EXHIBIT 10.2
EXECUTION COPY
U.S. $700,000,000
3-YEAR REVOLVING CREDIT AGREEMENT
Dated as of October 30, 2003
Among
HALLIBURTON COMPANY
as Borrower,
THE ISSUING BANKS NAMED HEREIN
as Issuing Banks,
THE BANKS NAMED HEREIN
as Banks,
CITICORP NORTH AMERICA, INC.
as Administrative Agent,
JPMORGAN CHASE BANK
as Syndication Agent,
and
ABN AMRO BANK, N.V.
as Documentation Agent
Co-Lead Arrangers:
CITIGROUP GLOBAL MARKETS INC.
and
J.P. MORGAN SECURITIES INC.
TABLE OF CONTENTS
Page
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Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms...................................................................... 1
Section 1.02 Computation of Time Periods................................................................ 15
Section 1.03 Accounting Terms; GAAP..................................................................... 15
Section 1.04 Miscellaneous.............................................................................. 16
Section 1.05 Ratings.................................................................................... 16
Article II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES
Section 2.01 The Revolving Credit Advances.............................................................. 16
Section 2.02 Making the Revolving Credit Advances....................................................... 17
Section 2.03 Issuance of and Drawings and Reimbursement Under Letters of Credit......................... 18
Section 2.04 Fees....................................................................................... 19
Section 2.05 Reduction of Commitments................................................................... 20
Section 2.06 Repayment of Advances; Required Cash Collateral............................................ 20
Section 2.07 Interest................................................................................... 22
Section 2.08 Additional Interest on Eurodollar Rate Advances............................................ 22
Section 2.09 Interest Rate Determination................................................................ 23
Section 2.10 Prepayments................................................................................ 24
Section 2.11 Payments and Computations.................................................................. 24
Section 2.12 Increased Costs and Capital Requirements................................................... 25
Section 2.13 Taxes...................................................................................... 26
Section 2.14 Sharing of Payments, Etc................................................................... 28
Section 2.15 Illegality................................................................................. 28
Section 2.16 Conversion of Advances..................................................................... 29
Section 2.17 Replacement or Removal of Bank............................................................. 29
Section 2.18 Evidence of Indebtedness................................................................... 30
Article III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness...................................................... 30
Section 3.02 Conditions Precedent to Each Revolving Credit Advance and Each Issuance and Renewal
of Each Letter of Credit....................................................................... 34
Section 3.03 Determinations Under Section 3.01.......................................................... 35
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower............................................. 35
Article V
COVENANTS OF THE BORROWER
Section 5.01 Affirmative Covenants...................................................................... 38
Section 5.02 Negative Covenants......................................................................... 44
Section 5.03 Financial Covenants........................................................................ 50
Article VI
EVENTS OF DEFAULT
Section 6.01 Events of Default.......................................................................... 50
Section 6.02 Actions in Respect of the Letters of Credit upon Default................................... 52
Article VII
THE AGENT
Section 7.01 Authorization and Action................................................................... 53
Section 7.02 Agent's Reliance, Etc...................................................................... 53
Section 7.03 The Agent and its Affiliates............................................................... 53
Section 7.04 Bank Credit Decision....................................................................... 54
Section 7.05 Indemnification............................................................................ 54
Section 7.06 Successor Agent............................................................................ 54
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.................................. 55
Article VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc............................................................................ 55
Section 8.02 Notices, Etc............................................................................... 55
Section 8.03 No Waiver; Remedies........................................................................ 57
Section 8.04 Expenses and Taxes; Compensation........................................................... 57
Section 8.05 Right of Set-Off........................................................................... 58
Section 8.06 Limitation and Adjustment of Interest...................................................... 58
Section 8.07 Binding Effect............................................................................. 59
Section 8.08 Assignments and Participations............................................................. 59
Section 8.09 Release of Collateral...................................................................... 61
Section 8.10 No Liability of Issuing Banks.............................................................. 62
Section 8.11 Execution in Counterparts.................................................................. 62
Section 8.12 Judgment................................................................................... 62
Section 8.13 Governing Law.............................................................................. 63
Section 8.14 Jurisdiction; Damages...................................................................... 63
Section 8.15 Confidentiality............................................................................ 63
Section 8.16 Prior Credit Facility...................................................................... 64
Section 8.17 Waiver of Jury Trial....................................................................... 1
ANNEX
Annex A
SCHEDULES
Schedule I - Commitments
Schedule II - Filing Entities
Schedule III - Bank Information
Schedule IV - Subsidiary Guarantors
Schedule 4.01(f) - Litigation
Schedule 4.01(g) - Asbestos and Silica Non-US Litigation
Schedule 4.01(h) - Domestic Subsidiaries
EXHIBITS
Exhibit A - Form of Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - Form of Notice of Issuance and Application for Letter of
Credit
Exhibit C-1 - Form of Opinion of Bruce A. Metzinger
Exhibit C-2 - Form of Opinion of Counsel to the Borrower
Exhibit D - [Intentionally Omitted]
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Pledge Agreement
Exhibit G - Form of Collateral Trust Agreement
Exhibit H - Form of Subsidiary Guaranty
3-YEAR REVOLVING CREDIT AGREEMENT
Dated as of October 30, 2003
Halliburton Company, a Delaware corporation (the "Borrower"), the
lenders party hereto and Citicorp North America, Inc. ("CNAI"), as
Administrative Agent hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
terms "Borrower" and "CNAI" shall have the meanings set forth above and the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means a Revolving Credit Advance under Section 2.01 or a
Letter of Credit Advance under Section 2.03 and refers to a Base Rate Advance or
a Eurodollar Rate Advance (each, a "Type" of Advance).
"Affected Bank" has the meaning specified in Section 2.15.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or any Subsidiary of such Person.
"Agent" means CNAI in its capacity as Administrative Agent pursuant to
Article VII and any successor in such capacity pursuant to Section 7.06.
"Agent's Account" means the account of the Agent maintained by the
Agent with _______________ at its office at ____________________, New York, New
York _____, Account No. __________, Attention: _______________, or such other
account as the Agent shall specify in writing to the Banks.
"Agreement" means this 3-Year Revolving Credit Agreement dated as of
October 30, 2003 among the Borrower, the Banks and the Agent, as amended from
time to time in accordance with the terms hereof.
"Applicable Commitment Fee Rate" has the meaning specified in Annex A.
"Applicable Lending Office" means, with respect to each Bank, (i) in
the case of a Base Rate Advance, such Bank's Domestic Lending Office, and (ii)
in the case of a Eurodollar Rate Advance, such Bank's Eurodollar Lending Office.
"Applicable Margin" has the meaning specified in Annex A.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit E.
"Available Amount" of any Letter of Credit means, at any time, the
Dollar Equivalent of the maximum amount available to be drawn under such Letter
of Credit at such time as set forth in Section 2.01(b) (assuming compliance at
such time with all conditions to drawing).
"Bankruptcy Court" means the U.S. Bankruptcy Court for the Western
District of Pennsylvania.
"Banks" means the Issuing Banks and the other Banks party hereto from
time to time as lenders, including each Eligible Assignee that becomes a party
hereto pursuant to Section 8.08(a), (b) and (d).
"Barracuda Facility" means the $260,000,000 Second Amended and Restated
Credit and Reimbursement Agreement, dated as of February 21, 2003, among Kellogg
Brown & Root, Inc., as borrower, the banks named therein and ABN AMRO Bank,
N.V., as administrative agent, as amended.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/8 of 1% or, if there is
no nearest 1/8 of 1%, to the next higher 1/8 of 1%) of (i)1/2 of one
percent per annum plus (ii) the rate obtained by dividing (A) the
latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month Dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring Dollar
deposits of Citibank in the United States; and
(c) the sum of 1/2 of one percent per annum plus the Federal
Funds Rate in effect from time to time.
"Base Rate Advance" means an Advance which bears interest as provided
in Section 2.07(a).
"Borrowing" means a borrowing consisting of Advances of the same Type
made on the same day by the Banks pursuant to Section 2.01 and, if such Advances
are Eurodollar Rate Advances, having Interest Periods of the same duration.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advance, on which dealings in Dollar deposits are
carried on in the London interbank market.
"Chapter 11 Cases" means the cases to be filed by the Filing Entities
under Chapter 11 of the Bankruptcy Code.
"Citibank" means Citibank, N.A., a national banking association.
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"Co-Lead Arrangers" means Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code, and the regulations promulgated and rulings issued
thereunder, in each case as now or hereafter in effect, and any reference to any
statutory provision shall be deemed to be a reference to any successor provision
or provisions.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent for the benefit of the Secured Holders.
"Collateral Documents" means the Pledge Agreement, the Collateral Trust
Agreement and any other agreement now or hereafter in effect that creates or
purports to create a Lien in favor of the Collateral Agent for the benefit of
the Secured Holders.
"Collateral Release Date" means the date on which each of the following
statements shall be true and correct, and the Borrower shall have so certified
to the Agent in writing:
(i) The Exit Date has occurred;
(ii) There exists no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its subsidiaries on a
consolidated basis other than the Disclosed Litigation (the
"Pre-Closing Information") or (ii) purports to affect the legality,
validity or enforceability of the Borrower's Obligations, or the rights
and remedies of any of the Banks, relating to the Revolving Credit
Facility and the Loan Documents, and there shall have been no material
adverse change in the status, or financial effect on the Borrower and
its subsidiaries on a consolidated basis, of the Disclosed Litigation
from that described in the Pre-Closing Information;
(iii) The long-term senior unsecured debt of the Borrower
has been recently confirmed by letter at BBB or higher (stable outlook)
by S&P and Baa2 or higher (stable outlook) by Moody's;
(iv) There has occurred no material adverse change (which
term shall not be deemed to refer to the commencement of the Chapter 11
Cases) since December 31, 2002 in the business, condition (financial or
otherwise), operations, performance, properties or prospects of the
Borrower and its subsidiaries on a consolidated basis, except as
disclosed in the Borrower's report on Form 10-Q filing with the
Securities and Exchange Commission for the fiscal quarter ended June
30, 2003 and except for the accounting charges to be taken by the
Borrower directly in connection with the Settlement Payments; and
(v) There exists no Default or Event of Default under any
of the Loan Documents.
"Collateral Trust Agreement" means the Collateral Trust Agreement,
dated as of November __, 2003, between the Borrower and Citibank, as Collateral
Agent.
"Collateral Agent" means Citibank in its capacity as Collateral Agent
under the Collateral Trust Agreement, together with its successors in interest
and permitted assigns.
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"Commitment Fee" has the meaning specified in Section 2.04(a).
"Commitment" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"Consolidated Debt" means at any time the Debt of the Borrower and its
consolidated subsidiaries calculated on a consolidated basis as of such time,
determined in accordance with GAAP.
"Consolidated Debt to Total Consolidated Capitalization Ratio" means,
as of any date of calculation, the ratio of the Borrower's Consolidated Debt
outstanding on such date to the sum of (i) Consolidated Debt and (ii)
Consolidated Net Worth outstanding on such date; provided, that during the
period from the time that Net Asbestos and Silica Liability increases to account
for the Settlement Payments until the time that the Borrower records the equity
component of the Settlement Payments, the amount of such increase in Net
Asbestos and Silica Liability and related reduction in equity shall be
disregarded for purposes of calculating the Consolidated Debt to Total
Consolidated Capitalization Ratio.
"Consolidated EBITDA" means, with reference to any period of time, the
EBITDA of the Borrower and its consolidated subsidiaries calculated on a
consolidated basis for such period, determined in accordance with GAAP.
"Consolidated Interest Expense" means, with reference to any period,
the Interest Expense of the Borrower and its consolidated subsidiaries
calculated on a consolidated basis for such period, determined in accordance
with GAAP.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Borrower and its consolidated subsidiaries
calculated on a consolidated basis as of such time (excluding treasury stock),
determined in accordance with GAAP and excluding any aggregate charges for
asbestos litigation claims.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Revolving Credit Advances of one Type into Revolving Credit Advances of the
other Type pursuant to Section 2.08, 2.14 or 2.15.
"Convertible Notes" means the 3 1/8% Convertible Senior Notes of the
Borrower due July 15, 2023, issued pursuant to the Convertible Notes Indenture.
"Convertible Notes Indenture" means the Indenture dated as of June 30,
2003 between the Borrower, as issuer and JPMCB, as Trustee.
"Debt" of any Person means (i) Indebtedness of such Person, plus (ii)
obligations of such Person under direct third party guaranties for borrowed
money, plus (iii) the aggregate face amount of all outstanding letters of credit
in respect of which such Person has any reimbursement obligation (other than
Performance Letters of Credit), plus (iv) 50% of the aggregate face amount of
all outstanding Performance Letters of Credit issued of such Person, plus (v)
the Net Asbestos and Silica Liability, minus (vi) any Unrestricted Cash.
"Default" means any event or condition which with notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"DIP Facility" means the Revolving Credit Agreement among DII
Industries, LLC and each other borrower named therein and the Borrower, as
lender, as amended from time to time.
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"Disclosed Litigation" means the litigation described in the
information provided by or on behalf of the Borrower to the Agent for disclosure
to the Banks prior to the Effective Date of this Agreement.
"Disclosure Statement" means the disclosure statement, dated as of
September 18, 2003, with respect to the Plan of Reorganization proposed to be
filed in connection with the Chapter 11 Cases as the same may be supplemented or
restated prior to the Effective Date.
"Documentation Agent" means ABN AMRO Bank, N.V., solely in its capacity
as documentation agent under the Agreement.
"Dollar Equivalent" means, on any date, (i) in relation to an amount
denominated in a currency other than Dollars, the equivalent in Dollars
determined by using the quoted spot rate at which the Agent's principal office
in London offers to exchange Dollars for such currency in London prior to 4:00
P.M. (London time) on such date and (ii) in relation to an amount denominated in
Dollars, such amount.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto, in the Assignment and Acceptance pursuant to which it became
a Bank, or such other office of such Bank as such Bank may from time to time
specify to the Borrower and the Agent.
"EBITDA" means (a) Net Income plus (b) to the extent deducted in
determining Net Income, (i) Interest Expense, (ii) taxes, and (iii) depreciation
and amortization minus (c) to the extent added in determining Net Income,
extraordinary gains (including gains from assets sales) for such period, plus
(d) to the extent recognized in determining Net Income, extraordinary,
non-recurring losses (excluding asbestos charges) for such period. EBITDA shall
be calculated on a rolling four quarters basis using the financial results for
the four-quarter period ending on the date as of which the calculation is made.
"Effective Date" means has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) any Bank, (ii) any Affiliate of any Bank
and (iii) with the consent of the Agent (which consent shall not be unreasonably
withheld) and, so long as no Event of Default under Section 6.01(a) or 6.01(e)
shall have occurred and be continuing, the Borrower (which consent shall not be
unreasonably withheld), any other Person not covered by clause (i) or (ii) of
this definition; provided, however, that neither the Borrower nor any Affiliate
of the Borrower shall be an Eligible Assignee.
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
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"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common control
with the Borrower, within the meaning of Section 414(a) or (b) of the Internal
Revenue Code, and, for purposes of Section 412 of the Internal Revenue Code,
Section 414(m) of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of the Borrower or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Borrower or any ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any Plan; (g)
the adoption of an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC
of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, a Plan; provided, however, that in no event shall the filing of the
Chapter 11 Cases be an ERISA Event.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto, in the Assignment and Acceptance pursuant to which it became
a Bank (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Bank as such Bank may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
(rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such
rate per annum is not such a multiple) equal to the rate per annum at which
deposits in Dollars are offered by the principal office of Citibank in London,
England to prime banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to Citibank's Eurodollar Rate Advance comprising part
of such Borrowing and for a period equal to such Interest Period.
"Eurodollar Rate Advance" means an Advance which bears interest as
provided in Section 2.07(b).
"Eurodollar Rate Reserve Percentage" of any Bank for any Interest
Period for all Eurodollar Rate Advances comprising part of the same borrowing
means the reserve percentage applicable during such Interest Period (or if more
than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
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marginal reserve requirement) for such Bank with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Dispositions" means (i) dispositions of assets in the
ordinary course of business, (ii) dividends and distributions permitted by
Section 5.02(c), (iii) dispositions to the Borrower or a Subsidiary of the
Borrower, (iv) dispositions constituting investments and capital contributions,
(v) dispositions of any fixed or capital asset pursuant to a sale/leaseback
transaction which is consummated within 180 days of the Borrower or such
Subsidiary acquiring or completing the construction of such asset and (vi) any
Securitization Transaction.
"Existing Indebtedness" means Indebtedness of each Loan Party and its
Subsidiaries outstanding immediately before the Effective Date.
"Exit Date" means the date on which (i) the Plan of Reorganization
shall have been confirmed and (ii) the Order Entry shall have occurred.
"Federal Funds Rate" means, for any day, a fluctuating interest rate
per annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected by
it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereof.
"Filing Entities" means the Borrower's Subsidiaries listed on Schedule
II hereto.
"Financial Statements" means the consolidated balance sheet and other
financial statements of the Borrower and its consolidated subsidiaries dated
December 31, 2002 included in the Borrower's Form 10-K filing with the SEC for
the fiscal year ended December 31, 2002, as amended prior to the Effective Date
in order to reflect changes in the Borrower's segment reporting.
"Foreign Currency" means any lawful currency (other than Dollars) that
is freely transferable or convertible into Dollars.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Guaranty Supplement" has the meaning specified in the Subsidiary
Guaranty.
"HESI" means Halliburton Energy Services, Inc., a Delaware corporation.
"Hundred Year Notes Indenture" means the indenture, dated as of April
18, 1996, between Dresser Industries, Inc., as issuer, and Texas Commerce Bank
National Association, as trustee.
"Indebtedness" means, for any Person, (a) its liabilities for borrowed
money or the deferred purchase price of property or services (other than current
accounts and salaries payable or accrued in the ordinary course of business),
(b) obligations of such Person for borrowed money evidenced by bonds,
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debentures, notes or other similar instruments and (c) all Indebtedness of
others the payment, purchase or other acquisition or obligation of which such
Person has assumed, or the payment, purchase or other acquisition or obligation
of which such Person has otherwise become directly or contingently liable for.
"Indemnified Costs" has the meaning specified in Section 7.05.
"Indemnified Party" has the meaning specified in Section 8.04(c).
"Initial Extension of Credit" means the earlier to occur of the initial
Revolving Credit Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Interest Charge Coverage Ratio" means, as of the end of any fiscal
quarter, the ratio of (a) Consolidated EBITDA for the four-fiscal quarter period
then ended (excluding, for each quarter through and including the quarter ending
December 31, 2003, any non-cash charges related to the proposed global asbestos
settlement contemplated in the Borrower's press release dated December 18, 2002)
to (b) Consolidated Interest Expense (calculated in accordance with GAAP) for
the four-fiscal quarter period then ended.
"Interest Expense" means for any period, interest expense, whether
expensed or capitalized, paid, accrued or scheduled to be paid or accrued during
such period, determined in accordance with GAAP, without duplication.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, with respect to
Eurodollar Rate Advances, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three or six months (or, as to
any Interest Period, such other period as the Borrower and each of the Banks may
agree to for such Interest Period), in each case as the Borrower may, upon
notice received by the Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period (or, as to
any Interest Period, at such other time as the Borrower and the Banks may agree
to for such Interest Period), select; provided, however, that:
(i) Interest Periods commencing on the same date for
Advances comprising part of the same Borrowing shall be of the same
duration;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day;
(iii) any Interest Period which begins on the last Business
Day of the calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar
month in which it would have ended if there were a numerically
corresponding day in such calendar month; and
(iv) the Borrower may not select an Interest Period for
any Advance if the last day of such Interest Period would be later than
the date on which the Advances are then payable in full
- 8 -
or if any Event of Default under Section 6.01(a) shall have occurred
and be continuing at the time of selection.
