case of any such request with respect to the
issuance of Letters of Credit, such request shall be subject to the approval of
the Administrative Agent and the applicable Issuing Bank. Any such request shall
be made to the Administrative Agent and the applicable Issuing Bank not later
than 9:00 am, Houston time, at least five (5) Business Days prior to the date of
the desired Letter of Credit issuance (or such other time or date as may be
agreed to by the Administrative Agent and the applicable Issuing Bank in their
sole discretion). In the case of any such request, the Administrative Agent
shall promptly advise each applicable Issuing Bank thereof. Each Issuing Bank
shall notify the Administrative Agent, not later than noon, Houston time, two
(2) Business Days (or such other period of time as may be agreed by the
Administrative Agent in its sole discretion) after receipt of such request
whether it consents, in its sole discretion, to the issuance of Letters of
Credit in such requested Alternative Currency. Any failure by any Issuing Bank,
as the case may be, to respond to such request within the time period specified
in the preceding sentence shall be deemed to be a refusal by such Issuing Bank
to permit Letters of Credit to be issued in such requested Alternative Currency.
If the Administrative Agent and an Issuing Bank consent to the issuance of
Letters of Credit in such requested Alternative Currency, the Administrative
Agent shall so notify the Borrower.
(d)Without in any way limiting the foregoing provisions, the Administrative
Agent shall make any calculations of Dollar Equivalents to determine compliance
with this Section 1.07, which calculations shall be conclusive absent manifest
error.

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Exhibit 10.23

ARTICLE II

THE CREDITS
SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein,
each Lender severally (and not jointly) agrees to make Revolving Loans in
dollars to the Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (a) such Lender’s Revolving
Exposure exceeding such Lender’s Commitment or (b) the Aggregate Revolving
Exposure exceeding the lesser of (i) the Aggregate Commitment and (ii) the
Borrowing Base, subject to the Administrative Agent’s authority, in its sole
discretion, to make Protective Advances and Overadvances pursuant to the terms
of Section 2.04 and 2.05. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.
SECTION 2.02 Loans and Borrowings.
(e)Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing
consisting of Loans of the same Class and Type made by the Lenders ratably in
accordance with their respective Commitments of the applicable Class. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required. Any Protective Advance,
any Overadvance and any Swingline Loan shall be made in accordance with the
procedures set forth in Section 2.04 and 2.05.
(f)Subject to Section 2.14, each Borrowing shall be comprised entirely of CBFR
Loans or Eurodollar Loans as the Borrower may request in accordance herewith,
provided that all Borrowings made on the Effective Date must be made as CBFR
Borrowings but may be converted into Eurodollar Borrowings in accordance with
Section 2.08. Each Swingline Loan shall be a CBFR Loan. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the
provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate
to the same extent as to such Lender); provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accord-ance with the terms of this Agreement.
(g)At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000. CBFR Borrowings may be in any amount.
Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of six (6),
Eurodollar Borrowings outstanding.
(h)Notwithstanding any other provision of this Agreement, the Borrower shall not
be entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.
SECTION 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request either in writing (delivered by
hand or facsimile) in a form approved by the Administrative Agent and signed by
the Borrower or by telephone or through Electronic System, if arrangements for
doing so have been approved by the Administrative Agent, not later than (a) in
the case of a Eurodollar Borrowing, 10:00 a.m., Houston time, three (3) Business
Days before the date of the proposed Borrowing or (b) in the case of a CBFR
Borrowing, noon, Houston time, on the date of the proposed Borrowing; provided
that any such notice of a CBFR Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00
a.m., Houston time, on the date of such proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery, facsimile or a communication through Electronic System to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i)the aggregate amount of the requested Borrowing and a breakdown of the
separate wires comprising such Borrowing;
(ii)the date of such Borrowing, which shall be a Business Day;
(iii)whether such Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing;
and
(iv)in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a CBFR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed

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Exhibit 10.23

to have selected an Interest Period of one (1) month’s duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.
SECTION 2.04 Protective Advances.
(i)Subject to the limitations set forth below, the Administrative Agent is
authorized by the Borrower and the Lenders, from time to time in the
Administrative Agent’s sole discretion (but shall have absolutely no obligation
to), to make Loans to the Borrower, on behalf of all Lenders, which the
Administrative Agent, in its Permitted Discretion, deems necessary or desirable
(i) to preserve or protect the Collateral, or any portion thereof, (ii) to
enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, or (iii) to pay any other past due amount chargeable to or
required to be paid by the Borrower pursuant to the terms of this Agreement,
including payments of reimbursable expenses (including costs, fees, and expenses
as described in Section 9.03) and other sums payable under the Loan Documents
(any of such Loans are herein referred to as “Protective Advances”); provided
that, the aggregate amount of Protective Advances and Overadvances,
collectively, outstanding at any time shall not at any time exceed $5,000,000;
provided further that, the Aggregate Revolving Exposure after giving effect to
the Protective Advances being made shall not exceed the Aggregate Commitment.
Protective Advances may be made even if the conditions precedent set forth in
Section 4.02 have not been satisfied. The Protective Advances shall be secured
by the Liens in favor of the Administrative Agent in and to the Collateral and
shall constitute Obligations hereunder. All Protective Advances shall be CBFR
Borrowings. The making of a Protective Advance on any one occasion shall not
obligate the Administrative Agent to make any Protective Advance on any other
occasion. The Administrative Agent’s authorization to make Protective Advances
may be revoked at any time by the Required Lenders. Any such revocation must be
in writing and shall become effective prospectively upon the Administrative
Agent’s receipt thereof. At any time that there is sufficient Availability and
the conditions precedent set forth in Section 4.02 have been satisfied, the
Administrative Agent may request the Lenders to make a Revolving Loan to repay a
Protective Advance. At any other time the Administrative Agent may require the
Lenders to fund their risk participations described in Section 2.04(b).
(j)Upon the making of a Protective Advance by the Administrative Agent (whether
before or after the occurrence of a Default), each Lender shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Administrative Agent, without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage. From and after the date, if any, on
which any Lender is required to fund its participation in any Protective Advance
purchased hereunder, the Administrative Agent shall promptly distribute to such
Lender, such Lender’s Applicable Percentage of all payments of principal and
interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Protective Advance.
SECTION 2.05 Swingline Loans and Overadvances.
(k)If there is more than one (1) Lender at such time, the Administrative Agent,
the Swingline Lender and the Lenders agree that in order to facilitate the
administration of this Agreement and the other Loan Documents, promptly after
the Borrower requests a CBFR Borrowing, the Swingline Lender may elect to have
the terms of this Section 2.05(a) apply to such Borrowing Request by advancing,
on behalf of the Lenders and in the amount requested, same day funds to the
Borrower on the date of the applicable Borrowing to the Funding Account (each
such Loan made solely by the Swingline Lender pursuant to this Section 2.05(a)
is referred to in this Agreement as a “Swingline Loan”), with settlement among
them as to the Swingline Loans to take place on a periodic basis as set forth in
Section 2.05(d). Each Swingline Loan shall be subject to all the terms and
conditions applicable to other CBFR Loans funded by the Lenders, except that all
payments thereon shall be payable to the Swingline Lender solely for its own
account. In addition, the Borrower hereby authorizes the Swingline Lender to,
and the Swingline Lender may, subject to the terms and conditions set forth
herein (but without any further written notice required), not later than 1:00
p.m., Houston time, on each Business Day, make available to the Borrower by
means of a credit to the Funding Account, the proceeds of a Swingline Loan to
the extent necessary to pay items to be drawn on any Controlled Disbursement
Account that Business Day; provided that, if on any Business Day there is
insufficient borrowing capacity to permit the Swingline Lender to make available
to the Borrower a Swingline Loan in the amount necessary to pay all items to be
so drawn on any such Controlled Disbursement Account on such Business Day, then
the Borrower shall be deemed to have requested a CBFR Borrowing pursuant to
Section 2.03 in the amount of such deficiency to be made on such Business Day.
In addition, the Borrower hereby authorizes the Swingline Lender to, and the
Swingline Lender may, subject to the terms and conditions set forth herein (but
without any further written notice required), to the extent that

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Exhibit 10.23

from time to time on any Business Day funds are required under the DDA Access
Product to reach the Target Balance (a “Deficiency Funding Date”), make
available to the Borrower the proceeds of a Swingline Loan in the amount of such
deficiency up to the Target Balance, by means of a credit to the Funding Account
on or before the start of business on the next succeeding Business Day, and such
Swingline Loan shall be deemed made on such Deficiency Funding Date. If there is
only one (1) Lender at such time, no Swingline Loans will be permitted; provided
that, if there is more than one (1) Lender at any time, the aggregate amount of
Swingline Loans outstanding at any time shall not exceed $2,000,000. The
Swingline Lender shall not make any Swingline Loan if the requested Swingline
Loan exceeds Availability (before or after giving effect to such Swingline
Loan). All Swingline Loans shall be CBFR Borrowings.
(l)Any provision of this Agreement to the contrary notwithstanding, at the
request of the Borrower, the Administrative Agent may, in its sole discretion
(but with absolutely no obligation), on behalf of the Lenders, (x) make
Revolving Loans to the Borrower in amounts that exceed Availability (any such
excess Revolving Loans are herein referred to collectively as “Overadvances”) or
(y) deem the amount of Revolving Loans outstanding to the Borrower that are in
excess of Availability to be Overadvances; provided that, no Overadvance shall
result in a Default due to Borrower’s failure to comply with Section 2.01 for so
long as such Overadvance remains outstanding in accordance with the terms of
this paragraph, but solely with respect to the amount of such Overadvance. In
addition, Overadvances may be made even if the condition precedent set forth in
Section 4.02(c) has not been satisfied. All Overadvances shall constitute CBFR
Borrowings. The making of an Overadvance on any one occasion shall not obligate
the Administrative Agent to make any Overadvance on any other occasion. The
authority of the Administrative Agent to make Overadvances is limited to an
aggregate amount not to exceed $5,000,000 at any time; provided that, the
aggregate amount of Overadvances and Protective Advances shall not collectively
exceed $5,000,000. No Overadvance may remain outstanding for more than thirty
(30) days and no Overadvance shall cause any Lender’s Revolving Exposure to
exceed its Commitment; provided that, the Required Lenders may at any time
revoke the Administrative Agent’s authorization to make Overadvances. Any such
revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof.
(m)Upon the making of a Swingline Loan or an Overadvance (whether before or
after the occurrence of a Default and regardless of whether a Settlement has
been requested with respect to such Swingline Loan or Overadvance), each Lender
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Swingline Lender or the
Administrative Agent, as the case may be, without recourse or warranty, an
undivided interest and participation in such Swingline Loan or Overadvance in
proportion to its Applicable Percentage of the Commitment. The Swingline Lender
or the Administrative Agent may, at any time, require the Lenders to fund their
participations. From and after the date, if any, on which any Lender is required
to fund its participation in any Swingline Loan or Overadvance purchased
hereunder, the Administrative Agent shall promptly distribute to such Lender,
such Lender’s Applicable Percentage of all payments of principal and interest
and all proceeds of Collateral received by the Administrative Agent in respect
of such Swingline Loan or Overadvance.
(n)The Administrative Agent, on behalf of the Swingline Lender, shall request
settlement (a “Settlement”) with the Lenders on at least a weekly basis or on
any date that the Administrative Agent elects, by notifying the Lenders of such
requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon
Houston time on the date of such requested Settlement (the “Settlement Date”).
Each Lender (other than the Swingline Lender, in the case of the Swingline
Loans) shall transfer the amount of such Lender’s Applicable Percentage of the
outstanding principal amount of the applicable Loan with respect to which
Settlement is requested to the Administrative Agent, to such account of the
Administrative Agent as the Administrative Agent may designate, not later than
2:00 p.m., Houston time, on such Settlement Date. Settlements may occur during
the existence of a Default and whether or not the applicable conditions
precedent set forth in Section 4.02 have then been satisfied. Such amounts
transferred to the Administrative Agent shall be applied against the amounts of
the Swingline Lender’s Swingline Loans and, together with Swingline Lender’s
Applicable Percentage of such Swingline Loan, shall constitute Revolving Loans
of such Lenders, respectively. If any such amount is not transferred to the
Administrative Agent by any Lender on such Settlement Date, the Swingline Lender
shall be entitled to recover from such Lender on demand such amount, together
with interest thereon, as specified in Section 2.07.
SECTION 2.06 Letters of Credit.
(o)General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit denominated in dollars, or in
Alternative Currencies that the applicable Issuing Bank may permit at such time
in its discretion and in accordance with Section 1.07, as the applicant thereof
for the support of its or its Subsidiaries’ obligations, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any

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Exhibit 10.23

time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control. The Borrower unconditionally and irrevocably agrees
that, in connection with any Letter of Credit issued for the support of any
Subsidiary’s obligations as provided in the first sentence of this paragraph,
the Borrower will be fully responsible for the reimbursement of LC Disbursements
in accordance with the terms hereof, the payment of interest thereon and the
payment of fees due under Section 2.12(b) to the same extent as if it were the
sole account party in respect of such Letter of Credit (the Borrower hereby
irrevocably waives any defenses that might otherwise be available to it as a
guarantor or surety of the obligations of such Subsidiary that is an account
party in respect of any such Letter of Credit). Notwithstanding anything herein
to the contrary, the Issuing Bank shall have no obligation hereunder to issue,
and shall not issue, any Letter of Credit (i) the proceeds of which would be
made available to any Person (A) to fund any activity or business of or with any
Sanctioned Person, or in any country or territory that, at the time of such
funding, is a Sanctioned Country or (B) in any manner that would result in a
violation of any Sanctions by any party to this Agreement, (ii) if any order,
judgment or decree of any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of
Credit, or any Requirement of Law relating to the Issuing Bank or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Bank shall prohibit, or request
that the Issuing Bank refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the Issuing Bank
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Bank is not otherwise compensated hereunder)
not in effect on the Effective Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Effective
Date and which the Issuing Bank in good faith deems material to it, or (iii) if
the issuance of such Letter of Credit would violate one or more policies of the
Issuing Bank applicable to letters of credit generally; provided that,
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements or directives thereunder or issued in connection therewith or in
the implementation thereof, and (y) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed not to be in
effect on the Effective Date for purposes of clause (ii) above, regardless of
the date enacted, adopted, issued or implemented.
(p)Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall deliver by
hand or facsimile (or transmit through Electronic System, if arrangements for
doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of, but in any event prior to 9:00
am, Houston time, at least three (3) Business Days prior to the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) (a) the aggregate LC Exposure shall not
exceed 10,000,000, (b) the aggregate Standby LC Exposure shall not exceed
$10,000,000, and (c) the aggregate Commercial LC Exposure shall not exceed
$10,000,000 (ii) no Lender’s Revolving Exposure shall exceed its Commitment and
(iii) the Aggregate Revolving Exposure shall not exceed the lesser of (x) the
Aggregate Commitment and (y) the Borrowing Base. Notwithstanding the foregoing
or anything to the contrary contained herein, no Issuing Bank shall be obligated
to issue or modify any Letter of Credit if, immediately after giving effect
thereto, the outstanding LC Exposure in respect of all Letters of Credit issued
by such Person and its Affiliates would exceed such Issuing Bank’s Issuing Bank
Sublimit. Without limiting the foregoing and without affecting the limitations
contained herein, it is understood and agreed that the Borrower may from time to
time request that an Issuing Bank issue Letters of Credit in excess of its
individual Issuing Bank Sublimit in effect at the time of such request, and each
Issuing Bank agrees to consider any such request in good faith but shall have no
obligation to issue such requested Letter of Credit.

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Exhibit 10.23

Any Letter of Credit so issued by an Issuing Bank in excess of its individual
Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of
Credit for all purposes of the Credit Agreement, and shall not affect the
Issuing Bank Sublimit of any other Issuing Bank, subject to the limitations on
the aggregate LC Exposure set forth in clause (i) of this Section 2.06(b).
(q)Expiration Date. Each Letter of Credit shall expire (or be subject to
termination or non-renewal by notice from the Issuing Bank to the beneficiary
thereof) at or prior to the close of business on the earlier of (i) the date one
(1) year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, including, without limitation, any
automatic renewal provision, one (1) year after such renewal or extension) or
such longer period of time as may be agreed to by the applicable Issuing Bank in
its sole discretion (which shall in no event extend beyond the date set forth in
clause (ii) hereof) and (ii) the date that is five (5) Business Days prior to
the Maturity Date.
(r)Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(s)Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent (A) an amount equal to such LC Disbursement
in dollars (based on the Dollar Equivalent of such amount, if applicable) and
(B) the Dollar Equivalent of any taxes, fees, charges or other costs or expenses
incurred by the Issuing Bank in connection with such payment, (i) not later than
11:00 a.m., Houston time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 9:00 a.m.,
Houston time, on such date, or, (ii) if such notice has not been received by the
Borrower prior to such time on such date, then not later than 11:00 a.m.,
Houston time, on (x) the Business Day that the Borrower receives such notice, if
such notice is received prior to 9:00 a.m., Houston time, on the day of receipt,
or (y) the Business Day immediately following the day that the Borrower receives
such notice, if such notice is not received prior to such time, on the day of
receipt; provided that the Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.03 or 2.05 that such
payment be financed with a CBFR Borrowing or Swingline Loan (to the extent
available) in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by
the resulting CBFR Borrowing or Swingline Loan, as applicable. If the Borrower
fails to make such payment when due, the Administrative Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.07 with respect to Loans made by such
Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank, as their interests may appear. Any payment made by a
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of CBFR Loans or a Swingline Loan as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(t)Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements
as provided in paragraph (e) of this Section shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any

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Exhibit 10.23

lack of validity or enforceability of any Letter of Credit or this Agreement, or
any term or provision therein or herein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) any payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. None of
the Administrative Agent, the Lenders, or the Issuing Bank or any of their
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder or any acts or omissions of any
beneficiary with respect to its use of any Letter of Credit), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing (including, without
limitation, the Borrower’s absolute, unconditional and irrevocable obligation to
reimburse LC Disbursements as set forth in this Section 2.06(f)) shall not be
construed to (x) preclude the Borrower’s pursuing any rights and remedies as it
may have against the beneficiary of any Letter of Credit at law or under any
other agreement or (y) excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to special, indirect, consequential
or punitive damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence, willful misconduct or bad faith on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(u)Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by facsimile) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
(v)Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to CBFR Loans and such interest shall be due and
payable on the date when such reimbursement is payable; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(d) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(w)Replacement of the Issuing Bank.
(i)The Issuing Bank may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced Issuing Bank and the successor
Issuing Bank. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall

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Exhibit 10.23

remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Bank under this Agreement with respect to Letters of Credit then
outstanding and issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(ii)Subject to the appointment and acceptance of a successor Issuing Bank, the
Issuing Bank may resign as an Issuing Bank at any time upon thirty (30) days’
prior written notice to the Administrative Agent, the Borrower and the Lenders,
in which case, such Issuing Bank shall be replaced in accordance with
Section 2.06(i) above.
(x)Cash Collateralization. If any Event of Default shall occur and be
continuing, within three (3) Business Days after the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders with LC Exposure representing greater
than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders (the “LC Collateral Account”), an amount in cash equal to
105% of the amount of the LC Exposure as of such date plus accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (h) or
(i) of Article VII. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the Secured Obligations. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over the LC Collateral Account and the Borrower
hereby grants the Administrative Agent a security interest in the LC Collateral
Account and all money or other assets on deposit therein or credited thereto.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits shall
not bear interest. Interest or profits, if any, on such investments shall
accumulate in the LC Collateral Account. Moneys in the LC Collateral Account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the aggregate LC Exposure), be applied to
satisfy other Secured Obligations. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three (3) Business Days after all such Events of Default
have been cured or waived as confirmed in writing by the Administrative Agent.
(y)Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by
the Administrative Agent, each Issuing Bank (other than JPMCB) shall, in
addition to its notification obligations set forth elsewhere in this Section,
report in writing to the Administrative Agent (i) periodic activity (for such
period or recurrent periods as shall be requested by the Administrative Agent)
in respect of Letters of Credit issued by such Issuing Bank, including all
issuances, extensions, amendments and renewals, all expirations and cancelations
and all disbursements and reimbursements, (ii) reasonably prior to the time that
such Issuing Bank issues, amends, renews or extends any Letter of Credit, the
date of such issuance, amendment, renewal or extension, and the stated amount of
the Letters of Credit issued, amended, renewed or extended by it and outstanding
after giving effect to such issuance, amendment, renewal or extension (and
whether the amounts thereof shall have changed), (iii) on each Business Day on
which such Issuing Bank makes any LC Disbursement, the date and amount of such
LC Disbursement, (iv) on any Business Day on which the Borrower fails to
reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on
such day, the date of such failure and the amount of such LC Disbursement, and
(v) on any other Business Day, such other information as the Administrative
Agent shall reasonably request as to the Letters of Credit issued by such
Issuing Bank.
(z)LC Exposure Determination. For all purposes of this Agreement, the amount of
a Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at the time of determination, provided, that, if applicable,
in the case of any Letter of Credit denominated in an Alternative Currency, the
deemed amount of such Letter of Credit shall give effect to converting the
stated amount of such Letter of Credit into the Dollar Equivalent thereof as of
the date of issuance.
SECTION 2.07 Funding of Borrowings.