"Issuing Bank" means each of Citibank, JPMCB, HSBC, Standard Chartered
Bank and ABN AMRO Bank, N.V. and any of their respective Affiliates, in their
capacities as initial issuing banks, and any Eligible Assignee to which a Letter
of Credit Commitment has been assigned pursuant to Section 8.08 so long as each
such Eligible Assignee expressly agrees to perform in accordance with their
terms all the obligations that by the terms of the Agreement are required to be
performed by it as an Issuing Bank and notifies the Agent of its Applicable
Lending Office and the amount of its Letter of Credit Commitment (which
information shall be recorded by the Agent in the Register), for so long as such
initial Issuing Bank or Eligible Assignee, as the case may be, shall have a
Letter of Credit Commitment.
"Joint Venture Debt" has the meaning specified in Section
5.02(a)(x)(x).
"JPMCB" means JPMorgan Chase Bank, a New York banking corporation.
"June 2003 10-Q" means the Borrower's Form 10-Q filing with the SEC for
the quarter ended on June 30, 2003.
"JV Subsidiary" means each Subsidiary of the Borrower (a) that, at any
time, directly holds an Equity Interest in any joint venture (not a Subsidiary)
and (b) that has no other material assets.
"L/C Cash Collateral Account" means the l/c cash collateral deposit
account, Account No. ____, with __________ at its office at ___________, New
York, New York _____, in the name of _______ and under the sole control and
dominion of the ___________ and subject to the terms of this Agreement.
"L/C Related Documents" has the meaning specified in Section
2.06(b)(ii)(A).
"LC Agent" means CNAI, in its capacity as agent under Master LC
Facility Agreement.
"LC Banks" means the Banks under and as defined in the Master LC
Facility Agreement.
"Letter of Credit" has the meaning set forth in Section 2.01(b).
"Letter of Credit Advance" means an Advance made by any Issuing Bank or
any Bank pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" of any Issuing Bank means, at any time,
the amount set opposite such Issuing Bank's name on Schedule I under the heading
"Letter of Credit Commitments" or as reflected for such Issuing Bank in the
relevant Assignment and Acceptance to which it is a party, as such amount may be
terminated, reduced or increased pursuant to Section 2.05, Section 6.01 or
Section 8.08.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor, a
statutory deemed trust and any easement, right of way or other encumbrance on
title to real property; provided, however, that for the avoidance of doubt, the
interest of a Person as owner or lessor under charters or leases of property and
the rights of setoff of banks shall not constitute a "Lien" on or in respect of
the relevant property.
- 9 -
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guaranty, and the Collateral Documents.
"Loan Party" means, (i) at any time prior the Collateral Release Date,
each of the Borrower and each Subsidiary Guarantor and (ii) from and after the
Collateral Release Date, the Borrower.
"Long-Dated Letters of Credit" means Letters of Credit having expiry
dates later than one year from the date of issuance, excluding any automatic
renewals.
"Master LC Facility Agreement" means the senior secured master letter
of credit facility agreement, dated as of October 30, 2003, among the Borrower,
the Borrower's subsidiaries party thereto, the banks party thereto, CNAI, as
agent, and Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., as
co-lead arrangers.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries, taken as a whole, (b) the
rights and remedies of the Agent or any Bank under any Loan Document or (c) the
ability of the Borrower and any material Subsidiary which is a Loan Party to
perform its Obligations under any Loan Document to which it is or is to be a
party; provided, however, the filing of the Chapter 11 Cases shall not be deemed
to constitute a Material Adverse Effect.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt ratings business.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the Borrower
and the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA in the event such plan has been or were to be terminated.
"Net Asbestos and Silica Liability" means (a) estimated asbestos
litigation claims and silica litigation claims minus (b) estimated insurance for
asbestos litigation claims and silica litigation claims, in each case as
reflected in the financial statements most recently delivered pursuant to
Section 5.01(d)(i) and 5.01(d)(ii) (or, prior to such date, financial statements
as filed in the June 2003 10-Q), to the extent that such liability is greater
than zero.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any Collateral, the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions and (b) the
amount of taxes payable in connection with or as a result of such transaction,
in each case to the extent, but only to the extent, that the amounts so deducted
are, at the time of receipt of such cash, actually paid to a Person that is not
an Affiliate of such Person or any Loan Party or any Affiliate of any Loan Party
and are properly attributable to such transaction or to the asset that is the
subject thereof.
"Net Income" means, for any period, the Borrower's net income for such
period, as determined in accordance with GAAP.
- 10 -
"Note" means a promissory note of the Borrower payable to the order of
any Bank, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Bank resulting from the Advances
owing to such Bank.
"Notes Agreements" has the meaning set forth in the Pledge Agreement.
"Notice of Issuance and Application for Letter of Credit" has the
meaning specified in Section 2.03(a).
"Notice of Revolving Credit Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Termination" has the meaning specified in Section 2.01(b).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of any Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the obligation of
such Loan Party to reimburse any amount in respect of any of the foregoing that
any Bank, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.
"Order Entry" means the date on which (i) a final, non-appealable order
shall have been entered in the Chapter 11 Cases approving the establishment of a
trust pursuant to Section 524(g) of the Bankruptcy Code in order to dispose of
the present asbestos claims and future demands against any of the Borrower's
subsidiaries identified on Schedule 4.01(h) hereto arising out of exposure to
asbestos and/or asbestos-related products prior to the date of entry of such
order, which order (A) enjoins the assertion of such asbestos claims against the
Borrower and such subsidiaries, (B) contains an injunction which is reasonably
satisfactory in scope, nature and extent to the Co-Lead Arrangers and (C)
incorporates the terms of the Plan of Reorganization and (ii) a final,
non-appealable order reasonably satisfactory to the Co-Lead Arrangers shall have
been entered in the Chapter 11 Cases approving the establishment of a trust
pursuant to Section 105(a) of the Bankruptcy Code in order to dispose of the
present silica claims and future demands against any of the Borrower's
subsidiaries identified on Schedule 4.01(h) hereto arising out of exposure to
silica and/or silica-related products prior to the date of entry of such order,
which order (A) enjoins the assertion of such silica claims against the Borrower
and such subsidiaries, (B) contains an injunction which is reasonably
satisfactory in scope, nature and extent to the Co-Lead Arrangers and (C)
incorporates the terms of the Plan of Reorganization.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Performance Letter of Credit" means a letter of credit qualifying as a
"performance-based standby letter of credit" under 12 C.F.R. Part 3, Appendix A,
Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced or, if commenced, have been stayed: (a) Liens for taxes,
assessments and governmental charges or levies to the extent not required to be
paid under Section 5.01(c); (b) Liens imposed by law, such as materialmen's,
mechanics', carriers',
- 11 -
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business securing obligations that individually or together with all
other Permitted Liens outstanding on any date of determination do not materially
adversely affect the use of the property to which they relate; (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) easements, rights
of way and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; (e) Liens to secure the
performance of bids, trade contracts (other than for Indebtedness), leases
(including permitted capitalized leases), statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business; and (f) Liens with respect to joint ventures
or other similar arrangements to secure the obligations of one joint venture
party to another, provided that such Liens do not secure Indebtedness.
"Permitted Non-Recourse Indebtedness" means Indebtedness and other
obligations of the Borrower or any Subsidiary incurred in connection with the
acquisition or construction by the Borrower or such Subsidiary of any property
with respect to which:
(a) the holders of such Indebtedness and other
obligations agree that they will look solely to the property so
acquired or constructed and securing such Indebtedness and other
obligations, and neither the Borrower nor any Subsidiary (i) provides
any direct or indirect credit support, including any undertaking,
agreement or instrument that would constitute Indebtedness or (ii) is
directly or indirectly liable for such Indebtedness; and
(b) no default with respect to such Indebtedness or
obligations would cause, or permit (after notice or passage of time or
otherwise), according to the terms thereof, any holder (or any
representative of any such holder) of any other Indebtedness of the
Borrower or such Subsidiary to declare a default on such Indebtedness
or cause the payment, repurchase, redemption, defeasance or other
acquisition or retirement for value thereof to be accelerated or
payable prior to any scheduled principal payment, scheduled sinking
fund or maturity.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof or any trustee, receiver, custodian or similar official.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Plan of Reorganization" means the plan of reorganization in the form
attached as Exhibit B to the Disclosure Statement.
"Pledge Agreement" has the meaning specified in Section 3.01(e)(ii).
"Pledged Equity" has the meaning specified in the Pledge Agreement.
"Pre-Closing Information" has the meaning specified in clause (ii) of
the definition of "Collateral Release Date".
"Prior Credit Facility" means the 5-Year Revolving Credit Agreement
dated as of August 16, 2001 among the Borrower, Citibank, as paying agent,
Citibank and JPMCB (as successor to The Chase Manhattan Bank), as
co-administrative agents, and the lenders party thereto.
- 12 -
"Pro Rata Share" of any amount means, with respect to any Bank at any
time, such amount times a fraction the numerator of which is the amount of such
Bank's Revolving Credit Commitment at such time (or, if the Commitments shall
have been terminated pursuant to Section 2.05 or 6.01, such Revolving Credit
Commitment as in effect immediately prior to such termination) and the
denominator of which is the Revolving Credit Facility at such time (or, if the
Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the
Revolving Credit Facility as in effect immediately prior to such termination).
"Project Financing" means Indebtedness and other obligations that (a)
are incurred by a Project Finance Subsidiary, (b) are secured by a Lien of the
type permitted under clause (v) of Section 5.02(a) and (c) constitute Permitted
Non-Recourse Indebtedness (other than recourse to the assets of, and Equity
Interests in, any Project Finance Subsidiary).
"Project Finance Subsidiary" means a Subsidiary that is a
special-purpose entity created solely to (i) construct or acquire any asset or
project that will be or is financed solely with Project Financing for such asset
or project and related equity investments in, loans to, or capital contributions
in, such Subsidiary that are not prohibited hereby and/or (ii) own an interest
in any such asset or project.
"Property" or "asset" (in each case, whether or not capitalized) means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.
"Ratings Event" means at any time (a) the senior unsecured long-term
debt of the Borrower (i) is rated lower than BBB- by S&P or (ii) is rated lower
than Baa3 by Moody's or (b) either S&P or Moody's ceases to rate such senior
unsecured long-term debt.
"Receivables Subsidiary" means (i) Oilfield Services Receivables
Corporation, a Delaware corporation, and any other transferor under the
transaction referred to in Section 5.02(a)(iii), including any replacement
transaction and (ii) any other special purpose entity created in connection with
a Securitization Transaction.
"Register" has the meaning specified in Section 8.08(c).
"Regulation U" means Regulation U of the Federal Reserve Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Required Banks" means at any time Banks owed or holding at least a
majority in interest of the sum of (i) the aggregate principal amount of the
Advances outstanding at such time; (ii) the Available Amount of all Letters of
Credit outstanding at such time (calculated by reference to each Bank's Pro Rata
Share) and (iii) the aggregate Unused Revolving Credit Commitments at such time.
"Responsible Officer" means each of the chairman and chief executive
officer, the president, the chief financial officer, the treasurer, the
secretary or any vice president (whether or not further described by other
terms, such as, for example, senior vice president or vice president-operations)
of the Borrower or, if any such office is vacant, any Person performing any of
the functions of such office.
"Revolving Credit Advance" means an Advance by a Bank to the Borrower
pursuant to Section 2.01 and refers to a Base Rate Advance or a Eurodollar Rate
Advance (each of which shall be a "Type" of Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Banks.
- 13 -
"Revolving Credit Commitment" means, with respect to any Bank at any
time, the amount set forth opposite such Bank's name on Schedule I hereto under
the caption "Revolving Credit Commitment" or, if such Bank has entered into one
or more Assignment and Acceptances, set forth for such Bank in the Register
maintained by the Agent pursuant to Section 8.08(c) as such Bank's "Revolving
Credit Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount of
the Banks' Revolving Credit Commitments at such time.
"S&P" means Standard & Poor's Ratings Service Group, a division of The
McGraw-Hill Companies, Inc. on the date hereof, or any successor to its debt
ratings business.
"SEC" means the Securities and Exchange Commission or any successor
thereof.
"Securitization Transaction" means any transfer by the Borrower or any
Subsidiary of accounts receivable or interests therein (including, without
limitation, all collateral securing such accounts receivable, all contracts and
guarantees or other obligations in respect of such accounts receivable, the
proceeds of such receivables and other assets which are customarily transferred,
or in respect of which security interests are customarily granted, in connection
with asset securitizations involving accounts receivable), or grant of a
security interest therein, (a) to a trust, in part, directly or indirectly, by
the incurrence or issuance by the transferee or any successor transferee of
Indebtedness or securities that are to receive payments from, or that represent
interests in, the cash flow derived from such accounts receivable or interests,
or (b) directly to one or more investors or other purchasers.
"Secured Holders" has the meaning specified in the Collateral Trust
Agreement.
"Senior Unsecured Credit Facility Agreement" means the credit agreement
dated as of October 30, 2003 among the Borrower, the lenders party thereto,
CNAI, as administrative agent, JPMCB, as syndication agent, ABN AMRO Bank, N.V.,
as documentation agent and Citigroup Global Markets Inc., Goldman Sachs Capital
Partners L.P. and J.P. Morgan Securities Inc., as co-lead arrangers.
"Settlement Payments" means payments by the Borrower of approximately
$2.775 billion to asbestos and silica claimants as described in the Disclosure
Statement.
"Shared Collateral Account" means the account of the Borrower with
Citibank at its office at __________ in the name of the Collateral Agent and
under the sole dominion and control of the Collateral Agent and subject to the
terms of the Pledge Agreement and the Collateral Trust Agreement.
"Shared Collateral Obligations" has the meaning specified in the
Collateral Trust Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and the
ERISA Affiliates or (b) was so maintained and in respect of which the Borrower
or any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Stock Agreement" means the Stock Agreement among DII Industries, LLC,
HESI and the Borrower, as amended from time to time.
"Subsidiary" of any Person means any corporation (including a business
trust), partnership, joint stock company, trust, unincorporated association,
joint venture or other entity of which more than 50% of
- 14 -
the outstanding capital stock, securities or other ownership interests having
ordinary voting power to elect directors of such corporation or, in the case of
any other entity, others performing similar functions (irrespective of whether
or not at the time capital stock, securities or other ownership interests of any
other class or classes of such corporation or such other entity shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person or by one or more other Subsidiaries of such
Person.
"Subsidiary Guarantor" means, during such time as such Subsidiary is a
party to the Subsidiary Guaranty or a Guaranty Supplement, each of the
Subsidiaries of the Borrower listed on Schedule IV hereto and each other
Subsidiary of the Borrower that shall be required to execute and deliver a
Guaranty Supplement pursuant to Section 5.01(i) and each other Subsidiary of the
Borrower which voluntarily executes and delivers a Guaranty Supplement.
"Subsidiary Guaranty" has the meaning specified in Section 3.01(e)(iii)
"Syndication Agent" means JPMCB, solely in its capacity as syndication
agent under the Agreement.
"Taxes" has the meaning specified in Section 2.13(a).
"Termination Date" means October 20, 2006, or the earlier date of
termination in whole of the Commitments pursuant to Section 2.05 or Section
6.01.
"Transaction" means the consummation of the Plan of Reorganization, the
creation of the Trusts, the Settlement Payments and related transactions.
"Trusts" means the trusts to be organized pursuant to Section 524(g)
and 105(a) of the Bankruptcy Code as provided in the Plan of Reorganization.
"Type" has the meaning specified in the definition of Revolving Credit
Advance.
"Unrestricted Cash" means cash not subject to a security interest
granted by a Person to a third party (other than the Collateral Agent for the
benefit of the Secured Holders). For the avoidance of doubt, contractual and
statutory offset rights are not considered to be security interests for the
purposes of this definition.
"Unused Revolving Credit Commitment" means, with respect to any Bank at
any time, (a) such Bank's Revolving Credit Commitment at such time minus (b) the
sum of (i) the aggregate principal amount of all Revolving Credit Advances and
Letter of Credit Advances made by such Bank and outstanding at such time plus
(ii) such Bank's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Banks pursuant to
Section 2.03(c) and outstanding at such time.
Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 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 the Borrower notifies the Agent that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or
- 15 -
in the application thereof on the operation of such provision (or if the Agent
notifies the Borrower that the Required Banks request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such 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 change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
Section 1.04 Miscellaneous. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified.
Section 1.05 Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or
(in the absence of such announcement or publication) the effective date of, any
change in such rating. In the event the standards for any rating by Moody's or
S&P are revised, or such rating is designated differently (such as by changing
letter designations to numerical designations), then the references herein to
such rating shall be deemed to refer to the revised or redesignated rating for
which the standards are closest to, but not lower than, the standards at the
date hereof for the rating which has been revised or redesignated, all as
determined by the Required Banks in good faith. Long-term debt supported by a
letter of credit, guaranty or other similar credit enhancement mechanism shall
not be considered as senior unsecured long-term debt. If either Moody's or S&P
has at any time more than one rating applicable to senior unsecured long-term
debt of any Person, the lowest such rating shall be applicable for purposes
hereof. For example, if Moody's rates some senior unsecured long-term debt of
the Borrower Baa1 and other such debt of the Borrower Baa2, the senior unsecured
long-term debt of the Borrower shall be deemed to be rated Baa2 by Moody's.
ARTICLE II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES
Section 2.01 The Revolving Credit Advances. (a) Each Bank severally
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances in Dollars to the Borrower from time to time on any Business Day
during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed such Bank's Unused Revolving Credit Commitment at
such time; provided that no Revolving Credit Advance shall be required to be
made, except as a part of a Revolving Credit Borrowing that is in an aggregate
amount not less than $10,000,000 in the case of Eurodollar Rate Advances and
$5,000,000 in the case of Base Rate Advances and in an integral multiple of
$1,000,000, and each Revolving Credit Borrowing shall consist of Revolving
Credit Advances of the same Type made on the same day by the Banks ratably
according to their respective Revolving Credit Commitments. Within the limits of
each Bank's Unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow, prepay pursuant to Section 2.10 and reborrow under this
Section 2.01. The Borrower agrees to give a Notice of Revolving Credit Borrowing
in accordance with Section 2.02(a) as to each Revolving Credit Advance.
(b) Letters of Credit. Each Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (collectively,
the "Letters of Credit", and each a "Letter of Credit") for the account of the
Borrower (such issuance, and any funding of a draw thereunder, to be made by the
Issuing Banks in reliance on the agreements of the other Banks pursuant to
Section 2.03) from time to time on any Business Day during the period from the
Effective Date until 10 days prior to the
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Termination Date in an aggregate Available Amount (i) for all Letters of Credit
issued by the Issuing Banks not to exceed at any time the lesser of (A) the
aggregate Letter of Credit Commitments at such time and (B) the Letter of Credit
Commitment of such Issuing Bank at such time and (ii) for each such Letter of
Credit not to exceed an amount equal to the Unused Revolving Credit Commitments
of the Banks at such time. No Letters of Credit shall have expiration dates
(including all rights of the Borrower or the beneficiary to request renewals
thereof pursuant to the next sentence) later than the earlier of (x) one year
from the date of issuance and (y) 10 Business Days prior to the Termination
Date; provided, however, that upon the Borrower's request, the Issuing Banks
agree, on the terms and conditions hereof, to issue Long-Dated Letters of Credit
with an aggregate outstanding face value not exceeding 33-1/3% of the aggregate
amount of the Revolving Credit Commitments (which Long-Dated Letters of Credit
shall in no event expire later than 10 Business Days before the Termination
Date). Notwithstanding the foregoing, any Letter of Credit may by its terms be
renewable automatically annually, unless the relevant Issuing Bank has notified
the Borrower (with a copy to the Agent) on or prior to the date for notice of
termination set forth in such Letter of Credit but in any event at least 30 days
prior to the date of renewal of its election not to renew such Letter of Credit
(a "Notice of Termination"). If a Notice of Termination is given by the relevant
Issuing Bank pursuant to the immediately preceding sentence, such Letter of
Credit shall expire on the date on which it otherwise would have been
automatically renewed. Within the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this Section 2.01(b), repay any
Letter of Credit Advances resulting from drawings thereunder pursuant to Section
2.03(a) and request the issuance of additional Letters of Credit under this
Section 2.01(b).
Section 2.02 Making the Revolving Credit Advances. (a) Each Revolving
Credit Borrowing shall be made on notice in the form of Exhibit B-1 (a "Notice
of Revolving Credit Borrowing"), given not later than 11:00 A.M. (New York City
time) (i) on the date of a proposed Revolving Credit Borrowing comprised of Base
Rate Advances and (ii) on the third Business Day prior to the date of a proposed
Revolving Credit Borrowing comprised of Eurodollar Rate Advances, by the
Borrower to the Agent, which shall give to each Bank prompt notice thereof by
facsimile. Each Notice of Revolving Credit Borrowing shall be by facsimile,
confirmed immediately in writing, in substantially the form of Exhibit B-1,
specifying therein the requested (i) date of such Revolving Credit Borrowing,
(ii) Type of Revolving Credit Advances comprising such Revolving Credit
Borrowing, (iii) aggregate amount of such Revolving Credit Borrowing, and (iv)
if such Revolving Credit Borrowing is to be comprised of Eurodollar Rate
Advances, the initial Interest Period for each such Revolving Credit Advance.
Each Bank shall, before 2:00 p.m. (New York City time) on the date of such
Revolving Credit Borrowing, make available for the account of its Applicable
Lending Office to the Agent at its address referred to in Section 8.02, in same
day funds, such Bank's ratable portion of such Revolving Credit Borrowing. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower at the Agent's aforesaid address.
(b) Notwithstanding any other provision in this Agreement, at
no time shall there be more than ten Revolving Credit Borrowings outstanding;
provided that for purposes of the limitation set forth in this sentence, all
Revolving Credit Borrowings consisting of Base Rate Advances shall constitute a
single Revolving Credit Borrowing.
(c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the Borrower. In the case of any Revolving Credit
Borrowing that the related Notice of Revolving Credit Borrowing specifies is to
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Bank
against any loss, cost or expense incurred by such Bank as a result of any
failure to fulfill on or before the date specified in such Notice of Revolving
Credit Borrowing for such Revolving Credit Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Bank to
fund the Revolving Credit Advance to
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be made by such Bank as part of such Revolving Credit Borrowing when such
Revolving Credit Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Bank
prior to the time of any Revolving Credit Borrowing that such Bank will not make
available to the Agent such Bank's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Bank has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such ratable portion
available to the Agent, such Bank and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Revolving Credit
Advances comprising such Revolving Credit Borrowing and (ii) in the case of such
Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's
Revolving Credit Advance as part of such Revolving Credit Borrowing for all
purposes.
(e) The failure of any Bank to make the Revolving Credit
Advance to be made by it as part of any Revolving Credit Borrowing shall not
relieve any other Bank of its obligation, if any, hereunder to make its
Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no
Bank shall be responsible for the failure of any other Bank to make the
Revolving Credit Advance to be made by such other Bank on the date of any
Revolving Credit Borrowing.
Section 2.03 Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice and application, given not later than 11:00 A.M. (New York City time) on
the third Business Day (or a later day, if acceptable to the relevant Issuing
Bank in its sole discretion, but in no event later than the first Business Day)
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to any Issuing Bank, which shall give to the Agent prompt notice
thereof by telex or facsimile. Each such notice of issuance of a Letter of
Credit (a "Notice of Issuance and Application for Letter of Credit") shall be by
telephone, confirmed immediately in writing, or telex or facsimile, in the form
of Exhibit B-2, specifying therein the requested (A) date of such issuance
(which shall be a Business Day), (B) Available Amount of such Letter of Credit,
(C) expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit, (E) form of such Letter of Credit and (F)
the requested currency of such Letter of Credit, if other than Dollars. If the
requested form of such Letter of Credit is acceptable to such Issuing Bank in
its sole discretion, such Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 8.02 or as otherwise agreed with
the Borrower in connection with such issuance; provided that no Issuing Bank
shall be obligated to issue any Letter of Credit in a Foreign Currency, but each
Issuing Bank shall be permitted to do so in its sole discretion if requested by
the Borrower.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish (A)
to the Agent on the first Business Day of each week a written report summarizing
issuance and expiration dates of Letters of Credit issued by such Issuing Bank
during the previous week and drawings during such week under all Letters of
Credit issued by such Issuing Bank, (B) to the Agent on the first Business Day
of each month a written report summarizing issuance and expiration dates of
Letters of Credit issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by such Issuing
Bank and (C) to the Agent on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such Issuing
Bank.
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(c) Drawing and Reimbursement. The payment by any Issuing Bank of
a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by such Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the Dollar Equivalent amount of such
draft. Upon written demand by any Issuing Bank with an outstanding Letter of
Credit Advance, with a copy of such demand to the Agent, each Bank shall
purchase from such Issuing Bank, and such Issuing Bank shall sell and assign to
each such Bank, such Bank's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Agent for the account of such Issuing Bank,
by deposit to the Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Bank. Promptly after receipt thereof, the Agent shall
transfer such funds to such Issuing Bank. The Borrower hereby agrees to each
such sale and assignment. Each Bank agrees to purchase its Pro Rata Share of an
outstanding Letter of Credit Advance on (i) the Business Day on which demand
therefor is made by the Issuing Bank which made such Advance, provided that
notice of such demand is given not later than 11:00 A.M. (New York City time) on
such Business Day, or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by an
Issuing Bank to any Bank of a portion of a Letter of Credit Advance, such
Issuing Bank represents and warrants to such other Bank that such Issuing Bank
is the legal and beneficial owner of such interest being assigned by it, free
and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Bank shall not
have so made the amount of such Letter of Credit Advance available to the Agent,
such Bank agrees to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date of demand by Issuing Bank
until the date such amount is paid to the Agent, at the Federal Funds Rate for
its account or the account of Issuing Bank, as applicable. If such Bank shall
pay to the Agent such amount for the account of Issuing Bank on any Business
Day, such amount so paid in respect of principal shall constitute a Letter of
Credit Advance made by such Bank on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Letter of Credit Advance
made by Issuing Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Bank to make the Letter of Credit Advance to be made by it on the date specified
in Section 2.03(c) shall not relieve any other Bank of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Bank shall be
responsible for the failure of any other Bank to make the Letter of Credit
Advance to be made by such other Bank on such date.
Section 2.04 Fees. (a) Commitment Fees. The Borrower agrees to pay to
the Agent for the account of each Bank a commitment fee through the Termination
Date on the amount of such Bank's Unused Revolving Credit Commitment, (i) from
November 1, 2003 in the case of each Bank listed on the signature pages hereof
or (ii) from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Bank, payable quarterly in arrears (within three
Business Days after receipt from the Agent of an invoice therefor) for each
period ending on the last day of each March, June, September and December
hereafter, commencing December 31, 2003, and on the Termination Date, at a rate
per annum equal to the Applicable Commitment Fee Rate in effect from time to
time (the "Commitment Fee").
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Agent for the account of each Bank a commission, payable in arrears
quarterly (within three Business Days after receipt from the Agent of an invoice
therefor) for each period ending on the last day of each March, June, September
and December, commencing December 31, 2003 and on the Termination Date, on such
Bank's Pro Rata Share of the average daily aggregate Available Amount during
such quarter of all Letters of Credit then
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outstanding at a rate equal to the Applicable Margin on Eurodollar Rate Advances
in effect from time to time.
(ii) The Borrower shall pay to each Issuing Bank, for its
own account, (A) an issuance fee for each Letter of Credit issued by such
Issuing Bank in an amount equal to 0.125% of the Available Amount of such Letter
of Credit on the date of issuance of such Letter of Credit, payable on such date
and (B) such other commissions, fronting fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of
Credit as the Borrower and Issuing Bank shall agree.
(c) Other Fees. The Borrower agrees to pay to the Agent, the
Co-Lead Arrangers, and the Banks such other fees as may be separately agreed to
in writing.
Section 2.05 Reduction of Commitments. The Borrower shall have the
right, upon at least three Business Days' notice to the Agent, to terminate in
whole or reduce ratably in part the Unused Revolving Credit Commitments;
provided that each partial reduction shall be in the minimum aggregate amount of
$10,000,000 and in an integral multiple of $5,000,000. Any termination or
reduction of any of the Commitments shall be permanent.
Section 2.06 Repayment of Advances; Required Cash Collateral. (a)
Revolving Credit Advances. The Borrower shall repay the principal amount of each
Revolving Credit Advance owing to each Bank on the Termination Date or on such
earlier date as may be applicable pursuant hereto.
(b) Letter of Credit Advances. (i) The Borrower shall repay to
the Agent for the account of each Issuing Bank and each other Bank that has made
a Letter of Credit Advance on the earlier of the third Business Day following
the date on which such Letter of Credit Advance is made and the Termination Date
the outstanding principal amount of each Letter of Credit Advance made by each
of them.
(ii) The Obligations of the Borrower under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument, in each
case relating to any Letter of Credit, shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Borrower is without prejudice to,
and does not constitute a waiver of, any rights the Borrower might have or might
acquire as a result of the payment by any Issuing Bank of any draft or the
reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of
any Loan Document, any Letter of Credit Agreement, any Letter
of Credit or any other agreement or instrument relating
thereto (all of the foregoing being, collectively, the "L/C
Related Documents");
(B) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations of the Borrower in respect of any L/C Related
Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or
any Persons for which any such beneficiary or any such
transferee may be
- 20 -
acting), any Issuing Bank or any other Person, whether in
connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;
(D) any statement or any other document
presented under a Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(E) payment by any Issuing Bank under a Letter
of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit;
(F) any exchange, release or non-perfection of
any Collateral or other collateral, or any release or
amendment or waiver of or consent to departure from the
Subsidiary Guaranty or any other guarantee, for all or any of
the Obligations of the Borrower in respect of the L/C Related
Documents; or
(G) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
(c) Cash Collateral. (i) Prior to the Collateral Release Date,
(x) so long as no Ratings Event shall have occurred, 100% of the Net Cash
Proceeds received by the Borrower or any of its Subsidiaries (or, in the case of
a non-wholly-owned Subsidiary, the pro rata share attributable to the Borrower's
(direct or indirect) percentage ownership interest in such Subsidiary) from
dispositions of Collateral and (y) from and after the occurrence of a Ratings
Event and the granting and perfection of additional security pursuant to Section
5.01(i)(ii), 100% of the Net Cash Proceeds from dispositions of Collateral
(other than (A) proceeds from any Excluded Disposition or (B) proceeds which do
not exceed $5,000,000 in any single transaction or any series of related
transactions) shall be in each case deposited in the Shared Collateral Account
as collateral for the Shared Collateral Obligations; provided, that an aggregate
amount of up to $150,000,000 of such Net Cash Proceeds referred to in clause (y)
which would otherwise be required to be deposited to the Shared Collateral
Account may be retained by the Borrower and its Subsidiaries. Upon the
Collateral Release Date, such Collateral shall be released on the terms set
forth in Section 8.09(b). For purposes of this Section 2.06(c), if the
Borrower's (direct or indirect) percentage ownership in any consolidated
Subsidiary whose Equity Interests constitute part of the Collateral is reduced
(whether due to an issuance of equity by such Person or otherwise) then the
portion of the net cash proceeds received by such Person attributable to such
reduction shall be deemed to be proceeds received by the Borrower or one of its
Subsidiaries from a disposition of Collateral pursuant to this Section and shall
be subject to the prepayment provisions hereof.
(ii) If on any date the sum of the aggregate Available
Amount of all Letters of Credit outstanding on such date plus the aggregate
principal amount of Advances outstanding on such date exceeds the aggregate
Commitments on such date, the Borrower shall, within three Business Days
thereafter, pay to the Agent in same day funds at the Agent's office, for
deposit in the L/C Cash Collateral Account, an amount equal to such excess,
which amount shall be released within three Business Days after notice from the
Borrower to the Agent that the sum of the aggregate Available Amount of all
Letters of Credit plus the aggregate principal amount of Advances outstanding on
such date no longer exceeds the aggregate Commitments.
(d) At any time that the Advances have been paid in full,
the Available Amount of Letters of Credit has been cash collateralized and the
Commitments have been terminated, if at such time
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the Collateral Release Date has not occurred, the Agent agrees to provide to the
Collateral Agent a written notification to such effect.
Section 2.07 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(a) During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate in effect
from time to time plus the Applicable Margin in effect from time to
time, payable quarterly in arrears on the last day of each March, June,
September and December and on the date such Base Rate Advance shall be
Converted or paid in full; provided, that any amount of principal of a
Base Rate Advance which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to the sum of
the rate otherwise payable thereon plus 2%.
(b) During such periods as such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during each Interest
Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to time,
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Revolving Credit
Advance shall be Converted or paid in full; provided, that any amount
of principal of a Eurodollar Rate Advance which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear
interest, payable on demand, (i) from the date on which such amount is
due until the end of the Interest Period for such Revolving Credit
Advance, at a rate per annum equal at all times to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable Margin in
effect from time to time plus 2%, and (ii) from the end of such
Interest Period until such amount is paid in full, at a rate per annum
equal at all times to the sum of the rate of interest in effect from
time to time for Base Rate Advances plus 2%.
(c) Upon the occurrence and during the continuance of an Event
of Default under Section 6.01(a), the Borrower shall pay simple
interest, to the fullest extent permitted by law, on the amount of any
interest, fee or other amount (other than principal of Advances which
is covered by Sections 2.07(a) and 2.07(b)) payable hereunder that is
not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal
at all times to the sum of the rate of interest in effect from time to
time for Base Rate Advances plus 2% per annum.
Section 2.08 Additional Interest on Eurodollar Rate Advances. The
Borrower shall pay to each Bank, so long as such Bank shall be required under
regulations of the Federal Reserve Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Advance of such Bank
during such periods as such Advance is a Eurodollar Rate Advance, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period then in effect for such Eurodollar Rate
Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is payable
on such Eurodollar Rate Advance. Such additional interest shall be determined by
such Bank and notified to the Borrower through the Agent.
- 22 -
Section 2.09 Interest Rate Determination. (a) The Agent shall give
prompt notice to the Borrower and the Banks of the applicable interest rate
determined by the Agent for purposes of Section 2.07(b).
(b) If the Agent is unable to determine the Eurodollar Rate
for any Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the
Banks that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance (or if such Advance is then a Base Rate
Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Banks to make Eurodollar Rate
Advances or to Convert Revolving Credit Advances into Eurodollar Rate
Advances shall be suspended until the Agent shall notify the Borrower
and the Banks that the circumstances causing such suspension no longer
exist.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Banks notify the Agent (A) that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Banks of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period or (B) that Dollar deposits for the relevant
amounts and Interest Period for their respective Advances are not available to
them in the London interbank market, the Agent shall forthwith so notify the
Borrower and the Banks, whereupon
(i) each Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance, and
(ii) the obligation of the Banks to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Banks that the circumstances
causing such suspension no longer exist.
(d) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Banks and such Revolving
Credit Advances will automatically, on the last day of the then existing
Interest Period therefor, Convert into Base Rate Advances (or if such Advances
are then Base Rate Advances, will continue as Base Rate Advances).
(e) On the date on which the aggregate unpaid principal amount
of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances, and on and after such date
the right of the Borrower to Convert such Advances into Eurodollar Rate Advances
shall terminate.
(f) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Banks to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
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Section 2.10 Prepayments. The Borrower shall have no right to prepay
any principal amount of any Advance other than as provided in this Section 2.10.
The Borrower may, upon notice given to the Agent before 11:00 A.M. (New York
City time) on the first Business Day prior to the date of prepayment in the case
of Base Rate Advances or upon at least three Business Days' notice to the Agent
in the case of Eurodollar Rate Advances, in each case stating the proposed date
(which shall be a Business Day) and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amounts of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount not less
than $10,000,000 in the case of Eurodollar Rate Advances and $5,000,000 in the
case of Base Rate Advances and in integral multiples of $1,000,000, and after
giving effect thereto no Borrowing then outstanding shall have a principal
amount of less than $5,000,000; and (y) in the case of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Banks
in respect thereof pursuant to Section 8.04(b).
Section 2.11 Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes not later than 11:00 A.M. (New York
City time) on the day when due in Dollars to the Agent (except that payments
under Section 2.08 shall be paid directly to the Bank entitled thereto) at Two
Penns Way, Suite 200, New Castle, Delaware 19720, in same day funds. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal, interest, Commitment Fees or Letter of Credit Fees ratably
(except amounts payable pursuant to Section 2.12 or Section 2.13 and except that
any Bank may receive less than its ratable share of interest to the extent
Section 8.06 is applicable to it) to the Banks for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Bank to such Bank for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.08(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Bank assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves. At the time of each payment of any principal of or interest
on any Borrowing to the Agent, the Borrower shall notify the Agent of the
Borrowing to which such payment shall apply. In the absence of such notice the
Agent may specify the Borrowing to which such payment shall apply.
(b) All computations of interest based on the Base Rate
(except during such times as the Base Rate is determined pursuant to clause (c)
of the definition thereof), of Commitment Fees and of Letter of Credit Fees
shall be made by the Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate, the
Federal Funds Rate or, during such times as the Base Rate is determined pursuant
to clause (c) of the definition thereof, the Base Rate shall be made by the
Agent, and all computations of interest pursuant to Section 2.07 shall be made
by a Bank, on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each determination by
the Agent (or in the case of Section 2.07, by a Bank) of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, Commitment Fees and
Letter of Credit Fees, as the case may be; provided, however, if such extension
- 24 -
would cause payment of interest on or principal of Eurodollar Rate Advances to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(d) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment in full to
the Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
Section 2.12 Increased Costs and Capital Requirements. (a) If, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation by any
governmental authority charged with the interpretation or administration thereof
or (ii) the compliance with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law), there
shall be any increase in the cost to any Bank of agreeing to make or making,
funding or maintaining any Eurodollar Rate Advance or of agreeing to issue or of
issuing or maintaining or participating in Letters of Credit or of agreeing to
make or of making or maintaining Letter of Credit Advances (excluding, for
purposes of this Section 2.12, any such increased costs resulting from (x) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (y) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such Bank
is organized or has its Applicable Lending Office or any political subdivision
thereof),, then the Borrower shall from time to time, within 15 days after
demand by such Bank (with a copy of such demand to the Agent), pay to the Agent
for the account of such Bank additional amounts sufficient to compensate such
Bank for such increased cost; provided, however, that the Borrower shall not be
required to pay to such Bank any portion of such additional amounts that are
incurred more than 90 days prior to any such demand, unless such additional
amounts had not been imposed or were not determinable on the date that is 90
days prior to such demand. A certificate setting forth in reasonable detail the
amount of such increased cost, submitted to the Borrower and the Agent by such
Bank, shall be conclusive and binding for all purposes, absent manifest error.