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Exhibit 10.23

(aa)Each Lender shall make each Loan to be made by such Lender hereunder on the
proposed date thereof solely by wire transfer of immediately available funds by
1:00 p.m., Houston time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders in an amount
equal to such Lender’s Applicable Percentage; provided that, Swingline Loans
shall be made as provided in Section 2.05. The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the funds so received
in the aforesaid account of the Administrative Agent to the Funding Account;
provided that CBFR Loans made to finance the reimbursement of (i) an LC
Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an
Overadvance shall be retained by the Administrative Agent.
(ab)Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to CBFR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
SECTION 2.08 Interest Elections.
(ac)Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, Overadvances or Protective Advances, which may not be
converted or continued.
(ad)To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by telephone or through Electronic System,
if arrangements for doing so have been approved by the Administrative Agent, by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery, Electronic System or facsimile to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(ae)Each telephonic and written Interest Election Request (including requests
submitted through Electronic System) shall specify the following information in
compliance with Section 2.02:
(i)the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
(ii)the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(iii)whether the resulting Borrowing is to be a CBFR Borrowing or a Eurodollar
Borrowing; and
(iv)if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one (1) month’s duration.
(af)Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

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Exhibit 10.23

(ag)If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to a CBFR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to a CBFR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.09 Termination and Reduction of Commitments; Increase in Commitments.
(ah)Unless previously terminated, the Commitments shall terminate on the
Maturity Date.
(ai)The Borrower may at any time terminate the Commitments upon Payment in Full
of the Secured Obligations.
(aj)The Borrower may from time to time reduce the Commitments; provided that (i)
each reduction of the Commitments shall be in an amount that is an integral
multiple of $5,000,000 and not less than $5,000,000, (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.11, the Aggregate
Revolving Exposure would exceed the lesser of (x) the Aggregate Commitment and
(y) the Borrowing Base, and (iii) the Borrower shall not reduce the Commitments
if such reduction will make the Commitments less than $20,000,000.
(ak)The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) or (c) of this Section
at least three (3) Business Days prior to the effective date of such termination
or reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
(al)The Borrower shall have the right to increase the Commitments by obtaining
additional Commitments, either from one or more of the Lenders or one or more
other lending institutions provided that (i) any such request for an increase
shall be in a minimum amount of $25,000,000 (or such lower amount as the
Administrative Agent agrees), (ii) the Borrower may make a maximum of five (5)
such requests, (iii) after giving effect thereto, the sum of the total of the
additional Commitments does not exceed $125,000,000, (iv) the Aggregate
Commitment does not exceed $225,000,000, (v) the Administrative Agent and the
Issuing Bank have approved the identity of any such new Lender, such approvals
not to be unreasonably withheld, (vi) any such new Lender assumes all of the
rights and obligations of a “Lender” hereunder, and (vii) the procedure
described in Section 2.09(f) have been satisfied. Nothing contained in this
Section 2.09 shall constitute, or otherwise be deemed to be, a commitment on the
part of any Lender to increase its Commitment hereunder at any time.
(am)Any amendment hereto for such an increase or addition shall be in form and
substance reasonably satisfactory to the Administrative Agent and shall only
require the written signatures of the Administrative Agent, the Borrower and
each Lender being added or increasing its Commitment, subject only to the
approval of all Lenders if any such increase or addition would cause the
Aggregate Commitment to exceed $225,000,000. As a condition precedent to such an
increase or addition, the Borrower shall deliver to the Administrative Agent
(i) a certificate of each Loan Party signed by an authorized officer of such
Loan Party (A) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such increase, and (B) in the case of the
Borrower, certifying that, before and after giving effect to such increase or
addition, (1) the representations and warranties contained in Article III and
the other Loan Documents are true and correct, 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, (2) no Default exists,
(3) the Borrower is in compliance (on a pro forma basis) with the covenants
contained in Section 6.12 and (ii)  legal opinions and documents consistent with
those delivered on the Effective Date, to the extent requested by the
Administrative Agent. If the Borrower elects to increase the Aggregate
Commitment by increasing the Commitment of a Lender, the Borrower and such
Lender shall execute and deliver to the Administrative Agent an agreement
substantially in the form of Exhibit G (a “Commitment Increase Agreement”) or in
such other form, including an amendment to this Agreement, otherwise acceptable
to the Administrative Agent. If the Borrower elects to increase the Commitments
by

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Exhibit 10.23

causing an additional Lender to become a party to this Agreement and there is no
increased Commitment by an existing Lender, then the Borrower and such
additional Lender shall execute and deliver to the Administrative Agent an
agreement substantially in the form of Exhibit H (an “Additional Lender
Agreement”) or in such form, including an amendment to this Agreement, otherwise
acceptable to the Administrative Agent. Each such additional Lender shall submit
to the Administrative Agent an Administrative Questionnaire and a processing and
recordation fee of $3,500 (unless such fee is waived by the Administrative
Agent). The Borrower shall, if requested by the additional Lender deliver a
promissory note payable to such additional Lender in a principal amount equal to
its Commitment, and otherwise duly completed.
(an)On the effective date of any such increase or addition, (i) any Lender
increasing (or, in the case of any newly added Lender, extending) its Commitment
shall make available to the Administrative Agent such amounts in immediately
available funds as the Administrative Agent shall determine, for the benefit of
the other Lenders, as being required in order to cause, after giving effect to
such increase or addition and the use of such amounts to make payments to such
other Lenders, each Lender’s portion of the outstanding Revolving Loans of all
the Lenders to equal its revised Applicable Percentage of such outstanding
Revolving Loans, and the Administrative Agent shall make such other adjustments
among the Lenders with respect to the Revolving Loans then outstanding and
amounts of principal, interest, commitment fees and other amounts paid or
payable with respect thereto as shall be necessary, in the opinion of the
Administrative Agent, in order to effect such reallocation and (ii)  the
Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving
Loans as of the date of any increase (or addition) in the Commitments (with such
reborrowing to consist of the Types of Revolving Loans, with related Interest
Periods if applicable, specified in a notice delivered by the Borrower, in
accordance with the requirements of Section 2.03). The deemed payments made
pursuant to clause (ii) of the immediately preceding sentence shall be
accompanied by payment of all accrued interest on the amount prepaid and, in
respect of each Eurodollar Loan, shall be subject to indemnification by the
Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs
other than on the last day of the related Interest Periods. Within a reasonable
time after the effective date of any increase or addition, the Administrative
Agent shall, and is hereby authorized and directed to, revise the Commitment
Schedule to reflect such increase or addition and shall distribute such revised
Commitment Schedule to each of the Lenders and the Borrower, whereupon such
revised Commitment Schedule shall replace the old Commitment Schedule and become
part of this Agreement.
SECTION 2.10 Repayment of Loans; Evidence of Debt.
(ao)The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative
Agent the then unpaid amount of each Protective Advance on the earlier of the
Maturity Date and demand by the Administrative Agent, (iii)  to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of
the Maturity Date and the fifth (5th) Business Day after such Swingline Loan is
made; provided that, on each date that a Revolving Loan is made, the Borrower
shall repay all Swingline Loans then outstanding and the proceeds of any such
Revolving Loan shall be applied by the Administrative Agent to repay any
Swingline Loans outstanding, and (iv) to the Administrative Agent the then
unpaid principal amount of each Overadvance on the earlier of the Maturity Date,
the thirtieth (30th) day after such Overadvance is made and demand by the
Administrative Agent.
(ap)At all times during an Activation Period, on each Business Day, the
Administrative Agent shall apply all funds credited to the Collection Account on
such Business Day or the immediately preceding Business Day (at the discretion
of the Administrative Agent, whether or not immediately available) first to
prepay any Protective Advances and Overadvances that may be outstanding , pro
rata, second to prepay the Revolving Loans (including Swingline Loans) and third
to cash collateralize outstanding LC Exposure to the extent required herein.
Notwithstanding the foregoing, to the extent any funds credited to the
Collection Account constitute Net Proceeds, the application of such Net Proceeds
shall be subject to Section 2.11(c).
(aq)Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(ar)The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

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Exhibit 10.23

(as)The entries made in the accounts maintained pursuant to paragraph (c) or (d)
of this Section 2.10 shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(at)Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 9.04) be represented by one or more promissory notes in such form.
SECTION 2.11 Prepayment of Loans.
(au)The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, without penalty or premium, subject to
prior written notice in accordance with paragraph (e) of this Section and, if
applicable, payment of any break funding expenses under Section 2.16.
(av)Except for Overadvances permitted under Section 2.05, in the event and on
such occasion that the Aggregate Revolving Exposure exceeds the lesser of
(i) the Aggregate Commitment and (ii) the Borrowing Base, the Borrower shall
prepay the Revolving Loans, LC Exposure and/or Swingline Loans or cash
collateralize the LC Exposure in an account with the Administrative Agent
pursuant to Section 2.06(j) as applicable in an aggregate amount equal to such
excess.
(aw)In the event and on each occasion that any Net Proceeds are received by or
on behalf of any Loan Party or any Subsidiary in respect of any Prepayment
Event, the Borrower shall, promptly and in any event within three (3) Business
Days (or, for any event described in clause (c) of the definition of the term
“Prepayment Event”, not later than the first Business Day) after such Net
Proceeds are received by any Loan Party or Subsidiary, prepay the Obligations
and cash collateralize the LC Exposure as set forth in Section 2.11(d) below in
an aggregate amount equal to (100%) of such Net Proceeds, provided that, in the
case of any event described in clause (a) or (b) of the definition of the term
“Prepayment Event”, (x) if the property or asset that is the subject of such
event constitutes an Excluded Asset that secures any Permitted Acquisition Debt,
then the Borrower may apply the Net Proceeds thereof to any prepayment then
required under the terms of such Permitted Acquisition Debt prior to applying
the remainder thereof (if any) in accordance with this Section 2.11(c) and (y)
if the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer to the effect that the Loan Parties intend to apply the Net
Proceeds from such event (or a portion thereof specified in such certificate),
within one hundred eighty (180) days after receipt of such Net Proceeds, to
acquire (or replace or rebuild) real property, equipment or other tangible
assets (excluding Inventory) to be used in the business of the Loan Parties, and
certifying that no Event of Default has occurred and is continuing, then either
(i) so long as an Activation Period is not in effect, no prepayment shall be
required pursuant to this paragraph in respect of the Net Proceeds specified in
such certificate or (ii) if an Activation Period is in effect, then, if the Net
Proceeds specified in such certificate are to be applied to acquire, replace or
rebuild such assets by (A) the Borrower, such Net Proceeds shall be applied by
the Administrative Agent to reduce the outstanding principal balance of the
Revolving Loans (without a permanent reduction of the Commitment) and upon such
application, the Administrative Agent shall establish a Reserve against the
Borrowing Base in an amount equal to the amount of such proceeds so applied and
(B) any Loan Party that is not the Borrower, such Net Proceeds shall be
deposited in a cash collateral account, and in the case of either clause (A) or
(B), thereafter, such funds shall be made available to the applicable Loan Party
as follows:
(i)Borrower shall request a Borrowing (specifying that the request is to use Net
Proceeds pursuant to this Section 2.11) or the applicable Loan Party shall
request a release from the cash collateral account be made in the amount needed;
(ii)so long as the conditions set forth in Section 4.02 have been met, the
Lenders shall make such Borrowing or the Administrative Agent shall release
funds from the cash collateral account; and
(iii)in the case of Net Proceeds applied against the Borrowing, the Reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such Borrowing;

provided that to the extent of any such Net Proceeds therefrom that have not
been so applied by the end of such one hundred eighty (180)-day period, a
prepayment shall be required at such time in an amount equal to such Net
Proceeds that have not been so applied.

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Exhibit 10.23

(ax)All such amounts prepaid by the Borrower pursuant to Section 2.11(c) (as to
any insurance or condemnation proceeds, to the extent they arise from casualties
or losses to Collateral) shall be applied, first to prepay any Protective
Advances and Overadvances that may be outstanding, pro rata, second to prepay
the Revolving Loans (including Swingline Loans) without a corresponding
reduction in the Commitments and to cash collateralize outstanding LC Exposure.
If the precise amount of insurance or condemnation proceeds allocable to
Collateral as compared to other equipment, fixtures and real property is not
otherwise determined, the allocation and application of those proceeds shall be
determined by the Administrative Agent, in its Permitted Discretion.
(ay)The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
facsimile) or through Electronic System, if arrangements for doing so have been
approved by the Administrative Agent, of any prepayment hereunder not later than
(i) 10:00 a.m., Houston time, (A) in the case of prepayment of a Eurodollar
Borrowing, three (3) Business Days before the date of prepayment, or (B) in the
case of prepayment of a CBFR Borrowing, one (1) Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Revolving Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by
(i) accrued interest to the extent required by Section 2.13 and (ii) break
funding payments pursuant to Section 2.16.
(az)During the Cash Balance Testing Period, if (i) the Aggregate Revolving
Exposure exceeds $0, (ii) the Non-Loan Party Cash Balance exceeds $50,000,000
(including the Dollar Equivalent of any Non-Loan Party Cash Balance denominated
in any other currency) and (iii) Availability is less than $25,000,000, then the
Borrower shall, promptly and in any event within three (3) Business Days after
such events occur, prepay the Obligations and cash collateralize LC Exposure in
an aggregate amount equal to the lesser of (x) the then outstanding Aggregate
Revolving Exposure and (y) an amount such that Availability (plus the aggregate
amount of such cash collateralized LC Exposure, if applicable) is equal to or
greater than $25,000,000 upon giving effect to a prepayment and/or cash
collateralization in such amount; provided, that all amounts prepaid by the
Borrower pursuant to this Section 2.11(f) shall be applied, first to prepay any
Protective Advances and Overadvances that may be outstanding, pro rata, second
to prepay the Revolving Loans (including Swingline Loans) without a
corresponding reduction in the Commitments and third to cash collateralize
outstanding LC Exposure.
SECTION 2.12 Fees.
(ba)The Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee, which shall accrue at the Applicable Rate on the
average daily amount of the Available Commitment of such Lender to make
Revolving Loans during the period from and including the Effective Date to but
excluding the date on which the Commitments terminate. Accrued commitment fees
shall be payable in arrears on the first Business Day of each calendar month and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of three hundred sixty (360) days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(bb)The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Lender a participation fee with respect to its participations in Letters
of Credit, which shall accrue at the same Applicable Rate used to determine the
interest rate applicable to Eurodollar Revolving Loans on the average daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
attributable to Letters of Credit issued by the Issuing Bank during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank’s standard fees and commissions with
respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued

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Exhibit 10.23

through and including the last day of each calendar month shall be payable on
the first Business Day of each calendar month following such last day,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within ten (10) days after demand.
All participation fees and fronting fees shall be computed on the basis of a
year of three hundred sixty (360) days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(bc)The Borrower agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.
(bd)All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13 Interest.
(be)The Loans comprising CBFR Borrowings (including Swingline Loans) shall bear
interest at the CBFR plus the Applicable Rate.
(bf)The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
(bg)Each Protective Advance and each Overadvance shall bear interest at the CBFR
plus the Applicable Rate for Revolving Loans plus 2%.
(bh)Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Administrative Agent or the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 9.02 requiring the
consent of “each Lender affected thereby” for reductions in interest rates),
declare that (i) all Loans shall bear interest at 2% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount outstanding hereunder, such amount shall
accrue at 2% plus the rate applicable to such fee or other obligation as
provided hereunder.
(bi)Accrued interest on each Loan (for CBFR Loans, accrued through the last day
of the prior calendar month) shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (d) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of a CBFR Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(bj)All interest hereunder shall be computed on the basis of a year of three
hundred sixty (360) days, except that interest computed by reference to the CB
Floating Rate shall be computed on the basis of a year of three hundred
sixty-five (365) days (or three hundred sixty-six (366) days in a leap year),
and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable CB Floating
Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14 Alternate Rate of Interest.
(bk)If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(i)the Administrative Agent determines (which determination shall be conclusive
and binding absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable
(including, without limitation, by means of an Interpolated Rate or because the
LIBO Screen Rate is not available or published on a current basis) for such
Interest Period; or
(ii)the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders through Electronic System as provided in Section 9.01 as promptly as
practicable thereafter and, until the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (A) any Interest Election

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Exhibit 10.23

Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and any such
Eurodollar Borrowing shall be repaid or converted into a CBFR Borrowing on the
last day of the then current Interest Period applicable thereto, and (B) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as a CBFR Borrowing.
(bl)If any Lender determines that any Requirement of Law has made it unlawful,
or if any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable lending office to make, maintain, fund or continue any
Eurodollar Borrowing, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrower through the Administrative Agent, any obligations of
such Lender to make, maintain, fund or continue Eurodollar Loans or to convert
CBFR Borrowings to Eurodollar Borrowings will be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the
Borrower will upon demand from such Lender (with a copy to the Administrative
Agent), either convert or prepay all Eurodollar Borrowings of such Lender to
CBFR Borrowings, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Borrowings to such day,
or immediately, if such Lender may not lawfully continue to maintain such Loans.
Upon any such conversion or prepayment, the Borrower will also pay accrued
interest on the amount so converted or prepaid.
(bm)If at any time the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that (i) the circumstances set forth
in clause (a)(i) have arisen and such circumstances are unlikely to be temporary
or (ii) the circumstances set forth in clause (a)(i) have not arisen but the
supervisor for the administrator of the LIBO Screen Rate or a Governmental
Authority having jurisdiction over the Administrative Agent has made a public
statement identifying a specific date after which the LIBO Screen Rate shall no
longer be used for determining interest rates for loans, then the Administrative
Agent and the Borrower shall endeavor to establish an alternate rate of interest
to the LIBO Rate that gives due consideration to the then prevailing market
convention for determining a rate of interest for syndicated loans in the United
States at such time, and shall enter into an amendment to this Agreement to
reflect such alternate rate of interest and such other related changes to this
Agreement as may be applicable. Notwithstanding anything to the contrary in
Section 9.02, such amendment shall become effective without any further action
or consent of any other party to this Agreement so long as the Administrative
Agent shall not have received, within five (5) Business Days of the date notice
of such alternate rate of interest and other related changes (including, to the
extent necessary, corresponding changes to the definition of “Applicable Rate”
and other definitions referenced therein) is provided to the Lenders, a written
notice from the Required Lenders stating that such Required Lenders object to
such amendment. Until an alternate rate of interest shall be determined in
accordance with this clause (c) (but, in the case of the circumstances described
in clause (ii) of the first sentence of this Section 2.14(c), only to the extent
the LIBO Screen Rate for such Interest Period is not available or published at
such time on a current basis), (x) any Interest Election Request that requests
the conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (y) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as a CBFR
Borrowing; provided that, if such alternate rate of interest shall be less than
zero, such rate shall be deemed to be zero for the purposes of this Agreement.
SECTION 2.15 Increased Costs.
(bn)If any Change in Law shall:
(i)impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank;
(ii)impose on any Lender or the Issuing Bank or the London interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender or any Letter of Credit or participation therein; or
(iii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

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Exhibit 10.23

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting into or
main-taining any Loan (or of maintaining its obligation to make any such Loan)
or to increase the cost to such Lender, the Issuing Bank or such other Recipient
of participating in, issuing or maintaining any Letter of Credit or to reduce
the amount of any sum received or receivable by such Lender, the Issuing Bank or
such other Recipient hereunder (whether of principal, interest or otherwise),
then the Borrower will pay to such Lender, the Issuing Bank or such other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, the Issuing Bank or such other Recipient, as the case
may be, for such additional costs incurred or reduction suffered.
(bo)If any Lender or the Issuing Bank determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement, the Commitments of, or the Loans made by, or
participations in Letters of Credit, Overadvances, Protective Advances or
Swingline Loans held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender’s or the Issuing Bank’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Issuing
Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding
company with respect to capital adequacy and liquidity), then from time to time
the Borrower will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.
(bp)A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within ten (10)
Business Days after receipt thereof.
(bq)Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than one hundred eighty (180) days prior to the date that such Lender or the
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
Issuing Bank’s intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the one hundred eighty (180)-day period referred to above
shall be extended to include the period of retroactive effect thereof.
SECTION 2.16 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.11), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.09(d) or 2.11(e) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.19 or 9.02(d), then, in any
such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such loss,
cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Eurodollar Loan had such event not
occurred, at the Adjusted LIBO Rate that would have been applicable to such
Eurodollar Loan, for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest
Period for such Eurodollar Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within ten
(10) days after receipt thereof.