(b) If following the introduction of or any change in any
applicable law or regulation or any guideline or request from any central bank
or other governmental authority (whether or not having the force of law) any
Bank determines that compliance by such Bank with any such law or regulation or
guideline or request regarding capital adequacy affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
Person controlling such Bank and that the amount of such capital is increased by
or based upon the existence of such Bank's commitment to lend or to issue or
participate in Letters of Credit hereunder and other commitments of such type or
the issuance or maintenance of or participation in Letters of Credit (or similar
contingent obligations), then, within 15 days after demand by such Bank (with a
copy of such demand to the Agent), the Borrower shall pay to the Agent for the
account of such Bank, from time to time as specified by such Bank, additional
amounts sufficient to compensate such Bank or such Person in the light of such
circumstances, to the extent that such Bank reasonably determines such increase
in capital to be allocable to the existence of such Bank's commitment to lend or
to issue or participate in Letters of Credit hereunder or to the issuance of or
participation in any Letters of Credit; provided, however, that the Borrower
shall not be required to pay to such Bank any portion of such additional amounts
that are incurred more than 90 days prior to any such demand, unless such
additional amounts had not been imposed or were not determinable on the date
that is 90 days prior to such demand. A certificate setting forth in reasonable
detail such amounts submitted to
- 25 -
the Borrower and the Agent by such Bank shall be conclusive and binding for
all purposes, absent manifest error.
(c) Each Bank shall make reasonable efforts (consistent with
its internal policies and legal and regulatory restrictions) to select a
jurisdiction for its Applicable Lending Office or change the jurisdiction of its
Applicable Lending Office, as the case may be, so as to avoid the imposition of
any increased costs under this Section 2.12 or to eliminate the amount of any
such increased cost which may thereafter accrue; provided that no such selection
or change of the jurisdiction for its Applicable Lending Office shall be made
if, in the reasonable judgment of such Bank, such selection or change would be
disadvantageous to such Bank.
Section 2.13 Taxes. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made, in accordance with Section 2.11, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges and withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, taxes imposed on its
overall net income (including branch profits), and franchise taxes imposed on or
measured by net income, by the jurisdiction under the laws of which such Bank or
the Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its overall net income(including
branch profits), and franchise taxes imposed on or measured by net income, by
the jurisdiction of such Bank's Applicable Lending Office or principal executive
office or any political subdivision thereof, and all liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"), except
as may otherwise be required by law. If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Bank or the Agent, (i) the sum payable shall be increased by such
amount (an "Additional Amount") as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law. Any such payment by the Borrower shall be
made in the name of the relevant Bank or the Agent (as the case may be).
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, performing under, or
otherwise with respect to, this Agreement or any of the Notes (hereinafter
referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) imposed on or paid by such Bank or the Agent (as the case may be)
and any liability (including penalties, interest and reasonable expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payments under any indemnification
provided for in this Section 2.13(c) shall be made within 30 days from the date
such Bank or the Agent (as the case may be) makes written demand therefor
describing such Taxes or Other Taxes in reasonable detail.
(d) If the Agent or a Bank reasonably determines that it has
finally and irrevocably received a refund in respect of any Taxes or Other Taxes
as to which it has been indemnified by the Borrower, or with respect to which
the Borrower has paid Additional Amounts, pursuant to this Section 2.13, it
shall within 30 days from the date of such receipt pay over such refund to the
Borrower (but only to the extent such refund is attributable, as reasonably
determined by such Agent or Bank, to such
- 26 -
indemnity payments made, or Additional Amounts paid, by the Borrower under this
Section 2.13 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all reasonable out-of-pocket expenses of the Agent or Bank and
without interest (other than interest paid by the relevant taxation authority
with respect to such refund); provided, however, that the Borrower, upon the
request of the Agent or Bank, agrees to repay the amount paid over to the
Borrower (plus penalties, interest or other charges, if any, imposed by the
relevant taxation authority in respect of such repayment) to the Agent or Bank
in the event the Agent or Bank is required to repay such refund to the
applicable taxation authority. Nothing contained in this Section 2.13(d) shall
interfere with the right of the Agent or any Bank to arrange its tax affairs in
whatever manner it determines appropriate nor oblige the Agent or any Bank to
claim any tax credit or to disclose any information relating to its tax affairs
or any computations in respect thereof or require the Agent or any Bank to do
anything that would prejudice its ability to benefit from any other tax relief
to which it may be entitled.
(e) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof (or
other evidence of payment reasonably satisfactory to the Agent). In the case of
any payment hereunder or under the Notes by or on behalf of the Borrower through
an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel reasonably acceptable to the Agent stating that such payment
is exempt from Taxes imposed by the jurisdiction from which such payment is
made. For purposes of this Section 2.13(e) and Section 2.13(f), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Code.
(f) Each Bank organized under the laws of a jurisdiction
outside the United States, (i) on or prior to the date of the Initial Extension
of Credit in the case of each such Bank listed on the signature pages hereof,
(ii) on the date of the Assignment and Acceptance pursuant to which it becomes a
Bank, (iii) on or before the date, if any, it changes its Applicable Lending
Office, and (iv) from time to time thereafter if reasonably requested in writing
by the Borrower or the Agent or promptly upon the obsolescence or invalidity of
any form previously delivered by such Bank (but only so long as such Bank
remains lawfully able to do so), shall provide the Agent and the Borrower with
two original Internal Revenue Service Forms W-8BEN or W-8ECI (or, in the case of
a Bank that is entitled to claim exemption from withholding of United States
federal income tax under Section 871(h) or 881(c) of the Code, (A) a certificate
representing that such Bank is not a "bank" for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code) and (B) Internal Revenue Service Form W-8BEN), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, properly
completed and duly executed by such Bank, certifying that such Bank is exempt
from or entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or the Notes (or, in the case of a Bank providing the
certificate described in clause (A), certifying that such Bank is a foreign
corporation, partnership, estate or trust). If the forms provided by a Bank at
the time such Bank first becomes a party to this Agreement indicate or require a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes for purposes of this
Section 2.13 unless and until such Bank provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Bank becomes a party to this Agreement (or the
date, if any, a Bank changes its Applicable Lending Office), the Bank assignor
(or such Bank) was entitled to payments under subsection (a) of this Section
2.13 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
- 27 -
includable in Taxes, subject to the provisions of this subsection (f)) United
States withholding tax, if any, applicable with respect to the Bank assignee (or
such Bank) on such date.
(g) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form described in subsection (f) above
(other than if such failure is due to a change in law, or in the interpretation
or application thereof by any governmental authority charged with the
interpretation or application thereof, occurring after the date on which a form
originally was required to be provided or if such form otherwise is not required
under subsection (f) above), such Bank shall not be entitled to indemnification
or payment of an Additional Amount under subsection (a) or (c) of this Section
2.13 with respect to Taxes imposed by the United States to the extent such
United States Taxes exceed the United States Taxes that would have been imposed
had such form been provided; provided, however, that should a Bank become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(h) Any Bank claiming any indemnity payment or Additional
Amounts payable pursuant to this Section 2.13 shall use commercially reasonable
efforts (consistent with its generally applicable internal policy and legal and
regulatory restrictions) to file any certificate or document reasonably
requested in writing by the Borrower or to designate a different Applicable
Lending Office following the reasonable request in writing of the Borrower if
the making of such a filing or change would avoid the need for or reduce the
amount of any such indemnity payment or Additional Amounts that may thereafter
accrue and would not, in the sole determination of such Bank, require the
disclosure of information that the Bank reasonably considers confidential, or be
otherwise disadvantageous to such Bank.
Section 2.14 Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the principal of or interest on the
Advances owing to it (except amounts payable pursuant to Sections 2.08, 2.12 or
2.13, and except that any Bank may receive less than its ratable share of
interest to the extent Section 8.06 is applicable to it) in excess of its
ratable share of payments on account of the principal of or interest on the
Advances obtained by all the Banks, such Bank shall forthwith purchase from the
other Banks such participations in the Advances owing to them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them, provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such Bank's ratable share (according to the
proportion of (i) the amount of the participation purchased from such Bank as a
result of such excess payment to (ii) the total amount of such excess payment)
of such recovery together with an amount equal to such Bank's ratable share
(according to the proportion of (i) the amount of such Bank's required repayment
to (ii) the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.14 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Bank were the direct creditor of the Borrower in the amount of such
participation.
Section 2.15 Illegality. Notwithstanding any other provision of this
Agreement, if any Bank ("Affected Bank") shall notify the Borrower and the Agent
that the introduction of or any change in any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Bank, or its Eurodollar Lending Office, to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of the Affected Bank to
make, or to Convert Advances into, Eurodollar Rate Advances shall forthwith be
suspended (and any request by the Borrower for a Borrowing comprised of
Eurodollar Rate Advances
- 28 -
shall, as to each Affected Bank, be deemed a request for a Base Rate Advance to
be made on the same day as the Eurodollar Rate Advances of the Banks that are
not Affected Banks and such Base Rate Advance shall be considered as part of
such Borrowing) until the Affected Bank shall notify the Borrower, the Banks and
the Agent that the circumstances causing such suspension no longer exist and
(ii) forthwith after such notice from an Affected Bank to the Agent and the
Borrower, all Eurodollar Rate Advances of such Affected Bank shall be deemed to
be Converted to Base Rate Advances (but will otherwise continue to be considered
as a part of the respective Borrowings that they were a part of prior to such
Conversion); provided, however, that, before making any such demand, such Bank
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Bank or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the judgment of such Bank, be otherwise materially disadvantageous to
such Bank. In the event any Bank shall notify the Agent of the occurrence of any
circumstance contemplated under this Section 2.15, all payments and prepayments
of principal that would otherwise have been applied to repay the Eurodollar Rate
Advances that would have been made by such Bank or the Converted Eurodollar Rate
Advances shall instead be applied to repay the Base Rate Advances made by such
Bank in lieu of such Eurodollar Rate Advances or resulting from the Conversion
of such Eurodollar Rate Advances and shall be made at the time that payments on
the Eurodollar Rate Advances of the Banks that are not Affected Banks are made.
Each Bank that has delivered a notice of illegality pursuant to this Section
2.15 above agrees that it will notify the Borrower as soon as practicable if the
conditions giving rise to the illegality cease to exist.
Section 2.16 Conversion of Advances. The Borrower may on any Business
Day, upon notice given to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.02(b), 2.09 and 2.15, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that (i) any Conversion of any Eurodollar Rate Advances
into Base Rate Advances shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Rate Advances, except as provided in Section
2.15, and (ii) Advances comprising a Borrowing may not be Converted into
Eurodollar Rate Advances if the outstanding principal amount of such Borrowing
is less than $10,000,000 or if any Event of Default under Section 6.01(a) shall
have occurred and be continuing on the date the related notice of Conversion
would otherwise be given pursuant to this Section 2.16. Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. Each notice of Conversion shall be
irrevocable and binding on the Borrower. If any Event of Default under Section
6.01(a) shall have occurred and be continuing on the third Business Day prior to
the last day of any Interest Period for any Eurodollar Rate Advances, the
Borrower agrees to Convert all such Advances into Base Rate Advances on the last
day of such Interest Period.
Section 2.17 Replacement or Removal of Bank. In the event that any Bank
shall claim payment of any increased costs pursuant to Section 2.12 or any
additional amounts pursuant to Section 2.13, or exercises its rights under
Section 2.15, the Borrower shall have the right, if no Default or Event of
Default then exists, to (a) replace such Bank with an Eligible Assignee in
accordance with Section 8.08(a), (b) and (d) (including execution of an
appropriate Assignment and Acceptance); provided that such Eligible Assignee (i)
shall unconditionally offer in writing (with a copy to the Agent) to purchase on
a date therein specified all of such Bank's rights hereunder and interest in the
Advances owing to such Bank and the Note held by such Bank without recourse at
the principal amount of such Note plus interest, Commitment Fees and Letter of
Credit Fees accrued thereon to the date of such purchase, and (ii) shall execute
and deliver to the Agent an Assignment and Acceptance, as assignee, pursuant to
which such Eligible Assignee becomes a party hereto with a Commitment equal to
that of the Bank being replaced (plus, if
- 29 -
such Eligible Assignee is already a Bank, the amount of its Commitment prior to
such replacement), provided, further, that no Bank or other Person shall have
any obligation to increase its Commitment or otherwise to replace, in whole or
in part, any Bank or (b) remove such Bank without replacing it; provided that
the Borrower may not remove a Bank pursuant to this clause (b) if the aggregate
Commitments of all Banks so removed would exceed $100,000,000. Upon satisfaction
of the requirements set forth in the first sentence of this Section 2.17,
acceptance of such offer to purchase by the Bank to be replaced, payment to such
Bank of the purchase price in immediately available funds by the Eligible
Assignee replacing such Bank, execution of such Assignment and Acceptance by
such Bank, such Eligible Assignee and the Agent, the payment by the Borrower of
all requested costs accruing to the date of purchase which the Borrower is
obligated to pay under Section 8.04 and all other amounts owed by the Borrower
to such Bank (other than Commitment Fees and Letter of Credit Fees accrued for
the account of such Bank and the principal of and interest on the Advances of
such Bank purchased by such Eligible Assignee) and notice by the Borrower to the
Agent that such payment has been made, such Eligible Assignee shall constitute a
"Bank" hereunder with a Commitment as so specified and the Bank being so
replaced shall no longer constitute a "Bank" hereunder except that the rights
under Sections 2.07, 2.12, 2.13 and 8.04 of the Bank being so replaced shall
continue with respect to events and occurrences before or concurrently with its
ceasing to be a "Bank" hereunder. If, however, (x) a Bank accepts such an offer
and such Eligible Assignee fails to purchase such rights and interest on such
specified date in accordance with the terms of such offer or such Eligible
Assignee or the Agent fails to execute the relevant Assignment and Acceptance,
the Borrower shall continue to be obligated to pay the increased costs to such
Bank pursuant to Section 2.12 or the additional amounts pursuant to Section
2.13, as the case may be, or (y) the Bank proposed to be replaced fails to
accept such purchase offer or to execute the relevant Assignment and Acceptance,
the Borrower shall not be obligated to pay to such Bank such increased costs or
additional amounts incurred or accrued from and after the date of such purchase
offer.
Section 2.18 Evidence of Indebtedness. Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Bank resulting from each Advance owing to
such Bank from time to time, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder. The Borrower agrees
that upon notice by any Bank to the Borrower (with a copy of such notice to the
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Bank to evidence (whether for purposes
of pledge, enforcement or otherwise) the Advances owing to, or to be made by,
such Bank, the Borrower shall promptly execute and deliver to such Bank, with a
copy to the Agent, a Note in substantially the form of Exhibit A hereto, payable
to the order of such Bank in a principal amount equal to the Revolving Credit
Commitment of such Bank. All references to Notes in the Loan Documents shall
mean Notes, if any, to the extent issued hereunder.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective on and as of the first date (the "Effective Date") on
which the Agent shall have received counterparts of this Agreement duly executed
by the Borrower and all of the Banks and the following additional conditions
precedent shall have been satisfied, except that Section 2.04(a) shall become
effective as of the first date on which the Agent shall have received
counterparts of this Agreement duly executed by the Borrower and all of the
Banks:
(a) The Borrower shall have notified the Agent in writing as
to the proposed Effective Date.
(b) The Chapter 11 Cases shall have been filed.
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(c) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be reasonably satisfied in all material
respects with (i) the structure of the Plan of Reorganization and the
other aspects of the Transaction (excluding the terms of the settlement
contemplated thereby and the amount of the Settlement Payments to the
extent, in each case, such terms and amount are not materially
different from those set forth in the June 2003 10-Q) and all related
tax, legal and accounting matters, (ii) the capitalization, corporate
or organizational, and legal structure and equity ownership of the
Borrower and its material Subsidiaries (including, without limitation,
the charters and bylaws of each of the Borrower and its material
Subsidiaries and each agreement or instrument relating thereto) after
giving effect to the Transaction and (iii) the projected financial
condition of the Borrower and its subsidiaries on a consolidated basis
following the consummation of the Plan of Reorganization.
(d) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be reasonably satisfied that there has been
no material adverse change since August 18, 2003 (which shall not be
deemed to refer to the contemplated restructurings disclosed to the
Co-Lead Arrangers prior to such date) in either (i) the corporate and
legal structure and capitalization of the Borrower and its material
Subsidiaries, including, without limitation, the charters and bylaws of
each of the Borrower and each of its material Subsidiaries and each
agreement or instrument relating thereto or (ii) the projected
financial condition of the Borrower and its Subsidiaries on a
consolidated basis following the Order Entry.
(e) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
reasonably satisfactory to the Agent and (except for the Notes) in
sufficient copies for each Bank:
(i) The Notes to the order of the Banks to the
extent requested by any Bank pursuant to Section 2.18.
(ii) A share pledge agreement in substantially
the form of Exhibit F hereto (together with each other pledge
agreement and pledge agreement supplement delivered pursuant
to Section 5.01(i), in each case as amended, the "Pledge
Agreement"), duly executed by the Borrower and HESI in favor
of the Collateral Agent, together with:
(A) to the extent such Pledged Equity is
certificated, certificates representing the Pledged
Equity referred to therein accompanied by undated
stock powers executed in blank;
(B) financing statements in proper form for
filing under the Uniform Commercial Code of all
jurisdictions that the Agent may deem necessary or
desirable in order to perfect and protect the first
priority liens and security interests created under
the Pledge Agreement, covering the Collateral
described in the Pledge Agreement;
(C) completed requests for information,
dated on or before the date of the Initial Extension
of Credit, listing all effective financing statements
filed in the jurisdictions referred to in clause (B)
above that name any Loan Party as debtor, together
with copies of such other financing statements; and
(D) except for the filing of financing
statements to occur after the Effective Date and
except as otherwise permitted by the Loan Documents,
evidence that all other action that the Agent may
reasonably deem necessary or
- 31 -
desirable in order to perfect and protect the first
priority liens and security interests created under
the Pledge Agreement has been taken.
(iii) A subsidiary guaranty in substantially the
form of Exhibit G hereto (together with each other subsidiary
guaranty and subsidiary agreement supplement delivered by a
Subsidiary Guarantor pursuant to Section 5.01(i), in each case
as amended, the "Subsidiary Guaranty"), duly executed by each
Subsidiary Guarantor in favor of the Agent, the Banks, the LC
Agent and the LC Banks.
(iv) A collateral trust agreement in
substantially the form of Exhibit H hereto (together with each
other collateral trust agreement supplement delivered by a
Loan Party pursuant to Section 5.01(i), in each case as
amended, the "Collateral Trust Agreement"), duly executed by
the Borrower, HESI and the Collateral Agent.
(v) Certified copies of the resolutions of the
Board of Directors, members or partners of each Loan Party
approving each Loan Document to which such Loan Party is or is
to be a party, and of all documents evidencing other necessary
corporate or organizational action and governmental approvals,
if any, with respect to each Loan Document to which such Loan
Party is or is to be a party.
(vi) A certificate of the Secretary or an
Assistant Secretary of each Loan Party certifying the names
and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which such Loan Party
is or is to be a party and the other documents to be delivered
by such Loan Party hereunder.
(vii) A certificate of an officer of the Borrower
stating the respective ratings by each of S&P and Moody's,
respectively, of the senior unsecured long-term debt of the
Borrower as in effect on the Effective Date.
(viii) A letter addressed to the Agent from the
Borrower with respect to the Prior Credit Facility stating
that (i) all the "Commitments" (as defined in the Prior Credit
Facility) of the "Banks" (as defined in the Prior Credit
Facility) have been terminated, (ii) no "Advances" (as defined
in the Prior Credit Facility) are outstanding under the Prior
Credit Facility, and (iii) all fees and other amounts known by
the Borrower to be payable under the Prior Credit Facility
have been paid in full.
(ix) A favorable opinion of Bruce A. Metzinger,
Assistant Secretary and Assistant General Counsel for the
Borrower, in substantially the form of Exhibit C-1 hereto.
(x) A favorable opinion of Baker Botts LLP,
counsel for the Loan Parties, in substantially the form of
Exhibit C-2 hereto.
(xi) A solvency opinion of Houlihan Lokey Howard
& Zukin in form and substance satisfactory to the Agent, the
Syndication Agent and the Documentation Agent.
(xii) A favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(f) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be satisfied that the investigation of the
Borrower by the Securities and Exchange Commission has
- 32 -
been concluded or will be concluded without (i) giving rise to a
Material Adverse Effect, including, without limitation, the obligation
to restate prior reported earnings or (ii) adversely affecting the
Borrower's ability to access the capital markets in the reasonable
judgment of any of the Agent, the Syndication Agent or the
Documentation Agent.
(g) There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that (i) could
reasonably be expected to have a Material Adverse Effect other than the
Disclosed Litigation or (ii) purports to affect the legality, validity
or enforceability of the Borrower's or any Subsidiary Guarantor's
obligations or the rights and remedies of the Banks relating to the
Agreement and the other Loan Documents, and except as set forth in
Schedule 4.01(f) to this Agreement, there shall have been no material
adverse change in the status, or financial effect on the Borrower and
its subsidiaries on a consolidated basis, of the Disclosed Litigation
from that described to the Agent prior to August 18, 2003.
(h) There shall have occurred no material adverse change
(which term shall not be deemed to refer to the commencement of the
Chapter 11 Cases) in the business, condition (financial or otherwise),
operations, performance or properties of the Borrower and its
subsidiaries, on a consolidated basis, since December 31, 2002, except
as disclosed in the June 2003 10-Q and except for the accounting
charges to be taken by the Borrower directly in connection with the
Settlement Payments and except as set forth in Schedule 4.01(f) to this
Agreement, and the Agent shall have received a certificate signed by a
Responsible Officer of the Borrower stating that the condition in this
Section 3.01(h) has been satisfied as of the Effective Date.
(i) Each of the Agent, the Syndication Agent and the
Documentation Agent shall be satisfied that the Borrower and its
subsidiaries are not subject to material contractual or other
restrictions that would be violated by the Transaction, including the
incurrence of indebtedness under this Agreement, the Master LC Facility
Agreement and the Senior Unsecured Credit Facility Agreement, the
granting of guarantees and collateral and the payment of dividends by
subsidiaries.
(j) Consent solicitations or tender or exchange offers with
respect to the event of default arising from the filing of the Chapter
11 Cases under the Hundred Year Notes Indenture shall have been
successfully completed, and the result shall be that the covenants in
the Hundred Year Notes Indenture are replaced with covenants no more
restrictive than those in the Convertible Notes Indenture.
(k) The Master LC Facility Agreement shall have become
effective or substantially simultaneously with the Effective Date shall
become effective.
(l) The Senior Unsecured Credit Facility Agreement shall have
been executed and delivered.
(m) Except as otherwise permitted by the Loan Documents, all
governmental and third party consents and approvals necessary in
connection with the transactions contemplated hereby shall have been
obtained (without the imposition of any conditions that are not
reasonably acceptable to the Agent, the Syndication Agent and the
Documentation Agent) and shall remain in effect, and no law or
regulation shall be applicable in the reasonable judgment of the Agent,
the Syndication Agent and the Documentation Agent that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.
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(n) On the Effective Date, the following statements shall be
true and the Agent shall have received a certificate signed by a duly
authorized officer of the Borrower, dated the Effective Date, stating
that:
(i) The representations and warranties contained
in Section 4.01 are correct on and as of the Effective Date,
(ii) No event has occurred and is continuing that
constitutes a Default,
(iii) Any default under the Borrower's or any of
its material Subsidiaries' material debt instruments that
would be triggered by the filing of the Chapter 11 Cases and
related transactions has been permanently waived or amended,
(iv) The Borrower has disclosed to the Agents (A)
all material potential cash collateral and/or reimbursement
obligations under letters of credit and (B) all material
potential liabilities with respect to sureties, in each case,
existing prior to the date hereof, that might arise as a
result of the filing of the Chapter 11 Cases and related
transactions, and
(v) To the Borrower's knowledge, the Borrower
will not be required for any reason to cause its consolidated
financial statements for fiscal year 2001 or 2002 to be
reaudited or restated after the Effective Date, except in
order to reflect changes in the Borrower's segment reporting.
(o) The Barracuda Facility shall have been amended such that
the maximum "Leverage Ratio" (as such term is defined in the Barracuda
Facility) permitted thereunder is 0.55:1.00 or a higher ratio.
(p) All accrued fees and reasonable out-of-pocket expenses of
the Co-Lead Arrangers (including the reasonable fees and expenses of
counsel to the Co-Lead Arrangers for which invoices have been
submitted) shall have been paid.
(q) The Borrower shall have paid all accrued fees and
reasonable out-of-pocket expenses of the Agent (including reasonable
fees and expenses of counsel for which invoices have been submitted).
Section 3.02 Conditions Precedent to Each Revolving Credit Advance and
Each Issuance and Renewal of Each Letter of Credit. The obligation of each Bank
to make an Advance (other than a Letter of Credit Advance made by an Issuing
Bank or a Revolving Credit Bank pursuant to Section 2.03(c)) (including, without
limitation, the initial Revolving Credit Advance) and each Issuing Bank to issue
or renew Letters of Credit (including the initial Letter of Credit) shall be
subject to the further conditions precedent that on the date of such Advance or
such issuance of a Letter of Credit, the following statements shall be true (and
each of the giving of the applicable Notice of Revolving Credit Borrowing or
Notice of Issuance and Application for Letter of Credit and the acceptance by
the Borrower of the proceeds of the Borrowing of which such Advance or of such
Letter of Credit or of the renewal of such Letter of Credit is a part shall
constitute a representation and warranty by the Borrower that on the date of
such Advance or such issuance or renewal such statements are true):
(i) the representations and warranties contained
in Section 4.01 (other than, in the case of a Revolving Credit
Borrowing, if the Borrower specifies in the Notice of
Revolving Credit Borrowing that the proceeds of the related
Revolving Credit Advance
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shall be used to repay the Borrower's Obligations under one of
the Borrower's commercial paper programs, those
representations and warranties contained in Section 4.01(f)
and 4.01(g)) are correct on and as of the date of such
Revolving Credit Advance or such Letter of Credit (other than
those representations and warranties that expressly relate
solely to a specific earlier date, which shall remain correct
as of such earlier date), before and after giving effect to
such Borrowing or issuance or renewal and to the application
of the proceeds therefrom, as though made on and as of such
date.
(ii) no event has occurred and is continuing, or
would result from such Borrowing or such issuance or renewal
or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default, and
(iii) there exists no request or directive issued
by any governmental authority, central bank or comparable
agency, injunction, stay, order, litigation or proceeding
purporting to affect or calling into question the legality,
validity or enforceability of any Loan Document or the
consummation of any transaction (including any Advance or
proposed Advance or issuance or renewal of a Letter of Credit
or proposed Letter of Credit) contemplated hereby.
Section 3.03 Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, the Agent,
the Co-Lead Arrangers and each Bank shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Persons unless an officer of the Agent responsible for the
transactions contemplated by this Agreement shall have received notice from such
Person prior to the date that the Borrower, by notice to the Agent, designates
as the proposed Effective Date, specifying its objection thereto. The Agent
shall promptly notify the Banks and the Borrower of the occurrence of the
Effective Date, which notice shall be conclusive and binding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite organizational
power and authority to own its properties, to conduct its business as
now being conducted and to execute, deliver and perform each Loan
Document to which it is or is to be a party, except for any failures to
be so organized, existing, qualified to do business or in good standing
or to have such power and authority as would not, individually or in
the aggregate, have a Material Adverse Effect.
(b) The execution, delivery and performance by each Loan Party
of each Loan Document to which it is or is to be a party and the
consummation of the transactions contemplated hereby (including,
without limitation, the Transaction, each Revolving Credit Borrowing
and issuance or renewal of a Letter of Credit hereunder and the use of
the proceeds thereof) and the transactions contemplated thereby (i) are
within such Loan Party's organizational power, (ii) have been duly
authorized by all necessary organizational action, and (iii) do not
contravene (A) such Loan Party's certificate of organization or
by-laws, (B) any law, rule, regulation, order, writ, injunction or
decree, or (C) any contractual restriction under any material
agreements binding on or
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affecting such Loan Party or any Subsidiary of such Loan Party or any
other contractual restriction the contravention of which would have a
Material Adverse Effect.
(c) No authorization, approval, consent, license or other
action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person is required for the due execution,
delivery and performance by each Loan Party of each Loan Document to
which it is or is to be a party, or for the consummation of the
transactions contemplated hereby (including, without limitation, the
Transaction (other than the Order Entry), each Revolving Credit
Borrowing and issuance or renewal of a Letter of Credit hereunder and
the use of the proceeds thereof) and the transactions contemplated
thereby, except (i) consents, authorizations, filings and notices which
have been obtained or made and are in full force and effect, (ii) the
UCC filings referred to in Section 3.01, (iii) approvals that would be
required under agreements that are not material agreements and (iv) as
otherwise permitted by the Loan Documents.
(d) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party thereto and constitute legal, valid and binding obligations
of such Loan Party enforceable against such Loan Party in accordance
with their respective terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally.
(e) The Financial Statements have been reported on by KPMG LLP
and fairly present the consolidated financial position of the Borrower
and its consolidated subsidiaries as at such date and the consolidated
results of their operations and cash flows for the year then ended, all
in accordance with GAAP. The unaudited consolidated balance sheet of
the Borrower and its consolidated subsidiaries as at June 30, 2003 and
the related unaudited consolidated statements of income and cash flows
of the Borrower and its consolidated subsidiaries for the six months
then ended, included in the Borrower's June 2003 10-Q, fairly present,
subject to year-end audit adjustments, the consolidated financial
position of the Borrower and its consolidated subsidiaries as at such
date and the consolidated results of their operations and cash flows
for the six months ended on such date, all in accordance with GAAP.
Since December 31, 2002 through October 30, 2003 there has been no
material adverse change (which shall not be deemed to refer to the
filing of the Chapter 11 Cases or to the accounting charge to be taken
by the Borrower directly in connection with the Settlement Payments) in
the condition (financial or otherwise), operations or business of the
Borrower and its Subsidiaries, taken as a whole except as disclosed in
the June 2003 10-Q.
(f) Except as set forth in the Borrower's Form 10-K for the
year ended December 31, 2002, the June 2003 10-Q, Schedule 4.01(f) to
this Agreement and, from and after the occurrence of the Collateral
Release Date, except for litigation, investigations and proceedings
arising after the date hereof that are described in reasonable detail
in a notice from the Borrower to the Agent, there is no litigation,
investigation or proceeding pending or, to the Borrower's knowledge,
threatened against or affecting the Borrower, any of its Subsidiaries
or any of its or their respective rights or properties before any court
or by or before any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, (i) that could
reasonably be expected to have a Material Adverse Effect or (ii) that
in any manner draws into question or purports to affect (A) prior to
the Collateral Release Date, the Transaction (other than objections to
the Plan of Reorganization and appeals of the confirmation order
entered by the Bankruptcy Court in connection therewith) or (B) any
other transaction contemplated hereby or the legality, validity,
binding effect or enforceability of any Loan Document.
- 36 -
(g) Schedule 4.01(g) hereto constitutes a complete and
accurate list of all pending non-US lawsuits as of October 30, 2003
against the Borrower and its Subsidiaries (including, without
limitation, claims arising through a Subsidiary not listed on Schedule
II hereto) asserting exposure to asbestos, asbestos-related products,
silica and/or silica-related products and, except as set forth in such
Schedule 4.01(g) and other non-material asbestos or silica claims
disclosed to the Co-Lead Arrangers in writing prior to October 30,
2003, the Borrower has not been notified of (A) any claims against the
Borrower and its Subsidiaries asserting exposure to asbestos,
asbestos-related products, silica and/or silica-related products which
will not be resolved pursuant to the Order Entry or (B) any adoption or
change of any statute, rule or regulation affecting such claims or
future claims against the Borrower and its Subsidiaries asserting
exposure to asbestos, asbestos-related products, silica and/or
silica-related products, in each case, which could be reasonably
expected to have a Material Adverse Effect.
(h) Schedule 4.01(h) hereto lists all of the Borrower's
domestic Subsidiaries as of October 30, 2003.
(i) Neither any Loan Party nor any Subsidiary of a Loan Party
is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation
U). Following the application of the proceeds of each Advance and each
Letter of Credit, (i) not more than 25% of the value of the assets of
the Borrower that are subject to any arrangement with the Agent or any
Bank (herein or otherwise) whereby the Borrower's right or ability to
sell, pledge or otherwise dispose of assets is in any way restricted
(or pursuant to which the exercise of any such right is or may be cause
for accelerating the maturity of all or any portion of the Advances or
any other amount payable hereunder or under any such other
arrangement), will be margin stock (within the meaning of Regulation
U); and (ii) not more than 25% of the value of the assets of the
Borrower and its Subsidiaries that are subject to any arrangement with
the Agent or any Bank (herein or otherwise) whereby the right or
ability of the Borrower or any of its Subsidiaries to sell, pledge or
otherwise dispose of assets is in any way restricted (or pursuant to
which the exercise of any such right is or may be cause for
accelerating the maturity of all or any portion of the Advances or any
other amount payable hereunder or under any such other arrangement),
will be any such margin stock. No proceeds of any Advance or any Letter
of Credit will be used in any manner that is not permitted by Section
5.02.
(j) No Loan Party is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(k) Neither any Loan Party nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
(l) No statement or information contained in this Agreement or
any other document, certificate or statement furnished to the Agent or
the Banks by or on behalf of the Borrower for use in connection with
the transactions contemplated by this Agreement or the Notes (as
modified or supplemented by other information furnished) contains as of
the date such statement, information, document or certificate was so
furnished any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under
which they were made; provided, however, that, with respect to any such
information, exhibit or report consisting of statements, estimates, pro
forma financial information, forward-looking statements and projections
regarding the future performance of the Borrower or any of its
Subsidiaries ("Projections"), no
- 37 -
representation or warranty is made other than that such Projections
have been prepared in good faith based upon assumptions believed to be
reasonable at the time.
ARTICLE V
COVENANTS OF THE BORROWER
Section 5.01 Affirmative Covenants. So long as any Advance or any other
amount payable by any Loan Party hereunder or under any other Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding or any Bank shall
have any Commitment hereunder, the Borrower will, unless the Required Banks
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, with all applicable law, rules, regulations and
orders (including, without limitation, ERISA and environmental laws and
permits) except to the extent that failure to so comply (in the
aggregate for all such failures) could not reasonably be expected to
have a Material Adverse Effect.
(b) Preservation of Corporate or Organizational Existence,
Etc. (i) Preserve and maintain and cause each of its Subsidiaries to
preserve and maintain (unless, in the case of any Subsidiary, (A) such
Loan Party or Subsidiary determines that such preservation and
maintenance is no longer necessary in the conduct of the business of
the Borrower and its Subsidiaries, taken as a whole, and (B) the
failure to so preserve and maintain would not impair the Collateral in
any material respect), its corporate or organizational existence,
rights (charter and statutory), franchises, permits, licenses,
approvals and privileges in the jurisdiction of its organization;
provided, however, that such Loan Party and its Subsidiaries may
consummate any merger or consolidation permitted under Section 5.02(d)
and provided further that neither such Loan Party nor any of its
Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise the failure to do so would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect and (ii) qualify and remain qualified and cause
each of its Subsidiaries to qualify and remain qualified, as a foreign
organization in each jurisdiction in which qualification is necessary
or desirable in view of its business and operations or the ownership of
its Properties, except where the failure to so qualify or remain
qualified could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect.
(c) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments, charges and like levies levied
or imposed upon it or upon its income, profits or Property prior to the
date on which penalties attach thereto and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its Property; provided that
neither the Borrower nor any Subsidiary shall be required to pay and
discharge any such tax, assessment, charge, levy or claim if the
failure to do so (in the aggregate for all such failures) could not
reasonably be expected to have a Material Adverse Effect.
(d) Reporting Requirements. Furnish to the Agent:
(i) not later than 60 days after the end of each
of the first three quarters of each fiscal year of the
Borrower, (1) the consolidated and, prior to the Collateral
Release Date, consolidating (provided that such statements
prepared on a consolidating basis need not be audited and
shall only relate to each of the "Energy Services Group" and
the "Engineering and Construction Group") balance sheets of
the Borrower and its consolidated subsidiaries as at the end
of such quarter and the consolidated and, prior to
- 38 -
the Collateral Release Date, consolidating (with respect only
to each of the "Energy Services Group" and the "Engineering
and Construction Group") statements of income and cash flows
of the Borrower and its consolidated subsidiaries for the
period commencing at the end of the previous fiscal year and
ending with the end of such quarter, all in reasonable detail,
and (2) a copy of the Borrower's Form 10-Q for such quarter as
filed with the SEC and copies of each Form 8-K (other than
press releases) filed by the Borrower with the SEC during such
quarter;
(ii) not later than 120 days after the end of
each fiscal year of the Borrower, (1) copies of the audited
consolidated balance sheet and, prior to the Collateral
Release Date, unaudited consolidating balance sheet (with
respect only to each of the "Energy Services Group" and the
"Engineering and Construction Group") of the Borrower and its
consolidated subsidiaries as at the end of such fiscal year
and audited consolidated statements and, prior to the
Collateral Release Date, unaudited consolidating statements
(provided that such statements prepared on a consolidating
basis need not be audited and shall only relate to each of the
"Energy Services Group" and the "Engineering and Construction
Group") of income, retained earnings and cash flows of the
Borrower and its consolidated subsidiaries for such fiscal
year, and (2) a copy of the Borrower's Form 10-K for such year
as filed with the SEC and copies of each Form 8-K filed by the
Borrower with the SEC during such year (other than those Forms
8-K previously delivered to the Banks in accordance with
Section 5.01(d)(i) and press releases);
(iii) within five Business Days after filing with
the SEC, copies of all registration statements (other than on
Form S-8), proxy statements and Schedules 13-D filed by, or in
respect of, the Borrower or any of its Subsidiaries with the
SEC;
(iv) as soon as possible, and in any event within
ten days after any Responsible Officer has obtained knowledge
of the occurrence of any Default or Event of Default, written
notice thereof setting forth details of such Default or Event
of Default and the actions that the Borrower has taken and
proposes to take with respect thereto;
(v) promptly (and in any event within five
Business Days) after any change in, or withdrawal or
termination of, the rating of any senior unsecured long-term
debt of the Borrower by S&P or Moody's, notice thereof;
(vi) promptly after the sending or filing
thereof, copies of all reports that the Borrower sends to any
of its holders of common stock;
(vii) prior to the Collateral Release Date,
promptly after the receipt thereof, notice of all actions and
proceedings before any court, governmental or agency or
arbitrator affecting the Borrower or any of its Subsidiaries
of the type described in Section 4.01(f); and
(viii) such other information as any Bank through
the Agent may from time to time reasonably request.