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Exhibit 10.23

SECTION 2.17 Withholding of Taxes; Gross-Up.
(br)Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of any
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law. If such Tax is an Indemnified Tax, then the sum payable by
the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.17) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.
(bs)Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Governmental Authority in accordance with applicable law, or
at the option of the Administrative Agent timely reimburse it for, Other Taxes.
(bt)Evidence of Payment. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 2.17, such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(bu)Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section)
payable or paid by such Recipient or required to be withheld or deducted from a
payment to such Recipient and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to any Loan Party by a Lender
(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(bv)Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

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Exhibit 10.23

(bw)Status of Lenders.
(i)Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
applicable Withholding Agent, at the time or times reasonably requested by such
Withholding Agent, such properly completed and executed documentation reasonably
requested by the Borrower or the Administrative Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if reasonably requested by a Withholding Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by such Withholding Agent as will enable such Withholding Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in
Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.
(ii)Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,
(A)any Lender that is a U.S. Person shall deliver to the applicable Withholding
Agent on or prior to the date on which such Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of a
Withholding Agent), an executed IRS Form W-9 certifying that such Lender is
exempt from U.S. Federal backup withholding tax;
(B)any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the applicable Withholding Agent (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of a Withholding Agent), whichever of the following
is applicable:
(1)in the case of a Foreign Lender claiming the benefits of an income tax treaty
to which the United States is a party (x) with respect to payments of interest
under any Loan Document, an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as
applicable, establishing an exemption from, or reduction of, U.S. Federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from,
or reduction of, U.S. Federal withholding Tax pursuant to the “business profits”
or “other income” article of such tax treaty;
(2)in the case of a Foreign Lender claiming that its extension of credit will
generate U.S. effectively connected income, an executed IRS Form W-8ECI;
(3)in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
an executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or
(4)to the extent a Foreign Lender is not the Beneficial Owner, an executed IRS
Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the
form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification
documents from each Beneficial Owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit F-4 on behalf of each such direct and indirect partner;
(C)any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the applicable Withholding Agent (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from

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Exhibit 10.23

time to time thereafter upon the reasonable request of such Withholding Agent),
executed originals of any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in U.S. Federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to permit such Withholding Agent to determine the withholding
or deduction required to be made; and
(D)if a payment made to a Lender under any Loan Document would be subject to
U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the applicable Withholding Agent at the time or times
prescribed by law and at such time or times reasonably requested by such
Withholding Agent such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by such Withholding Agent as may be necessary
for such Withholding Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the applicable Withholding Agent in
writing of its legal inability to do so.
(bx)Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including by
the payment of additional amounts pursuant to this Section 2.17), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.17 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts
giving rise to such refund had never been paid. This paragraph (g) shall not be
construed to require any indemnified party to make available its Tax returns (or
any other information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.
(by)Survival. Each party’s obligations under this Section 2.17 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document (including the Payment in Full of the Secured Obligations).
(bz)Defined Terms. For purposes of this Section 2.17, the term “applicable law”
includes FATCA.
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs.
(ca)The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00
p.m., Houston time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 10 South Dearborn Street, Floor L2, Chicago, Illinois, except
payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due

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Exhibit 10.23

on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.
(cb)Any proceeds of Collateral received by the Administrative Agent (i) not
constituting either (A) a specific payment of principal, interest, fees or other
sum payable under the Loan Documents (which shall be applied as specified by the
Borrower), (B) a mandatory prepayment, including any Net Proceeds received
pursuant to Section 2.11(c) (which shall be applied in accordance with
Section 2.11) or (C) amounts to be applied from the Collection Account when an
Activation Period is in effect (which shall be applied in accordance with
Section 2.10(b)) or (ii) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct, shall be applied ratably first, to pay any fees, indemnities, or expense
reimbursements then due to the Administrative Agent and the Issuing Bank from
the Borrower (other than in connection with Banking Services Obligations or Swap
Agreement Obligations), second, to pay any fees, indemnities, or expense
reimbursements then due to the Lenders from the Borrower (other than in
connection with Banking Services Obligations or Swap Agreement Obligations),
third, to pay interest due in respect of the Overadvances and Protective
Advances, fourth, to pay the principal of the Overadvances and Protective
Advances, fifth, to pay interest then due and payable on the Loans (other than
the Overadvances and Protective Advances) ratably, sixth, to prepay principal on
the Loans (other than the Overadvances and Protective Advances) and unreimbursed
LC Disbursements, seventh, to pay an amount to the Administrative Agent equal to
105% of the aggregate LC Exposure, to be held as cash collateral for such
Obligations, eighth, to payment of any amounts owing in respect of Banking
Services Obligations and Swap Agreement Obligations up to and including the
amount most recently provided to the Administrative Agent pursuant to
Section 2.22, and ninth, to the payment of any other Secured Obligation due to
the Administrative Agent, any Lender or any other Secured Party by the Borrower
or any other Loan Party. Notwithstanding the foregoing, amounts received from
any Loan Party shall not be applied to any Excluded Swap Obligation of such Loan
Party. Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrower, or unless a Default is in existence, neither
the Administrative Agent nor any Lender shall apply any payment which it
receives to any Eurodollar Loan of a Class, except (a) on the expiration date of
the Interest Period applicable thereto or (b) in the event, and only to the
extent, that there are no outstanding CBFR Loans of the same Class and, in any
such event, the Borrower shall pay the break funding payment required in
accordance with Section 2.16. The Administrative Agent and the Lenders shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Secured Obligations.
(cc)All payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for
fees, costs and expenses pursuant to Section 9.03), and other sums payable under
the Loan Documents, may be paid from any deposit account of the Borrower (other
than any Excluded Deposit Account) maintained with the Administrative Agent, or
if any such deposit account does not have sufficient funds to make such payment,
from the proceeds of Borrowings made hereunder either pursuant to a request by
the Borrower pursuant to Section 2.03 or a deemed request as provided in this
Section. The Borrower hereby irrevocably authorizes (i) the Administrative Agent
to make a Borrowing for the purpose of paying each payment of principal,
interest and fees as it becomes due hereunder or any other amount due under the
Loan Documents to the extent any deposit account of the Borrower (other than any
Excluded Deposit Account) maintained with the Administrative Agent has
insufficient funds therefor, and agrees that all such amounts charged shall
constitute Loans (including Swingline Loans and Overadvances, but such a
Borrowing may only constitute a Protective Advance if it is to reimburse costs,
fees and expenses as described in Section 9.03) and that all such Borrowings
shall be deemed to have been requested pursuant to Section 2.03, 2.04 or 2.05,
as applicable, and (ii) the Administrative Agent to charge any deposit account
of the Borrower (other than any Excluded Deposit Account) maintained with the
Administrative Agent for each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents.
(cd)If, except as otherwise expressly provided herein, any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other similarly situated Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by all such Lenders ratably in

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Exhibit 10.23

accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements or Swingline Loans to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(ce)Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(cf)If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations hereunder until all such unsatisfied obligations are fully paid
and/or (ii) hold any such amounts in a segregated account as cash collateral
for, and application to, any future funding obligations of such Lender
hereunder. Application of amounts pursuant to (i) and (ii) above shall be made
in any order determined by the Administrative Agent in its discretion.
(cg)The Administrative Agent may from time to time provide the Borrower with
account statements or invoices with respect to any of the Secured Obligations
(the “Statements”). The Administrative Agent is under no duty or obligation to
provide Statements, which, if provided, will be solely for the Borrower’s
convenience. Statements may contain estimates of the amounts owed during the
relevant billing period, whether of principal, interest, fees or other Secured
Obligations. If the Borrower pays the full amount indicated on a Statement on or
before the due date indicated on such Statement, the Borrower shall not be in
default of payment with respect to the billing period indicated on such
Statement; provided, that acceptance by the Administrative Agent, on behalf of
the Lenders, of any payment that is less than the total amount actually due at
that time (including but not limited to any past due amounts) shall not
constitute a waiver of the Administrative Agent’s or the Lenders’ right to
receive payment in full at another time.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders.
(ch)If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(ci)If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights

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Exhibit 10.23

(other than its existing rights to payments pursuant to Section 2.15 or 2.17)
and obligations under this Agreement and other Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (and in
circumstances where its consent would be required under Section 9.04, the
Issuing Bank and the Swingline Lender), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
SECTION 2.20 Defaulting Lenders. Notwithstanding any provision of this Agreement
to the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:
(cj)fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.12(a);
(ck)such Defaulting Lender shall not have the right to vote on any issue on
which voting is required (other than to the extent expressly provided in
Section 9.02(b)) and the Commitment and Revolving Exposure of such Defaulting
Lender shall not be included in determining whether the Required Lenders have
taken or may take any action hereunder (including any consent to any amendment,
waiver or other modification pursuant to Section 9.02) or under any other Loan
Document; provided, that, except as otherwise provided in Section 9.02, this
clause (b) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification requiring the consent of such Lender or
each Lender directly affected thereby;
(cl)if any Swingline Exposure or LC Exposure exists at the time such Lender
becomes a Defaulting Lender then:
(i)all or any part of the Swingline Exposure and LC Exposure of such Defaulting
Lender shall be reallocated among the non-Defaulting Lenders in accordance with
their respective Applicable Percentages but only (x) to the extent that the
conditions set forth in Section 4.02 are satisfied at the time of such
reallocation (and, unless the Borrower shall have otherwise notified the
Administrative Agent at such time, the Borrower shall be deemed to have
represented and warranted that such conditions are satisfied at such time) and
(y) to the extent that such reallocation does not, as to any non-Defaulting
Lender, cause such non-Defaulting Lender’s Revolving Exposure to exceed its
Commitment;
(ii)if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one (1) Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, cash collateralize, for the benefit of the Issuing Bank, the
Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.06(j) for so long as
such LC Exposure is outstanding;
(iii)if the Borrower cash collateralizes any portion of such Defaulting Lender’s
LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to
pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect
to such Defaulting Lender’s LC Exposure during the period such Defaulting
Lender’s LC Exposure is cash collateralized;
(iv)if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to
Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and
(v)if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Bank or any other
Lender hereunder, all letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing
Bank until and to the extent that such LC Exposure is reallocated and/or cash
collateralized; and

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Exhibit 10.23

(cm)so long as such Lender is a Defaulting Lender, the Issuing Bank shall not be
required to issue, amend, renew, extend or increase any Letter of Credit, unless
it is satisfied that such Defaulting Lender’s then outstanding LC Exposure will
be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash
collateral will be provided by the Borrower in accordance with Section 2.20(c),
and LC Exposure related to any newly issued or increased Letter of Credit shall
be allocated among non-Defaulting Lenders in a manner consistent with
Section 2.20(c)(i) (and such Defaulting Lender shall not participate therein).
If (i) a Bankruptcy Event or a Bail-In Action with respect to the Parent of any
Lender shall occur following the date hereof and for so long as such event shall
continue or (ii) the Issuing Bank has a good faith belief that any Lender has
defaulted in fulfilling its obligations under one or more other agreements in
which such Lender commits to extend credit, the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless the Issuing
Bank shall have entered into arrangements with the Borrower or such Lender,
satisfactory to the Issuing Bank to defease any risk to it in respect of such
Lender hereunder.
In the event that each of the Administrative Agent, the Borrower, the Swingline
Lender and the Issuing Bank agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Commitment and on the date of such readjustment
such Lender shall purchase at par such of the Loans of the other Lenders (other
than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
Applicable Percentage.
SECTION 2.21 Returned Payments. If after receipt of any payment which is applied
to the payment of all or any part of the Secured Obligations (including a
payment effected through exercise of a right of setoff), the Administrative
Agent or any Secured Party is for any reason compelled to surrender such payment
or proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason (including pursuant to any settlement entered into by the
Administrative Agent or such Secured Party in its discretion), then the Secured
Obligations or part thereof intended to be satisfied shall be revived and
continued and this Agreement shall continue in full force as if such payment or
proceeds had not been received by the Administrative Agent or such Secured
Party. The provisions of this Section 2.21 shall be and remain effective
notwithstanding any contrary action which may have been taken by the
Administrative Agent or any Secured Party in reliance upon such payment or
application of proceeds. The provisions of this Section 2.21 shall survive the
termination of this Agreement.
SECTION 2.22 Banking Services and Swap Agreements. Each Lender or Affiliate
thereof (other than JPMCB and its Affiliates) providing Banking Services for, or
having Swap Agreements with, any Loan Party or any Subsidiary of a Loan Party
shall deliver to the Administrative Agent, promptly after entering into such
Banking Services or Swap Agreements, written notice setting forth the aggregate
amount of all Banking Services Obligations and Swap Agreement Obligations of
such Loan Party or Subsidiary thereof to such Lender or Affiliate (whether
matured or unmatured, absolute or contingent). In addition, each such Lender or
Affiliate thereof shall deliver to the Administrative Agent, upon (a) the
Administrative Agent’s request therefor or (b) any material change in the
amounts due or to become due in respect of such Banking Services Obligations and
Swap Agreement Obligations, a summary of the amounts due or to become due in
respect of such Banking Services Obligations and Swap Agreement Obligations. The
information set forth in the most recent summary delivered to the Administrative
Agent pursuant to this Section 2.22 shall be used in determining the amounts to
be applied in respect of such Banking Services Obligations and/or Swap Agreement
Obligations pursuant to Section 2.18(b).

ARTICLE III

REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders that:
SECTION 3.01 Organization; Powers. Each Loan Party and each Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in

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Exhibit 10.23

the aggregate, would not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business, and is in good standing, in every
juris-diction where such qualification is required.
SECTION 3.02 Authorization; Enforceability. The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
Each Loan Document to which each Loan Party is a party has been duly executed
and delivered by such Loan Party and constitutes a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not
violate or result in a “default” or “event of default” under any indenture,
agreement or other instrument binding upon any Loan Party or any Subsidiary or
the assets of any Loan Party or any Subsidiary, or give rise to a right
thereunder to require any payment to be made by any Loan Party or any
Subsidiary, and (d) will not result in the creation or imposition of any Lien on
any asset of any Loan Party or any Subsidiary, except Liens created pursuant to
the Loan Documents.
SECTION 3.04 Financial Condition; No Material Adverse Change.
(cn)The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows
(i) as of and for the fiscal year ended December 31, 2016 reported on by
PricewaterhouseCoopers LLP, independent public accountants, and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended September 30,
2017 certified by its Financial Officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP or IFRS, as
applicable, subject to normal year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.
(co)No event, change or condition has occurred that has had, or would reasonably
be expected to have, a Material Adverse Effect, since December 31, 2016.
SECTION 3.05 Properties.
(cp)As of the date of this Agreement, Schedule 3.05 sets forth the address of
each parcel of real property that is owned or leased by any Loan Party necessary
or used in the conduct of its business. Each of such leases and subleases is
valid and enforceable in accordance with its terms and is in full force and
effect, and, to the Knowledge of such Loan Party, no default by any party to any
such lease or sublease exists. Each of the Loan Parties and each of its
Subsidiaries has good and indefeasible title to, or valid leasehold interests
in, all of its real and personal property, (i) free of all Liens other than
those permitted by Section 6.02 and (ii) except for minor irregularities or
deficiencies in title that, individually or in the aggregate, do not materially
interfere with any Loan Party’s ability to conduct its business as currently
conducted or to utilize such property for its intended purpose.
(cq)Each Loan Party and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, and the use thereof by each
Loan Party and each Subsidiary does not infringe in any material respect upon
the rights of any other Person, and each Loan Party’s and each Subsidiary’s
rights thereto are not subject to any licensing agreement or similar
arrangement.
SECTION 3.06 Litigation and Environmental Matters.
(cr)There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the Knowledge of any Loan Party,
threatened against or affecting any Loan Party or any Subsidiary (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any Loan Document or the Transactions.
(cs)Except for the Disclosed Matters (i) no Loan Party or any Subsidiary has
received notice of any claim with respect to any Environmental Liability, (ii)
Knows of any basis for any Environmental Liability that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect
and (iii) except with respect to any other matters that, individually or in the
aggregate, would not reasonably be expected to result in a Material

--------------------------------------------------------------------------------

Exhibit 10.23

Adverse Effect, no Loan Party or any Subsidiary (A) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law, (B) has become subject
to any Environmental Liability, or (C) has received notice of any claim with
respect to any Environmental Liability.
SECTION 3.07 Compliance with Laws and Agreements; No Default. Except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, each Loan Party and each
Subsidiary is in compliance with (a) all Requirement of Law applicable to it or
its property and (b) all indentures, agreements and other instruments binding
upon it or its property. No Default has occurred and is continuing.
SECTION 3.08 Investment Company Status. No Loan Party or any Subsidiary is an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.
SECTION 3.09 Taxes. Each Loan Party and each Subsidiary has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which such Loan Party or such Subsidiary, as applicable, has set aside on
its books adequate reserves or (b) to the extent that the failure to do so could
not be expected to result in a Material Adverse Effect. No tax liens have been
filed and no claims are being asserted with respect to any such Taxes.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, would reasonably be expected to
result in a Material Adverse Effect. To the extent applicable, the present value
of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87 or
subsequent recodification thereof, as applicable) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan , and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87 or subsequent
recodification thereof, as applicable) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of all such underfunded Plans.
SECTION 3.11 Disclosure. The Loan Parties have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Loan
Party or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of any Loan Party or any
Subsidiary to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
delivered and, if such projected financial information was delivered prior to
the Effective Date, as of the Effective Date.
SECTION 3.12 Solvency.
(ct)Immediately after the consummation of the Transactions, (i) the fair value
of the assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (ii) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) each Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (iv) no Loan Party
will have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
after the Effective Date.
(cu)No Loan Party intends to, nor will permit any Subsidiary to, and no Loan
Party believes that it or any Subsidiary will, incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the Indebtedness
of any such Subsidiary.
SECTION 3.13 Insurance. Schedule 3.13 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties and their Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Borrower maintains, and has caused each Subsidiary
to maintain, with financially

--------------------------------------------------------------------------------

Exhibit 10.23

sound and reputable insurance companies, insurance on all their real and
personal property in such amounts, subject to such deductibles and
self-insurance retentions and covering such properties and risks as are adequate
and customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 3.14 Capitalization and Subsidiaries. As of the Effective Date,
Schedule 3.14 sets forth (a) a correct and complete list of the name and
relationship to the Borrower of each Subsidiary, (b) a true and complete listing
of each class of each of the Borrower’s authorized Equity Interests, all of
which issued Equity Interests are validly issued, outstanding, fully paid and
non-assessable, and owned beneficially and of record by the Persons identified
on Schedule 3.14, and (c) the type of entity of the Borrower and each
Subsidiary. All of the issued and outstanding Equity Interests owned by any Loan
Party have been (to the extent such concepts are relevant with respect to such
ownership interests) duly authorized and issued and are fully paid and
non‑assessable. As of the Effective Date, there are no outstanding commitments
or other obligations of any Loan Party to issue, and no options, warrants or
other rights of any Person to acquire, any shares of any class of capital stock
or other equity interests of any Loan Party.
SECTION 3.15 Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all of the
Collateral in favor of the Administrative Agent, for the benefit of the Secured
Parties, and such Liens constitute perfected and continuing Liens on the
Collateral, securing the Secured Obligations, enforceable against the applicable
Loan Party and all third parties, and having priority over all other Liens on
the Collateral except (a) in the case of Permitted Encumbrances, to the extent
any such Permitted Encumbrances would have priority over the Liens in favor of
the Administrative Agent pursuant to any applicable law or agreement, and (b) in
the case of Liens perfected only by possession (including possession of any
certificate of title), to the extent the Administrative Agent has not obtained
or does not maintain possession of such Collateral.
SECTION 3.16 Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to
the Knowledge of any Loan Party, threatened. The hours worked by and payments
made to employees of the Loan Parties and their Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters. All payments due from any
Loan Party or any Subsidiary, or for which any claim may be made against any
Loan Party or any Subsidiary, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on the books of such Loan Party or such Subsidiary.
SECTION 3.17 Federal Reserve Regulations. No part of the proceeds of any Loan or
Letter of Credit has been used or will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.
SECTION 3.18 Use of Proceeds. The proceeds of the Loans have been used and will
be used, whether directly or indirectly as set forth in Section 5.08.
SECTION 3.19 No Burdensome Restrictions. No Loan Party is subject to any
Burdensome Restrictions except Burdensome Restrictions permitted under
Section 6.10.
SECTION 3.20 Anti-Corruption Laws and Sanctions. Each Loan Party has implemented
and maintains in effect policies and procedures designed to ensure compliance by
such Loan Party, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions, and
such Loan Party, its Subsidiaries and their respective officers and directors
and, to the Knowledge of such Loan Party, its employees and agents, are not
knowingly engaged in any activity that would reasonably be expect to result in
any Loan Party being designated as a Sanctioned Person, and are in compliance
with Anti-Corruption Laws and applicable Sanctions in all material respects.
None of (a) any Loan Party, any Subsidiary or, to the Knowledge of any such Loan
Party or Subsidiary, any of their respective directors, officers or employees,
or (b) to the Knowledge of any such Loan Party or Subsidiary, any agent of such
Loan Party or any Subsidiary that will act in any capacity in connection with or
benefit from the credit facility established hereby, is a Sanctioned Person. No
Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction
contemplated by this Agreement or the other Loan Documents will violate
Anti-Corruption Laws or applicable Sanctions.
SECTION 3.21 Affiliate Transactions. Except as set forth on Schedule 3.21, as of
the date of this Agreement, there are no existing or proposed agreements,
arrangements, understandings or transactions between any Loan Party and any of
the officers, members, managers, directors, stockholders, parents, holders of
other Equity Interests or Affiliates (other than Subsidiaries) of any Loan Party
or, to the Knowledge of such Loan Party, any members of their respective
immediate families, and, to the Knowledge of such Loan Party, none of the
foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership or voting interest in any Affiliate of any Loan
Party.