Information required to be delivered pursuant to Sections 5.01(d)(i),
5.01(d)(ii), 5.01(d)(iii) or 5.01(d)(vi) shall be deemed to have been
delivered on the date on which the Borrower provides notice to the
Agent that such information has been posted on the Borrower's website
on the Internet at www.halliburton.com, at sec.gov/edaux/searches.htm
or at another website identified in such notice and accessible by the
Banks without charge; provided that the Borrower shall
- 39 -
deliver paper copies of the information referred to in such Sections to
the Agent for distribution to (x) any Bank to which the above
referenced websites are for any reason not available if such Bank has
so notified the Borrower and (y) any Bank that has notified the
Borrower that it desires paper copies of all such information; provided
further that the Agent shall notify the Banks as provided in Section
8.02 of any materials delivered pursuant to this paragraph.
(e) Inspections. At any reasonable time and from time to time,
in each case upon reasonable notice to the Borrower and subject to any
applicable restrictions or limitations on access to any facility or
information that is classified or restricted by contract or by law,
regulation or governmental guidelines, permit each Bank to visit and
inspect the properties of the Borrower or any Subsidiary of the
Borrower, and to examine and make copies of and abstracts from the
records and books of account of the Borrower and its Subsidiaries and
discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with its and their officers and independent accountants
provided, however, that advance notice of any discussion with such
independent public accountants shall be given to the Loan Parties, and
the Loan Parties shall have the opportunity to be present at any such
discussion.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
material properties that are used or useful in the conduct of the
business of the Borrower and its Subsidiaries, taken as a whole, in
good working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
this Agreement with any of their Affiliates on terms that are fair and
reasonable and, if a comparable arm's-length transaction is known by
the Borrower, no less favorable to the Borrower or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person
not an Affiliate; provided, however, that the foregoing restriction
shall not apply to
(i) transactions between or among the Borrower
and its subsidiaries;
(ii) transactions or payments pursuant to any
employment arrangements or employee, officer or director
benefit plans or arrangements entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business;
(iii) to the extent permitted by law, customary
loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or
consultants of the Borrower or any of its Subsidiaries;
(iv) any transactions pursuant to agreements
among the Borrower and/or its Subsidiaries and the Trusts
entered into in connection with the Plan of Reorganization;
(v) transactions pursuant to any contract or
agreement in effect on the date hereof, as the same may be
amended, modified or replaced from time to time, so long as
any such contract or agreement as so amended, modified or
replaced is, taken as a whole, no less favorable to the
Borrower and its Subsidiaries in any material respect than the
contract or agreement as in effect on the date hereof;
- 40 -
(vi) any transaction or series of transactions
between the Borrower or any Subsidiary and any of their joint
ventures, provided that (a) such transaction or series of
transactions is in the ordinary course of business and
consistent with past practices of the Borrower, and/or its
Subsidiaries and their joint ventures and (b) such Affiliate
transaction involves aggregate consideration paid to such
Affiliate not in excess of $35 million; or
(vii) any payment, distribution or other
transaction of the type described in 5.02(c) and permitted
thereunder.
(i) Covenant to Guarantee Obligations and Give Security. (i)
Subject to Section 5.01(i)(ii), upon the formation or acquisition after
the date hereof and prior to the Collateral Release Date, of any new
first-tier Subsidiaries by the Borrower or HESI, the Borrower shall,
and, if applicable, shall cause HESI to, at the Borrower's or HESI's
expense:
(A) within 20 days after such formation or
acquisition, cause each such wholly-owned Subsidiary
organized under the laws of a state of the United
States, to duly execute and deliver to the Agent a
Guaranty Supplement, guaranteeing the other Loan
Parties' obligations under the Loan Documents;
provided that no Project Finance Subsidiary, JV
Subsidiary or Receivables Subsidiary shall be
required to execute and deliver a Guaranty
Supplement,
(B) within 20 days after such formation or
acquisition, duly execute and deliver, to the Agent,
Pledge Agreement supplements (together with
certificates representing, in the case of such a
Subsidiary organized under the laws of a state of the
United States, 100% of the equity interests of such
Subsidiary owned by the Borrower or HESI and, in the
case of such a foreign Subsidiary, 66% of the equity
interests of such foreign Subsidiary owned by the
Borrower or HESI (excluding, in each case, the equity
interests in any Project Finance Subsidiary or any
Receivables Subsidiary), in each case accompanied by
undated stock powers executed in blank), securing
payment of all the Obligations of all Loan Parties
under the Loan Documents and constituting Liens on
all such properties,
(C) within 20 days after such formation or
acquisition, take, and cause such Subsidiary to take
whatever action (including, without limitation, the
filing of Uniform Commercial Code financing
statements and the giving of notices) may be
necessary or advisable in the reasonable opinion of
the Agent to vest in the Agent (or in any
representative of the Agent designated by it) valid
and subsisting Liens on the properties purported to
be subject to the Pledge Agreement supplements
delivered pursuant to this Section 5.01(i),
enforceable against all third parties in accordance
with their terms,
(D) within 60 days after such formation or
acquisition, deliver to the Agent, upon the
reasonable request of the Agent, a signed copy of a
favorable opinion, addressed to the Agent and the
other Secured Holders, of in-house counsel of the
Borrower or other counsel for the Loan Parties
reasonably acceptable to the Agent as to the matters
contained in clauses (A), (B) and (C) above, as to
such Guaranty Supplements and Pledge Agreement
supplements being legal, valid and binding
obligations of each Loan Party party thereto
enforceable in accordance with their terms, as to
such recordings, filings, notices, endorsements and
other actions being sufficient to create valid
perfected Liens on
- 41 -
such properties, and as to such other matters as the
Agent may reasonably request, and
(E) at any time and from time to time,
promptly execute and deliver any and all further
instruments and documents and take all such other
action as the Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such
guaranties and Pledge Agreement supplements.
(ii) Prior to the occurrence of the Collateral
Release Date, upon (x) the occurrence of a Ratings Event or
(y)(1) the formation or acquisition at any time after a
Ratings Event of any new direct or indirect Specified
Subsidiaries (as defined below) by any Loan Party or (2) the
acquisition at any time after a Ratings Event of any property
by any Loan Party, and such property, in the judgment of the
Agent, shall not already be subject to a perfected first
priority (subject to Liens permitted by Section 5.02(a))
security interest in favor of the Agent for the benefit of the
Secured Holders, then the Borrower shall, and/or shall cause
each Loan Party to, in each case at the Borrower's expense,
and in each case subject to such reasonable and customary
exceptions as the Agent may agree:
(A) in connection with the formation or
acquisition of a domestic Subsidiary directly or
indirectly wholly-owned by the Borrower or HESI (each
such Subsidiary other than DII Industries LLC,
Halliburton Affiliates LLC and each of their
respective Subsidiaries, any Project Finance
Subsidiary, any JV Subsidiary, any dormant Subsidiary
and any Receivables Subsidiary being a "Specified
Subsidiary"), within 20 days after such formation or
acquisition, cause each such Specified Subsidiary, to
duly execute and deliver to the Agent a Guaranty
Supplement, guaranteeing the other Loan Parties'
obligations under the Loan Documents,
(B) within 20 days after such Ratings Event,
formation or acquisition, furnish to the Agent a
description of the real and personal properties of
the Loan Parties and their respective Subsidiaries or
such new Specified Subsidiary, as the case may be in
detail reasonably satisfactory to the Agent,
(C) within 20 days after such Ratings Event,
formation or acquisition, duly execute and deliver,
and cause each such new Specified Subsidiary, if
applicable (and each direct parent of such new
Specified Subsidiary or JV Subsidiary shall pledge
its equity in such Specified Subsidiary or JV
Subsidiary) (if it has not already done so) to duly
execute and deliver, to the Agent pledges,
assignments, Pledge Agreement supplements and other
security agreements, as specified by and in form and
substance reasonably satisfactory to the Agent,
securing payment of all the Obligations of the
applicable Loan Party, such new Specified Subsidiary
or such parent, as the case may be, under the Loan
Documents and constituting Liens on all such
properties of the Loan Parties and Specified
Subsidiaries, including, without limitation, bank
accounts; provided that (1) no JV Subsidiary shall be
required to execute and deliver a pledge of its
Equity Interest in a joint venture to the extent that
the applicable joint venture agreement prohibits such
a pledge, (2) no Project Finance Subsidiary, JV
Subsidiary or Receivables Subsidiary shall be
required to grant a security interest in its assets
(3) no pledge of Equity Interests in a Project
Finance Subsidiary or a
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Receivables Subsidiary shall be required, (4) no such
encumbrance shall be required as to property that is
subject to a Lien permitted by Section 5.02(a) or
that is already subject to an agreement (otherwise
permitted by this Agreement), in each case, that
prohibits the granting of Liens on such specific
property and (5) no more than 66% of the equity
interests owned by such Person in any foreign
Subsidiary shall be required to be pledged.
(D) within 20 days after such Ratings Event,
formation or acquisition, take, and cause such new
Specified Subsidiary, if applicable, or such parent
to take, whatever action (including, without
limitation, the filing of Uniform Commercial Code
financing statements, the giving of notices and the
endorsement of notices on title documents) may be
necessary or advisable in the opinion of the Agent to
vest in the Agent (or in any representative of the
Agent designated by it) valid and subsisting Liens on
the properties purported to be subject to the
pledges, assignments, Pledge Agreement supplements
and security agreements delivered pursuant to this
Section 5.01(i)(ii), enforceable against all third
parties in accordance with their terms,
(E) within 45 days after such Ratings Event,
formation or acquisition, deliver to the Agent, deeds
of trust, trust deeds, mortgages, leasehold mortgages
and leasehold deeds of trust on the real property of
the Loan Parties located in the United States with a
value in excess of $1,000,000, except real property
that is subject to a Lien permitted by Section
5.02(a) or that is already subject to an agreement
(otherwise permitted by this Agreement), in each
case, that prohibits the granting of such Liens on
such specific property,
(F) within 60 days after such Ratings Event,
formation or acquisition, deliver to the Agent, upon
the reasonable request of the Agent in its sole
discretion, a signed copy of a favorable opinion,
addressed to the Agent and the other Secured Holders,
of counsel for the Loan Parties reasonably acceptable
to the Agent as to the matters contained in clauses
(A), (C), (D) and (E) above, as to such guaranties,
guaranty supplements, mortgages, pledges,
assignments, Pledge Agreement supplements and
security agreements being legal, valid and binding
obligations of each Loan Party party thereto
enforceable in accordance with their terms, as to the
matters contained in clauses (D) and (E) above, as to
such recordings, filings, notices, endorsements and
other actions being sufficient to create valid
perfected Liens on such properties, and as to such
other matters as the Agent may reasonably request,
(G) as promptly as practicable after such
Ratings Event, request, formation or acquisition,
deliver, upon the reasonable request of the Agent,
with respect to each parcel of real property to be so
mortgaged, owned or held by the entity that is the
subject of such request, formation or acquisition
title reports, surveys and engineering, soils and
other reports, and environmental assessment reports,
each in scope, form and substance reasonably
satisfactory to the Agent, provided, however, that to
the extent that any Loan Party or any of its
Subsidiaries shall have otherwise received any of the
foregoing items with respect to such real property,
such items shall, promptly after the receipt thereof,
be delivered to the Agent, and
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(H) at any time and from time to time,
promptly execute and deliver any and all further
instruments and documents and take all such other
action as the Agent may reasonably deem necessary or
desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such
guaranties, mortgages, pledges, assignments, Pledge
Agreement supplements and security agreements.
The time periods required by this Section 5.01(i)(ii) may, upon the Borrower's
request, be extended at the option of the Agent by up to 15 Business Days in the
event the Borrower is exercising commercially reasonable efforts to perform the
actions required by such time periods but additional time is required to
complete such actions. The granting and perfection of Collateral under this
Section 5.01(i) (including, without limitation, Collateral consisting of foreign
Subsidiary stock pledges) will be subject to cost efficiency determinations
reasonably made by the Co-Lead Arrangers in consultation with the Borrower,
taking into account, among other things, adverse tax consequences,
administrative procedures required by local law or practice, and other
parameters to be agreed.
(j) Further Assurances. At any time that the Banks are
entitled to be secured by Collateral under the provisions of the Loan
Documents,
(i) promptly upon request by the Agent, or any Bank
through the Agent, correct, and cause each other Loan Party promptly to
correct, any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and
(ii) promptly upon request by the Agent, or any Bank
through the Agent, do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages, deeds
of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Agent,
or any Bank through the Agent, may reasonably require from time to time
in order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and maintain
the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Banks the rights granted or now or
hereafter intended to be granted to the Secured Holders under any Loan
Document or under any other instrument executed in connection with any
Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so.
Section 5.02 Negative Covenants. So long as any Advance or any other
amount payable by any Loan Party hereunder or under any other Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding or any Bank shall
have any Commitment hereunder, the Borrower will not, without the written
consent of the Required Banks:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist,
(x) prior to the Collateral Release Date, any Lien on or with respect
to any of its Properties whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any accounts or
other right to receive income, except:
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(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens incurred pursuant to (A) the
transactions contemplated by the Receivables Transfer
Agreement, dated as of April 15, 2002, by and among Oilfield
Services Receivables Corporation, a Delaware corporation, as
transferor, Halliburton Energy Services, Inc., a Delaware
corporation, individually and as collection agent, and the
other parties thereto, and any replacement, extension or
renewal thereof, and the receivables purchase agreement
related thereto and (B) other Securitization Transactions;
(iv) Liens on or with respect to any of the
properties of the Loan Parties and any of their Subsidiaries
existing on the date hereof;
(v) (A) Liens upon or in property acquired
(including acquisition through merger or consolidation) or
constructed or improved by the Borrower or any of its
Subsidiaries including general intangibles, proceeds and
improvements, accessories and upgrades thereto and created
contemporaneously with, or within 12 months after, such
acquisition or the completion of construction or improvement
to secure or provide for the payment of all or a portion of
the purchase price of such property or the cost of
construction or improvement thereof (including any
Indebtedness incurred to finance such acquisition,
construction or improvement), as the case may be and (B) Liens
on property (including any unimproved portion of partially
improved property) of the Borrower or any of its Subsidiaries
created within 12 months of completion of construction of a
new plant or plants on such property to secure all or part of
the cost of such construction (including any Indebtedness
incurred to finance such construction) if, in the opinion of
the Borrower, such property or such portion thereof was prior
to such construction substantially unimproved for the use
intended by the Borrower; provided, however, no such Lien
shall extend to or cover any property other than the property
being acquired, constructed or improved (including any
unimproved portion of a partially improved property) including
general intangibles, proceeds and improvements, accessories
and upgrades thereto;
(vi) Liens arising in connection with capitalized
leases permitted hereunder, provided that no such Lien shall
extend to or cover any Collateral or assets other than the
assets subject to such capitalized leases; and proceeds
(including, without limitation, proceeds from associated
contracts and insurances) of, and improvements, accessories
and upgrades to, the property leased pursuant thereto;
(vii) any Lien existing on any property including
general intangibles, proceeds and improvements, accessories
and upgrades thereto prior to the acquisition (including
acquisition through merger or consolidation) thereof by any
Loan Party or any of their respective Subsidiaries or existing
on any property of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a
Subsidiary, provided that such a Lien is not created in
contemplation or in connection with such acquisition or such
Person becoming a Subsidiary and no such Lien shall be
extended to cover property other than the asset being acquired
including general intangibles, proceeds and improvements,
accessories and upgrades thereto;
(viii) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in
- 45 -
part, of any Indebtedness or other obligation secured by any
Lien referred to in the foregoing clauses (ii), (iv), (v),
(vi) and (vii), provided that (A) the principal amount of the
Indebtedness or other obligation secured thereby is no greater
than the outstanding principal amount of such Indebtedness or
other obligation immediately before such extension, renewal,
refinancing, refunding or replacement and (B) such Lien shall
only extend to such assets as are already subject to a Lien in
respect of such Indebtedness or other obligation;
(ix) Liens pursuant to merger agreements, stock
purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of
property or assets of the Borrower and its Subsidiaries (but
in any event not securing Indebtedness), to the extent such
dispositions are permitted hereunder and such Liens relate
only to the assets or properties to be disposed of;
(x) Liens arising in connection with the pledge
of any Equity Interests in any joint venture (that is not a
Subsidiary), and liens on the assets of a JV Subsidiary, in
each case to secure Joint Venture Debt of such joint venture
and/or such JV Subsidiary. For purposes hereof, "Joint Venture
Debt" shall mean Indebtedness and other obligations as to
which the lenders will not, pursuant to the terms in the
agreements governing such Indebtedness, have any recourse to
the stock or assets of the Borrower or any Subsidiary, other
than such pledged assets of such JV Subsidiary;
(xi) Lien on assets of the Filing Entities
securing the DIP Credit Facility;
(xii) Liens on the Equity Interests of DII and
Mid-Valley, Inc. in favor of the Trusts;
(xiii) Liens arising in connection with the pledge
of any Equity Interests in any Project Finance Subsidiary, so
long as such Liens secure only Project Financing;
(xiv) prejudgment Liens which are being contested
in good faith by appropriate proceedings;
(xv) judgment Liens which are being contested in
good faith by appropriate proceedings and Liens securing
appeal or similar surety bonds therefor; provided that no
Event of Default exists under Section 6.01(f) relating
thereto;
(xvi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xvii) netting provisions and setoff rights in
favor of counterparties securing obligations under hedge
agreements;
(xviii) Liens on assets under construction securing
progress or partial payments relating to such assets;
(xix) the interest of a lessor or licensor under
an operating lease or license under which the Borrower or any
Subsidiary are lessee, sublessee or licensee, including
protective financing statement filings; and
- 46 -
(xx) other Liens securing Indebtedness and
obligations under hedge agreements outstanding in principal
amount (in the case of Indebtedness) and mark-to-market value
(in the case of hedge agreements) not to exceed $100,000,000
for all such secured Indebtedness and hedge agreements;
provided, that no such Lien shall extend to or cover any
Collateral; and
(y) from and after the Collateral Release Date, any Lien on or with
respect to any of its Properties whether now owned or hereafter
acquired to secure Indebtedness or reimbursement obligations in respect
of letters of credit, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens of the type identified in clause (iii)
of Section 5.02(a)(x);
(ii) Liens of the type identified in clauses
(iv), (v), (vi) and (vii) of Section 5.02(a)(x);
(iii) Liens to secure any extension, renewal,
refunding or replacement (or successive extensions, renewals,
refinancing, refundings or replacements), in whole or in part,
of any Indebtedness or other obligation secured by any Lien
referred to in the foregoing clause (ii), provided that (A)
the principal amount of the Indebtedness or other obligation
secured thereby is no greater than the outstanding principal
amount of such Indebtedness or other obligation immediately
before such extension, renewal, refinancing, refunding or
replacement and (B) such Lien shall only extend to such assets
as are already subject to a Lien in respect of such
Indebtedness or other obligation;
(iv) Liens of the type identified in clauses (x),
(xii) and (xiii) of Section 5.02(a)(x);
(v) Liens securing other Indebtedness and
obligations under hedge agreements, provided that at the time
of the creation, incurrence or assumption of any Indebtedness
or obligation under a hedge agreement secured by such Liens
and after giving effect thereto, the sum of the principal
amount of such Indebtedness and the mark-to-market value of
such obligations under hedge agreements secured by Liens
permitted by this clause (v) shall not exceed, when taken
together with the aggregate principal amount of Indebtedness
of Subsidiaries outstanding pursuant to Section 5.02(b)(xi),
15% of Consolidated Net Worth as reflected in the most recent
financial statements delivered pursuant to Section 5.01(d)(i)
and (ii); and
(vi) Liens securing other Indebtedness provided
that the Obligations of the Loan Parties hereunder and under
the other Loan Documents are secured equally and ratably with
such other Indebtedness.
(b) Indebtedness of Subsidiaries. Permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness except:
(i) Indebtedness incurred in the ordinary course
of business and consistent with the past practices of the
Borrower's Subsidiaries;
(ii) Existing Indebtedness, including any
extension, renewal, refinancing or replacement thereof;
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(iii) Project Financing;
(iv) Indebtedness of any Person that becomes a
Subsidiary after the date hereof; provided that such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary;
(v) Indebtedness referred to in clauses (v) and
(vi) of Section 5.02(a)(x) and secured by Liens permitted
thereby;
(vi) Indebtedness of the Filing Entities incurred
pursuant to the DIP Facility;
(vii) During such time as the Obligations of the
Loan Parties under the Loan Documents are guaranteed by the
Subsidiary Guarantors, guarantees of Obligations of the
Borrower by such Subsidiary Guarantors under the Notes
Agreements;
(viii) Indebtedness under the Loan Documents;
(ix) Indebtedness under Securitization
Transactions;
(x) Indebtedness of Subsidiary Guarantors so
long as such Subsidiary remains a Subsidiary Guarantor for so
long as such Indebtedness is outstanding or such Indebtedness
is otherwise permitted by this Section 5.02(b);
(xi) From and after the Collateral Release Date,
additional Indebtedness, provided that at the time of the
creation, incurrence or assumption of such Indebtedness, the
aggregate principal amount thereof taken together with the
aggregate principal amount of outstanding Indebtedness
incurred in reliance on this clause (xi) and the aggregate
principal amount of outstanding Indebtedness secured by Liens
permitted under clause (v) of Section 5.02(a)(y), shall not
exceed 15% of Consolidated Net Worth, as reflected in the most
recent financial statements delivered pursuant to Section
5.01(d)(i) and (ii);
(xii) Indebtedness of Subsidiaries that are
special-purpose business trusts under trust preferred
securities that are guaranteed by the Borrower; and
(xiii) Indebtedness under the Master LC Facility
Agreement.
(c) Restricted Payments. Prior to the date on which (i) the
Collateral Release Date shall have occurred and (ii) the Senior
Unsecured Credit Facility Agreement and all commitments thereunder
shall have been terminated and all amounts outstanding thereunder shall
have been repaid in full, declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or
the equivalent Persons thereof) as such or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any Equity Interests in the Borrower or to issue or sell any
Equity Interests therein, except that:
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(i) the Borrower may declare and may pay, once
declared, dividends and distributions payable on stock of the
Borrower only at levels per outstanding share in effect as of
the Effective Date (such amount to be appropriately adjusted
to reflect any stock split, reverse stock split, stock
dividend or similar transactions made after the date hereof so
that the aggregate amount of dividends payable after such
transaction is the same as the amount payable immediately
prior to such transaction); provided that (i) if an Event of
Default shall have occurred and be continuing or shall result
therefrom, no such declaration shall be permitted if any
Advances are then outstanding and (ii) if an Event of Default
under Section 6.01(a) shall have occurred and be continuing,
no such payment or distribution shall be permitted if any
Advances are then outstanding;
(ii) any Subsidiary of the Borrower may declare
and pay dividends and distributions to the Borrower or any
other Loan Party of which it is a Subsidiary;
(iii) any Subsidiary of the Borrower may pay
dividends or distributions to all holders of a class of Equity
Interests of such Subsidiary on a pro rata basis or on a basis
that is more favorable to the Borrower;
(iv) the Borrower or any Subsidiary may redeem,
repurchase, retire or otherwise acquire any of its Equity
Interests in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary
of the Borrower) of, Equity Interests of the Borrower;
(v) the Borrower or any Subsidiary of the
Borrower may redeem, repurchase, retire or otherwise acquire
any of its Equity Interests in connection with a compensation
plan, program or practice; provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $20 million in any fiscal
year of the Borrower;
(vi) DII may purchase common stock of the
Borrower from HESI pursuant to the Stock Agreement; and
(vii) the Borrower and any Subsidiary of the
Borrower may grant, issue, distribute or dividend Equity
Interests to its directors, officers and employees and make or
permit the vesting, lapse, exercise or payment of Equity
Interests in options, restricted stock, performance awards (in
the form of either cash or stock of the Borrower), and other
similar grants and awards pursuant to existing (or
substantially similar replacement or amended) compensation
plans, programs or practices.
For purposes of clarification, it is agreed and understood that Section
5.02(c) does not restrict the issuance, grant, dividend or distribution
of Equity Interests.
(d) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person,
or, prior to the Collateral Release Date, permit any of its material
Subsidiaries to do so; provided, however, that (i) this Section 5.02(d)
shall not prohibit any such merger or consolidation if (1) at the time
of, and immediately after giving effect to, such merger or
consolidation, no Default or Event of Default exists or would result
therefrom, (2) the Borrower is the surviving corporation in such merger
or consolidation, and (3) the Borrower shall continue to have senior
unsecured long-term debt rated at least BBB- by S&P and Baa3 by Moody's
and (ii) any Subsidiary of the Borrower
- 49 -
may transfer assets to, or merge into or consolidate with, the Borrower
or any other Subsidiary of the Borrower, provided that in the case of
any such merger or consolidation to which a Subsidiary Guarantor is a
party, the Person formed by such merger or consolidation shall be the
Borrower or a Subsidiary Guarantor.
(e) Use of Proceeds. Use the proceeds of any Advance or any
Letter of Credit for any purpose other than for general corporate
purposes of the Borrower or use any such proceeds (i) in a manner which
violates or results in a violation of any law or regulation, (ii) to
purchase or carry any margin stock (as defined in Regulation U), except
that this clause (ii) shall not prohibit the Borrower from using
proceeds of the Advances to purchase its own common stock if the
aggregate amount of all such proceeds so used does not exceed
$100,000,000 and if each Notice of Borrowing pertaining to such
Advances specified that such proceeds would be so used, (iii) to extend
credit to others for the purpose of purchasing or carrying any margin
stock (as defined in Regulation U), or (iv) to acquire any equity
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
Section 5.03 Financial Covenants. So long as any Advance shall remain
unpaid or any Bank shall have any Commitment hereunder, the Borrower will:
(a) Interest Charge Coverage Ratio. Not permit the Interest
Charge Coverage Ratio as of the end of a fiscal quarter to be less than
3.50 to 1.00.
(b) Consolidated Debt to Total Consolidated Capitalization
Ratio. Maintain at all times a maximum Consolidated Debt to Total
Consolidated Capitalization Ratio of:
(i) Prior to the Exit Date: 0.60 to 1.00; and
(ii) On and after the Exit Date: 0.55 to 1.00.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, whether at the due date
thereof or by acceleration thereof or otherwise or (ii) the Borrower
shall fail to pay any interest on any Advance or any fees hereunder or
other amount payable hereunder or any Loan Party shall fail to make any
other payment under any Loan Document, in each case under this clause
(ii), within five Business Days of when the same becomes due and
payable, whether at the due date thereof or by acceleration thereof or
otherwise; or
(b) Any representation, warranty or certification made by any
Loan Party (or any of its officers) herein pursuant to or in connection
with any Loan Document or in any certificate or document furnished to
any Bank pursuant to or in connection with any Loan Document, or any
representation or warranty deemed to have been made by the Borrower
pursuant to Section 3.02, shall prove to have been incorrect or
misleading in any material respect when made or so deemed to have been
made; or
- 50 -
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(b), (d), (e), or
(i), 5.02 or 5.03 of this Agreement; or (ii) the Borrower shall fail to
perform or observe any other term, covenant or agreement contained in
Section 5.01 or any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document on its
part to be performed or observed (other than any term, covenant or
agreement covered by Section 6.01(a)) and, in each case under this
clause (ii), such failure shall remain unremedied for 30 days after
notice thereof shall have been given to the Borrower by the Agent or by
any Bank; or
(d) The Borrower or any material Subsidiary of the Borrower
shall default in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Debt (other than
Project Financing or Permitted Non-Recourse Debt) (whether principal,
interest, premium or otherwise) of, or directly or indirectly
guaranteed by, the Borrower or any such material Subsidiary, as the
case may be, in excess of $75,000,000 or the Borrower or any material
Subsidiary of the Borrower shall default in the performance or
observance of any obligation or condition with respect to any such Debt
(other than Project Financing or Permitted Non-Recourse Debt) if the
effect of such default is to accelerate the maturity of or require the
posting of cash collateral with respect to any such Debt or, in any
case, any such Debt shall become due prior to its stated maturity
(other than by a regularly-scheduled required payment and mandatory
prepayments from proceeds of asset sales, debt incurrence, excess cash
flow, equity issuances and insurance proceeds); provided that for the
avoidance of doubt the parties acknowledge and agree that (i) any
payment required to be made under a guaranty or letter of credit
reimbursement agreement described in the definition herein of Debt
shall be due and payable at the time such payment is due and payable
under the terms of such guaranty or letter of credit reimbursement
agreement (taking into account any applicable grace period) and such
payment shall not be deemed to have been accelerated or have become due
as a result of the obligation guaranteed having become due and (ii) the
conversion of the Convertible Notes shall not be a Default or Event of
Default hereunder; or
(e) The Borrower or any material Subsidiary of the Borrower
(other than a Filing Entity in connection with the filing of the
Chapter 11 Cases) shall be adjudicated a bankrupt or insolvent by a
court of competent jurisdiction, or generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Borrower or any such material Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its Property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 90 days, or any of the
actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any
substantial part of its Property) shall occur; or the Borrower or any
such material Subsidiary shall take any corporate or organizational
action to authorize any of the actions set forth above in this
subsection (e) (other than in connection with the filing of the Chapter
11 Cases); or
(f) Any final, non-appealable judgment or order by a court of
competent jurisdiction for the payment of money in excess of
$75,000,000 over and above the amount of insurance coverage available
from a financially sound insurer that has acknowledged coverage shall
be rendered against the Borrower or any material Subsidiary of the
Borrower and not discharged
- 51 -
within 30 days after such order or judgment becomes final; or any
judgment, writ, warrant of attachment or execution or similar process
shall be issued or levied against a substantial part of the property of
the Borrower or any material Subsidiary of the Borrower and such
judgment, writ, warrant of attachment or execution or similar process
shall not be released, stayed, vacated or fully bonded within 30 days
after its issue or levy; or
(g) Any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01, 5.01(i) or 5.01(j) shall for
any reason (other than pursuant to the terms thereof or due to the
action or inaction of the Collateral Agent) cease to create a valid and
perfected first priority (other than prior Liens permitted under the
Loan Documents) lien on and security interest in the Collateral
purported to be covered thereby or any Loan Party shall so state in
writing and, if such security interest was granted pursuant to Section
5.01(i)(ii), such situation shall remain unremedied for 30 days;
(h) The Plan of Reorganization shall be amended, modified or
supplemented after the Effective Date in any manner materially adverse
to (i) the Banks or (ii) the ability of the Borrower and any material
Subsidiary which is a Loan Party to perform its Obligations under any
Loan Document to which it is or is to be a party, in each case without
the consent of the Required Banks; or
(i) The Borrower or any of its ERISA Affiliates shall incur,
or, in the reasonable opinion of the Required Banks, shall be
reasonably likely to incur liability in excess of $75,000,000 in the
aggregate as a result of one or more of the following: (i) the
occurrence of any ERISA Event; (ii) the partial or complete withdrawal
of the Borrower or any of its ERISA Affiliates from a Multiemployer
Plan; or (iii) the reorganization or termination of a Multiemployer
Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances (other than Letter of Credit Advances
by an Issuing Bank or a Bank pursuant to Section 2.03(c)) and of each Issuing
Bank to issue Letters of Credit to be terminated, whereupon the same (and all of
the Commitments) shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Banks, by notice to the Borrower, declare
the Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or any other notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that in the event of any
actual or deemed entry of an order for relief with respect to the Borrower under
the Bankruptcy Code, (A) the Commitment of each Bank and the obligation of each
Bank to make Advances (other than Letter of Credit Advances by an Issuing Bank
or a Bank pursuant to Section 2.03(c)) and of each Issuing Bank to issue Letters
of Credit shall automatically be terminated, and (B) the Advances, all interest
thereon and all other amounts payable under this Agreement shall automatically
and immediately become and be due and payable, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration, or any other
notice of any kind, all of which are hereby expressly waived by the Borrower.
Section 6.02 Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the Agent may, or
shall at the request of the Required Banks, irrespective of whether it is taking
any of the actions described in Section 6.01 or otherwise, make demand upon the
Borrower to, and forthwith upon such demand the Borrower will, pay to the Agent
on behalf of the Banks in same day funds at the Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding. If at
any time the Agent determines that any funds held in the L/C Cash Collateral
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Account are subject to any right or claim of any Person other than the Agents
and the Banks or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith upon
demand by the Agent, pay to the Agent, as additional funds to be deposited and
held in the L/C Cash Collateral Account, an amount equal to the excess of (a)
such aggregate Available Amount over (b) the total amount of funds, if any, then
held in the L/C Cash Collateral Account that the Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit in the L/C Cash Collateral Account, such funds shall
be applied to reimburse the relevant Issuing Bank or the Banks, as applicable,
to the extent permitted by applicable law.
ARTICLE VII
THE AGENT
Section 7.01 Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof or of any other Loan Document, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement (including, without limitation, enforcement or collection
of the Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Banks and such instructions shall be binding upon
all Banks and all holders of Notes; provided, however, that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to any Loan Document or applicable law. The Agent agrees to
give to each Bank prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
Section 7.02 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any Loan Document,
except for their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agent: (i) may consult with legal
counsel (including, without limitation, counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with any of the Loan Documents or any other instrument or
document; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any of
Loan Documents or any other instrument or document on the part of the Borrower
or any Subsidiary of the Borrower or to inspect the Property (including the
books and records) of the Borrower or any Subsidiary of the Borrower; (iv) shall
not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the Loan Documents
or any other instrument or document; and (v) shall incur no liability under or
in respect of any of Loan Documents or any other instrument or document by
acting upon any notice (including telephonic notice), consent, certificate or
other instrument or writing (which may be by facsimile, telegram or telex)
believed by it to be genuine and signed, given or sent by the proper party or
parties.
Section 7.03 The Agent and its Affiliates. With respect to its
Commitment, the Advances owed to it and the Notes issued to it, each Bank which
is also the Agent shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Agent; and
the term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
any Bank serving as the Agent in its individual capacity. Any Bank serving as
the Agent and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
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generally engage in any kind of business with, the Borrower, any Affiliate of
the Borrower and any Person who may do business with or own securities of the
Borrower or any Affiliate of the Borrower, all as if such Bank were not the
Agent and without any duty to account therefor to the Banks.
Section 7.04 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the Financial Statements and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents or any
other instrument or document.
Section 7.05 Indemnification. The Banks agree to indemnify the Agent
(to the extent not promptly reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes then held by each of the Banks (or
if no Advances are at the time outstanding or if any Notes are held by Persons
which are not Banks, ratably according to either (a) the respective amounts of
the Banks' Commitments, or (b) if no Commitments are at the time outstanding,
the respective amounts of the Commitments immediately prior to the time the
Commitments ceased to be outstanding), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of any of the Loan Documents or any other instrument or document furnished
pursuant hereto or in connection herewith, or any action taken or omitted by the
Agent under any of the Loan Documents or any other instrument or document
furnished pursuant hereto or in connection herewith ("Indemnified Costs");
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction. Without limitation of the foregoing, each Bank agrees to reimburse
the Agent promptly upon demand for such Bank's ratable share of any costs and
expenses (including, without limitation, counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, any of the Loan Documents or any other instrument or
document furnished pursuant hereto or in connection herewith to the extent that
the Agent is not reimbursed for such expenses by the Borrower. In the case of
any investigation, litigation or proceeding giving rise to any Indemnified
Costs, this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any other Agent, any Bank or a third party.
Section 7.06 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower and may be removed
at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent which, if such successor Agent is not a Bank, is approved by the
Borrower (which approval will not be unreasonably withheld). If no successor
Agent shall have been so appointed by the Required Banks (and, if not a Bank,
approved by the Borrower), and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation or removal
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hereunder as Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement.
Section 7.07 Co-Lead Arrangers, Syndication Agent, Documentation Agent.
The Co-Lead Arrangers, Syndication Agent and Documentation Agent shall have no
duties, obligations or liabilities hereunder or in connection herewith.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement or any Note or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or in the case of the Collateral
Documents or the Subsidiary Guaranty, consented to) by the Required Banks, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) waive any of the conditions specified in
Section 3.01, (b) increase the Commitment of any Bank or subject any Bank to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Advances or any fees
or other amounts payable hereunder, (e) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Advances which shall be
required for the Banks or any of them to take any action hereunder, (f)
materially reduce or limit the obligations of the Subsidiary Guarantors under
Section 1 of the Subsidiary Guaranty or otherwise limit the Subsidiary
Guarantors' liability with respect to the Obligations owing to the Agents and
the Banks (it being understood that (i) on the sale or merger of a Subsidiary
Guarantor or the transfer of all or substantially all of its assets otherwise
permitted hereunder, or (ii) on the request of the Borrower with respect to any
Subsidiary Guarantor that provided a guaranty solely to comply with Section
5.02(b)(x), so long as such guaranty is no longer required in order to comply
with such Section, such guaranty shall automatically be released), (g) release
all or substantially all of the Collateral in any transaction or series of
related transactions, except as contemplated by Section 8.09; or (h) amend
Section 2.14 or this Section 8.01; and provided, further, that (x) no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Banks required above to take such action, affect the rights or duties of
the Agent under this Agreement or any of the Notes and (y) no amendment, waiver
or consent shall, unless in writing and signed by each Issuing Bank in addition
to the Banks required above to take such action, affect the rights or
obligations of the Issuing Banks under this Agreement.
Section 8.02 Notices, Etc. (a) All notices and other communications
provided for hereunder shall be either (x) in writing (including facsimile
communication) and mailed, telecopied, or delivered or (y) as and to the extent
set forth in Section 8.02(b) and in the proviso to this Section 8.02(a), (i) if
to the Borrower, at its address at 1401 McKinney, Suite 2400, Houston, Texas
77010-4035 Attention: Jerry H. Blurton, Vice President and Treasurer, Facsimile:
(713) 759-2686; (ii) if to any Bank listed on the signature pages hereof, at its
Domestic Lending Office specified opposite its name on Schedule III hereto;
(iii) if to any other Banks, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it becomes a Bank; (iv) if to the
Agent, at the addresses set forth below:
Citicorp North America, Inc.