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Exhibit 10.23

SECTION 3.22 Common Enterprise. The successful operation and condition of each
of the Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole. Each Loan Party expects
to derive benefit (and its board of directors or other governing body has
determined that it may reasonably be expected to derive benefit), directly and
indirectly, from (a) successful operations of each of the other Loan Parties as
a whole and (b) the credit extended by the Lenders to the Borrower hereunder,
both in their separate capacities and as members of the group of companies. Each
Loan Party has determined that execution, delivery, and performance of this
Agreement and any other Loan Documents to be executed by such Loan Party is
within its purpose, in furtherance of its direct and/or indirect business
interests, will be of direct and/or indirect benefit to such Loan Party, and is
in its best interest.
SECTION 3.23 EEA Financial Institutions. No Loan Party is an EEA Financial
Institution.

ARTICLE IV

CONDITIONS
SECTION 4.01 Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.02):
(cv)Credit Agreement and Other Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile or other
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement, (ii) either (A) a counterpart
of each other Loan Document signed on behalf of each party thereto or
(B) written evidence satisfactory to the Administrative Agent (which may include
facsimile or other electronic transmission of a signed signature page thereof)
that each such party has signed a counterpart of such Loan Document and
(iii) such other certificates, documents, instruments and agreements as the
Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
including any promissory notes requested by a Lender pursuant to Section 2.10
payable to the order of each such requesting Lender and a written opinion of the
Loan Parties’ counsel (which may include the general counsel of the Borrower),
addressed to the Administrative Agent, the Issuing Bank and the Lenders, all in
form and substance satisfactory to the Administrative Agent and its counsel.
(cw)Financial Statements and Projections. The Lenders shall have received
(i) audited consolidated financial statements of the Borrower for the fiscal
year ended December 31, 2016, (ii) unaudited interim consolidated financial
statements of the Borrower for each fiscal quarter ended after the date of the
latest applicable financial statements delivered pursuant to clause (i) of this
paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the Administrative
Agent, reflect any material adverse change in the consolidated financial
condition of the Borrower, as reflected in the audited, consolidated financial
statements described in clause (i) of this paragraph and (iii) satisfactory
quarterly projections for the Borrower’s fiscal year ending December 31, 2018,
and annual projections for each of the Borrower’s fiscal years thereafter,
through and including the Borrower’s fiscal year ending December 31, 2021.
(cx)Officer’s Certificates; Certified Certificate of Incorporation; Good
Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Effective Date and executed by its
Secretary or Assistant Secretary, which shall (A) certify the resolutions of its
board of directors, board of managers, members or other governing body
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party, (B) identify by name and title and bear the signatures of
the officers of such Loan Party authorized to sign the Loan Documents to which
it is a party and, in the case of the Borrower, its Financial Officers, and
(C) contain, as attachments, the certificate or articles of incorporation or
organization of such Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of
its by-laws or operating, management or partnership agreement, or other
organizational or governing documents, and (ii) a good standing certificate, as
of a recent date, for such Loan Party from its jurisdiction of organization or
the substantive equivalent available in the jurisdiction of organization for
such Loan Party from the appropriate governmental officer in such jurisdiction.

--------------------------------------------------------------------------------

Exhibit 10.23

(cy)Closing Certificate. The Administrative Agent shall have received a
certificate, signed by a Financial Officer of the Borrower and each other Loan
Party, dated as of the Effective Date (i) stating that no Default has occurred
and is continuing, (ii) stating that the representations and warranties
contained in the Loan Documents are true and correct as of such date,
(iii) stating that Availability for the Borrower is equal to or greater than
$35,000,000 after giving effect to all Borrowings to be made on the Effective
Date, the issuance of any Letters of Credit on the Effective Date, the
consummation of the Transactions and the payment of all fees and expenses due
hereunder, and (iv) certifying as to any other factual matters as may be
reasonably requested by the Administrative Agent.
(cz)Fees. The Lenders, the Lead Arranger and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which invoices have
been presented (including the reasonable fees and expenses of legal counsel), on
or before the Effective Date. All such amounts may be paid with proceeds of
Loans made on the Effective Date, in which case they will be reflected in the
funding instructions given by the Borrower to the Administrative Agent on or
before the Effective Date.
(da)Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each jurisdiction where the Loan Parties are organized and
where the assets of the Loan Parties are located, and such search shall reveal
no Liens on any of the assets of the Loan Parties except for Liens permitted by
Section 6.02 or discharged on or prior to the Effective Date pursuant to a
pay-off letter or other documentation satisfactory to the Administrative Agent.
(db)Pay-Off Letter. The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness required to be repaid from the
proceeds of the initial Borrowing, confirming that all Liens upon any of the
property of the Loan Parties constituting Collateral will be terminated
concurrently with such payment.
(dc)Funding Account. The Administrative Agent shall have received a notice
setting forth the deposit account of the Borrower (the “Funding Account”) to
which the Administrative Agent is authorized by the Borrower to transfer the
proceeds of any Borrowings requested or authorized pursuant to this Agreement.
(dd)Customer List. The Administrative Agent shall have received a true and
complete customer list for each Loan Party, which list shall be in form
reasonably satisfactory to the Administrative Agent and shall be certified as
true and correct by a Financial Officer.
(de)Collateral Access Agreements. The Administrative Agent shall have received
each Collateral Access Agreement required to be provided pursuant to Section
4.12 of the Security Agreement.
(df)Solvency. The Administrative Agent shall have received a solvency
certificate of the Borrower signed by a Financial Officer dated the Effective
Date.
(dg)Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of a date
specified by the Administrative Agent prior to or on the Effective Date with
customary supporting schedules and documentation.
(dh)Closing Availability. After giving effect to all Borrowings to be made on
the Effective Date, the issuance of any Letters of Credit on the Effective Date,
the consummation of the Transactions and the payment of all fees and expenses
due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and
obligations current, Availability shall not be less than $35,000,000.
(di)Pledged Equity Interests; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates (if any) representing the Equity
Interests pledged pursuant to the Security Agreement, together with an undated
stock power or membership power, as applicable, for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof and
(ii) each promissory note (if any) required to be pledged to the Administrative
Agent pursuant to the Security Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank) by the pledgor thereof.
(dj)Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of itself, the Lenders and the other Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by
Section 6.02), shall have been delivered to the Administrative Agent and be in
proper form for filing, registration or recordation.
(dk)Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 5.10
hereof and Section 4.12 of the Security Agreement.

--------------------------------------------------------------------------------

Exhibit 10.23

(dl)Letter of Credit Application. If a Letter of Credit is requested to be
issued on the Effective Date, the Administrative Agent shall have received a
properly completed letter of credit application (whether standalone or pursuant
to a master agreement, as applicable). The Borrower shall have executed the
Issuing Bank’s master agreement for the issuance of commercial Letters of
Credit, if applicable.
(dm)Tax Withholding. The Administrative Agent shall have received the
appropriate IRS Form W-8 or W-9, as applicable, for each Loan Party, in each
case, properly completed and signed.
(dn)Corporate Structure. The corporate structure, capital structure and other
debt instruments, material accounts and governing documents of the Borrower and
its Affiliates shall be acceptable to the Administrative Agent in its sole
discretion.
(do)Field Examination. The Administrative Agent or its designee shall have
conducted a field examination of the Loan Parties’ Accounts, Inventory and such
other information or materials as the Administrative Agent shall include within
the scope of such field examination and audit, all of which shall be in form and
substance reasonably satisfactory to the Administrative Agent in its sole
discretion.
(dp)Legal Due Diligence. The Administrative Agent and its counsel shall have
completed all legal due diligence, the results of which shall be satisfactory to
Administrative Agent in its sole discretion.
(dq)Appraisal(s).The Administrative Agent shall have received an appraisal of
the applicable Loan Parties’ Inventory from one or more firms satisfactory to
the Administrative Agent, which appraisal shall be satisfactory to the
Administrative Agent in its sole discretion.
(dr)USA PATRIOT Act, Etc. The Administrative Agent and the Lenders shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act, for each Loan Party.
(ds)Government and Third Party Consents and Approvals. The Administrative Agent
shall have received evidence that all consents and approvals, if any, required
to be obtained from any Governmental Authority or other Person in connection
with the Transactions (including member and shareholder approvals) have been
obtained and are in full force and effect.
(dt)Material Adverse Change. No event shall have occurred and no condition shall
exist which has had or would be reasonably expected to have a Material Adverse
Effect.
(du)Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent, the Issuing Bank, any Lender or their
respective counsel may have reasonably requested.
The Administrative Agent shall notify the Borrower, the Lenders and the Issuing
Bank of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 2:00 p.m., Houston time, on February
28, 2018 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(dv)The representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects).
(dw)At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, (i) no Default shall have occurred and be continuing, and (ii) no
Protective Advance shall be outstanding.
(dx)After giving effect to any Borrowing or the issuance, amendment, renewal or
extension of any Letter of Credit, Availability shall not be less than zero.
(dy)If the Non-Loan Party Cash Balance (including the Dollar Equivalent of any
Non-Loan Party Cash Balance denominated in any other currency) is greater than
$50,000,000 during the Cash Balance Testing Period, then after giving effect to
any Borrowing or the issuance, amendment, renewal or extension of any Letter of
Credit, Availability shall not be less than $25,000,000.

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Exhibit 10.23

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b),
(c) and (d) of this Section.
Notwithstanding the failure to satisfy the conditions precedent set forth in
paragraphs (a) or (b) of this Section, unless otherwise directed by the Required
Lenders, the Administrative Agent may, but shall have no obligation to, continue
to make Loans and an Issuing Bank may, but shall have no obligation to, issue,
amend, renew or extend, or cause to be issued, amended, renewed or extended, any
Letter of Credit for the ratable account and risk of Lenders from time to time
if the Administrative Agent believes that making such Loans or issuing,
amending, renewing or extending, or causing the issuance, amendment, renewal or
extension of, any such Letter of Credit is in the best interests of the Lenders.
ARTICLE V

AFFIRMATIVE COVENANTS
Until all of the Secured Obligations have been Paid in Full, each Loan Party
executing this Agreement covenants and agrees, jointly and severally with all of
the other Loan Parties, with the Lenders that:
SECTION 5.01 Financial Statements; Borrowing Base and Other Information. The
Borrower will furnish to the Administrative Agent:
(dz)within ninety (90) days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by PricewaterhouseCoopers LLP or another
independent public accountants of recognized national standing (without a “going
concern” or like qualification, commentary or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, accompanied by any management letter prepared by said
accountants;
(ea)within forty-five (45) days after the end of each fiscal quarter of the
Borrower, its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of such fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by a Financial Officer as presenting fairly in all material respects
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(eb)concurrently with any delivery of financial statements under clause (a) or
(b) above, a compliance certificate of a Financial Officer in substantially the
form of Exhibit D (i) certifying, in the case of the financial statements
delivered under clause (a) or (b) above, as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, (ii) certifying as to whether a Default has occurred and
is continuing, and, if a Default has occurred and is continuing, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (iii) setting forth reasonably detailed calculations demonstrating
compliance with Section 6.12, if applicable and (iv) stating whether any change
in GAAP or in the application thereof has occurred since the date of the audited
financial statements most recently delivered pursuant to clause (a) above and,
if any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(ec)within sixty (60) days after the end of each fiscal year of the Borrower,
but in any event no more than thirty (30) days prior to the end of the previous
fiscal year of the Borrower, a copy of the plan and forecast (including a
projected consolidated and consolidating balance sheet, income statement and
cash flow statement) of the Borrower for each fiscal quarter of the upcoming
fiscal year (the “Projections”) in form reasonably satisfactory to the
Administrative Agent;
(ed)as soon as available but in any event within twenty-five (25) days of the
end of each calendar month, and at such other times as may be necessary to
re-determine Availability or as may be requested by the Administrative Agent in
its Permitted Discretion, as of the period then ended, a Borrowing Base
Certificate and supporting information

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Exhibit 10.23

in connection therewith together with any additional reports with respect to the
Borrowing Base as the Administrative Agent may reasonably request provided that,
at any time an Activation Period exists, a Borrowing Base Certificate shall be
delivered weekly within three (3) Business Days after the end of each calendar
week;
(ee)as soon as available but in any event within twenty-five (25) days of the
end of each calendar month, and at such other times as may be requested by the
Administrative Agent in its Permitted Discretion, as of the period then ended,
all delivered electronically in a text formatted file reasonably acceptable to
the Administrative Agent:
(i)a detailed aging of the Loan Parties’ Accounts, including all invoices aged
by invoice date and due date (with an explanation of the terms offered),
prepared in a manner reasonably acceptable to the Administrative Agent, together
with a summary specifying the name, address, and balance due for each Account
Debtor;
(ii)a schedule detailing the Loan Parties’ Inventory, in form reasonably
satisfactory to the Administrative Agent, (A) by location (showing Inventory in
transit and any Inventory located with a third party under any consignment,
bailee arrangement or warehouse agreement), by class (raw material,
work-in-process and finished goods), by product type, and by volume on hand,
which Inventory shall be valued at the lower of cost (determined on a first-in,
first-out basis) or market and adjusted for Reserves as the Administrative Agent
has previously indicated to the Borrower are deemed by the Administrative Agent
to be appropriate, and (B) including a report of any variances or other results
of Inventory counts performed by the Loan Parties since the last Inventory
schedule (including information regarding sales or other reductions, additions,
returns, credits issued by the Loan Parties and claims made against the Loan
Parties with respect thereto);
(iii)a worksheet of calculations prepared by the Borrower to determine Eligible
Accounts, Eligible Bill-And-Hold Accounts and Eligible Inventory, such
worksheets detailing the Accounts and Inventory excluded from Eligible Accounts,
Eligible Bill-And-Hold Accounts and Eligible Inventory and the reason for such
exclusion; and
(iv)a report setting forth in reasonable detail the physical location of the
goods giving rise to any Eligible Bill-And-Hold Accounts;
provided, that at any time an Activation Period exists, the Administrative
Agent, in its sole discretion, may require delivery of the information required
by this clause (f) weekly within three (3) Business Days after the end of each
calendar week;
(ef)as soon as available but in any event within twenty-five (25) days of the
end of each calendar month and at such other times as may be requested by the
Administrative Agent in its Permitted Discretion, as of the month then ended, a
schedule and aging of the Borrower’s accounts payable, delivered electronically
in a text formatted file reasonably acceptable to the Administrative Agent;
provided, that at any time an Activation Period exists, the Administrative
Agent, in its sole discretion, may require delivery of the information required
by this clause (g) weekly within three (3) Business Days after the end of each
calendar week;
(eg)promptly upon the Administrative Agent’s request:
(i)copies of invoices issued by the Loan Parties in connection with any
Accounts, credit memos, shipping and delivery documents, and other information
related thereto;
(ii)copies of purchase orders, invoices, and shipping and delivery documents in
connection with any Inventory purchased by any Loan Party;
(iii)a schedule detailing the balance of all intercompany accounts of the Loan
Parties;
(iv)an updated customer list for the Borrower and its Subsidiaries, which list
shall be in form reasonably satisfactory to the Administrative Agent and
delivered electronically in a text formatted file reasonably acceptable to the
Administrative Agent and certified as true and correct by a Financial Officer;
and
(v)for the calendar month most recently ended, the Borrower’s sales journal,
cash receipts journal (identifying trade and non-trade cash receipts) and debit
memo/credit memo journal;
(eh)promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by any Loan Party
or any Subsidiary with the SEC, or any Governmental Authority succeeding to any
or all of the functions of the SEC, or with any national securities exchange, if
applicable, or distributed by the Borrower to its shareholders generally, as the
case may be;
(ei)promptly after any request therefor by the Administrative Agent or any
Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that
the Borrower or any ERISA Affiliate may request with respect to any
Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA
that the Borrower or any

--------------------------------------------------------------------------------

Exhibit 10.23

ERISA Affiliate may request with respect to any Multiemployer Plan; provided
that if the Borrower or any ERISA Affiliate has not requested such documents or
notices from the administrator or sponsor of the applicable Multiemployer Plan,
the Borrower or the applicable ERISA Affiliate shall promptly make a request for
such documents and notices from such administrator or sponsor and shall provide
copies of such documents and notices promptly after receipt thereof; and
(ej)promptly following any request therefor, such other information regarding
the operations, material changes in ownership of Equity Interests, business
affairs and financial condition of any Loan Party or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any
Lender may reasonably request.
Documents required to be delivered pursuant to clauses (a), (b) and (i) of this
Section 5.01 and Section 5.02(f) may (but shall not be required to) be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date on which (i) the Borrower posts such documents, or provides a link
thereto on its website on the Internet to which the Administrative Agent and
each Lender has access (located at http://www.dril-quip.com) or (ii) such
documents are posted on the Internet website of the SEC (http://www.sec.gov) on
the Borrower’s behalf; provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent if the Administrative Agent
or any Lender requests the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent or
such Lender and (ii) the Borrower shall notify the Administrative Agent (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. The Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above.
SECTION 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent prompt (but in any event within any time period that may be
specified below) written notice of the following:
(ek)the occurrence of any Default;
(el)receipt of any written notice of any investigation by a Governmental
Authority or any litigation or proceeding commenced or threatened against any
Loan Party or any Subsidiary that (i) seeks damages in excess of $5,000,000,
(ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan,
its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan
Party or any Subsidiary, (v) alleges the violation of, or seeks to impose
remedies under, any Environmental Law or related Requirement of Law, or seeks to
impose Environmental Liability, (vi)  asserts liability on the part of any Loan
Party or any Subsidiary in excess of $5,000,000 in respect of any tax, fee,
assessment, or other governmental charge, or (vii) involves any recall of a
product manufactured or sold by a Loan Party;
(em)any Lien (other than Permitted Encumbrances) or claim made or asserted
against any of the Collateral;
(en)any loss, damage, or destruction to the Collateral in the amount of
$5,000,000 or more, whether or not covered by insurance;
(eo)within two (2) Business Days of receipt thereof, any and all default notices
received under or with respect to any leased location or public warehouse where
Collateral is located;
(ep)all material amendments to or terminations of any Material Indebtedness, if
any, together with a copy of each such amendment or termination;
(eq)within two (2) Business Days after the occurrence thereof, any Loan Party
entering into a Swap Agreement or an amendment thereto, together with copies of
all agreements evidencing such Swap Agreement or amendment;
(er)the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, would reasonably be expected to result in
liability of the Loan Parties and their Subsidiaries in an aggregate amount
exceeding $5,000,000; and
(es)any other development that results, or would reasonably be expected to
result, in a Material Adverse Effect.
Each notice delivered under this Section 5.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto as of the time of
such notice.
SECTION 5.03 Existence; Conduct of Business. Each Loan Party will, and will
cause each Subsidiary to, (a) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual

--------------------------------------------------------------------------------

Exhibit 10.23

property rights, licenses and permits material to the conduct of its business,
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03, and (b) carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted.
SECTION 5.04 Payment of Obligations. Each Loan Party will, and will cause each
Subsidiary to, pay or discharge all (x) Taxes, (y) Material Indebtedness and (z)
all other liabilities and obligations that would result in liabilities, in an
aggregate amount under this clause (z), exceeding $5,000,000, in each case for
the preceding clauses (x), (y) and (z), before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropri-ate proceedings, (b) such Loan Party or
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such contest
would not reasonably be expected to result in a Material Adverse Effect;
provided, however, that each Loan Party will, and will cause each Subsidiary to,
remit withholding taxes and other payroll taxes to appropriate Governmental
Authorities as and when claimed to be due, notwithstanding the foregoing
exceptions.
SECTION 5.05 Maintenance of Properties. Each Loan Party will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
SECTION 5.06 Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (a) keep proper books of record and account in
which full, true and correct entries in all material respects are made of all
dealings and transactions in relation to its business and activities and
(b) permit any representatives designated by the Administrative Agent (including
employees of the Administrative Agent, any Lender or any consultants,
accountants, lawyers, agents, field examiners and appraisers retained by the
Administrative Agent), upon reasonable prior written notice, to visit and
inspect its properties, to conduct at such Loan Party’s premises field
examinations of such Loan Party’s assets, liabilities, books and records,
including examining and making extracts from its books and records,
environmental assessment reports and Phase I or Phase II studies, and to discuss
its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
The applicable Loan Party shall have the right to accompany any such
representative designated by the Administrative Agent during any such
inspection. Each Loan Party acknowledges that the Administrative Agent, after
exercising its rights of inspection, may prepare and distribute to the Lenders
certain Reports pertaining to such Loan Party’s assets for internal use by the
Administrative Agent and the Lenders. If no Event of Default has occurred and is
continuing, the Administrative Agent may conduct, and the Loan Parties shall be
responsible for the costs of expenses of, one (1) field examination during any
12-month period, provided, that one (1) additional field examination (for the
total of two (2) such field examinations during any 12-month period) may be
conducted at any time after Availability falls below the greater of
(i) $20,000,000 and (ii) 30% of the lesser of the Borrowing Base and the
Aggregate Commitment; provided, further, that there shall be no limitation on
the number or frequency of field examinations conducted while an Event of
Default has occurred and is continuing and the Loan Parties shall be responsible
for the costs and expenses of any field examinations conducted while an Event of
Default has occurred and is continuing.
SECTION 5.07 Compliance with Laws and Material Contractual Obligations. Each
Loan Party will, and will cause each Subsidiary to, (i) comply in all material
respects with each Requirement of Law applicable to it or its property
(including without limitation Environmental Laws, Anti-Corruption Laws and
Sanctions) and (ii) perform in all material respects its obligations under
material agreements to which it is a party, except, in each case, where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect. Each Loan Party will maintain
in effect and enforce policies and procedures designed to ensure compliance by
such Loan Party, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions.
SECTION 5.08 Use of Proceeds.
(et)The proceeds of the Loans and the Letters of Credit will be used only to
finance expenses incurred in connection with the Transactions and for the
working capital needs, capital expenditures and other general corporate purposes
of the Loan Parties and their Subsidiaries in the ordinary course of business,
including, without limitation, to finance Permitted Acquisitions and expenses
incurred in connection therewith. No part of the proceeds of any Loan and no
Letter of Credit will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.

--------------------------------------------------------------------------------

Exhibit 10.23

(eu)The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and shall procure that its Subsidiaries and its and
their respective directors, officers, employees and agents shall not use, the
proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or
anything else of value, to any Person in violation of any Anti-Corruption Laws,
(b) for the purpose of funding, financing or facilitating any activities,
business or transaction of or with any Sanctioned Person, or in any Sanctioned
Country, to the extent that such activities, businesses or transaction would be
prohibited by Sanctions if conducted by a corporation incorporated in the United
States or the European Union, or (c) in any manner that would result in the
violation of any Sanctions applicable to any party hereto.
SECTION 5.09 Accuracy of Information. The Loan Parties will ensure that any
information, including financial statements or other documents, furnished to the
Administrative Agent or the Lenders in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder contains no material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and the
furnishing of such information shall be deemed to be a representation and
warranty by the Borrower on the date thereof as to the matters specified in this
Section 5.09; provided that, with respect to projected financial information,
the Loan Parties will only ensure that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.
SECTION 5.10 Insurance. Each Loan Party will, and will cause each Subsidiary to,
maintain with financially sound and reputable carriers having a financial
strength rating of at least A- by A.M. Best Company (a) insurance in such
amounts (with no greater risk retention) and against such risks (including,
without limitation: loss or damage by fire and loss in transit; theft, burglary,
pilferage, larceny, embezzlement, and other criminal activities and general
liability) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (b) all insurance required pursuant to the
Collateral Documents. The Borrower will furnish to the Lenders, upon request of
the Administrative Agent, information in reasonable detail as to the insurance
so maintained.
SECTION 5.11 Casualty and Condemnation. The Borrower will (a) furnish to the
Administrative Agent prompt written notice of any casualty or other insured
damage to any material portion of the Collateral or the commencement of any
action or proceeding for the taking of any material portion of the Collateral or
interest therein under power of eminent domain or by condemnation or similar
proceeding and (b) ensure that the Net Proceeds of any such event (whether in
the form of insurance proceeds, condemnation awards or otherwise) are collected
and applied in accordance with the applicable provisions of this Agreement and
the Collateral Documents.
SECTION 5.12 Appraisals. At any time that the Administrative Agent requests, the
Borrower will, and will cause each Subsidiary to, provide the Administrative
Agent with appraisals or updates thereof of its Inventory from an appraiser
selected and engaged by the Administrative Agent, and prepared on a basis
reasonably satisfactory to the Administrative Agent, such appraisals and updates
to include, without limitation, information required by any applicable
Requirement of Law. If no Event of Default has occurred and is continuing, the
Loan Parties shall be responsible for the costs of expenses of no more than one
(1) Inventory appraisal during any 12-month period, provided, that one (1)
additional Inventory appraisal (for the total of two (2) such Inventory
appraisals during any 12-month period) may be conducted at any time after
Availability falls below the greater of (i) $20,000,000 and (ii) 30% of the
lesser of the Borrowing Base and the Aggregate Commitment. Additionally, there
shall be no limitation on the number or frequency of Inventory appraisals if an
Event of Default has occurred and is continuing, and the Loan Parties shall be
responsible for the costs and expenses of any such appraisals conducted while an
Event of Default has occurred and is continuing.
SECTION 5.13 Depository Banks. Commencing on the thirtieth (30th) day following
the Effective Date (or such later date as the Administrative Agent may agree in
its sole discretion) and at all times thereafter, the Borrower and each
Subsidiary will maintain the Administrative Agent as its principal depository
bank in the United States, including for the maintenance of operating,
administrative, cash management, collection activity and other deposit accounts
for the conduct of its business. For the avoidance of doubt, nothing herein
shall prohibit the Borrower or its Subsidiaries from maintaining any Excluded
Deposit Account with a depository bank other than the Administrative Agent.
SECTION 5.14 Additional Collateral; Further Assurances.
(ev)Subject to any applicable Requirement of Law, each Loan Party will cause
each Significant Domestic Subsidiary (other than any Excluded Domestic
Subsidiary) formed or acquired after the date of this Agreement to become a Loan
Party by executing a Joinder Agreement within thirty (30) days of such formation
or acquisition. Upon execution and delivery thereof, each such Person (i) shall
automatically become a Loan Guarantor hereunder and

--------------------------------------------------------------------------------

Exhibit 10.23

thereupon shall have all of the rights, benefits, duties, and obligations in
such capacity under the Loan Documents and (ii) will grant Liens to the
Administrative Agent, for the benefit of the Administrative Agent and the other
Secured Parties, in any property of such Loan Party which constitutes
Collateral.
(ew)Subject to Section 5.15(b)(ii), each Loan Party will cause (i) 100% of the
issued and outstanding Equity Interests of each of its Significant Domestic
Subsidiaries (other than any Excluded Domestic Subsidiary) and (ii) 65% (or such
greater percentage that (1) would not reasonably be expected to cause the
undistributed earnings of any CFC as determined for U.S. federal income tax
purposes to be treated as a deemed dividend to such CFC’s U.S. parent and (2)
would not reasonably be expected to cause any material adverse tax consequences)
of the issued and outstanding Equity Interests entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and
outstanding Equity Interests not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) in each Significant Domestic Subsidiary that is a
FSHCO and each Significant Foreign Subsidiary to be subject at all times to a
first priority, perfected Lien in favor of the Administrative Agent, for the
benefit of the Administrative Agent and the other Secured Parties, pursuant to
the terms and conditions of the Loan Documents or other security documents as
the Administrative Agent shall reasonably request.
(ex)Notwithstanding the foregoing clauses of this Section 5.14, if as of the
last day of any fiscal quarter of the Borrower, (i) the aggregate Total Assets
(without duplication) of (A) all Domestic Subsidiaries (other than any Excluded
Domestic Subsidiary) which are not Loan Parties and (B) all FSHCOs and
First-Tier Foreign Subsidiaries, in each case, whose Equity Interests are not
subject to a first priority, perfected Lien in favor of the Administrative Agent
in accordance with and subject to the limits in Section 5.14(b) (collectively,
the “Excluded Subsidiaries”) (when combined with the assets of their respective
subsidiaries, after eliminating intercompany obligations) are equal to or
greater than 5% of the Total Assets of the Borrower and its Subsidiaries on such
date or (ii) the aggregate EBITDA of all Excluded Subsidiaries (determined as if
references to the Borrower and its Subsidiaries in the definitions of “EBITDA”,
“Interest Expense” and “Net Income” were references to each such Excluded
Subsidiary and its subsidiaries) is equal to or greater than 5% of EBITDA, then
the Borrower shall, no later than ten (10) Business Days after the date on which
financial statements for such fiscal quarter are required to be delivered
pursuant to Section 5.01(b), cause (x) additional Subsidiaries to become Loan
Guarantors in accordance with Section 5.14(a) and/or (y) the Equity Interests in
additional Subsidiaries to become subject to a first priority, perfected Lien in
favor of the Administrative Agent in accordance with and subject to the limits
in Section 5.14(b), to the extent necessary for the aggregate Total Assets of
the Excluded Subsidiaries to account for less than 5% of the Total Assets of the
Borrower and its Subsidiaries and the aggregate EBITDA of the Excluded
Subsidiaries to account for less than 5% of EBITDA; provided that EBITDA for all
purposes under this Section 5.14(c) shall be calculated for the most recently
ended period of four (4) consecutive fiscal quarters of the Borrower.
(ey)Without limiting the foregoing, each Loan Party will, and will cause each
Subsidiary to, execute and deliver, or cause to be executed and delivered, to
the Administrative Agent such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements and other documents and such other actions or
deliveries of the type required by Section 4.01, as applicable), which may be
required by any Requirement of Law or which the Administrative Agent may, from
time to time, reasonably request to carry out the terms and conditions of this
Agreement and the other Loan Documents and to ensure perfection and priority of
the Liens created or intended to be created by the Collateral Documents, all in
form and substance reasonably satisfactory to the Administrative Agent and all
at the expense of the Loan Parties.
(ez)If any material assets (excluding any Excluded Assets) are acquired by any
Loan Party after the Effective Date (other than assets constituting Collateral
under the Security Agreement that become subject to the Lien under the Security
Agreement upon acquisition thereof), the Borrower will (i) notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, cause such assets to be subjected
to a Lien securing the Secured Obligations and (ii) take, and cause each
applicable Loan Party to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such Liens, including
actions described in paragraph (a) of this Section, all at the expense of the
Loan Parties.
(fa)Notwithstanding the foregoing clauses of this Section 5.14, if the Borrower
or any Subsidiary incurs Permitted Acquisition Debt which Permitted Acquisition
Debt is secured by Excluded Assets, the Administrative Agent and the Lenders
hereby agree to release any Liens in their favor on such Excluded Assets (if
any), upon the written request of the Borrower or the applicable Subsidiary,
subject to the terms and conditions of Section 9.02(c)(A).
SECTION 5.15 Post-Closing Obligations.

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Exhibit 10.23

(fb)With respect to any deposit account, securities account or commodity account
of the Borrower or any Loan Party other than any Excluded Deposit Accounts or De
Minimis Accounts (each term as defined in the Security Agreement), within sixty
(60) days following the Effective Date (or such later date as the Administrative
Agent may agree in its sole discretion), the Borrower or the applicable Loan
Party will either (a) close such account, provide evidence of such closure
satisfactory to the Administrative Agent, and transfer the remaining balance of
such account, if any, to an account held with JPMCB, or (b) provide to the
Administrative Agent a Deposit Account Control Agreement, Securities Account
Control Agreement or Commodity Account Control Agreement, as applicable, for
such account in accordance with Section 4.13 of the Security Agreement.
(fc)Within sixty (60) days following the Effective Date (or such later date as
the Administrative Agent may agree in its sole discretion), the Borrower and
each applicable Subsidiary will, and will cause each applicable Subsidiary to,
execute and deliver, or cause to be executed and delivered, to the
Administrative Agent such documents, agreements and instruments (each to be in
form and substance reasonably acceptable to the Administrative Agent), and will
take or cause to be taken such further actions (including the filing and
recording of financing statements and other documents and such other actions or
deliveries of the type required by Section 4.01 and/or the equivalents of any of
the foregoing in the applicable foreign jurisdictions, as applicable), which may
be required by any Requirement of Law or which the Administrative Agent may
reasonably request:
(i) to cause the Equity Interests of Dril-Quip Brazil to be subject to a first
priority, perfected Lien in favor of the Administrative Agent, for the benefit
of the Administrative Agent and the other Secured Parties, in accordance with
and subject to the limits in Section 5.14 and pursuant to the other terms and
conditions of the Loan Documents; and
(ii)to cause the Equity Interests of DRQ to be subject to a first priority,
perfected Lien in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Parties, in accordance with and
subject to the limits in Section 5.14 and pursuant to the other terms and
conditions of the Loan Documents (the “DRQ Pledge”); provided that, if, after
the Effective Date, the Borrower reasonably determines in good faith, upon
consultation with its outside advisors, that providing the DRQ Pledge would
result in material adverse tax consequences to the Borrower and its
Subsidiaries, the Borrower shall inform the Administrative Agent in writing of
such determination and, in lieu of delivering the DRQ Pledge, shall comply with
the requirements of Section 5.15(c) below.
(fd)If the Borrower reasonably determines not to provide the DRQ Pledge in
accordance with the proviso to Section 5.15(b)(ii), then the Borrower and each
applicable Subsidiary will (i) within sixty (60) days following the Effective
Date (or such later date as the Administrative Agent may agree in its sole
discretion), cause (A) each Person that directly holds any Equity Interests in
DRQ (each, a “DRQ Parent”) that is not then a Loan Party to become a Loan Party
by executing a Joinder Agreement, whereupon each such DRQ Parent shall
automatically become a Loan Guarantor and shall grant Liens to the
Administrative Agent in any of its property constituting Collateral (other than
any Equity Interests of DRQ held by such DRQ Parent) and (B) 100% of the issued
and outstanding Equity Interests of each DRQ Parent to become subject to a first
priority, perfected Lien in favor of the Administrative Agent and (ii) cause
100% of the issued and outstanding Equity Interests of DRQ and each DRQ Parent
to be held by one or more Loan Parties at all times.
(fe)The Borrower’s failure to comply with any requirement of this Section 5.15
on or before the dates specified in this Section 5.15 shall constitute an
immediate Event of Default.

ARTICLE VI

NEGATIVE COVENANTS
Until all of the Secured Obligations have been Paid in Full, each Loan Party
executing this Agreement covenants and agrees, jointly and severally with all of
the other Loan Parties, with the Lenders that:
SECTION 6.01 Indebtedness. No Loan Party will, nor will it permit any Subsidiary
to, create, incur, assume or suffer to exist any Indebtedness, except:
(ff)the Secured Obligations;
(fg)Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
any extensions, renewals, refinancings and replacements of any such Indebtedness
in accordance with clause (g) hereof;
(fh)Indebtedness consisting of letters of credit or bank guarantees in an
aggregate amount not to exceed $16,000,000;

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Exhibit 10.23

(fi)Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary, provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to the Borrower or any other Loan Party
shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any
Subsidiary that is not a Loan Party shall be subordinated to the Secured
Obligations on terms reasonably satisfactory to the Administrative Agent;
(fj)Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by the Borrower or any other Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 6.04 and
(iii) Guarantees permitted under this clause (e) shall be subordinated to the
Secured Obligations on the same terms as the Indebtedness so Guaranteed is
subordinated to the Secured Obligations;
(fk)term loan Indebtedness, on terms reasonably acceptable to the Administrative
Agent, of the Borrower or any Subsidiary incurred in connection with, or to
finance, an Acquisition with a purchase price greater than or equal to
$25,000,000, and any Indebtedness assumed in connection with such Acquisition,
and extensions, renewals and replacements of any such Indebtedness in accordance
with clause (g) below; provided that (i) such Indebtedness is incurred prior to
or within one hundred twenty (120) days after such Acquisition, (ii) the
aggregate principal amount of Indebtedness permitted by this clause (f) together
with any Refinance Indebtedness in respect thereof permitted by clause (g)
below, does not exceed $200,000,000 at any time outstanding, (iii) if any such
Indebtedness is secured, (A) such Indebtedness is only secured by Liens
permitted under Section 6.02(d), (B) such Indebtedness is not secured by any
Collateral and (C) the Administrative Agent has received all documentation
required to be delivered in connection therewith under Section 6.02(d)(ii), as
applicable (such Indebtedness being referred to herein as the “Permitted
Acquisition Debt”);
(fl)Indebtedness which represents extensions, renewals, refinancing or
replacements (such Indebtedness being so extended, renewed, refinanced or
replaced being referred to herein as the “Refinance Indebtedness”) of any of the
Indebtedness described in clauses (b) and (f) and (i) hereof (such Indebtedness
being referred to herein as the “Original Indebtedness”); provided that (i) such
Refinance Indebtedness does not increase the principal amount of the Original
Indebtedness, (ii) such Refinance Indebtedness does not increase the interest
rate of the Original Indebtedness, except as necessary to reflect market terms
and conditions at the time of the incurrence or issuance of such Refinance
Indebtedness (as reasonably determined by the Borrower in good faith) (iii) any
Liens securing such Refinance Indebtedness are not extended to any additional
property of any Loan Party or any Subsidiary, (iv) no Loan Party or any
Subsidiary that is not originally obligated with respect to repayment of such
Original Indebtedness is required to become obligated with respect to such
Refinance Indebtedness, (v) such Refinance Indebtedness does not result in a
shortening of the average weighted maturity of such Original Indebtedness,
(vi) the terms of such Refinance Indebtedness other than fees and interests are
not less favorable to the obligor thereunder than the original terms of such
Original Indebtedness and (vii) if such Original Indebtedness was subordinated
in right of payment to the Secured Obligations, then the terms and conditions of
such Refinance Indebtedness must include subordination terms and conditions that
are at least as favorable to the Administrative Agent and the Lenders as those
that were applicable to such Original Indebtedness;
(fm)Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;
(fn)Capital Lease Obligations not to exceed $25,000,000 in the aggregate at any
time;
(fo)Swap Agreement Obligations permitted by Section 6.07;
(fp)Indebtedness of any Loan Party in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business; and
(fq)Subordinated Indebtedness and other Indebtedness in an aggregate principal
amount not to exceed $5,000,000 outstanding at any time.
SECTION 6.02 Liens. No Loan Party will, nor will it permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset
(including, for the avoidance of doubt, (i) real property and (ii) patents,
copyrights, trademarks or licenses) now owned or hereafter acquired by it, or
assign or sell any income or revenues (including Accounts) or rights in respect
of any thereof, except:
(fr)Liens created pursuant to any Loan Document;
(fs)Permitted Encumbrances;

--------------------------------------------------------------------------------

Exhibit 10.23

(ft)any Lien on any property or asset of the Borrower or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof, and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(fu)Liens on fixed or capital assets, including real property, improvements,
fixtures and equipment, acquired, constructed or improved by the Borrower or any
Subsidiary (other than any Collateral); provided that, (i) only Permitted
Acquisition Debt is secured by such Liens, (ii) with respect to any Liens on
real property where any Collateral is located or to be located, the holders of
Permitted Acquisition Debt (or an agent or representative thereof) have,
concurrently with the incurrence thereof, delivered to the Administrative Agent
such documentation as the Administrative Agent may require to establish the
Administrative Agent’s access to, and rights and interests in respect of, such
Collateral, before, during and after any exercise of remedies by any such holder
of Permitted Acquisition Debt (or an agent or representative thereof), (iii)
such Liens and the Permitted Acquisition Debt secured thereby are incurred prior
to or within one hundred twenty (120) days after such Acquisition, construction
or improvement, (iv) the Indebtedness secured by such Liens does not exceed 100%
of the cost of such Acquisition, construction or improvement, and (v) such Liens
do not apply to any other property or asset of the Borrower or any Subsidiary;
(fv)any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset (other than Accounts and Inventory) of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(fw)(i) Liens of a collecting bank arising in the ordinary course of business
under Section 4-208 of the UCC in effect in the relevant jurisdiction covering
only the items being collected upon and (ii) banker’s Liens and customary
contractual rights of setoff arising in the ordinary course of business with
respect to funds and securities in accounts maintained by the Borrower or any
Subsidiary with banks or other financial institutions and not given in
connection with the incurrence of Indebtedness;
(fx)Liens arising out of Sale and Leaseback Transactions permitted by
Section 6.06;
(fy)Liens that secure, or are deemed to secure, (i) Capital Lease Obligations
permitted by Section 6.01(i) and (ii) any other lease obligations incurred by
the Borrower or any Subsidiary in the ordinary course of business;
(fz)Liens granted by a Subsidiary that is not a Loan Party in favor of the
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary; and
(ga)Liens on cash or Permitted Investments securing Indebtedness owing under
Section 6.01(c); provided, that such Liens do not secure obligations in excess
of 105% of the stated amount of such Indebtedness.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to (x) any Loan Party’s (A) Accounts, other
than those permitted under clause (a) of the definition of Permitted
Encumbrances and clause (a) above and (B) Inventory, other than those permitted
under clauses (a) and (b) of the definition of Permitted Encumbrances and
clause (a) above and (y) any Equity Interest of any Subsidiary, other than those
permitted under clauses (a) and (b) above.
SECTION 6.03 Fundamental Changes.
(gb)No Loan Party will, nor will it permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall
have occurred and be continuing (i) any Subsidiary of the Borrower that is not a
Loan Party may merge into (A) the Borrower in a transaction in which the
Borrower is the surviving entity, (B) any Loan Party (other than the Borrower)
in a transaction in which the surviving entity is a Loan Party or (C) any other
Subsidiary of the Borrower that is not a Loan Party, (ii) any Loan Party (other
than the Borrower) may merge into any other Loan Party in a transaction in which
the surviving entity is a Loan Party and (iii) any Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders (it being understood that in the case of any
liquidation or dissolution of a Subsidiary that is a Loan Party, such Subsidiary
shall at or before the time of such liquidation or dissolution transfer all its
assets to another Subsidiary that is a Loan Party);

--------------------------------------------------------------------------------

Exhibit 10.23

provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
(gc)No Loan Party will, nor will it permit any Subsidiary to, engage to any
material extent in any business other than businesses of the type conducted by
the Borrower and its Subsidiaries on the date hereof and businesses reasonably
related thereto.
(gd)No Loan Party will, nor will it permit any Subsidiary to, change its fiscal
year from the basis in effect on the Effective Date.
(ge)No Loan Party will change the accounting basis upon which its financial
statements are prepared.
(gf)No Loan Party will change the tax filing elections it has made under the
Code.
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any Subsidiary to, form any subsidiary after the
Effective Date, or purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Loan Party and a wholly owned Subsidiary prior to
such merger) any evidence of Indebtedness or Equity Interests or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit (whether through purchase of assets, merger or otherwise) (in each case, an
“Investment”), except:
(gg)Permitted Investments;
(gh)Investments in existence on the date hereof and described in Schedule 6.04;
(gi)Investments by the Borrower and the Subsidiaries in Equity Interests in
their respective Subsidiaries, provided that (i) any such Equity Interests held
by a Loan Party shall be pledged pursuant to the Security Agreement (subject to
the limitations applicable to Equity Interests of a Foreign Subsidiary referred
to in Section 5.13) and (ii) the aggregate amount of Investments by Loan Parties
in Subsidiaries that are not Loan Parties (together with outstanding
intercompany loans permitted under clause (ii) to the proviso to Section 6.04(d)
and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall
(A) not exceed $5,000,000 at any time outstanding (in each case, determined at
the time of making each such Investment and without regard to any write-downs or
write-offs) or (B) be subject to the satisfaction of the Payment Condition on a
pro forma basis after giving effect thereto;
(gj)loans or advances made by any Loan Party to any Subsidiary and made by any
Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such
loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Security Agreement and (ii) the amount of such loans and
advances made by Loan Parties to Subsidiaries that are not Loan Parties
(together with outstanding Investments permitted under clause (ii) to the
proviso to Section 6.04(c) and outstanding Guarantees permitted under the
proviso to Section 6.04(e)) shall (A) not exceed $5,000,000 at any time
outstanding (in each case determined without regard to any write-downs or
write-offs) or (B) be subject to the satisfaction of the Payment Condition on a
pro forma basis after giving effect thereto;
(gk)Guarantees constituting Indebtedness permitted by Section 6.01, provided
that the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party (together with outstanding
Investments permitted under clause (ii) to the proviso to Section 6.04(c) and
outstanding intercompany loans permitted under clause (ii) to the proviso to
Section 6.04(d)) shall not exceed $5,000,000 at any time outstanding (in each
case determined without regard to any write-downs or write-offs);
(gl)loans or advances made by a Loan Party to its employees on an arms-length
basis in the ordinary course of business consistent with past practices for
travel and entertainment expenses, relocation costs and similar purposes up to a
maximum of $250,000 in the aggregate at any one time outstanding;
(gm)notes payable, or stock or other securities issued by Account Debtors to a
Loan Party pursuant to negotiated agreements with respect to settlement of such
Account Debtor’s Accounts in the ordinary course of business;
(gn)Investments in, or deemed to be made in, Account Debtors by virtue of
extended payment terms granted in the ordinary course of business for some or
all of such Account Debtor’s Accounts;
(go)Investments in the form of Swap Agreements permitted by Section 6.07;
(gp)Investments of any Person existing at the time such Person becomes a
Subsidiary of the Borrower or consolidates or merges with the Borrower or any of
the Subsidiaries (including in connection with a permitted acquisition) so long
as such Investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;
(gq)Investments received in connection with the disposition of assets permitted
by Section 6.05;

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Exhibit 10.23

(gr)Investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;
(gs)Investments in Permitted Acquisitions, subject to the satisfaction of the
Payment Condition on a pro forma basis after giving effect to such Investment;
(gt)Investments in property, the payments for which constitute Capital Lease
Obligations permitted by Section 6.01(i); and
(gu)other Investments in an aggregate amount not to exceed $1,000,000 at any
time.
SECTION 6.05 Asset Sales. No Loan Party will, nor will it permit any Subsidiary
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will the Borrower permit any Subsidiary to
issue any additional Equity Interest in such Subsidiary (other than to the
Borrower or another Subsidiary in compliance with Section 6.04), except:
(gv)sales, transfers and dispositions of (i) Inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property in
the ordinary course of business;
(gw)sales, transfers and dispositions of assets to the Borrower or any
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Loan Party shall be made in compliance with
Section 6.09; provided, further that compliance with Section 6.09(a)(i) shall
not be required, subject to the satisfaction of the Payment Condition on a pro
forma basis after giving effect to such sale, transfer or disposition;
(gx)sales, transfers and dispositions of Accounts in connection with the
compromise, settlement or collection thereof;
(gy)sales, transfers and dispositions of Permitted Investments and other
investments permitted by clauses (i) and (k) of Section 6.04;
(gz)Sale and Leaseback Transactions permitted by Section 6.06;
(ha)dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Borrower or any Subsidiary;
(hb)the sale to Ardyne of TIW Corporation’s casing pulling tool business
comprised of approximately twenty-four (24) casing pulling tools and the
associated intellectual property, provided that the aggregate fair market value
of such sale made in reliance upon this paragraph (g) shall not exceed
$10,000,000;
(hc)licenses, sublicenses, leases and subleases, in each case, in the ordinary
course of business and which do not materially interfere with the business of
the Borrower and the Subsidiaries; and
(hd)sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other clause of this Section, provided that
the aggregate net book value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (i) shall not exceed $5,000,000
during any fiscal year of the Borrower;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b), (c) and (f) above) shall
be made for fair value and for at least 75% cash consideration.
SECTION 6.06 Sale and Leaseback Transactions. No Loan Party will, nor will it
permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred (a “Sale and
Leaseback Transaction”), except for any such sale of any fixed or capital assets
by the Borrower or any Subsidiary that is made for cash consideration in an
amount not less than the fair value of such fixed or capital asset and is
consummated within ninety (90) days after the Borrower or such Subsidiary
acquires or completes the construction of such fixed or capital asset.
SECTION 6.07 Swap Agreements. No Loan Party will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which the Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of the Borrower
or any Subsidiary), and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from floating to fixed rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness.
(he)No Loan Party will, nor will it permit any Subsidiary to, declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except (i) the

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Exhibit 10.23

Borrower may declare and pay dividends with respect to its Equity Interests
payable solely in additional shares of its Equity Interests, and, with respect
to its preferred Equity Interests, payable solely in additional shares of such
preferred Equity Interests or in shares of its Equity Interests,
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
Equity Interests, (iii) the Borrower may purchase its Equity Interests from
employees upon vesting of stock awards in order to satisfy any tax withholding
obligations with respect to such vesting, provided that the aggregate amount of
all such purchases made during any fiscal year shall not exceed $5,000,000 and
(iv) the Borrower may make other Restricted Payments, including any Restricted
Payment with respect to its preferred Equity Interests, so long as the Payment
Condition is satisfied on a pro forma basis at the time such Restricted Payment
is made and after giving effect to such payment.
(hf)No Loan Party will, nor will it permit any Subsidiary to, make or agree to
pay or make, directly or indirectly, any payment or other distribution (whether
in cash, securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:
(i)payment of Indebtedness created under the Loan Documents;
(ii)payment of regularly scheduled interest and principal payments as and when
due in respect of any Indebtedness permitted under Section 6.01, other than
payments in respect of the Subordinated Indebtedness prohibited by the
subordination provisions thereof;
(iii)refinancings of Indebtedness to the extent permitted by Section 6.01;
(iv)payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness
to the extent such sale or transfer is permitted by the terms of Section 6.05;
and
(v)voluntary prepayments of Indebtedness, so long as the Payment Condition is
satisfied on a pro forma basis at the time such voluntary prepayment is made and
after giving effect to such prepayment.
SECTION 6.09 Transactions with Affiliates. No Loan Party will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to such Loan
Party or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among the Borrower and any
Subsidiary that is a Loan Party not involving any other Affiliate, (c) any
investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness
permitted under Section 6.01(c), (e) any Restricted Payment permitted by
Section 6.08, (f) loans or advances to employees permitted under Section 6.04,
(g) the payment of reasonable fees to directors of the Borrower or any
Subsidiary who are not employees of the Borrower or any Subsidiary, and
compensation and employee benefit arrangements paid to, and indemnities provided
for the benefit of, directors, officers or employees of the Borrower or its
Subsidiaries in the ordinary course of business and (h) any issuances of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment agreements, Equity Interest options
and Equity Interest ownership plans approved by the Borrower’s board of
directors, board of managers or other governing body, as applicable.
SECTION 6.10 Restrictive Agreements. No Loan Party will, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Loan Party or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any of its Equity Interests or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by any Requirement of Law or by any Loan
Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof and (vi) clause (b) of

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Exhibit 10.23

the foregoing shall not apply to customary provisions in any agreement relating
to Permitted Acquisition Debt that is no more restrictive or burdensome than the
comparable provision in this Agreement.
SECTION 6.11 Amendment of Material Documents. No Loan Party will, nor will it
permit any Subsidiary to, amend, modify or waive any of its rights under (a) any
agreement relating to any Subordinated Indebtedness, or (b) its charter,
articles or certificate of incorporation or organization, by-laws, operating,
management or partnership agreement or other organizational or governing
documents, in each case, to the extent any such amendment, modification or
waiver would be materially adverse to the Lenders.
SECTION 6.12 Fixed Charge Coverage Ratio. When an Activation Period is in
effect, the Borrower will not permit the Fixed Charge Coverage Ratio, as of the
end of any fiscal quarter, to be less than 1.00 to 1.00, commencing with the
fiscal quarter most recently ended prior to the commencement of such Activation
Period for which financial statements have been delivered in accordance with
Section 5.01(b) and for each fiscal quarter thereafter during which the
Activation Period remains in effect.

ARTICLE VII

EVENTS OF DEFAULT
If any of the following events (“Events of Default”) shall occur:
(hg)the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(hh)the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days;
(hi)any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in, or in connection with, this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect (without
duplication of any materiality qualifier therein) when made or deemed made;
provided that, if (i) such Loan Party or Subsidiary was not aware that such
representation or warranty was incorrect at the time such representation or
warranty was made or deemed made, (ii) the fact, event or circumstance resulting
in such incorrect representation or warranty is capable of being cured,
corrected or otherwise remedied and (iii) such fact, event or circumstance
resulting in such incorrect representation or warranty shall have been cured,
corrected or otherwise remedied within thirty (30) days from the date a
Responsible Officer of any Loan Party or Subsidiary obtains knowledge thereof
(including, without limitation, upon notice by the Administrative Agent or any
Lender), such incorrect representation or warranty shall not constitute a
Default or an Event of Default for purposes of the Loan Documents;
(hj)any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence), 5.08, 5.14, 5.15 or in Article VI;
(hk)any Loan Party shall fail to observe or perform any covenant, condition or
agree-ment contained in this Agreement (other than those which constitute a
default under another clause of this Article), and such failure shall continue
unremedied for a period of (i) five (5) Business Days after the earlier of any
Loan Party’s Knowledge of such breach or notice thereof from the Administrative
Agent (which notice will be given at the request of any Lender) if such breach
relates to terms or provisions of Section 5.01, 5.02 (other than
Section 5.02(a)), 5.04, 5.07, 5.10, or 5.13 of this Agreement or (ii) thirty
(30) days after the earlier of any Loan Party’s Knowledge of such breach or
notice thereof from the Administrative Agent (which notice will be given at the
request of any Lender) if such breach relates to terms or provisions of any
other Section of this Agreement, provided that, with respect to the foregoing
clause (ii), (A) if such failure does not involve the payment of money to any
Person and is not susceptible to cure within such thirty (30)-day period, (B)
such Person is proceeding with diligence and good faith to cure such failure and
such failure is susceptible to cure and (C) the existence of such failure has
not had, and would not be reasonably expected to have, a Material Adverse
Effect, such thirty (30)-day period may be extended in the Administrative
Agent’s Permitted

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Exhibit 10.23

Discretion as may be necessary to cure such failure, such extended period not to
exceed sixty (60) days in the aggregate (inclusive of the original thirty
(30)-day period);
(hl)any Loan Party or Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(hm)(i) any event or condition occurs that results in any Material Indebtedness
(other than any Indebtedness under any Swap Agreement) becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided that
this clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such
Indebtedness to the extent such sale or transfer is permitted by Section 6.05 or
(ii) there occurs under any Swap Agreement an Early Termination Date (or similar
term, as defined in such Swap Agreement) resulting from (A) an event of default
under such Swap Agreement as to which a Loan Party or a Subsidiary is the
Defaulting Party (or similar term, as defined in such Swap Agreement) or (B) any
Termination Event (or similar term, as defined in such Swap Contract) under such
Swap Agreement (with or without the giving of notice, the lapse of time or
both), and, in either event, the maximum aggregate payment owed by the
applicable Loan Party or Subsidiary thereunder (giving effect to any netting
agreements) exceeds $10,000,000;
(hn)an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or Subsidiary or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Loan Party or Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for
sixty (60) days or an order or decree approving or ordering any of the foregoing
shall be entered;
(ho)any Loan Party or Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar offi-cial
for such Loan Party or such Subsidiary or for a substantial part of its assets,
(iv) file an answer admit-ting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
fore-going;
(hp)any Loan Party or Subsidiary shall become unable, admit in writing its
inability, or publicly declare its intention not to, or fail generally to pay
its debts as they become due;
(hq)(i) one or more judgments for the payment of money in an aggregate amount in
excess of $5,000,000 shall be rendered against any Loan Party, any Subsidiary or
any combination thereof (to the extent not covered by independent third-party
insurance as to which the insurer is rated at least A- by A.M. Best Company, has
been notified of the potential claim and does not dispute coverage) and the same
shall remain undischarged for a period of thirty (30) consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of any Loan Party
or Subsidiary to enforce any such judgment; or (ii) any Loan Party or Subsidiary
shall fail within thirty (30) days to discharge one or more non-monetary
judgments or orders which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, which judgments or orders, in any
such case, are not stayed on appeal or otherwise being appropriately contested
in good faith by proper proceedings diligently pursued;
(hr)an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
would reasonably be expected to result in a Material Adverse Effect;
(hs)a Change in Control shall occur;
(ht)the occurrence of any “default”, as defined in any Loan Document (other than
this Agreement), or the breach of any of the terms or provisions of any Loan
Document (other than this Agreement), which default or breach continues beyond
any period of grace therein provided (other than any such default or breach by
the Administrative Agent or any Lender);
(hu)the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty or any Loan Guarantor shall fail to comply with

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Exhibit 10.23

any of the terms or provisions of the Loan Guaranty to which it is a party
beyond any period of grace therein provided, or any Loan Guarantor shall deny
that it has any further liability under the Loan Guaranty or any Obligation
Guaranty to which it is a party, or shall give notice to such effect, including,
but not limited to notice of termination delivered pursuant to Section 10.08;
(hv)except as permitted by the terms of any Collateral Document, (i) any
Collateral Document shall for any reason fail to create a valid security
interest in any Collateral purported to be covered thereby or (ii) any Lien
securing any Secured Obligation shall cease to be a perfected, first priority
Lien, provided, that an Event of Default under this clause (p) shall not be
deemed to have occurred so long as the aggregate value of all Collateral
affected by any event described in the foregoing subclauses (i) and (ii) does
not exceed $500,000 at any time;
(hw)any Collateral Document shall fail to remain in full force or effect or any
action shall be taken by any Loan Party to discontinue or to assert the
invalidity or unenforceability of any Collateral Document; or
(hx)any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (other than solely
as a result of acts or omissions on the part of the Administrative Agent, any
Lender or their respective counsel) or any Loan Party shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in any
action or inaction that evidences its assertion, that any material provision of
any of the Loan Documents has ceased to be or otherwise is not valid, binding
and enforceable in accordance with its terms;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments (including the Swingline Commitment), whereupon the Commitments
shall terminate immediately, (ii) declare the Loans then outstanding to be due
and payable in whole (or in part, but ratably as among the Classes of Loans and
the Loans of each Class at the time outstanding, in which case any principal not
so declared to be due and payable may thereafter be declared to be due and
payable), whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, in each case without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower, and (iii) require
cash collateral for the LC Exposure in accordance with Section 2.06(j) hereof;
and in the case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Commitments (including the Swingline
Commitment) shall automatically terminate and the principal of the Loans then
outstanding and the cash collateral for the LC Exposure, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall automatically become due and payable, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower. Upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent may, and at the request of the
Required Lenders shall, increase the rate of interest applicable to the Loans
and other Obligations as set forth in this Agreement and exercise any rights and
remedies provided to the Administrative Agent under the Loan Documents or at law
or equity, including all remedies provided under the UCC.
ARTICLE VIII

THE ADMINISTRATIVE AGENT
SECTION 8.01 Appointment. Each of the Lenders, on behalf of itself and any of
its Affiliates that are Secured Parties and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto. In addition, to the extent required under
the laws of any jurisdiction other than the U.S., each of the Lenders and the
Issuing Bank hereby grants to the Administrative Agent any required powers of
attorney to execute any Collateral Document governed by the laws of such
jurisdiction on such Lender’s or Issuing Bank’s behalf. (a) The provisions of
this Article are solely for the benefit of the Administrative Agent and the
Lenders (including the Swingline Lender and the Issuing Bank), and (b) the Loan
Parties shall not have rights as a third party beneficiary of any of such
provisions. It is understood and agreed that the use of the term “agent” as used
herein or in any other Loan Documents (or any similar term) with reference to
the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any

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Exhibit 10.23

applicable law. Instead, such term is used as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
SECTION 8.02 Rights as a Lender. The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with any Loan Party
or any Subsidiary or any Affiliate thereof as if it were not the Administrative
Agent hereunder.
SECTION 8.03 Duties and Obligations. The Administrative Agent shall not have any
duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Administrative Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and, (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to any
Loan Party or any Subsidiary that is communicated to or obtained by the bank
serving as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct as determined by a final nonappealable judgment of a court of
competent jurisdiction. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Loan Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent. Notwithstanding anything to the contrary in this
Agreement, the Administrative Agent shall not be responsible or have any
liability for, or have any duty to ascertain, inquire into, monitor or enforce,
compliance with the provisions of this Agreement relating to Disqualified
Institutions. Without limiting the generality of the foregoing, the
Administrative Agent shall not ý(x) be obligated to ascertain, monitor or
inquire as to whether any Lender or Participant or prospective Lender or
Participant is a Disqualified ýInstitution or (y) have any liability with
respect to or arising out of any assignment or participation of Loans, or
disclosure of confidential information, to any ýDisqualified Institution.ý Each
Lender represents and warrants to the parties hereto that at the time it becomes
a Lender, it is not a Disqualified Institution.
SECTION 8.04 Reliance. The Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel, independent accountants and other experts selected by it,
and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.
SECTION 8.05 Actions through Sub-Agents. The Administrative Agent may perform
any and all of its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as the
Administrative Agent.

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Exhibit 10.23

SECTION 8.06 Resignation. Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York having assets
at such time in excess of $10,000,000,000, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Administrative Agent hereunder by its
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor, unless otherwise agreed by the Borrower and such
successor. Notwithstanding the foregoing, in the event no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its intent to resign, the retiring Administrative Agent may give
notice of the effectiveness of its resignation to the Lenders, the Issuing Bank
and the Borrower, whereupon, on the date of effectiveness of such resignation
stated in such notice, (a) the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents,
provided that, solely for purposes of maintaining any security interest granted
to the Administrative Agent under any Collateral Document for the benefit of the
Secured Parties, the retiring Administrative Agent shall continue to be vested
with such security interest as collateral agent for the benefit of the Secured
Parties and, in the case of any Collateral in the possession of the
Administrative Agent, shall continue to hold such Collateral, in each case until
such time as a successor Administrative Agent is appointed and accepts such
appointment in accordance with this paragraph (it being understood and agreed
that the retiring Administrative Agent shall have no duly or obligation to take
any further action under any Collateral Document, including any action required
to maintain the perfection of any such security interest), and (b) the Required
Lenders shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, provided that
(i) all payments required to be made hereunder or under any other Loan Document
to the Administrative Agent for the account of any Person other than the
Administrative Agent shall be made directly to such Person and (ii) all notices
and other communications required or contemplated to be given or made to the
Administrative Agent shall also directly be given or made to each Lender and the
Issuing Bank. Following the effectiveness of the Administrative Agent’s
resignation from its capacity as such, the provisions of this Article,
Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and
indemnification provisions set forth in any other Loan Document, shall continue
in effect for the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while it was acting as Administrative Agent and in
respect of the matters referred to in the proviso under clause (a) above.
SECTION 8.07 Non-Reliance.
(hy)Each Lender acknowledges and agrees that the extensions of credit made
hereunder are commercial loans and letters of credit and not investments in a
business enterprise or securities. Each Lender further represents that it is
engaged in making, acquiring or holding commercial loans in the ordinary course
of its business and has, independently and without reliance upon the
Administrative Agent, any arranger of this credit facility or any amendment
thereto or any other Lender and their respective Related Parties and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement as a Lender, and to make,
acquire or hold Loans hereunder. Each Lender shall, independently and without
reliance upon the Administrative Agent, any arranger of this credit facility or
any amendment thereto or any other Lender and their respective Related Parties
and based on such documents and informa-tion (which may contain material,
non-public information within the meaning of the United States securities laws
concerning the Borrower and its Affiliates) as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder and in deciding
whether or to the extent to which it will continue as a Lender or assign or
otherwise transfer its rights, interests and obligations hereunder.
(hz)Each Lender hereby agrees that (i) it has requested a copy of each Report
prepared by or on behalf of the Administrative Agent; (ii) the Administrative
Agent (A) makes no representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or

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Exhibit 10.23

omission contained in or relating to a Report and (B) shall not be liable for
any information contained in any Report; (iii) the Reports are not comprehensive
audits or examinations, and that any Person performing any field examination
will inspect only specific information regarding the Loan Parties and will rely
significantly upon the Loan Parties’ books and records, as well as on
representations of the Loan Parties’ personnel and that the Administrative Agent
undertakes no obligation to update, correct or supplement the Reports; (iv) it
will keep all Reports confidential and strictly for its internal use, not share
the Report with any Loan Party or any other Person except as otherwise permitted
pursuant to this Agreement; and (v) without limiting the generality of any other
indemnification provision contained in this Agreement, (A) it will hold the
Administrative Agent and any such other Person preparing a Report harmless from
any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any extension of
credit that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender’s participation in, or the indemnifying Lender’s purchase
of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and
hold the Administrative Agent and any such other Person preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses, and other amounts (including reasonable attorneys’ fees) incurred by
the Administrative Agent or any such other Person as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
SECTION 8.08 Other Agency Titles. The Lenders (or Affiliates thereof) identified
in this Agreement, or hereafter appointed by the Administrative Agent as
“Documentation Agent”, “Lead Arranger”, “Bookrunner”, “Syndication Agent” or
other similar titles shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to the relevant Lenders in
their respective capacities as “Documentation Agent”, “Lead Arranger”,
“Bookrunner”, “Syndication Agent” or similar capacities, as applicable, as it
makes with respect to the Administrative Agent in the preceding paragraph.
SECTION 8.09 Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties.
(ia)The Lenders are not partners or co-venturers, and no Lender shall be liable
for the acts or omissions of, or (except as otherwise set forth herein in case
of the Administrative Agent) authorized to act for, any other Lender. The
Administrative Agent shall have the exclusive right on behalf of the Lenders to
enforce the payment of the principal of and interest on any Loan after the date
such principal or interest has become due and payable pursuant to the terms of
this Agreement.
(ib)In its capacity, the Administrative Agent is a “representative” of the
Secured Parties within the meaning of the term “secured party” as defined in the
UCC. Each Lender authorizes the Administrative Agent to enter into each of the
Collateral Documents to which it is a party and to take all action contemplated
by such documents. Each Lender agrees that no Secured Party (other than the
Administrative Agent) shall have the right individually to seek to realize upon
the security granted by any Collateral Document, it being understood and agreed
that such rights and remedies may be exercised solely by the Administrative
Agent for the benefit of the Secured Parties upon the terms of the Collateral
Documents. In the event that any Collateral is hereafter pledged by any Person
as collateral security for the Secured Obligations, the Administrative Agent is
hereby authorized, and hereby granted a power of attorney, to execute and
deliver on behalf of the Secured Parties any Loan Documents necessary or
appropriate to grant and perfect a Lien on such Collateral in favor of the
Administrative Agent on behalf of the Secured Parties.
SECTION 8.10 Flood Laws. JPMCB has adopted internal policies and procedures that
address requirements placed on federally regulated lenders under the National
Flood Insurance Reform Act of 1994 and related legislation (the “Flood Laws”).
JPMCB, as administrative agent or collateral agent on a syndicated facility,
will post on the applicable electronic platform (or otherwise distribute to each
Lender in the syndicate) documents that it receives in connection with the Flood
Laws. However, JPMCB reminds each Lender and Participant in the facility that,
pursuant to the Flood Laws, each federally regulated Lender (whether acting as a
Lender or Participant in the facility) is responsible for assuring its own
compliance with the flood insurance requirements.

ARTICLE IX

MISCELLANEOUS
SECTION 9.01 Notices.
(ic)Except in the case of notices and other communications expressly permitted
to be given by telephone or Electronic Systems (and subject in each case to
paragraph (b) below), all notices and other communications provided

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Exhibit 10.23

for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile, as
follows:
(i)if to any Loan Party, to the Borrower at:
Dril-Quip, Inc.
6401 N. Eldridge Parkway
Houston, Texas 77041
Attention: Chief Financial Officer
Facsimile No: (713) 939-5329

with a copy to:
Dril-Quip, Inc.
6401 N. Eldridge Parkway
Houston, Texas 77041
Attention: General Counsel
Facsimile No: (713) 690-6303

(ii)if to the Administrative Agent, JPMCB in its capacity as an Issuing Bank or
the Swingline Lender, to JPMorgan Chase Bank, N.A. at:
JPMorgan Chase Bank, N.A.
2200 Ross Avenue, 9th Floor
Mail Code: TX1-2905
Dallas, TX 75201
Attention: Ross Gilbert
Facsimile No: (214) 965-2594

provided, that any DQ List or any updates thereto on or after the Effective Date
must be sent via electronic mail to JPMDQ_Contact@jpmorgan.com to be deemed
received by the Administrative Agent.

(iii)if to any other Lender or Issuing Bank, to it at its address or facsimile
number set forth in its Administrative Questionnaire.
All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received, (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours of the
recipient, such notice or communication shall be deemed to have been given at
the opening of business on the next Business Day of the recipient, or
(iii) delivered through Electronic Systems to the extent provided in
paragraph (b) below shall be effective as provided in such paragraph.
(id)Notices and other communications to the Lenders hereunder may be delivered
or furnished by Electronic Systems pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender (provided further that, if requested by the Administrative
Agent, the Borrower will deliver original copies of any compliance and no
Default certificates delivered pursuant to Section 5.01(c) promptly after the
delivery thereof by Electronic Systems). Each of the Administrative Agent and
the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to
accept notices and other communications to it hereunder by Electronic Systems
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications. Unless the
Administrative Agent otherwise proscribes, all such notices and other
communications (i) sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient, at its e-mail
address as described in the foregoing clause (i), of notification that such
notice or communication is available and identifying the website address
therefor; provided that, for both clauses (i) and (ii) above, if such notice,

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Exhibit 10.23

e-mail or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next Business Day of the recipient.
(ie)Any party hereto may change its address, facsimile number or e-mail address
for notices and other communications hereunder by notice to the other parties
hereto.
(if)Electronic Systems.
(i)Each Loan Party agrees that the Administrative Agent may, but shall not be
obligated to, make Communications (as defined below) available to the Issuing
Bank and the other Lenders by posting the Communications on Debt Domain,
Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.
(ii)Any Electronic System used by the Administrative Agent is provided “as is”
and “as available.” The Agent Parties (as defined below) do not warrant the
adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or
statutory, including any warranty of merchantability, fitness for a particular
purpose, non-infringement of third-party rights or freedom from viruses or other
code defects, is made by any Agent Party in connection with the Communications
or any Electronic System. In no event shall the Administrative Agent or any of
its Related Parties (collectively, the “Agent Parties”) have any liability to
the Borrower or the other Loan Parties, any Lender, the Issuing Bank or any
other Person or entity for damages of any kind, including direct or indirect,
special, incidental or consequential damages, losses or expenses (whether in
tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s or
the Administrative Agent’s transmission of communications through an Electronic
System. “Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of any Loan
Party pursuant to any Loan Document or the transactions contemplated therein
which is distributed by the Administrative Agent, any Lender or the Issuing Bank
by means of electronic communications pursuant to this Section, including
through an Electronic System.
SECTION 9.02 Waivers; Amendments.
(ig)No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
any other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(ih)Except as provided in the first sentence of Section 2.09(f) (with respect to
any commitment increase) and subject to Section 2.14(c) and subject to
Section 9.02(e) below, neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived, amended or modified except (x) in
the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or (y) in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender (including any such Lender that is a Defaulting Lender),
(ii) reduce or forgive the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce or forgive any interest or fees
payable hereunder, without the written consent of each Lender (including any
such Lender that is a Defaulting Lender) directly affected thereby (provided
that any amendment or modification of the financial covenants in this Agreement
(or any defined term used therein) shall not constitute a reduction in the rate
of interest or fees for purposes of this clause (ii)), (iii) postpone any
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender (including any such Lender that is a
Defaulting Lender) directly affected thereby, (iv) change Section 2.18

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Exhibit 10.23

(b) or (d) in a manner that would alter the manner in which payments are shared,
without the written consent of each Lender (other than any Defaulting Lender),
(v) increase the advance rates set forth in the definition of Borrowing Base or
add new categories of eligible assets, without the written consent of each
Lender (other than any Defaulting Lender), (vi) change any of the provisions of
this Section or the definition of “Required Lenders” or any other provision of
any Loan Document specifying the number or percentage of Lenders (or Lenders of
any Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (other than any Defaulting Lender) directly affected thereby,
(vii) change Section 2.20, without the consent of each Lender (other than any
Defaulting Lender), (viii) release any Guarantor from its obligation under its
Loan Guaranty or Obligation Guaranty, as applicable (except as otherwise
permitted herein or in the other Loan Documents), without the written consent of
each Lender (other than any Defaulting Lender), or (ix) except as provided in
clause (c) of this Section or in any Collateral Document, release all or
substantially all of the Collateral, without the written consent of each Lender
(other than any Defaulting Lender); provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without
the prior written consent of the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be (it being understood that any amendment to
Section 2.20 shall require the consent of the Administrative Agent, the Issuing
Bank and the Swingline Lender); provided further that no such agreement shall
amend or modify the provisions of Section 2.06 or any letter of credit
application and any bilateral agreement between the Borrower and the Issuing
Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights
and obligations between the Borrower and the Issuing Bank in connection with the
issuance of Letters of Credit without the prior written consent of the
Administrative Agent and the Issuing Bank, respectively. The Administrative
Agent may also amend the Commitment Schedule to reflect assignments entered into
pursuant to Section 9.04. Any amendment, waiver or other modification of this
Agreement or any other Loan Document that by its terms affects the rights or
duties under this Agreement of the Lenders of one or more Classes (but not the
Lenders of any other Class), may be effected by an agreement or agreements in
writing entered into by the Borrower and the requisite number or percentage in
interest of each affected Class of Lenders that would be required to consent
thereto under this Section if such Class of Lenders were the only Class of
Lenders hereunder at the time.
(ii)The Lenders and the Issuing Bank hereby irrevocably authorize the
Administrative Agent, at its option and in its sole discretion, to release any
Liens granted to the Administrative Agent by the Loan Parties on any Collateral
(i) upon the Payment in Full of all Secured Obligations, (ii) constituting
property being sold or disposed of if the Loan Party disposing of such property
certifies to the Administrative Agent that the sale or disposition is made in
compliance with the terms of this Agreement (and the Administrative Agent may
rely conclusively on any such certificate, without further inquiry), and to the
extent that the property being sold or disposed of constitutes 100% of the
Equity Interests of a Subsidiary, the Administrative Agent is authorized to
release any Loan Guaranty provided by such Subsidiary, (iii) constituting
property leased to a Loan Party under a lease which has expired or been
terminated in a transaction permitted under this Agreement, or (iv) as required
to effect any sale or other disposition of such Collateral in connection with
any exercise of remedies of the Administrative Agent and the Lenders pursuant to
Article VII. Except as provided in the preceding sentence, the Administrative
Agent will not release any Liens on Collateral without the prior written
authorization of the Required Lenders; provided that, the Administrative Agent
may in its discretion, (A) release its Liens on any Excluded Assets and (B)
release its Liens on Collateral valued in the aggregate not in excess of
$2,000,000 during any fiscal year without the prior written authorization of the
Required Lenders (it being agreed that the Administrative Agent may rely
conclusively on one or more certificates of the Borrower as to the value of any
Collateral to be so released, without further inquiry). Any such subordination
or release, as applicable, shall not in any manner discharge, affect, or impair
the Obligations or any Liens (other than those expressly being released) upon
(or obligations of the Loan Parties in respect of) all interests retained by the
Loan Parties, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral. Any execution and delivery by the
Administrative Agent of documents in connection with any such subordination or
release, as applicable, shall be without recourse to or warranty by the
Administrative Agent.
(ij)If, in connection with any proposed amendment, waiver or consent requiring
the consent of “each Lender” or “each Lender affected thereby,” the consent of
the Required Lenders is obtained, but the consent of other necessary Lenders is
not obtained (any such Lender whose consent is necessary but has not been
obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrower may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrower, the
Administrative Agent and the Issuing Bank shall agree, as of such date,

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Exhibit 10.23

to purchase for cash the Loans and other Obligations due to the Non-Consenting
Lender pursuant to an Assignment and Assumption and to become a Lender for all
purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause  (b) of Section 9.04, and (ii) the Borrower shall pay to
such Non-Consenting Lender in same day funds on the day of such replacement
(A) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.
(ik)Notwithstanding anything to the contrary herein the Administrative Agent
may, with the consent of the Borrower only, amend, modify or supplement this
Agreement or any of the other Loan Documents to cure any ambiguity, omission,
mistake, defect or inconsistency.
SECTION 9.03 Expenses; Indemnity; Damage Waiver.
(il)The Loan Parties shall, jointly and severally, pay all (i) reasonable
out‑of‑pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication and distribution
(including, without limitation, via the internet or through an Electronic
System) of the credit facilities provided for herein, the preparation and
administration of the Loan Documents and any amendments, modifications or
waivers of the provisions of the Loan Documents (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement, collection or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such reasonable out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit. Expenses being reimbursed by the Loan Parties under
this Section include, without limiting the generality of the foregoing,
reasonable fees, costs and expenses incurred in connection with:
(i)Collateral monitoring, Collateral reviews, appraisals and insurance reviews;
(ii)field examinations and the preparation of Reports based on the fees charged
by a third party retained by the Administrative Agent or the internally
allocated fees for each Person employed by the Administrative Agent with respect
to each field examination;
(iii)background checks regarding senior management and/or key investors, as
deemed necessary or appropriate in the sole discretion of the Administrative
Agent;
(iv)Taxes, fees and other charges for (A) lien searches and (B) filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Administrative Agent’s Liens;
(v)sums paid or incurred to take any action required of any Loan Party under the
Loan Documents that such Loan Party fails to pay or take; and
(vi)forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.
All of the foregoing fees, costs and expenses may be charged to the Borrower as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).
(im)The Loan Parties shall, jointly and severally, indemnify the Administrative
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
penalties, incremental taxes, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of the Loan Documents or any agreement
or instrument contemplated thereby, the performance by the parties hereto of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly

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Exhibit 10.23

comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or Release of Hazardous Materials on or from any property owned or
operated by a Loan Party or a Subsidiary, or any Environmental Liability related
in any way to a Loan Party or a Subsidiary, (iv) the failure of a Loan Party to
deliver to the Administrative Agent the required receipts or other required
documentary evidence with respect to a payment made by a Loan Party for Taxes
pursuant to Section 2.17, or (v) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
such claim, litigation, investigation or proceeding is brought by any Loan Party
or their respective equity holders, Affiliates, creditors or any other third
Person and whether based on contract, tort or any other theory and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, penalties, liabilities or related expenses are determined by a court of
competent jurisdiction by final and non-appealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee. This
Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that
represent losses or damages arising from any non-Tax claim.
(in)To the extent that any Loan Party fails to pay any amount required to be
paid by it to the Administrative Agent (or any sub-agent thereof), the Swingline
Lender or the Issuing Bank (or any Related Party of any of the foregoing) under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Swingline Lender or the Issuing Bank (or any Related
Party of any of the foregoing), as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount (it being understood that
any such payment by the Lenders shall not relieve any Loan Party of any default
in the payment thereof); provided that the unreimbursed expense or indemnified
loss, claim, damage, penalty, liability or related expense, as the case may be,
was incurred by or asserted against the Administrative Agent, the Swingline
Lender or the Issuing Bank in its capacity as such.
(io)To the extent permitted by applicable law, no Loan Party shall assert, and
each Loan Party hereby waives, any claim against any Indemnitee, (i) for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet), or (ii) on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document, or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof; provided that, nothing in this paragraph (d)
shall relieve any Loan Party of any obligation it may have to indemnify an
Indemnitee against special, indirect, consequential or punitive damages asserted
against such Indemnitee by a third party.
(ip)All amounts due under this Section shall be payable not later than ten (10)
days after written demand therefor.
SECTION 9.04 Successors and Assigns.
(iq)The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly provided
herein, the Related Parties of each of the Administrative Agent, the Issuing
Bank and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(ir)(i)    Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more Persons (other than an Ineligible Institution,
it being understood that any Disqualified Institution is subject to Section
9.04(e)) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment, participations in Letters of
Credit and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A)the Borrower, provided that the Borrower shall be deemed to have consented to
any such assignment unless it shall object thereto by written notice to the
Administrative Agent within ten (10) Business Days after having received written
notice thereof from the Administrative Agent or any

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Exhibit 10.23

applicable Lender, and provided further that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default has occurred and is continuing, any other
assignee;
(B)the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to a Lender (unless such Lender is a
Defaulting Lender);
(C)the Issuing Bank, provided that no consent of the Issuing Bank shall be
required for an assignment to a Lender (unless such Lender is a Defaulting
Lender); and
(D)the Swingline Lender, provided that no consent of the Swingline Lender shall
be required for an assignment to a Lender (unless such Lender is a Defaulting
Lender).
(ii) Assignments shall be subject to the following additional conditions:
(E)except in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if an
Event of Default has occurred and is continuing;
(F)each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
(G)the parties to each assignment shall execute and deliver to the
Administrative Agent (x) an Assignment and Assumption or (y) to the extent
applicable, an agreement incorporating an Assignment and Assumption by reference
pursuant to a Platform as to which the Administrative Agent and the parties to
the Assignment and Assumption are participants, together with a processing and
recordation fee of $3,500; and
(H)the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the other
Loan Parties and their Related Parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.
For the purposes of this Section 9.04(b), the terms “Approved Fund” and
“Ineligible Institution” have the following meanings:
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
“Ineligible Institution” means a (a) natural person, (b) Defaulting Lender or
its Parent, (c) Disqualified Institution, provided that the Administrative Agent
shall have the right, and the Borrower hereby expressly authorizes the
Administrative Agent, to (i) post the list of Disqualified Institutions provided
by the Borrower and any updates thereto from time to time (collectively, the “DQ
List”) on the Platform, including that portion of the Platform that is
designated for “public side” Lenders, as applicable and/or (ii) provide such
list and such updates thereto to each Lender requesting the same, (d) holding
company, investment vehicle or trust for, or owned and operated for the primary
benefit of, a natural person or relative(s) thereof; provided that, such holding
company, investment vehicle or trust shall not constitute an Ineligible
Institution if it (x) has not been established for the primary purpose of
acquiring any Loans or Commitments, (y) is managed by a professional advisor,
who is not such natural person or a relative thereof, having significant
experience in the business of making or purchasing commercial loans, and (z) has
assets greater than $500,000,000 and a significant part of its activities
consist of making or purchasing commercial loans and similar extensions of
credit in the ordinary course of its business; provided that upon the occurrence
of an Event of Default, any Person (other than a Lender) shall be an Ineligible
Institution if after giving effect to any proposed assignment to such Person,
such Person would hold more than 25% of the then outstanding Aggregate Revolving
Exposure or Commitments, as the case may be or (d) a Loan Party or a Subsidiary
or other Affiliate of a Loan Party.

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Exhibit 10.23

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obliga-tions under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03 with respect to facts and
circumstances occurring prior to the effective date of such assignment). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 9.04 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the Borrower, the Administrative Agent,
the Issuing Bank and the Lenders shall treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(v) Upon its receipt of (x) a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee or (y) to the extent applicable, an
agreement incorporating an Assignment and Assumption by reference pursuant to a
Platform as to which the Administrative Agent and the parties to the Assignment
and Assumption are participants, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e),
2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(c) Any Lender may, without the consent of the Borrower, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) other than an Ineligible
Institution in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged; (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations; and (iii) the Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Section 2.17(f) and (g) (it being
understood that the documentation required under Section 2.17(f) shall be
delivered to the participating Lender and the information and documentation
required under Section 2.17(g) will be delivered to the Borrower and the
Administrative Agent)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b)) of this
Section; and (B) shall not be entitled to receive any greater payment under
Section 2.15 or 2.17, with respect to any participation,

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Exhibit 10.23

than its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation.
Each Lender that sells a participation agrees, at the Borrower’s request and
expense, to use reasonable efforts to cooperate with the Borrower to effectuate
the provisions of Section 2.19(b) with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under this Agreement or any other Loan
Document (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any Commitments, Loans, Letters of Credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.
(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(e) (i) No assignment or participation shall be made to any Person that was a
Disqualified Institution as of the date (the “Trade Date”) on which the
assigning Lender entered into a binding agreement to sell and assign or
participate all or a portion of its rights and obligations under this Agreement
to such Person (unless the Borrower has consented to such assignment or
participation in writing in its sole and absolute discretion, in which case such
Person will not be considered a Disqualified Institution for the purpose of such
assignment or participation). For the avoidance of doubt, with respect to any
assignee that becomes a Disqualified Institution after the applicable Trade Date
(including as a result of the delivery of a notice pursuant to, and/or the
expiration of the notice period referred to in, the definition of “Disqualified
Institution”), (x) such assignee shall not retroactively be disqualified from
becoming a Lender and (y) the execution by the Borrower of an Assignment and
Assumption with respect to such assignee will not by itself result in such
assignee no longer being considered a Disqualified Institution. Any assignment
in violation of this clause (e)(i) shall not be void, but the other provisions
of this clause (e) shall apply.
(ii) If any assignment or participation is made to any Disqualified Institution
without the Borrower’s prior written consent in violation of clause (e)(i)
above, the Borrower may, at its sole expense and effort, upon notice to the
applicable Disqualified Institution and the Administrative Agent, require such
Disqualified Institution to assign, without recourse (in accordance with and
subject to the restrictions contained in this Section 9.04), all of its
interest, rights and obligations under this Agreement to one or more Persons
that meet the requirements to be an assignee under Section 9.04(b) (subject to
such consents, if any, as may be required thereunder) at the lesser of (x) the
principal amount thereof and] (y) the amount that such Disqualified Institution
paid to acquire such interests, rights and obligations, in each case plus
accrued interest, accrued fees and all other amounts (other than principal
amounts) payable to it hereunder.

(iii) Notwithstanding anything to the contrary contained in this Agreement, (A)
Disqualified Institutions will not (x) have the right to receive information,
reports or other materials provided to Lenders by the Borrower, the
Administrative Agent or any other Lender (other than any disclosure of the DQ
List made in accordance with Section 9.02(f)), (y) attend or participate in
meetings attended by the Lenders and the Administrative Agent or (z) access any
electronic site established for the Lenders or confidential communications from
counsel to or financial advisors of the Administrative Agent or the Lenders; it
being understood and agreed that the foregoing provisions shall only apply to a
Disqualified Institution and not to any assignee of such Disqualified
Institution that becomes a Lender so long as such assignee is not a Disqualified
Institution and (B) (x) for purposes of any consent to any amendment, waiver or

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Exhibit 10.23

modification of, or any action under, and for the purpose of any direction to
the Administrative Agent or any Lender to undertake any action (or refrain from
taking any action) under this Agreement or any other Loan Document, each
Disqualified Institution will be deemed to have consented in the same proportion
as the Lenders that are not Disqualified Institutions consented to such matter
and (y) for purposes of voting on any plan of reorganization or plan of
liquidation pursuant to any Debtor Relief Laws (a “Bankruptcy Plan”), each
Disqualified Institution party hereto hereby agrees (1) not to vote on such
Bankruptcy Plan, (2) if such Disqualified Institution does vote on such
Bankruptcy Plan notwithstanding the restriction in the foregoing clause (1),
such vote will be deemed not to be in good faith and shall be “designated”
pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in
any other Debtor Relief Laws), and such vote shall not be counted in determining
whether the applicable class has accepted or rejected such Bankruptcy Plan in
accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision
in any other Debtor Relief Laws) and (3) not to contest any request by any party
for a determination by any applicable court of competent jurisdiction
effectuating the foregoing clause (2).

SECTION 9.05 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instru-ments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstand-ing and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any other Loan Document or any provision hereof or thereof.
SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution.
(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to (i) fees payable to the Administrative Agent and (ii) increases or
reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(b) Delivery of an executed counterpart of a signature page of this Agreement by
telecopy, emailed pdf. or any other electronic means that reproduces an image of
the actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement. The words “execution,” “signed,”
“signature,” “delivery,” and words of like import in or relating to any document
to be signed in connection with this Agreement and the transactions contemplated
hereby or thereby shall be deemed to include Electronic Signatures, deliveries
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature,
physical delivery thereof or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.
SECTION 9.07 Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

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Exhibit 10.23

SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of any Loan Party
against any of and all the Secured Obligations held by such Lender, irrespective
of whether or not such Lender shall have made any demand under the Loan
Documents and although such obligations may be unmatured. The applicable Lender
shall notify the Borrower and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving such
notice shall not affect the validity of any such set-off or application under
this Section. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.
(a) The Loan Documents (other than those containing a contrary express choice of
law provision) shall be governed by and construed in accordance with the
internal laws of the State of Texas, but giving effect to federal laws
applicable to national banks.
(b) Each party to this Agreement hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of any U.S. Federal
or Texas State court sitting in Houston, Texas in any action or proceeding
arising out of or relating to any Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Loan Party or its proper-ties in the
courts of any jurisdiction.
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY
ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each of the Administrative Agent, the Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors that need to know such Information (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any Governmental
Authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by any
Requirement of Law or by any subpoena

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Exhibit 10.23

or similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies under this Agreement or any other
Loan Document or any suit, action or proceeding relating to this Agreement or
any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any bona
fide prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or bona fide prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the Loan
Parties and their obligations (it being understood and agreed that the DQ List
may be disclosed to any such actual or bona fide prospective assignee,
Participant or counterparty in reliance on this clause (f)), (g) with the
consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a non-confidential basis from a source other than the Borrower or any
of its Subsidiaries. For the purposes of this Section, “Information” means all
information (including any Projections) received from the Borrower or any of its
Subsidiaries relating to the Borrower or any of its Subsidiaries or their
business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Borrower or any of its Subsidiaries and other than
information pertaining to this Agreement provided by arrangers to data service
providers, including league table providers, that serve the lending industry;
provided that, in the case of information received from the Borrower or any of
its Subsidiaries after the date hereof, such information (other than
Projections, which shall be deemed confidential whether or not so identified) is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR
THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE
PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL
HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES
AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED
IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION
THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS
COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. Each Lender
hereby represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the Board) for the repayment of the Borrowings
provided for herein. Anything contained in this Agreement to the contrary
notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to
extend credit to the Borrower in violation of any Requirement of Law.
SECTION 9.14 USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the USA PATRIOT Act.

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Exhibit 10.23

SECTION 9.15 Disclosure. Each Loan Party, each Lender and the Issuing Bank
hereby acknowledges and agrees that the Administrative Agent and/or its
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with any of the Loan Parties and their respective
Affiliates.
SECTION 9.16 Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the other Secured Parties, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession or control. Should any Lender (other than the
Administrative Agent) obtain possession or control of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.
SECTION 9.17 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.18 Marketing Consent. The Borrower hereby authorizes JPMCB and its
affiliates (collectively, the “JPMCB Parties”), at their respective sole
expense, but without any prior approval by the Borrower, to publish such
tombstones and give such other publicity to this Agreement as each may from time
to time determine in its sole discretion, subject, in all instances, to the
provisions of Section 9.12. The foregoing authorization shall remain in effect
unless and until the Borrower notifies JPMCB in writing that such authorization
is revoked.
SECTION 9.19 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document may be subject to the write-down and
conversion powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:
(is)the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and
(it)the effects of any Bail-In Action on any such liability, including, if
applicable:
(i)a reduction in full or in part or cancellation of any such liability;
(ii)a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Loan Document; or
(iii)the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.
SECTION 9.20 No Fiduciary Duty, etc. The Borrower acknowledges and agrees, and
acknowledges its subsidiaries’ understanding, that no Credit Party will have any
obligations except those obligations expressly set forth herein and in the other
Loan Documents and each Credit Party is acting solely in the capacity of an
arm’s length contractual counterparty to the Borrower with respect to the Loan
Documents and the transaction contemplated therein and not as a financial
advisor or a fiduciary to, or an agent of, the Borrower or any other person. The
Borrower agrees that it will not assert any claim against any Credit Party based
on an alleged breach of fiduciary duty by such Credit Party in connection with
this Agreement and the transactions contemplated hereby. Additionally, the
Borrower acknowledges and agrees that no Credit Party is advising the Borrower
as to any legal, tax, investment, accounting, regulatory or any other matters in
any jurisdiction. The Borrower shall consult with its own advisors concerning
such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Credit Parties shall have no responsibility or liability to the Borrower with
respect thereto. The Borrower further acknowledges and agrees, and acknowledges
its subsidiaries’ understanding, that each Credit

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Exhibit 10.23

Party, together with its affiliates, is a full service securities or banking
firm engaged in securities trading and brokerage activities as well as providing
investment banking and other financial services. In the ordinary course of
business, any Credit Party may provide investment banking and other financial
services to, and/or acquire, hold or sell, for its own accounts and the accounts
of customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of, the Borrower and other
companies with which the Borrower may have commercial or other relationships.
With respect to any securities and/or financial instruments so held by any
Credit Party or any of its customers, all rights in respect of such securities
and financial instruments, including any voting rights, will be exercised by the
holder of the rights, in its sole discretion. In addition, the Borrower
acknowledges and agrees, and acknowledges its subsidiaries’ understanding, that
each Credit Party and its affiliates may be providing debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which the Borrower may have conflicting interests
regarding the transactions described herein and otherwise. No Credit Party will
use confidential information obtained from the Borrower by virtue of the
transactions contemplated by the Loan Documents or its other relationships with
the Borrower in connection with the performance by such Credit Party of services
for other companies, and no Credit Party will furnish any such information to
other companies. The Borrower also acknowledges that no Credit Party has any
obligation to use in connection with the transactions contemplated by the Loan
Documents, or to furnish to the Borrower, confidential information obtained from
other companies.
SECTION 9.21 Concerning Certificates. All certificates, statements and other
declarations required hereunder or under any other Loan Document to be executed
or made by a Responsible Officer shall be executed or made by such Responsible
Officer solely on behalf of the Borrower or any other Loan Party, in his or her
capacity as a Responsible Officer and not in any individual capacity.

ARTICLE X

LOAN GUARANTY
SECTION 10.01 Guaranty. Each Loan Guarantor (other than those that have
delivered a separate Guaranty) hereby agrees that it is jointly and severally
liable for, and, as a primary obligor and not merely as surety, absolutely,
unconditionally and irrevocably guarantees to the Secured Parties, the prompt
payment when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, of the Secured Obligations and all costs and
expenses, including, without limitation, all court costs and attorneys’ and
paralegals’ fees and expenses paid or incurred by the Administrative Agent, the
Issuing Bank and the other Secured Parties in endeavoring to collect all or any
part of the Secured Obligations from, or in prosecuting any action against, the
Borrower, any Loan Guarantor or any other guarantor of all or any part of the
Secured Obligations (such costs and expenses, together with the Secured
Obligations, collectively the “Guaranteed Obligations”; provided, however, that
the definition of “Guaranteed Obligations” shall not create any guarantee by any
Loan Guarantor of (or grant of security interest by any Loan Guarantor to
support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for
purposes of determining any obligations of any Loan Guarantor). Each Loan
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of any Lender that
extended any portion of the Guaranteed Obligations.
SECTION 10.02 Guaranty of Payment. This Loan Guaranty is a guaranty of payment
and not of collection. Each Loan Guarantor waives any right to require the
Administrative Agent, the Issuing Bank or any Lender to sue the Borrower, any
Loan Guarantor, any other guarantor of, or any other Person obligated for, all
or any part of the Guaranteed Obligations (each, an “Obligated Party”), or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty.
(a) Except as otherwise provided for herein, the obligations of each Loan
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
Payment in Full of the Guaranteed Obligations), including: (i) any claim of
waiver, release, extension, renewal, settlement, surrender, alteration or
compromise of any of the Guaranteed Obligations, by operation of law or
otherwise; (ii) any change in the corporate existence, structure or ownership of
the Borrower or any other Obligated Party liable for any of the Guaranteed
Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Obligated Party or their assets or any resulting
release or discharge of any obligation of any Obligated Party; or (iv) the
existence of any claim, setoff or other rights which any Loan Guarantor may have
at any time against any

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Exhibit 10.23

Obligated Party, the Administrative Agent, the Issuing Bank, any Lender or any
other Person, whether in connection herewith or in any unrelated transactions.
(b) The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.
(c) Further, the obligations of any Loan Guarantor hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of the Administrative
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy with respect to all or any part of the Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision
of any agreement relating to the Guaranteed Obligations; (iii) any release,
non-perfection or invalidity of any indirect or direct security for the
obligations of the Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other Obligated Party liable for any of the Guaranteed
Obligations; (iv) any action or failure to act by the Administrative Agent, the
Issuing Bank or any Lender with respect to any collateral securing any part of
the Guaranteed Obligations; or (v) any default, failure or delay, willful or
otherwise, in the payment or performance of any of the Guaranteed Obligations,
or any other circumstance, act, omission or delay that might in any manner or to
any extent vary the risk of such Loan Guarantor or that would otherwise operate
as a discharge of any Loan Guarantor as a matter of law or equity (other than
the Payment in Full of the Guaranteed Obligations).
SECTION 10.04 Defenses Waived. To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of the Borrower or any other Loan Guarantor or the unenforceability
of all or any part of the Guaranteed Obligations from any cause, or the
cessation from any cause of the liability of the Borrower, any other Loan
Guarantor or any other Obligated Party, other than the Payment in Full of the
Guaranteed Obligations. Without limiting the generality of the foregoing, each
Loan Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by law, any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against any Obligated Party or any other Person. Each Loan Guarantor
confirms that it is not a surety under any state law and shall not raise any
such law as a defense to its obligations hereunder. The Administrative Agent
may, at its election, foreclose on any Collateral held by it by one or more
judicial or nonjudicial sales, accept an assignment of any such Collateral in
lieu of foreclosure or otherwise act or fail to act with respect to any
collateral securing all or a part of the Guaranteed Obligations, compromise or
adjust any part of the Guaranteed Obligations, make any other accommodation with
any Obligated Party or exercise any other right or remedy available to it
against any Obligated Party, without affecting or impairing in any way the
liability of such Loan Guarantor under this Loan Guaranty except to the extent
the Guaranteed Obligations have been Paid in Full. To the fullest extent
permitted by applicable law, each Loan Guarantor waives any defense arising out
of any such election even though that election may operate, pursuant to
applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Loan Guarantor against any Obligated
Party or any security.
SECTION 10.05 Rights of Subrogation. Until the Payment in Full of the Guaranteed
Obligations, no Loan Guarantor will assert any right, claim or cause of action,
including, without limitation, a claim of subrogation, contribution or
indemnification, that it has against any Obligated Party or any collateral.
SECTION 10.06 Reinstatement; Stay of Acceleration. If at any time any payment of
any portion of the Guaranteed Obligations (including a payment effected through
exercise of a right of setoff) is rescinded, or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise (including pursuant to any settlement entered into by a Secured Party
in its discretion), each Loan Guarantor’s obligations under this Loan Guaranty
with respect to that payment shall be reinstated at such time as though the
payment had not been made and whether or not the Administrative Agent, the
Issuing Bank and the Lenders are in possession of this Loan Guaranty. If
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of any agreement
relating to the Guaranteed Obligations shall nonetheless be payable by the Loan
Guarantors forthwith on demand by the Administrative Agent.
SECTION 10.07 Information. Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
none of the Administrative Agent, the Issuing Bank or

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Exhibit 10.23

any Lender shall have any duty to advise any Loan Guarantor of information known
to it regarding those circumstances or risks.
SECTION 10.08 Termination. Each of the Lenders and the Issuing Bank may continue
to make loans or extend credit to the Borrower based on this Loan Guaranty until
five (5) days after it receives written notice of termination from any Loan
Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will
continue to be liable to the Lenders for any Guaranteed Obligations created,
assumed or committed to prior to the fifth day after receipt of the notice, and
all subsequent renewals, extensions, modifications and amendments with respect
to, or substitutions for, all or any part of such Guaranteed Obligations.
Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or
eliminate, limit, reduce or otherwise impair any rights or remedies the
Administrative Agent or any Lender may have in respect of, any Default or Event
of Default that shall exist under clause (o) of Article VII hereof as a result
of any such notice of termination.
SECTION 10.09 Taxes. Each payment of the Guaranteed Obligations will be made by
each Loan Guarantor without withholding for any Taxes, unless such withholding
is required by law. If any Loan Guarantor determines, in its sole discretion
exercised in good faith, that it is so required to withhold Taxes, then such
Loan Guarantor may so withhold and shall timely pay the full amount of withheld
Taxes to the relevant Governmental Authority in accordance with applicable law.
If such Taxes are Indemnified Taxes, then the amount payable by such Loan
Guarantor shall be increased as necessary so that, net of such withholding
(including such withholding applicable to additional amounts payable under this
Section), the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives the amount it would have received had no such withholding been made.
SECTION 10.10 Maximum Liability. Notwithstanding any other provision of this
Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be
limited to the extent, if any, required so that its obligations hereunder shall
not be subject to avoidance under Section 548 of the Bankruptcy Code or under
any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act, Uniform Voidable Transactions Act or similar statute or common
law. In determining the limitations, if any, on the amount of any Loan
Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the
intention of the parties hereto that any rights of subrogation, indemnification
or contribution which such Loan Guarantor may have under this Loan Guaranty, any
other agreement or applicable law shall be taken into account.
SECTION 10.11 Contribution.
(a) To the extent that any Loan Guarantor shall make a payment under this Loan
Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Loan Guarantor,
exceeds the amount which otherwise would have been paid by or attributable to
such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed
Obligations satisfied by such Guarantor Payment in the same proportion as such
Loan Guarantor’s “Allocable Amount” (as defined below) (as determined
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of each of the Loan Guarantors as determined immediately prior to the
making of such Guarantor Payment, then, following indefeasible payment in full
in cash of the Guarantor Payment and the Payment in Full of the Guaranteed
Obligations and the termination of this Agreement, such Loan Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Loan Guarantor for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.
(b) As of any date of determination, the “Allocable Amount” of any Loan
Guarantor shall be equal to the excess of the fair saleable value of the
property of such Loan Guarantor over the total liabilities of such Loan
Guarantor (including the maximum amount reasonably expected to become due in
respect of contingent liabilities, calculated, without duplication, assuming
each other Loan Guarantor that is also liable for such contingent liability pays
its ratable share thereof), giving effect to all payments made by other Loan
Guarantors as of such date in a manner to maximize the amount of such
contributions.
(c) This Section 10.11 is intended only to define the relative rights of the
Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or
shall impair the obligations of the Loan 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 Loan Guaranty.
(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Loan Guarantor or Loan
Guarantors to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Loan Guarantors against other Loan Guarantors
under this Section 10.11 shall be exercisable upon the Payment in Full of the
Guaranteed Obligations and the termination of this Agreement.

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Exhibit 10.23

SECTION 10.12 Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article X is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank
and the Lenders under this Agreement and the other Loan Documents to which such
Loan Party is a party or in respect of any obligations or liabilities of the
other Loan Parties, without any limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.
SECTION 10.13 Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan
Party to honor all of its obligations under this Guarantee in respect of a Swap
Obligation (provided, however, that each Qualified ECP Guarantor shall only be
liable under this Section 10.13 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this
Section 10.13 or otherwise under this Loan Guaranty voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). Except as otherwise provided herein, the obligations of each
Qualified ECP Guarantor under this Section 10.13 shall remain in full force and
effect until the termination of all Swap Obligations. Each Qualified ECP
Guarantor intends that this Section 10.13 constitute, and this Section 10.13
shall be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of
the Commodity Exchange Act.
(Signature Pages Follow)

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Exhibit 10.23

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective authorized officers as of the day and
year first above written.

DRIL-QUIP, INC.

By:
 /s/ Jeffrey Bird
 
Name: Jeffrey Bird
 
Title: Vice President and Chief Financial Officer

TIW CORPORATION

By:
 /s/ Jeffrey Bird    
 
Name: Jeffrey Bird
 
Title: Vice President and Chief Financial Officer

HONING, INC.

By:
 /s/ Jeffrey Bird
 
Name: Jeffrey Bird
 
Title: Vice President and Chief Financial Officer

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Exhibit 10.23

JPMORGAN CHASE BANK, N.A., individually and as a Lender and as Administrative
Agent, Issuing Bank and Swingline Lender

By:
/s/ Ross Gilbert
 
Name: Ross Gilbert
 
Title: Authorized Officer

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender

By:
/s/ Michael L. Bustios
 
Name: Michael L. Bustios
 
Title: Senior Vice President