Two Penns Way, Suite 200
New Castle, Delaware 19720
Facsimile No.: (302) 894-6120
Attention: Bank Loan Syndications Department
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with a copy to:
Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Facsimile No.: (713) 654-2849
Attention: Amy Pincu, Vice President
(but references herein to the address of the Agent for purposes of payments or
making available funds or for purposes of Section 8.08(c) shall not include the
address to which copies are to be sent); or, as to the Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent,
provided that materials required to be delivered pursuant to Section 5.01(d)(i),
(ii), (iii) or (vi), unless delivered by posting to a website as provided in
Section 5.01(d), shall be delivered to the Agent as specified in Section 8.02(b)
or as otherwise specified to the Borrower by the Agent. Each such notice or
communication shall be effective (i) if mailed, upon receipt, (ii) if delivered
by hand, upon delivery with written receipt, and (iii) if telecopied, when
receipt is confirmed by telephone, except that any notice or communication to
the Agent pursuant to this Agreement shall not be effective until actually
received by the Agent.
(b) So long as CNAI or any of its Affiliates is the
Agent, materials required to be delivered pursuant to Section 5.01(d)(i), (ii),
(iii) and (vi), unless delivered by posting to a website as provided in Section
5.01(d), shall be delivered to the Agent in an electronic medium in a format
acceptable to the Agent and the Banks by e-mail at
oploanswebadmin@citigroup.com. The Borrower agrees that the Agent may make such
materials, as well as any other written information, documents, instruments and
other material relating to the Borrower, any of its Subsidiaries or any other
materials or matters relating to this Agreement, the Notes or any of the
transactions contemplated hereby (collectively, the "Communications") available
to the Banks by posting such notices on Intralinks, "e-Disclosure", the Agent's
internet delivery system that is part of Fixed Income Direct, Global Fixed
Income's primary web portal, or a substantially similar electronic system (the
"Platform"). The Borrower acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided "as is" and "as available" and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, 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 the Agent
or any of its Affiliates in connection with the Platform. Notices and other
communications to the Banks and the Agent hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Agent; provided that the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Agent and the applicable Bank. The
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Each Bank agrees that notice to it (as provided in the
next sentence) (a "Notice") specifying that any Communications have been posted
to the Platform shall constitute effective delivery of such information,
documents or other materials to such Bank for purposes of this Agreement;
provided that if requested by any Bank the Agent shall deliver a copy of the
Communications to such Bank by email or facsimile. Each Bank agrees (i) to
notify the Agent in writing of such Bank's e-mail address to which a Notice may
be sent by electronic transmission (including by electronic communication) on or
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before the date such Bank becomes a party to this Agreement (and from time to
time thereafter to ensure that the Agent has on record an effective e-mail
address for such Bank) and (ii) that any Notice may be sent to such e-mail
address.
Section 8.03 No Waiver; Remedies. No failure on the part of any Bank or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 8.04 Expenses and Taxes; Compensation. (a) The Borrower agrees
to pay on demand (i) all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable fees and expenses of counsel) of the Co-Lead
Arrangers and the Agent and each of their respective affiliates in connection
with the preparation, execution, delivery and administration of the Loan
Documents and the other documents and instruments delivered hereunder or in
connection with any amendments, modifications, consents or waivers in connection
with the Loan Documents, (ii) all reasonable fees and expenses of counsel for
the Co-Lead Arrangers and the Agent, during the existence of any Event of
Default, any Bank with respect to advising the Agent or, during the existence of
any Event of Default, any Bank as to its rights and responsibilities under the
Loan Documents and (iii) all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable fees and expenses of counsel) of the
Co-Lead Arrangers, the Agent and each Bank in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of the Loan
Documents (including the enforcement of rights under this Section 8.04(a)) and
the other documents and instruments delivered hereunder and rights and remedies
hereunder and thereunder.
(b) If any payment or purchase of principal of, or Conversion
of, any Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Advance, as a result of a payment, purchase or
Conversion pursuant to Section 2.09, Section 2.10, Section 2.15, Section 2.16 or
Section 2.17, acceleration of the maturity of the Advances pursuant to Section
6.01 or for any other reason, the Borrower shall, within 15 days after demand by
any Bank (with a copy of such demand to the Agent), pay to the Agent for the
account of such Bank any amounts required to compensate such Bank for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, purchase or Conversion, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense reasonably incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Bank to fund or maintain such Advance. A certificate as to the amount of
such additional losses, costs or expenses, submitted to the Borrower and the
Agent by such Bank, shall be conclusive and binding for all purposes, absent
manifest error.
(c) The Borrower agrees to indemnify and hold harmless the
Agent, the Banks, the Co-Lead Arrangers and their respective directors,
officers, employees, affiliates, advisors, attorneys and agents (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, fees and expenses of
counsel) for which any of them may become liable or which may be incurred by or
asserted against any of the Indemnified Parties in connection with or arising
out of (i) any Loan Document or any other document or instrument delivered in
connection herewith, (ii) the existence of any condition on any property of the
Borrower or any of its Subsidiaries that constitutes a violation of any
environmental protection law or any other law, rule, regulation or order, or
(iii) any investigation, litigation, or proceeding, whether or not any of the
Indemnified Parties is a party thereto, related to or in connection with any of
the foregoing or any Loan Document, including, without limitation, any
transaction in which any proceeds of any Advance or Letter of Credit are
applied, including, without limitation, in each of the foregoing cases, any such
claim, damage, loss, liability or expense resulting from the negligence of any
Indemnified Party, but excluding any such claim, damage,
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loss, liability or expense sought to be recovered by any Indemnified Party to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnified Party.
(d) Except as set forth in the next succeeding sentence, each
of the Banks and the Agent and each of their respective directors, officers,
employees, affiliates, advisors and agents shall not be liable to the Borrower
for, and the Borrower agrees not to assert any claim for, amounts constituting
special, indirect, consequential, punitive, treble or exemplary damages arising
out of or in connection with any breach by such Bank or the Agent of any of its
obligations hereunder. If the Borrower becomes liable to a third party for
amounts constituting punitive, treble or exemplary damages as a result of a
breach of an obligation hereunder by a Bank or the Agent, as the case may be,
the Borrower shall be entitled to claim and recover (and does not waive its
rights to claim and recover) such amounts from such Bank or the Agent, as the
case may be, to the extent such Bank or the Agent, as the case may be, would be
liable to the Borrower for such amounts but for the limitation set forth in the
preceding sentence.
(e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, all obligations of the Borrower under Section 2.12,
Section 2.13 and this Section 8.04 shall survive the termination of the
Commitments and this Agreement and the payment in full of all amounts hereunder
and under the Notes.
Section 8.05 Right of Set-Off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making by the Required Banks of
the request or the granting by the Required Banks of the consent specified by
Section 6.01 to authorize the Agent to declare the Advances due and payable
pursuant to the provisions of Section 6.01, each Bank 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 indebtedness at any time owing
by such Bank (or by any branch, agency, subsidiary or other Affiliate of such
Bank, wherever located) to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement or any Note held by such Bank or any other Loan Document,
whether or not such Bank shall have made any demand under this Agreement or any
such Note or any other Loan Document and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Borrower after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which such Bank
may have.
Section 8.06 Limitation and Adjustment of Interest. (a) Notwithstanding
anything to the contrary set forth herein, in any other Loan Document or in any
other document or instrument, no provision of any of the Loan Documents or any
other instrument or document furnished pursuant hereto or in connection herewith
is intended or shall be construed to require the payment or permit the
collection of interest in excess of the maximum non-usurious rate permitted by
applicable law. Accordingly, if the transactions with any Bank contemplated
hereby would be usurious under applicable law, if any, then, in that event,
notwithstanding anything to the contrary in any Note payable to such Bank, this
Agreement or any other document or instrument, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received by such Bank under
any Note payable to such Bank, this Agreement or any other document or
instrument shall under no circumstances exceed the maximum amount allowed by
such applicable law, and any excess shall be canceled automatically and, if
theretofore paid, shall, at the option of such Bank, be credited by such Bank on
the principal amount of the indebtedness owed to such Bank by the Borrower or
refunded by such Bank to the Borrower, and (ii) in the event that the maturity
of any Note payable to such Bank is accelerated or in the event of any required
or permitted prepayment, then such consideration that
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constitutes interest under law applicable to such Bank may never include more
than the maximum amount allowed by such applicable law and excess interest, if
any, to such Bank provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall, at the option of such Bank, be credited by such Bank on
the principal amount of the indebtedness owed to such Bank by the Borrower or
refunded by such Bank to the Borrower. In determining whether or not the
interest contracted for, taken, reserved, charged or received by any Bank
exceeds the maximum non-usurious rate permitted by applicable law, such
determination shall be made, to the extent that doing so does not result in a
violation of applicable law, by amortizing, prorating, allocating and spreading,
in equal parts during the period of the full stated term of the loans hereunder,
all interest at any time contracted for, taken, charged, received or reserved by
such Bank in connection with such loans.
(b) In the event that at any time the interest rate applicable
to any Advance made by any Bank would exceed the maximum non-usurious rate
allowed by applicable law, the rate of interest to accrue on the Advances by
such Bank shall be limited to the maximum non-usurious rate allowed by
applicable law, but shall accrue, to the extent permitted by law, on the
principal amount of the Advances made by such Bank from time to time
outstanding, if any, at the maximum non-usurious rate allowed by applicable law
until the total amount of interest accrued on the Advances made by such Bank
equals the amount of interest which would have accrued if the interest rates
applicable to the Advances pursuant to Article II had at all times been in
effect. In the event that upon the final payment of the Advances made by any
Bank and termination of the Commitment of such Bank, the total amount of
interest paid to such Bank hereunder and under the Notes is less than the total
amount of interest which would have accrued if the interest rates applicable to
such Advances pursuant to Article II had at all times been in effect, then the
Borrower agrees to pay to such Bank, to the extent permitted by law, an amount
equal to the excess of (a) the lesser of (i) the amount of interest which would
have accrued on such Advances if the maximum non-usurious rate allowed by
applicable law had at all times been in effect or (ii) the amount of interest
which would have accrued on such Advances if the interest rates applicable to
such Advances pursuant to Article II had at all times been in effect over (b)
the amount of interest otherwise accrued on such Advances in accordance with
this Agreement.
Section 8.07 Binding Effect. This Agreement shall become effective as
provided in Section 3.01 hereof and thereafter shall be binding upon and inure
to the benefit of the Borrower and the Agent and each Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations hereunder or under any other Loan Document or
any interest herein or therein without the prior written consent of all of the
Banks.
Section 8.08 Assignments and Participations. (a) Each Bank may assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Notes held by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement, (ii)
except in the case of an assignment of all of a Bank's rights and obligations
under this Agreement, the amount of the Commitment of the assigning Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with the Notes subject to such assignment and a
processing and recordation fee of $3,000. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Bank hereunder and (y) the Bank assignor thereunder shall, to the
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extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Bank assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or any other instrument or document furnished pursuant hereto or in
connection herewith or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant hereto or in connection herewith; (ii) such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any other Person or
the performance or observance by the Borrower or any other Person of any of its
respective obligations under any Loan Document or any other instrument or
document furnished pursuant hereto or in connection herewith; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the Financial Statements and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Bank or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, any of the other Loan Documents or any other instrument or
document; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers and discretion under the Loan Documents as
are delegated to the Agent by the terms hereof or thereof, together with such
powers and discretion as are reasonably incidental thereto; (vii) such assignee
appoints and authorizes the Agent to take such action as the Agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
and discretion as are reasonably incidental thereto and (viii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Commitment of, and the principal amount of the Revolving Credit Advances
owing to, each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Bank at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee representing that it is an Eligible
Assignee, together with the Notes subject to such assignment, the Agent shall,
if such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit E, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower shall execute and deliver to the Agent in exchange for the
surrendered Notes a new Note payable to the order of such Eligible Assignee in
an amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Bank has retained a Commitment hereunder, a new
Note payable to the order of the assigning Bank in an amount equal to the
Commitment retained by it hereunder (such new Notes shall be in an
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aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A).
(e) Each Bank may sell participations to one or more banks or
other entities (other than the Borrower or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Notes held by it); provided, however, that (i) such Bank's obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of any such Notes for all purposes of
this Agreement, (iv) the Borrower, the Agent and the other Banks shall continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement, and (v) the terms of any such
participation shall not restrict such Bank's ability to make any amendment or
waiver of this Agreement or any Note or such Bank's ability to consent to any
departure by the Borrower therefrom without the approval of the participant,
except that the approval of the participant may be required to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation.
(f) Each Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.
(g) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.08, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Loan Party or any of its
Subsidiaries furnished to such Bank by or on behalf of the Borrower or any of
its Subsidiaries; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to comply with
Section 8.15.
(h) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Revolving Credit Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board.
Section 8.09 Release of Collateral. (a) Upon the sale, lease, transfer
or other disposition of any item of Collateral of any Loan Party (including,
without limitation, as a result of the sale or merger, in accordance with the
terms of the Loan Documents, of the Loan Party that owns such Collateral) in
accordance with the terms of the Loan Documents, the Agent will, at the
Borrower's expense, execute and deliver to the Collateral Agent such documents
as the Collateral Agent may reasonably request to evidence the release of such
item of Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.
(b) Upon the occurrence of the Collateral Release Date, the
Agent will, at the Borrower's written request and expense, execute and deliver
to the Collateral Agent such documents as the Collateral Agent may reasonably
request to evidence the release of the Collateral from the assignment and
security interest granted under the Collateral Documents.
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Section 8.10 No Liability of Issuing Banks. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither any Issuing
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
a claim against such Issuing Bank, and such Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) such Issuing Bank's
willful misconduct or gross negligence as determined in a final, non-appealable
judgment by a court of competent jurisdiction in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) such Issuing Bank's willful failure to make lawful payment under
a Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
Section 8.11 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of this Agreement.
Section 8.12 Judgment (a) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase Dollars with
such other currency at Citibank's principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.
(b) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in a Foreign Currency into Dollars,
the parties agree to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase such Foreign Currency with Dollars
at Citibank's principal office in London at 11:00 A.M. (London time) on the
Business Day preceding that on which final judgment is given.
(c) The obligation of the Borrower in respect of any sum due
from it in any currency (the "Primary Currency") to any Bank or the Agent
hereunder shall, notwithstanding any judgment in any other currency, be
discharged only to the extent that on the Business Day following receipt by such
Bank or the Agent (as the case may be), of any sum adjudged to be so due in such
other currency, such Bank or the Agent (as the case may be) may in accordance
with normal banking procedures purchase the applicable Primary Currency with
such other currency; if the amount of the applicable Primary Currency so
purchased is less than such sum due to such Bank or the Agent (as the case may
be) in the applicable Primary Currency, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Bank or the
Agent (as the case may be) against such loss, and if the amount of the
applicable Primary Currency so purchased exceeds such sum due to any Bank or the
Agent (as the case
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may be) in the applicable Primary Currency, such Bank or the Agent (as the case
may be) aggress to remit to the Borrower such excess.
Section 8.13 Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York. Without limiting the intent of the parties set forth above, (i) Chapter
346 of the Texas Finance Code (formerly known as Chapter 15, Subtitle 3, Title
79, of the Revised Civil Statutes of Texas, 1925), as amended (relating to
revolving loans and revolving triparty accounts), shall not apply to this
Agreement, the Notes or the transactions contemplated hereby, and (ii) to the
extent that any Bank may be subject to Texas law limiting the amount of interest
payable for its account, such Bank shall utilize the indicated (weekly) rate
ceiling from time to time in effect as provided in Chapter 303 of the Texas
Finance Code (formerly known as Article 5069-1.04 of the Revised Civil Statutes
of Texas), as amended.
Section 8.14 Jurisdiction; Damages. To the fullest extent it may
effectively do so under applicable law, (i) each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its Property, to the
non-exclusive jurisdiction of any New York state court or federal court sitting
in New York City, and any appellate court from any appeal thereof, in any action
or proceeding arising out of or relating to this Agreement, any of the Notes,
any other Loan Document or any other instrument or document furnished pursuant
hereto or in connection herewith 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 such action or proceeding may be heard and
determined in any such court; (ii) each of the parties hereto hereby irrevocably
and unconditionally waives the defense of an inconvenient forum to the
maintenance of such action or proceeding and any objection that it may now or
hereafter have to the laying of venue of any such action or proceeding in any
such court; (iii) the Borrower hereby agrees that service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to the Borrower at its address specified in Section 8.02; and (iv) 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 herein shall affect the
rights of any Bank or the Agent to serve legal process in any other manner
permitted by law or affect the right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement, any of the Notes or
any other instrument or document furnished pursuant hereto or in connection
herewith in the courts of any other jurisdiction. Each of the Borrower, the
Agent and the Banks hereby irrevocably and unconditionally waives, to the
fullest extent it may effectively do so under applicable law, any right it may
have to claim or recover in any action or proceeding referred to in this Section
8.14 any exemplary or punitive damages. The Borrower hereby further irrevocably
waives, to the fullest extent it may effectively do so under applicable law, any
right it may have to claim or recover in any action or proceeding referred to in
this Section 8.14 any special or consequential damages.
Section 8.15 Confidentiality. Each Bank agrees that it will use
reasonable efforts, to the extent not inconsistent with practical business
requirements, not to disclose without the prior consent of the Borrower (other
than to employees, auditors, accountants, counsel or other professional advisors
of the Agent or any Bank) any information with respect to the Borrower or its
Subsidiaries or the Transaction which is furnished pursuant to this Agreement,
provided that any Bank may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to or required by any municipal, state
or Federal regulatory body having or claiming to have jurisdiction over any Bank
or submitted to or required by the Federal Reserve Board or the Federal Deposit
Insurance Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to any
Bank, (e) to any assignee, participant, prospective assignee, or
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prospective participant that has agreed to comply with this Section 8.15, (f) in
connection with the exercise of any remedy by any Bank pertaining to this
Agreement, any of the Notes or any other document or instrument delivered in
connection herewith, (g) in connection with any litigation involving any Bank
pertaining to any Loan Document or any other document or instrument delivered in
connection herewith, (h) to any Bank or the Agent, or (i) to any Affiliate of
any Bank. Notwithstanding anything herein to the contrary, the Borrower and its
representatives, the Co-Lead Arrangers, Agent and Banks, and their
representatives, may disclose to any and all persons, without limitation of any
kind, the United States tax treatment and tax structure of the Transaction and
all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower, the Co-Lead Arrangers, Agent or Banks, as the case may
be, relating to such United States tax treatment or tax structure.
Section 8.16 Prior Credit Facility. Each Bank which is a "Bank" under
the Prior Credit Facility hereby (i) waives its right to receive any advance
notice of termination required by the Prior Credit Facility and agrees that such
Prior Credit Facility may be terminated by notice from the Borrower on the
Effective Date and (ii) waives any default thereunder which may have occurred in
connection with the Chapter 11 Cases.
[Remainder of page intentionally blank.]
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Section 8.17 Waiver of Jury Trial. Each of the Borrower, the Agent and
the Banks hereby irrevocably and unconditionally waives, to the fullest extent
it may effectively do so under applicable law, any and all right to trial by
jury in any action or proceeding arising out of or relating to this Agreement,
any of the Notes, any other Loan Document or any other instrument or document
furnished pursuant hereto or in connection herewith or the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
HALLIBURTON COMPANY
By: ________________________________________________
Name:
Title: