Exhibit 10.1
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$150,000,000
CREDIT AGREEMENT
AMONG
▇▇▇▇▇▇ DRILLING COMPANY,
AS BORROWER
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
▇▇▇▇▇▇ BROTHERS INC.,
DEUTSCHE BANK SECURITIES INC.,
AS JOINT ADVISORS, JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
DEUTSCHE BANK SECURITIES INC.,
AS SYNDICATION AGENT
BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT
DEUTSCHE BANK TRUST COMPANY AMERICAS,
AS COLLATERAL AGENT
AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF OCTOBER 10, 2003
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................... 1
1.1 Defined Terms.................................................................. 1
1.2 Other Definitional Provisions.................................................. 24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................................... 25
2.1 Term Loan Commitments.......................................................... 25
2.2 Procedure for Term Loan Borrowing.............................................. 25
2.3 Repayment of Term Loans........................................................ 26
2.4 Revolving Credit Commitments................................................... 26
2.5 Procedure for Revolving Credit Borrowing....................................... 27
2.6 Borrowing Base Calculations; Inclusion of Assets in Borrowing Base............. 27
2.7 Repayment of Loans; Evidence of Debt........................................... 27
2.8 Commitment Fees, etc........................................................... 28
2.9 Termination or Reduction of Credit Commitments................................. 29
2.10 Optional Prepayments........................................................... 29
2.11 Mandatory Prepayments.......................................................... 30
2.12 Conversion and Continuation Options............................................ 31
2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches...................... 31
2.14 Interest Rates and Payment Dates............................................... 32
2.15 Computation of Interest and Fees............................................... 32
2.16 Inability to Determine Interest Rate........................................... 33
2.17 Pro Rata Treatment and Payments................................................ 33
2.18 Requirements of Law............................................................ 35
2.19 Taxes.......................................................................... 36
2.20 Indemnity...................................................................... 37
2.21 Illegality..................................................................... 38
2.22 Change of Lending Office....................................................... 38
2.24 Bank Products.................................................................. 39
SECTION 3. LETTERS OF CREDIT..................................................................... 39
3.1 L/C Commitment................................................................. 39
3.2 Procedure for Issuance of Letter of Credit..................................... 39
3.3 Fees and Other Charges......................................................... 40
3.4 L/C Participations............................................................. 40
3.5 Reimbursement Obligation of the Borrower....................................... 41
3.6 Obligations Absolute........................................................... 42
3.7 Letter of Credit Payments...................................................... 42
3.8 Applications................................................................... 42
3.9 Indemnification; Exoneration; Power of Attorney................................ 42
3.10 Supporting Letter of Credit; Cash Collateral................................... 44
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................ 45
4.1 Financial Condition............................................................ 45
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4.2 No Change...................................................................... 46
4.3 Corporate Existence; Compliance with Law....................................... 46
4.4 Corporate Power; Authorization; Enforceable Obligations........................ 47
4.5 No Legal Bar................................................................... 47
4.6 No Material Litigation......................................................... 47
4.7 No Default..................................................................... 47
4.8 Ownership of Property; Liens................................................... 48
4.9 Intellectual Property.......................................................... 48
4.10 Taxes.......................................................................... 48
4.11 Federal Regulations............................................................ 48
4.12 Labor Matters.................................................................. 48
4.13 ERISA.......................................................................... 48
4.14 Investment Company Act; Other Regulations...................................... 49
4.15 Subsidiaries................................................................... 49
4.16 Use of Proceeds................................................................ 49
4.17 Environmental Matters.......................................................... 49
4.18 Accuracy of Information, etc................................................... 50
4.19 Security Documents............................................................. 51
4.20 Solvency....................................................................... 51
4.21 Senior Indebtedness............................................................ 51
4.22 Accounts....................................................................... 52
SECTION 5. CONDITIONS PRECEDENT.................................................................. 52
5.1 Conditions to Initial Extension of Credit...................................... 52
5.2 Conditions to Each Extension of Credit......................................... 55
SECTION 6. AFFIRMATIVE COVENANTS................................................................. 55
6.1 Financial Statements........................................................... 55
6.2 Certificates; Other Information................................................ 56
6.3 Redemption of Remaining 9.75% Senior Notes..................................... 57
6.4 Conduct of Business and Maintenance of Existence, etc.......................... 57
6.5 Maintenance of Property; Insurance............................................. 58
6.6 Inspection of Property; Books and Records; Discussions......................... 58
6.7 Notices........................................................................ 58
6.8 Environmental Laws............................................................. 59
6.9 Additional Collateral, etc..................................................... 59
6.10 Borrowing Base Certificate..................................................... 60
6.11 Cash Management Systems........................................................ 61
6.12 Inspection of Revolving Credit Facility Collateral............................. 62
6.13 Mortgages...................................................................... 62
6.14 Further Assurances............................................................. 62
SECTION 7. NEGATIVE COVENANTS.................................................................... 62
7.1 Financial Condition Covenants.................................................. 63
7.2 Limitation on Indebtedness..................................................... 63
7.3 Limitation on Liens............................................................ 64
7.4 Limitation on Fundamental Changes.............................................. 66
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7.5 Limitation on Disposition of Property.......................................... 66
7.6 Limitation on Restricted Payments.............................................. 67
7.7 Limitation on Capital Expenditures............................................. 68
7.8 Limitation on Investments...................................................... 68
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc..... 69
7.10 Limitation on Transactions with Affiliates..................................... 70
7.11 Limitation on Sales and Leasebacks............................................. 70
7.12 Limitation on Changes in Fiscal Periods........................................ 70
7.13 Limitation on Negative Pledge Clauses.......................................... 70
7.14 Limitation on Restrictions on Subsidiary Distributions......................... 71
7.15 Limitation on Lines of Business................................................ 71
7.16 Limitation on Hedge Agreements................................................. 71
SECTION 8. EVENTS OF DEFAULT..................................................................... 71
SECTION 9. THE AGENTS............................................................................ 75
9.1 Appointment.................................................................... 75
9.2 Delegation of Duties........................................................... 75
9.3 Exculpatory Provisions......................................................... 75
9.4 Reliance by Agents............................................................. 75
9.5 Notice of Default.............................................................. 76
9.6 Non-Reliance on Agents and Other Lenders....................................... 76
9.7 Indemnification................................................................ 77
9.8 Agent in Its Individual Capacity............................................... 77
9.9 Successor Agents............................................................... 77
9.10 Authorization to Release Liens and Guarantees.................................. 78
9.11 The Arrangers; the Syndication Agent; the Documentation Agent.................. 78
SECTION 10. MISCELLANEOUS........................................................................ 78
10.1 Amendments and Waivers......................................................... 78
10.2 Notices........................................................................ 80
10.3 No Waiver; Cumulative Remedies................................................. 81
10.4 Survival of Representations and Warranties..................................... 81
10.5 Payment of Expenses............................................................ 81
10.6 Successors and Assigns; Participations and Assignments......................... 82
10.7 Adjustments; Set-off........................................................... 85
10.8 Counterparts................................................................... 85
10.9 Severability................................................................... 86
10.10 Integration.................................................................... 86
10.11 GOVERNING LAW.................................................................. 86
10.12 Submission To Jurisdiction; Waivers............................................ 86
10.13 Acknowledgments................................................................ 87
10.14 Confidentiality................................................................ 87
10.15 Release of Collateral and Guarantee Obligations................................ 87
10.16 Accounting Changes............................................................. 88
10.17 Delivery of Lender Addenda..................................................... 89
10.18 Usury Not Intended............................................................. 89
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10.19 WAIVERS OF JURY TRIAL.......................................................... 89
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ANNEXES:
A Pricing Grid
B Existing Letters of Credit
SCHEDULES:
1.1(a) Borrowing Base Provisions
1.1(b) Mortgaged Vessels
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.17 Environmental Matters
4.19(a) UCC Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Reserved
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
F-2 Form of Legal Opinion of General Counsel of the Borrower
F-3 Form of Legal Opinion of Special Louisiana Counsel
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
H Form of Borrowing Base Certificate
I Form of Exemption Certificate
J Form of Lender Addendum
K Form of Borrowing Notice
CREDIT AGREEMENT, dated as of October 10, 2003, among ▇▇▇▇▇▇
DRILLING COMPANY, a Delaware corporation (the "Borrower"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), ▇▇▇▇▇▇ BROTHERS INC. and DEUTSCHE BANK SECURITIES
INC., as joint advisors, joint lead arrangers and joint bookrunners (in their
capacities as such, the "Arrangers"), DEUTSCHE BANK SECURITIES INC., as
syndication agent (in such capacity, the "Syndication Agent"), BANK OF AMERICA,
N.A., as documentation agent (in such capacity, the "Documentation Agent"),
DEUTSCHE BANK TRUST COMPANY AMERICAS, as collateral agent (in such capacity, the
"Collateral Agent"), and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as administrative agent
(in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower wishes to refinance (the "Refinancing")
its existing 9.75% Senior Notes due November 2006 (the "9.75% Senior Notes") and
a portion of its existing 5.5% Convertible Subordinated Notes due August 2004
(the "Existing Convertible Notes");
WHEREAS, to fund the Refinancing and to provide financing for
the Borrower's other general corporate purposes, the Borrower (i) has requested
that the Lenders extend to it the credit facilities provided for herein and (ii)
intends to issue concurrently with the closing of such credit facilities new
senior unsecured notes (the "Senior Notes") in an aggregate principal amount of
at least $175,000,000; and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Accounts": as defined in Schedule 1.1(a).
"ACH Transactions": any cash management or related services
including controlled disbursement accounts and the automated clearinghouse
transfer of funds by any Lender for the account of the Borrower or any of its
Subsidiaries pursuant to agreement or overdrafts.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Advance Rate": as defined on Schedule 1.1(a).
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"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Collateral Agent,
the Syndication Agent, the Documentation Agent and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans, (ii) the
amount of such Lender's Available Term Loan Commitment then in effect and (iii)
the amount of such Lender's Revolving Credit Commitment then in effect or, if
the Revolving Credit Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders at
such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan under each
Facility, the rate per annum set forth opposite such Facility under the relevant
column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Facility 1.75% 2.75%
Term Loan Facility 3.25% 4.25%
provided, that on and after the first Adjustment Date occurring after the
completion of one full fiscal quarter of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Credit Loans will be determined
pursuant to the Pricing Grid.
"Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.
"Arrangers": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c) (d), (g), (h), (i), (j), (k), (l) or (m) of Section 7.5) which
yields gross proceeds to the Borrower or any of its Subsidiaries (valued at the
initial principal amount thereof in the case of non-cash proceeds consisting of
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notes or other debt securities and valued at fair market value in the case of
other non-cash proceeds) in excess of $250,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Extensions of Credit then outstanding.
"Available Term Loan Commitment": with respect to any Term
Loan Lender at any time, the amount equal to the excess, if any, of (a) such
Lender's Term Loan Commitment (if any) then in effect over (b) the aggregate
principal amount of such Lender's Term Loans then outstanding.
"Bank Products": all (a) ACH Transactions and credit card
facilities extended to the Borrower or any of its Subsidiaries by any Lender (or
any Affiliate of any Lender in reliance on such Lender's agreement to indemnify
such Affiliate), and any instruments governing any of the foregoing and (b)
Specified Hedge Agreements.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable publicly available page as may, in the reasonable opinion
of the Administrative Agent after notice to the Borrower, replace such page for
the purpose of displaying such rate if such rate no longer appears on the
British Bankers Association Telerate Page 5), as in effect from time to time.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually available. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Base": as defined in Schedule 1.1(a).
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"Borrowing Base Certificate": a borrowing base certificate
substantially in the form of Exhibit H, as the same may be modified from time to
time as agreed by the Borrower and the Collateral Agent.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit K, delivered to the
Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2
by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six
5
months from the date of acquisition; (d) repurchase obligations of any Lender or
of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to securities
issued or fully guaranteed or insured by the United States government; (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition;
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition; and (h) shares of the Nations Cash Reserves fund for which an
affiliate of Bank of America, N.A. provides investment advisory services.
"Change of Control": the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) shall become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 35% of the
outstanding common stock of the Borrower; (b) the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors; or (c) a
Specified Change of Control.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date shall be not later
than October 31, 2003.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Collateral Agent": as defined in the preamble hereto.
"Commitment": with respect to any Lender, each of the Term
Loan Commitment and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": (a) with respect to the Revolving
Credit Commitments, 1/2 of 1% per annum and (b) with respect to the Term Loan
Commitments, (i) 3.00% per annum for the period from and including the Closing
Date to and including the day which is 90 days after the Closing Date and (ii)
4.25% per annum thereafter.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
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"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"Concentration Account": one or more bank accounts maintained
by the Collateral Agent, over which the Collateral Agent shall have sole
dominion and control, into which proceeds of Revolving Credit Facility
Collateral shall be transferred from other accounts maintained by the Borrower
and the Subsidiary Guarantors, in the event that the Collateral Agent requires
such transfer after a Dominion Event has occurred; provided, that if a Dominion
Termination Event has occurred, then the Collateral Agent shall cease to require
such transfers so long as such Dominion Termination Event is continuing.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated September, 2003 and furnished to the initial
Lenders in connection with the syndication of the Facilities.
"Consolidated Current Assets": of any Person at any date, all
amounts (other than cash and Cash Equivalents) that would, in conformity with
GAAP, be set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of such Person and its Subsidiaries at
such date.
"Consolidated Current Liabilities": of any Person at any date,
all amounts that would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a consolidated
balance sheet of such Person and its Subsidiaries at such date, but excluding,
with respect to the Borrower, (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries and (b), without duplication, all Indebtedness
consisting of Revolving Credit Loans, to the extent otherwise included therein.
"Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such period
plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) Consolidated Interest Expense of such Person and its
Subsidiaries, amortization or writeoff of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization costs,
(e) any extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business), to the extent such additions are found to be
acceptable by the Administrative Agent, acting reasonably, and (f) any other
non-cash charges, and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income (except
to the extent deducted in determining Consolidated Interest Expense), (b) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business), to the extent such deductions are found to be
acceptable by the Administrative Agent, acting reasonably, (c) any other
non-cash income, all as determined on a consolidated basis and (d) the amount of
any cash expenditures during such
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period in respect of items that were added as non-cash charges in determining
Consolidated EBITDA for a prior period.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period to (b) Consolidated Interest Expense of the Borrower and its Subsidiaries
for such period.
"Consolidated Interest Expense": of any Person for any period,
total interest expense (including that attributable to Capital Lease
Obligations) of such Person and its Subsidiaries for such period with respect to
all outstanding Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
by such Person with respect to letters of credit and bankers' acceptance
financing and net costs of such Person under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA of the Borrower
and its Subsidiaries for such period; provided that for purposes of calculating
Consolidated EBITDA of the Borrower and its Subsidiaries for any period, (i) the
Consolidated EBITDA of any Person acquired by the Borrower or its Subsidiaries
during such period shall be included on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day of such
period) if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the acquisition
of such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of which
Consolidated EBITDA is to be calculated (x) have been previously provided to the
Administrative Agent and the Lenders and (y) either (1) have been reported on
without a qualification arising out of the scope of the audit by independent
certified public accountants of nationally recognized standing or (2) have been
found acceptable by the Administrative Agent and (ii) the Consolidated EBITDA of
any Person Disposed of by the Borrower or its Subsidiaries during such period
shall be excluded for such period (assuming the consummation of such Disposition
and the repayment of any Indebtedness in connection therewith occurred on the
first day of such period).
"Consolidated Liquidity": for any day, the sum of (i) the
aggregate amount of unrestricted cash and Cash Equivalents of the Borrower and
the Subsidiary Guarantors on such day plus (ii) the aggregate amount of Excess
Revolving Credit Availability and, for purposes of Section 7.1(d) only,
Available Term Loan Commitments in effect on such day.
"Consolidated Liquidity Ratio": for any day, the ratio of (a)
Consolidated Liquidity on such day to (b) the aggregate outstanding principal
amount of Existing Convertible Notes on such day.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, there shall be excluded
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(a) the income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
cash dividends or similar cash distributions and (c) the undistributed earnings
of any Subsidiary of the Borrower to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Senior Secured Debt": all Consolidated Total
Debt that is secured by a Lien on any Property.
"Consolidated Senior Secured Leverage Ratio": as of the last
day of any period of four consecutive fiscal quarters, the ratio of (a)
Consolidated Senior Secured Debt on such day to (b) Consolidated EBITDA of the
Borrower and its Subsidiaries for such period.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries at
such date (other than Indebtedness of the type described in clause (f) of the
definition of "Indebtedness"), determined on a consolidated basis in accordance
with GAAP.
"Consolidated Working Capital": at any date, the difference of
(a) Consolidated Current Assets of the Borrower on such date less (b)
Consolidated Current Liabilities of the Borrower on such date.
"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the Refinancing and the other transactions
contemplated hereby, and each other director of the Borrower, if, in each case,
such other director's nomination for election to the board of directors of the
Borrower is recommended by at least a majority of the then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Agreement": in respect of each account identified as
provided in Section 6.11(a), a Control Agreement, in form and substance
reasonably satisfactory to the Designated Agents, pursuant to which (a) the
Borrower or the Subsidiary Guarantor, as the case may be, that is the owner of
such account irrevocably instructs the bank or securities intermediary that
maintains such account that such bank or securities intermediary shall follow
the instructions or entitlement orders, as the case may be, of the Collateral
Agent without further consent of the Borrower or such Subsidiary Guarantor and
(b) the Collateral Agent agrees that it will not give any instructions or
entitlement orders, as the case may be, in respect of such account unless a
Dominion Event has occurred. Each Control Agreement shall contain such other
terms as shall be customary for agreements of such type.
9
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Delayed Draw Borrowing Date": as defined in Section 2.1.
"Delayed Draw Commitment Period": the period commencing on the
Closing Date and ending on (i) August 1, 2004 or (ii) if earlier, the date on
which the Existing Convertible Notes shall have been fully redeemed, converted
or otherwise retired.
"Delayed Draw Term Loan": as defined in Section 2.1.
"Derivatives Counterparty": as defined in Section 7.6.
"Designated Agents": the collective reference to the
Collateral Agent and the Administrative Agent.
"Disposition": with respect to any Property, any sale, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"Dominion Event": either of (i) the borrowing of any Revolving
Credit Loan or (ii) the Borrower having Consolidated Liquidity of less than
$35,000,000.
"Dominion Termination Event": a Dominion Termination Event
shall be deemed to occur if for a period commencing after the occurrence of a
Dominion Event and ending not less than 90 days after the beginning of such
period, no Revolving Credit Loans shall be outstanding and Consolidated
Liquidity shall be no less than $35,000,000 at all times; and a Dominion
Termination Event shall be deemed to be continuing so long as a second Dominion
Event does not occur after such Dominion Termination Event; provided, that if a
second Dominion Event occurs, no further Dominion Termination Event shall be
permitted to occur.
"Eligible Accounts": as defined in Schedule 1.1(a).
"Eligible Rental Equipment": as defined in Schedule 1.1(a).
10
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
11
"Excess Cash Flow": for any fiscal year of the Borrower, the
difference, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) the amount of the decrease, if any, in Consolidated Working
Capital for such fiscal year, (iv) the aggregate net amount of non-cash loss on
the Disposition of Property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent deducted in arriving at such Consolidated Net Income and (v) the
net increase during such fiscal year (if any) in deferred tax accounts of the
Borrower minus (b) the sum, without duplication, of (i) the amount of all
non-cash credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (minus the principal
amount of Indebtedness incurred in connection with such expenditures and minus
the amount of any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all prepayments of
Revolving Credit Loans during such fiscal year to the extent accompanying
permanent optional reductions of the Revolving Credit Commitments and all
optional prepayments of the Term Loans and, to the extent paid out of such
Consolidated Net Income (excluding any payments made with cash in connection
with a prepayment as contemplated by clause (ii) of the proviso to Section
2.11(c)), the Existing Convertible Notes during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including, without limitation, the Term Loans) of the Borrower and its
Subsidiaries made during such fiscal year (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) the amount of the increase, if any, in
Consolidated Working Capital for such fiscal year, (vi) the aggregate net amount
of non-cash gain on the Disposition of Property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, and (vii) the net decrease during such fiscal year (if
any) in deferred tax accounts of the Borrower.
"Excess Cash Flow Application Date": as defined in Section
2.11(c).
"Excess Revolving Credit Availability": at any time, the
amount, determined by the Designated Agents at such time, equal to the lesser of
(a) the Borrowing Base minus the Total Revolving Extensions of Credit and (b)
the Total Revolving Credit Commitments minus the Total Revolving Extensions of
Credit.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary that
has not elected to be treated as a branch for U.S. income tax purposes.
"Existing Convertible Notes Indenture": the Indenture in
respect of the Existing Convertible Notes, together with all instruments and
other Agreements entered into by the Borrower or any of its Subsidiaries in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.
"Existing Credit Facility": the Loan and Security Agreement,
dated as of October 22, 1999, as amended, among the Borrower and the
Subsidiaries of the Borrower named therein, as borrowers, the lenders named
therein and Bank of America, N.A., as the agent.
12
"Existing Issuing Lender": Bank of America, N.A.
"Existing Letters of Credit": the letters of credit described
in Annex B.
"Facility": each of (a) the Term Loan Commitments and the Term
Loans made thereunder (the "Term Loan Facility") and (b) the Revolving Credit
Commitments and the extensions of credit made thereunder (the "Revolving Credit
Facility").
"Federal Funds Effective Rate": for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical
year designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower. (e.g., FQ4 2003 means the
fourth fiscal quarter of the Borrower's 2003 fiscal year, which ends December
31, 2003).
"Funded Debt": with respect to any Person, all Indebtedness of
such Person of the types described in clauses (a) through (e) of the definition
of "Indebtedness" in this Section.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of such obligation of such other Person the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or
13
not contingent, (i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
Property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by the Borrower or its Subsidiaries providing
for protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies. For avoidance of doubt, Hedge
Agreements shall include any interest rate swap or similar agreement that
provides for the payment by the Borrower or any of its Subsidiaries of (i)
amounts based upon a floating rate in exchange for receipt by the Borrower or
such Subsidiary of amounts based upon a fixed rate or (ii) amounts based upon a
fixed rate in exchange for receipt the Borrower or such Subsidiary of amounts
based upon a floating rate.
"Immaterial Account": any account in which the aggregate
amount on deposit (or, in the case of any securities account, the total fair
market value of all securities held in such account) does not at any time exceed
$10,000.
"Immaterial Subsidiary": any Subsidiary designated by the
Borrower, by written notice to the Designated Agents, as an "Immaterial
Subsidiary"; provided, that (a) no Subsidiary may be so designated unless such
Subsidiary (i) had assets having an aggregate book value, as of the end of the
fiscal year most recently ended, not exceeding $1,000,000 and (ii) had
Consolidated Net Income not exceeding $1,000,000 for such fiscal year and (b)
any Subsidiary shall automatically cease to be an Immaterial Subsidiary if at
the end of any subsequent fiscal year such Subsidiary would not meet the
requirements set forth in the foregoing clause (a).
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such
14
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
Property), (e) all Capital Lease Obligations of such Person, (f) all obligations
of such Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value (other than through the issuance of common stock of such
Person) any Capital Stock of such Person, other than any such obligations the
payment of which would be permitted by Section 7.6(c), (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above; (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on Property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation and (j) for the purposes of Section 8(e)
only, all obligations of such Person in respect of Hedge Agreements.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Indentures": the collective reference to the 9.75% Senior
Notes Indenture, the 10.125% Senior Notes Indenture, the Existing Convertible
Notes Indenture and the Senior Notes Indenture.
"Initial Term Loan": as defined in Section 2.1.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and processes,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan
15
and ending one, two, three or six months thereafter, as selected by the Borrower
in its notice of borrowing or notice of conversion, as the case may be, given
with respect thereto; and (b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date or beyond the date final
payment is due on the Term Loans, as the case may be, shall
end on the Revolving Credit Termination Date or such due date,
as applicable; and
(3) any Interest Period that begins on the last Business Day
of a 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 at the end of such Interest Period.
"Investments": as defined in Section 7.8.
"Issuing Lender": (a) in respect of the Existing Letters of
Credit only, the Existing Issuing Lender and (b) in respect of each Letter of
Credit issued hereunder on or after the Closing Date, Bank of America, N.A. and
any Revolving Credit Lender from time to time designated by the Borrower as an
Issuing Lender with the consent of such Revolving Credit Lender and the
Administrative Agent.
"L/C Commitment": $30,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit Commitment
Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the Issuing
Lender that issued such letter of Credit.
16
"▇▇▇▇▇▇ Entity": any of ▇▇▇▇▇▇ Commercial Paper Inc. or any of
its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit J, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.17.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, collateral
assignment, encumbrance, lien (statutory or other), charge or other security
interest of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Parties": the Borrower and each Subsidiary Guarantor.
"Lockbox Agreement": in respect of each lockbox account, and
related lockbox and collection account, an agreement, in form and substance
reasonably satisfactory to the Designated Agents, pursuant to which the bank
that maintains such account and the Borrower or the Subsidiary Guarantor, as the
case may be, that is the named owner of such account shall agree with the
Collateral Agent (a) that such lockbox and accounts shall be used solely for the
collection and deposit of proceeds of Revolving Credit Facility Collateral, (b)
that, upon notice from the Collateral Agent, such bank shall transfer at the end
of each business day all collected funds in any such account to a Concentration
Account and (c) the Collateral Agent agrees that it will not give the notice
described in the foregoing clause (b) unless a Dominion Event has occurred. Each
Lockbox Agreement shall contain such other terms as shall be customary for
agreements of such type.
"Majority Facility Lenders": (i) with respect to the Term Loan
Facility, the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans and the aggregate amount of Available Term Loan Commitments
and (ii) with respect to the Revolving Credit Facility, the holders of more than
50% of the aggregate unpaid principal amount of the Total Revolving Extensions
of Credit (or, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Majority Term Loan Facility Lenders": the Majority Facility
Lenders in respect of the Term Loan Facility.
17
"Material Adverse Effect": a material adverse effect on (a)
the Refinancing (as of the Closing Date only), (b) the business, assets,
property or financial condition of the Borrower and its Subsidiaries taken as a
whole or (c) the validity or enforceability of any material provision of this
Agreement or any of the other Loan Documents or the material rights or remedies
of the Agents or the Lenders hereunder or thereunder.
"Material Subsidiary": each Domestic Subsidiary that is not an
Immaterial Subsidiary.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Maximum Rate": as defined in Section 10.18.
"Mortgaged Vessels": the vessels listed on Schedule 1.1, as to
which the Collateral Agent for the benefit of the Secured Parties shall be
granted a Lien pursuant to one or more Mortgages.
"Mortgages": each of the first preferred fleet mortgages made
by any Loan Party in favor of, or for the benefit of, the Collateral Agent for
the benefit of the Secured Parties, which shall be in form and substance
satisfactory to the Designated Agents, and any other agreements, documents, or
instruments executed or delivered in connection therewith, in each case, as may
be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset which is the
subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"9.75% Senior Notes": as defined in the preamble hereto.
18
"9.75% Senior Notes Indenture": the Indenture, dated as of
November 12, 1996, in respect of the 9.75% Senior Notes, together with all
instruments and other agreements entered into by the Borrower or its
Subsidiaries in connection therewith, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.9.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to the Administrative Agent or the Collateral Agent
or to any Lender or any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
any other Loan Document, the Letters of Credit, any Bank Products or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent and the Collateral Agent or
to any Lender that are required to be paid by the Borrower pursuant hereto) or
otherwise; provided, that (i) obligations of the Borrower or any Subsidiary
under any Bank Products shall be secured and guaranteed pursuant to the Security
Documents only to the extent that, and for so long as, the other Obligations are
so secured and guaranteed and (ii) any release of Collateral or Subsidiary
Guarantors effected in the manner permitted by this Agreement shall not require
the consent of holders of obligations under Bank Products.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 10.6(b).
"Participation Amount": as defined in Section 3.4(b).
"Paying Subsidiary": as defined in Section 7.6(a).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
19
"Permitted Liens": any Liens permitted by paragraphs (a), (b),
(c), (d) and (e) of Section 7.3.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Quail Tools": Quail Tools, L.P. an Oklahoma limited
partnership.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.
"Refinancing": as defined in the preamble hereto.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued by such Issuing Lender.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith that are not applied to prepay
the Loans pursuant to Section 2.11(b) as a result of the delivery of a
Reinvestment Notice.
20
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale or Recovery Event to acquire assets useful in its business
and/or to repair the affected asset, as applicable.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date (or
contractually committed prior to such date to be expended within 6 months of
such date), and in any event expended prior to the date on which the Borrower
would otherwise be required to apply such Reinvestment Deferred Amount to repay
any other Indebtedness of the Borrower, to acquire assets useful in the
Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months after
such Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets useful in
the Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor or an affiliate thereof as such Lender, by such Lender or an Affiliate
of such Lender.
"Rental Equipment": as defined in Schedule 1.1(a).
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding and
the aggregate amount of Available Term Loan Commitments then in effect and (ii)
the Total Revolving Credit Commitments then in effect or, if the Revolving
Credit Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty,
21
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer, president,
chief financial officer or treasurer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Letters of Credit, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Total Revolving Credit Commitments is $50,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Revolving Credit Facility Collateral": as defined in the
Guarantee and Collateral Agreement.
"Revolving Credit Lender": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Note": as defined in Section 2.7.
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments (or, at
any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's Revolving
Extensions of Credit then outstanding constitutes the amount of the Total
Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": October 10, 2006.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then outstanding and
(b) such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding.
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"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Lockbox Agreements, the
Control Agreements and all other security documents hereafter delivered to the
Collateral Agent granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Senior Note Indenture": the Indenture entered into by the
Borrower and certain of its Subsidiaries in connection with the issuance of the
Senior Notes, together with all instruments and other agreements entered into by
the Borrower or such Subsidiaries in connection therewith, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"Senior Notes": the $175,000,000 aggregate principal amount of
senior unsecured notes of the Borrower issued on the Closing Date pursuant to
the Senior Note Indenture.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the probable liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Specified Change of Control": a "Change of Control", or like
event, as defined in any of the Indentures.
"Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any Subsidiary Guarantor and any Qualified Counterparty which
has been designated as a Specified Hedge Agreement pursuant to a notice given by
the Borrower and such Qualified Counterparty to the Designated Agents within 60
days after such Hedge Agreement is entered into.
23
"Specified Personal Property": any Property of the Borrower or
any Subsidiary Guarantor as to which the security interest of the Collateral
Agent may be perfected by (i) filing financing statements under the Uniform
Commercial Code, (ii) filings in the U.S. Patent and Trademark office, (iii)
recording of a U.S. vessel mortgage or (iv) possession or "Control" (as defined
in Section 8-106 of the New York Uniform Commercial Code) thereof in the United
States, with respect to any personal property (other than "Goods", as defined in
Section 9-102 of the New York Uniform Commercial Code) in which a security
interest may be so perfected.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned or otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Subsidiary Guarantor": (i) each Material Subsidiary of the
Borrower, (ii) Quail USA, LLC and (iii) for so long as it is a guarantor of the
Senior Notes or the 10.125% Senior Notes, ▇▇▇▇▇▇ Drilling Offshore
International, Inc.
"Supporting Letter of Credit": as defined in Section 3.10.
"10.125% Senior Notes": the Borrower's 10.125% Senior Notes
due November 2009.
"10.125% Senior Notes Indenture": the Indenture, dated as of
May 2, 2002, in respect of the 10.125% Senior Notes, together with all
instruments and other agreements entered into by the Borrower or its
Subsidiaries in connection therewith, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.9.
"Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make Term Loans to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading "Term Loan
Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Term Loan Commitments is $100,000,000.
"Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Term Loan Facility Collateral": as defined in the Guarantee
and Collateral Agreement.
"Term Loan Lender": each Lender that has a Term Loan
Commitment or is the holder of a Term Loan.
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"Term Loan Percentage": as to any Term Loan Lender at any
time, the percentage which such Lender's Term Loan Commitment then constitutes
of the aggregate Term Loan Commitments (or, at any time after the Closing Date,
the percentage which the aggregate principal amount of such Lender's Term Loans
then outstanding plus such Lender's Available Term Loan Commitment then in
effect constitutes of the aggregate principal amount of the Term Loans then
outstanding plus the aggregate amount of the Available Term Loan Commitments
then in effect).
"Term Loans": the collective reference to the Initial Term
Loans and the Delayed Draw Term Loans.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Unused Investment Basket Amount": on any date of
determination, an amount equal to the sum of (a) the difference of (i)
$15,000,000 minus (ii) the aggregate amount of Investments made by the Borrower
and the Subsidiary Guarantors in any other Subsidiaries pursuant to Section
7.8(l) during the period commencing on the Closing Date and ending on such date
of determination (the "Determination Period") and (b) the cumulative amount
repaid (whether by loan repayments, dividends, distributions or otherwise)
during the Determination Period by such other Subsidiaries to the Borrower or
the Subsidiary Guarantors in respect of such Investments.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
25
(c) 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 Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in Section
7.1 and the calculation of the Consolidated Leverage Ratio for purposes of
determining the Applicable Margin shall be calculated to the same number of
decimal places as the relevant ratios are expressed in and shall be rounded
upward if the number in the decimal place immediately following the last
calculated decimal place is five or greater. For example, if the relevant ratio
is to be calculated to the hundredth decimal place and the calculation of the
ratio is 5.126, the ratio will be rounded up to 5.13.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and
conditions hereof, (a) the Term Loan Lenders severally agree to make term loans
(each, an "Initial Term Loan") to the Borrower on the Closing Date in an amount
for each Term Loan Lender not to exceed one-half of the amount of the Term Loan
Commitment of such Lender and (b) the Term Loan Lenders severally agree to make
term loans (each, a "Delayed Draw Term Loan") to the Borrower on such date (the
"Delayed Draw Borrowing Date") during the Delayed Draw Commitment Period as the
Borrower shall determine and shall notify to the Administrative Agent in
accordance with Section 2.2 and in an amount not to exceed the Available Term
Loan Commitment of such Lender. The amount of the net proceeds of the Initial
Term Loans funded to the Borrower will be equal to the difference of (i) the
principal amount thereof requested by the Borrower in accordance with Section
2.2 minus (ii) $1,000,000. The Term Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent prior to 10:00 A.M. (in the case of
the Initial Term Loans) or 12:00 Noon (in the case of the Delayed Draw Term
Loans), New York City time, (i) three Business Days prior to the Closing Date or
the Delayed Draw Borrowing Date, as applicable, in the case of Eurodollar Loans,
and (ii) one Business Day prior to the Closing Date or the Delayed Draw
Borrowing Date, as applicable, in the case of Base Rate Loans) requesting that
the Term Loan Lenders make the Initial Term Loans on the Closing Date or the
Delayed Draw Term Loans on the Delayed Draw Borrowing Date, as the case may be.
The Initial Term Loans and, if the Delayed Draw Borrowing Date occurs within 5
days of the Closing Date, the Delayed Draw Loans, shall initially be Base Rate
Loans, and no Term Loan may be converted into a Eurodollar Loan prior to the
date which is 5 days after the Closing Date. Upon receipt of such Borrowing
Notice the Administrative Agent shall promptly notify each Term Loan Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date or
the Delayed Draw Borrowing Date, as applicable, each Term Loan Lender shall make
available to the
26
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the relevant Term Loan or Term Loans to be made by such Lender.
The Administrative Agent shall make available to the Borrower the aggregate of
the amounts made available to the Administrative Agent by the Term Loan Lenders,
in like funds as received by the Administrative Agent.
2.3 Repayment of Term Loans. The Term Loans of each Term
Loan Lender shall mature in 13 consecutive quarterly installments, commencing on
September 30, 2004, each of which shall be in an amount equal to such Lender's
Term Loan Percentage multiplied by the percentage set forth below opposite such
installment of the initial aggregate principal amount of the Initial Term Loans
plus the initial aggregate principal amount of the Delayed Draw Term Loans
(without giving effect to any discount at which the Term Loans are funded):
Installment Percentage
----------- ----------
September 30, 2004 1%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 24.00%
March 31, 2007 24.00%
June 30, 2007 24.00%
October 10, 2007 25.00%
2.4 Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, the Revolving Credit Lenders severally agree to
make revolving credit loans ("Revolving Credit Loans") to the Borrower from time
to time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender which, when
added to such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding, does not exceed the amount of such Lender's Revolving Credit
Commitment; provided that after giving effect to the making of each Revolving
Credit Loan and the immediate application of the proceeds thereof, the Total
Revolving Extensions of Credit shall not exceed the Borrowing Base at such time.
During the Revolving Credit Commitment Period the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. The Revolving Credit Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.12, provided that no
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Revolving Credit Termination Date.
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(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The
Borrower may borrow under the Revolving Credit Commitments on any Business Day
during the Revolving Credit Commitment Period, provided that the Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent prior to 12:00 Noon (or 11:00 A.M.
in the case of Base Rate Loans if a Dominion Event shall have occurred and no
Dominion Termination Event shall have subsequently occurred), New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing
Date (or on the requested Borrowing Date if a Dominion Event shall have occurred
and no Dominion Termination Event shall have subsequently occurred), in the case
of Base Rate Loans). Each borrowing of Revolving Credit Loans that are
Eurodollar Loans shall be in an amount equal to $500,000 or a whole multiple of
$100,000 in excess thereof. Upon receipt of any such Borrowing Notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Credit
Lender thereof. Each Revolving Credit Lender will make its Revolving Credit
Percentage of the amount of each borrowing of Revolving Credit Loans available
to the Administrative Agent for the account of the Borrower at the Funding
Office prior to 3:00 P.M., New York City time, on the Borrowing Date requested
by the Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent in like funds as received by the Administrative Agent.
2.6 Borrowing Base Calculations; Inclusion of Assets in
Borrowing Base. (a) Based on the most recent Borrowing Base Certificate
delivered by the Borrower to the Designated Agents, the Collateral Agent (in
consultation with the Administrative Agent) shall in its good faith credit
judgment determine which Accounts and Rental Equipment shall be "Eligible
Accounts" and "Eligible Rental Equipment," respectively, for purposes of this
Agreement, utilizing the criteria set forth on Schedule 1.1(a).
(b) Concurrently with delivery by the Borrower to the
Collateral Agent of any notice pursuant to the definition of "Specified Hedge
Agreement" in Section 1.1 designating any Hedge Agreement as a "Specified Hedge
Agreement", and not less frequently than monthly thereafter, the Borrower will
deliver to the Collateral Agent a report from the relevant counterparty setting
forth the "▇▇▇▇-to-market" value of such Hedge Agreement, determined in
accordance with procedures customary in the relevant market. The Collateral
Agent will calculate from time to time the net amount of the "▇▇▇▇-to-market"
values of all Specified Hedge Agreements on the basis of such counterparty
report, and if such net amount is unfavorable to the Borrower (i.e., the
Borrower would owe a net amount under all Specified Hedge Agreements if all
Specified Hedge Agreements were terminated on such date), the Collateral Agent
will establish a Reserve in an amount equal to such net unfavorable amount, and
will maintain such Reserve until the next determination by the Collateral Agent
pursuant to this paragraph.
2.7 Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal
28
amount of each Revolving Credit Loan of such Revolving Credit Lender on the
Revolving Credit Termination Date (or on such earlier date on which the Loans
become due and payable pursuant to Section 8), and (ii) the principal amount of
each Term Loan of such Term Loan Lender in installments according to the
amortization schedule set forth in Section 2.3 (or on such earlier date on which
the Loans become due and payable pursuant to Section 8). The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in Section 2.14. The Borrower
agrees that, if a Dominion Event shall have occurred (unless a Dominion
Termination Event has occurred subsequently and is continuing), the Collateral
Agent may (and the Collateral Agent hereby agrees that it shall) (i) cause each
bank that maintains any account subject to a Control Agreement or a Lockbox
Agreement to transfer, on a daily basis, all collected funds in any such account
to a Concentration Account and (ii) apply any amounts on deposit in a
Concentration Account to repay Revolving Credit Loans whenever any Revolving
Credit Loans are outstanding.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.7(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Term
Loans or Revolving Credit Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit G-1 or G-2, respectively (a "Term Note" or
"Revolving Credit Note", respectively), with appropriate insertions as to date
and principal amount; provided, that delivery of Notes shall not be a condition
precedent to the occurrence of the Closing Date or the making of the Loans on
the Closing Date.
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay
to the Administrative Agent (i) for the account of each Revolving Credit Lender,
a commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit
29
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Revolving Credit Commitment of such Lender during the
period for which payment is made, and (ii) for the account of each Term Loan
Lender, a commitment fee for the period from and including the Closing Date to
the earlier of (A) the Delayed Draw Borrowing Date and (B) the last day of the
Delayed Draw Commitment, computed at the Commitment Fee Rate on the average
daily amount of the Available Term Loan Commitment of such Lender during the
period for which payment is made, in each case payable quarterly in arrears on
the last day of each March, June, September and December and on the Revolving
Credit Termination Date (in the case of the Revolving Credit Commitments) or the
earlier of (x) the Delayed Draw Borrowing Date and (y) the last day of the
Delayed Draw Commitment Period (in the case of the Term Loan Commitments),
commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Collateral Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Collateral Agent.
(c) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
2.9 Termination or Reduction of Credit Commitments. (a)
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; provided that no such termination or reduction of
Revolving Credit Commitments shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Credit Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Credit Commitments then in effect.
(b) The Term Loan Commitments shall be automatically reduced
by $50,000,000 on the Closing Date (upon the making of the Initial Term Loans)
and shall be automatically terminated on the earlier of (i) the Delayed Draw
Borrowing Date (upon the making of the Delayed Draw Term Loans) and (ii) the
last day of the Delayed Draw Commitment Period.
2.10 Optional Prepayments. Subject to Consolidated
Liquidity being no less than $35,000,000 (after giving effect to such
prepayment), the Borrower may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty (except as otherwise
provided herein), upon irrevocable notice delivered to the Administrative Agent
at least three Business Days prior thereto in the case of Eurodollar Loans and
at least one Business Day prior thereto in the case of Base Rate Loans, which
notice shall specify the date and amount of such prepayment, whether such
prepayment is of Term Loans or Revolving Credit Loans, and whether such
prepayment is of Eurodollar Loans or Base Rate Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.20. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with (except in the case of Revolving Credit Loans
that are Base
30
Rate Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Credit Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof.
2.11 Mandatory Prepayments. (a) If, at any time during the
Revolving Credit Commitment Period, the amount of the Total Revolving Extensions
of Credit exceeds the lesser of (i) the Borrowing Base and (ii) the Total
Revolving Credit Commitments then in effect (whether as a result of the sale of
assets included in the Borrowing Base or otherwise), the Borrower shall, without
notice or demand, prepay, in accordance with this Section, the Revolving Credit
Loans in an aggregate principal amount equal to such excess, together (except in
the case of Revolving Credit Loans which are Base Rate Loans) with interest
accrued to the date of such payment or prepayment; provided that if the
aggregate principal amount of Revolving Credit Loans then outstanding is less
than the amount of such excess (because L/C Obligations constitute a portion
thereof), the Borrower shall, to the extent of the balance of such excess,
replace outstanding Letters of Credit and/or cash collateralize such Letters of
Credit in the manner described in Section 3.10(ii).
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if any Capital Stock shall be issued, or Indebtedness incurred, by the
Borrower or any of its Subsidiaries (excluding any Indebtedness incurred in
accordance with Section 7.2), then on the date of such issuance or incurrence,
the Loans shall be prepaid by an amount equal to the amount of the Net Cash
Proceeds of such issuance or incurrence, as set forth in Section 2.11(e). The
provisions of this Section do not constitute a consent to the issuance of any
equity securities by any entity whose equity securities are pledged pursuant to
the Guarantee and Collateral Agreement, or a consent to the incurrence of any
Indebtedness by the Borrower or any of its Subsidiaries.
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date the Borrower or any of its Subsidiaries shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event (except (i) a Recovery Event
in respect of any asset held in connection with the continuing operations of the
Borrower and (ii) any Asset Sale pursuant to Section 7.5(f), in each case to the
extent that a Reinvestment Notice shall be delivered in respect thereof), then
on the date of receipt by the Borrower of such Net Cash Proceeds, the Loans
shall be prepaid by an amount equal to the amount of such Net Cash Proceeds, as
set forth in Section 2.11(e); provided, that, notwithstanding the foregoing, (i)
on each Reinvestment Prepayment Date the Loans shall be prepaid by an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event, as set forth in Section 2.11(e) and (ii) so long as no
Revolving Credit Loans are outstanding at the time of receipt thereof, Net Cash
Proceeds of Asset Sales and Recovery Events (other than in respect of [Nigerian
Rig]) in an aggregate amount not to exceed $50,000,000 shall not be required to
be reinvested or applied toward prepayment of the Term Loans to the extent that
an amount of other cash of the Borrower equal to the amount of such Net Cash
Proceeds plus $10,000,000 has been used or is used at such time to prepay the
Existing Convertible Notes or has been placed or is placed at such time in
escrow (pursuant to documentation reasonably satisfactory to the Designated
Agents) for such purpose. The provisions of this Section do not constitute a
consent to the consummation of any Disposition not permitted by Section 7.5.
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(d) Unless the Required Prepayment Lenders shall otherwise
agree, if, for any fiscal year of the Borrower commencing with the fiscal year
ending December 31, 2004, there shall be Excess Cash Flow, then, on the relevant
Excess Cash Flow Application Date, the Loans shall be prepaid by an amount equal
to 75% of such Excess Cash Flow, as set forth in Section 2.11(e). Each such
prepayment shall be made on a date (an "Excess Cash Flow Application Date") no
later than fifteen days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal year
with respect to which such prepayment is made, are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to paragraphs (b), (c) and (d) of this
Section shall be applied, first, to the prepayment of the Term Loans and,
second, to the prepayment of the Revolving Credit Loans, in each case as
provided in Section 2.17.
2.12 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may be made only on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no Base Rate Loan under a
particular Facility may be converted into a Eurodollar Loan (i) when any Event
of Default has occurred and is continuing and the Administrative Agent has, or
the Majority Facility Lenders in respect of such Facility have, determined in
its or their sole discretion not to permit such conversions or (ii) after the
date that is one month prior to the final scheduled termination or maturity date
of such Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) The Borrower may elect to continue any Eurodollar Loan as
such upon the expiration of the then current Interest Period with respect
thereto by giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has, or the Majority Facility Lenders in respect of
such Facility have, determined in its or their sole discretion not to permit
such continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso, such Loans shall be converted automatically to Base Rate
Loans on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
2.13 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions,
32
continuations and optional prepayments of Eurodollar Loans and all selections of
Interest Periods shall be in such amounts and be made pursuant to such elections
so that, (a) after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche under the Term Loan Facility
shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof
and (b) no more than ten Eurodollar Tranches shall be outstanding at any one
time (no more than five of which shall be outstanding under the Revolving Credit
Facility).
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on
which it is outstanding at a rate per annum equal to the Base Rate in effect for
such day plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans under the
Revolving Credit Facility plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or Reimbursement Obligation or any commitment fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to Base Rate Loans under
the relevant Facility plus 2% (or, in the case of any such other amounts that do
not relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest, fees,
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
33
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a).
2.16 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing
by the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee or Letter of Credit fee, and any reduction of the
Commitments of the Lenders, shall be made pro rata according to the respective
Term Loan Percentages or Revolving Credit Percentages, as the case may be, of
the relevant Lenders.
(b) Each payment (including each prepayment) of principal or
interest in respect of the Term Loans shall be allocated among the Term Loan
Lenders pro rata based on the principal amount of the Term Loans held by such
Lenders, and such payments of principal shall be applied to the installments of
the Term Loans pro rata based on the remaining outstanding principal amount of
such installments. Amounts prepaid on account of the Term Loans may not be
reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the
34
Revolving Credit Lenders. Each payment in respect of Reimbursement Obligations
in respect of any Letter of Credit shall be made to the Issuing Lender that
issued such Letters of Credit.
(d) The application of any payment of Loans under any Facility
(including optional and mandatory prepayments) shall be made, first, to Base
Rate Loans under such Facility and, second, to Eurodollar Loans under such
Facility. Each payment of the Loans (except in the case of Revolving Credit
Loans that are Base Rate Loans) shall be accompanied by accrued interest to the
date of such payment on the amount paid.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been on the next following Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but
35
shall not be required to, in reliance upon such assumption, make available to
the Lenders their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Borrower within three
Business Days after such due date, the Administrative Agent shall be entitled to
recover, on demand, from each Lender to which any amount which was made
available pursuant to the preceding sentence, such amount with interest thereon
at the rate per annum equal to the daily average Federal Funds Effective Rate.
Nothing herein shall be deemed to limit the rights of the Administrative Agent
or any Lender against the Borrower.
(h) Notwithstanding any other provision of this Agreement or
any other Loan Document, any proceeds of any foreclosure or other realization by
the Collateral Agent in respect of any Collateral shall be applied as provided
in the Guarantee and Collateral Agreement.
2.18 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this
Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by
it, or change the basis of taxation of
payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by
Section 2.19 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or
similar requirement against assets held by,
deposits or other liabilities in or for the
account of, advances, loans or other
extensions of credit by, or any other
acquisition of funds by, any office of such
Lender that is not otherwise included in the
determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
36
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender's or such corporation's capital as
a consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes imposed
on any Agent or any Lender as a result of a present or former connection between
such Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from such Agent's or such
Lender's having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or any Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with respect to any Non-Excluded Taxes (i) that are
attributable to such Lender's failure to comply with the requirements of
paragraph (d) or (e) of this Section or (ii) that are United States withholding
taxes imposed on amounts payable to such Lender at the time such Lender becomes
a party to this Agreement, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph
(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower
37
fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agents and the Lenders for any incremental taxes, interest or penalties that
may become payable by any Agent or any Lender as a result of any such failure.
The agreements in this Section shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.20 Indemnity. The Borrower agrees to indemnify each
Lender for, and to hold each Lender harmless from, any loss (other than loss of
anticipated profits) or expense that such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a
38
notice requesting the same in accordance with the provisions of this Agreement,
(b) default by the Borrower in making any prepayment of Eurodollar Loans after
the Borrower has given a notice thereof in accordance with the provisions of
this Agreement or (c) the making of a prepayment or conversion of Eurodollar
Loans on a day that is not the last day of an Interest Period with respect
thereto. A certificate as to any amounts payable pursuant to this Section
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.21 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be suspended for the duration of such illegality and (b) such Lender's
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.20.
2.22 Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.18,
2.19(a) or 2.21 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.18, 2.19(a) or 2.21.
2.23 Replacement of Lenders under Certain Circumstances.
The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.18 or 2.19 or gives a
notice of illegality pursuant to Section 2.21 or (b) defaults in its obligation
to make Loans hereunder, with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have taken
no action under Section 2.22 so as to eliminate the continued need for payment
of amounts owing pursuant to Section 2.18 or 2.19 or to eliminate the illegality
referred to in such notice of illegality given pursuant to Section 2.21, (iv)
the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.20 (as though Section 2.20 were applicable) if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
replacement financial institution shall be obligated to pay the registration and
processing fee referred to therein), (viii) the Borrower shall pay all
additional amounts (if any)
39
required pursuant to Section 2.18 or 2.19, as the case may be, in respect of any
period prior to the date on which such replacement shall be consummated, (ix) in
the event the replaced Lender is an Issuing Lender, the outstanding Letters of
Credit issued by such replaced Lender shall be replaced and/or
cash-collateralized in an amount and manner satisfactory to such replaced Lender
and (x) any such replacement shall not be deemed to be a waiver of any rights
that the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.
2.24 Bank Products. The Borrower may request and any
Lender or Affiliate of any Lender may, in its sole and absolute discretion,
arrange for the Borrower to obtain from such Lender or such Affiliate Bank
Products (which shall be subject to all rules and regulations of such Lender or
such Affiliate) although the Borrower is not required to do so.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Prior to the date hereof, the
Existing Issuing Lender has issued the Existing Letters of Credit which, from
and after the Closing Date, shall constitute Letters of Credit hereunder.
Subject to the terms and conditions hereof, each Issuing Lender, in reliance on
the agreements of the other Revolving Credit Lenders set forth in Section
3.4(a), agrees to issue letters of credit (the letters of credit issued on and
after the Closing Date pursuant to this Section 3, together with the Existing
Letters of Credit collectively, "Letters of Credit") for the account of the
Borrower on any Business Day during the Revolving Credit Commitment Period in
such form as may be approved from time to time by such Issuing Lender; provided,
that no Issuing Lender shall have any obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the L/C Obligations would exceed
the L/C Commitment or (ii) the aggregate amount of the Available Revolving
Credit Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Revolving Credit Termination Date; provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
(b) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The
Borrower may from time to time request that an Issuing Lender issue a Letter of
Credit by delivering to such Issuing Lender at its address for notices specified
herein an Application therefor, completed to the satisfaction of such Issuing
Lender, and such other certificates, documents and other papers and information
as such Issuing Lender may request. Concurrently with the delivery of an
Application to an Issuing Lender, the Borrower shall deliver a copy thereof to
the Administrative Agent. Upon receipt of any Application, an Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by such Issuing Lender and the Borrower
(but in no event shall any Issuing Lender be required to issue any Letter of
Credit earlier than two Business Days after
40
its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto). Promptly after
issuance by an Issuing Lender of a Letter of Credit, such Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower. Each Issuing Lender
shall promptly give notice to the Administrative Agent of the issuance of each
Letter of Credit issued by such Issuing Lender (including the amount thereof),
and shall provide a copy of such Letter of Credit to the Administrative Agent as
soon as possible after the date of issuance.
3.3 Fees and Other Charges. (a) The Borrower will pay to
the Administrative Agent for distribution to the Revolving Credit Lenders a fee
on the aggregate drawable amount of all outstanding Letters of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Credit Facility, to be shared ratably among
the Revolving Credit Lenders in accordance with their respective Revolving
Credit Percentages and payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date. In addition, the Borrower shall pay to the relevant
Issuing Lender for its own account a fronting fee on the aggregate drawable
amount of all outstanding Letters of Credit issued by it at the rate per annum
agreed upon from time to time by the Borrower and such Issuing Lender, payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Each Issuing Lender
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce each Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases, without recourse or warranty, from each Issuing Lender, on the terms
and conditions hereinafter stated, for such L/C Participant's own account and
risk, an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in each Issuing Lender's obligations and rights under each Letter of
Credit issued by such Issuing Lender hereunder and the amount of each draft paid
by such Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with each Issuing Lender that, if a draft is paid under any
Letter of Credit issued by such Issuing Lender for which such Issuing Lender is
not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent for the
account of such Issuing Lender upon demand at such Issuing Lender's address for
notices specified herein (and thereafter the Administrative Agent shall promptly
pay to such Issuing Lender) an amount equal to such L/C Participant's Revolving
Credit Percentage of the amount of such draft, or any part thereof, that is not
so reimbursed.
(b) If any amount (a "Participation Amount") required to be
paid by any L/C Participant to an Issuing Lender pursuant to Section 3.4(a) in
respect of any unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is paid to such Issuing Lender within three Business
Days after the date such payment is due, such Issuing Lender shall so notify the
L/C Participants, and each L/C Participant shall pay to Administrative Agent,
for the account of such Issuing Lender, on demand (and thereafter the
Administrative
41
Agent shall promptly pay to such Issuing Lender) an amount equal to the product
of (i) such Participation Amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
Participation Amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Administrative Agent for the account
of the relevant Issuing Lender by such L/C Participant within three Business
Days after the date such payment is due, the Administrative Agent on behalf of
such Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such Participation Amount with interest thereon calculated from such due
date at the rate per annum applicable to Base Rate Loans under the Revolving
Credit Facility. A certificate of the Administrative Agent on behalf of an
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from the Administrative
Agent any L/C Participant's its pro rata share of such payment in accordance
with Section 3.4(a), such Issuing Lender receives any payment related to such
Letter of Credit (whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by such Issuing Lender), or any payment
of interest on account thereof, such Issuing Lender will distribute to the
Administrative Agent for the account of such L/C Participant (and thereafter the
Administrative Agent will promptly distribute to such L/C Participant) its pro
rata share thereof; provided, however, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such Issuing
Lender, such L/C Participant shall return to the Administrative Agent for the
account of such Issuing Lender (and thereafter the Administrative Agent shall
promptly return to such Issuing Lender) the portion thereof previously
distributed by such Issuing Lender.
3.5 Reimbursement Obligation of the Borrower. The
Borrower agrees to reimburse each Issuing Lender, on each date on which such
Issuing Lender notifies the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by such Issuing Lender, for the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by such Issuing Lender in connection with such payment (the
amounts described in the foregoing clauses (a) and (b) in respect of any
drawing, collectively, the "Payment Amount"). Each such payment shall be made to
such Issuing Lender at its address for notices specified herein in lawful money
of the United States of America and in immediately available funds. Interest
shall be payable on each Payment Amount from the date of the applicable drawing
until payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.14(b) and (ii)
thereafter, Section 2.14(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of Base Rate Loans in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Credit Loans could be made, pursuant to
Section 2.5, if the Administrative Agent had received a notice of such
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borrowing at the time the Administrative Agent receives notice from the relevant
Issuing Lender of such drawing under such Letter of Credit.
3.6 Obligations Absolute. The Borrower's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by an
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the
Uniform Commercial Code of the State of New York, shall not excuse the
Reimbursement Obligations of the Borrower hereunder and shall not result in any
liability of such Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the relevant Issuing Lender
shall promptly notify the Borrower and the Administrative Agent of the date and
amount thereof. The responsibility of the relevant Issuing Lender to the
Borrower in connection with any draft presented for payment under any Letter of
Credit, in addition to any payment obligation expressly provided for in such
Letter of Credit issued by such Issuing Lender, shall be limited to determining
that the documents (including each draft) delivered under such Letter of Credit
in connection with such presentment appear on their face to be in conformity
with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
3.9 Indemnification; Exoneration; Power of Attorney.
(a) Indemnification. IN ADDITION TO AMOUNTS PAYABLE AS
ELSEWHERE PROVIDED IN THIS SECTION, THE BORROWER HEREBY AGREES TO
PROTECT, INDEMNIFY, PAY AND SAVE THE LENDERS AND THE AGENTS HARMLESS
FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES,
LOSSES, COSTS, CHARGES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
FEES) WHICH ANY LENDER OR ANY AGENT (OTHER THAN ANY LENDER IN ITS
CAPACITY AS
43
AN ISSUING LENDER) MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT
OR INDIRECT, OF THE ISSUANCE OF ANY LETTER OF CREDIT OTHER THAN ANY
CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES, AND
EXPENSES RESULTING SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY SUCH INDEMNIFIED PERSON. THE AGREEMENT IN THIS
SECTION SHALL SURVIVE PAYMENT OF ALL OBLIGATIONS. NOTHING CONTAINED IN
THIS AGREEMENT IS INTENDED TO LIMIT THE BORROWER'S RIGHTS, IF ANY, WITH
RESPECT TO ANY ISSUING LENDER WHICH ARISE BY OPERATION OF LAW OR AS A
RESULT OF THE APPLICATION AND RELATED DOCUMENTS EXECUTED BY AND BETWEEN
THE BORROWER AND ANY ISSUING LENDER.
(b) Assumption of Risk by the Borrower. As among the Loan
Parties, the Lenders, the Issuing Lenders and the Agents, the Borrower
or the relevant Loan Party assumes all risks of the acts and omissions
of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders, the Issuing Lenders and the
Agents shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the
Letters of Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) the failure of
the beneficiary of any Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any document
required in order make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the
control of the Lenders, the Issuing Lenders or the Agents, including
any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority. None of the
foregoing shall affect, impair or prevent the vesting of any rights or
powers of any Agent, any Issuing Lender or any Lender under this
Section.
(c) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action
taken or omitted by any Agent, any Issuing Lender or any Lender under
or in connection with any of the Letters of Credit or any related
certificates, if taken or omitted in good faith, shall not put any
Agent, any Issuing Lender or any Lender under any resulting liability
to any Loan Party or relieve the relevant Loan Party of any of its
obligations hereunder to any such Person.
(d) Indemnification by Lenders. The Revolving Credit
Lenders agree to indemnify each Issuing Lender (to the extent not
reimbursed by the Borrower and
44
without limiting the obligations of the Borrower hereunder) ratably in
accordance with their respective Revolving Credit Percentages in effect
on the date on which indemnification is sought under this Section (or,
if indemnification is sought after the date upon which the Commitments
shall be terminated and the Revolving Credit Loans shall have been paid
in full, ratably in accordance with such Revolving Credit Percentages
immediately prior to such date), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees) or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or
asserted against such Issuing Lender in any way relating to or arising
out of any Letter of Credit or the transactions contemplated thereby or
any action taken or omitted by such Issuing Lender under any Letter of
Credit or any Loan Document in connection therewith; provided that no
Lender shall be liable for any of the foregoing to the extent it arises
from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Revolving Credit
Lender agrees to reimburse each Issuing Lender promptly upon demand for
its Revolving Credit Percentage of any costs or expenses payable by the
Borrower to such Issuing Lender, to the extent that such Issuing Lender
is not promptly reimbursed for such costs and expenses by the Borrower.
The agreement contained in this Section shall survive payment in full
of all Obligations.
(e) Power of Attorney. In connection with all inventory
financed by Letters of Credit, the Borrower hereby appoints each
Issuing Lender, or such Issuing Lender's designee, as its attorney,
with full power and authority: (i) to sign and/or endorse the
Borrower's name upon any warehouse or other receipts; (ii) to sign the
Borrower's name on bills of lading and other negotiable and
non-negotiable documents; (iii) to clear inventory through customs in
such Issuing Lender's or the Borrower's name, and to sign and deliver
to customs officials powers of attorney in the Borrower's name for such
purpose; (iv) to complete in the Borrower's or such Issuing Lender's
name, any order, sale, or transaction, obtain the necessary documents
in connection therewith, and collect the proceeds thereof; and (v) to
do such other acts and things as are necessary in order to enable such
Issuing Lender to obtain possession or control of the inventory and to
obtain payment of the Revolving Credit Facility Obligations (as defined
in the Guarantee and Collateral Agreement). None of the Issuing Lenders
or any of their respective designees, as the Borrower's attorney, will
be liable for any acts or omissions, nor for any error of judgment or
mistakes of fact or law. This power, being coupled with an interest, is
irrevocable until all Revolving Credit Facility Obligations have been
paid and satisfied.
(f) Account Party. The Borrower hereby authorizes and
directs any Issuing Lender to name the Borrower as the "Account Party"
therein and to deliver to the Collateral Agent all instruments,
documents and other writings and property received by such Issuing
Lender pursuant to the Letter of Credit, and to accept and rely upon
the Collateral Agent's instructions and agreements with respect to all
matters arising in connection with the Letter of Credit or the
Application therefor.
3.10 Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of this Section and Section 8, any Letter of
Credit is outstanding upon the termination of this Agreement, then upon such
termination the Borrower shall deposit with the Administrative Agent, for the
ratable benefit of the Issuing Lenders and the Revolving Credit
45
Lenders, with respect to each Letter of Credit then outstanding, as the Majority
Revolving Credit Facility Lenders in their discretion shall specify, either (i)
a standby letter of credit (a "Supporting Letter of Credit") in form and
substance satisfactory to the Administrative Agent, issued by an issuer
satisfactory to the Administrative Agent in an amount equal to the greatest
amount for which such Letter of Credit may be drawn plus any fees and expenses
associated with such Letter of Credit, under which Supporting Letter of Credit
the Administrative Agent is entitled to draw amounts necessary to reimburse the
Administrative Agent, the Issuing Lenders and the Revolving Credit Lenders for
payments to be made under or in connection with such Letter of Credit and any
fees and expenses associated with such Letter of Credit, or (ii) cash in amounts
necessary to reimburse the Administrative Agent, the Issuing Lenders and the
Revolving Credit Lenders for payments made under or in connection with such
Letter of Credit and any fees and expenses associated with such Letter of
Credit. Such Supporting Letter of Credit or deposit of cash shall be held by the
Administrative Agent, for the ratable benefit of the Administrative Agent, the
Issuing Lenders and the Revolving Credit Lenders, as security for, and to
provide for the payment of, the aggregate undrawn amount of such Letters of
Credit remaining outstanding. Reasonable interest shall accrue on any such cash
deposit, which accrued interest shall be for the account of the Borrower,
subject to this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to each Agent and each
Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at June 30, 2003 (including the notes thereto) (the "Pro Forma Balance Sheet"),
copies of which have heretofore been furnished to the Administrative Agent
(which shall make such copies available to each Lender), has been prepared
giving effect (as if such events had occurred on such date) to (i) the Loans to
be made and the Senior Notes to be issued on the Closing Date and the use of
proceeds thereof and (ii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet has been prepared based on the
information available to the Borrower as of the date of delivery thereof, and
presents fairly in all material respects on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at June 30,
2003, assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as
at December 31, 2001 and December 31, 2002, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers LLP, present fairly in all material respects the
consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheets of
the Borrower as at March 31, 2003 and June 30, 2003, and the related unaudited
consolidated statements of income and cash flows for the periods ended on such
date, present fairly in all material respects the consolidated financial
condition of the Borrower as at such dates, and the consolidated results of its
operations and its consolidated cash flows for the quarterly periods then ended
(subject to normal year-end audit adjustments). All
46
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). The Borrower and its Subsidiaries do not have any
material Guarantee Obligations, contingent liabilities and liabilities for taxes
(except for any such tax liabilities to taxing authorities outside of the United
States which are not, in the aggregate, material to the Borrower and its
Subsidiaries taken as a whole) or any long-term leases or unusual forward or
long-term commitments, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 31, 2002 to and
including the date hereof there has been no Disposition by the Borrower of any
material part of its business or Property, except as reflected in the foregoing
financial statements.
4.2 No Change. Since December 31, 2002 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification except to the extent that the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
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4.4 Corporate Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which it is a
party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has
taken all necessary corporate or other action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the Refinancing, the borrowings
hereunder or the execution, delivery, performance, validity or enforceability of
this Agreement or any of the other Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 4.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect (except as noted on Schedule 4.19) and (ii) the filings
referred to in Section 4.4. Each Loan Document has been duly executed and
delivered on behalf of each Loan Party that is a party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party that is a party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any Contractual Obligation of the Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or against the Borrower or
any of its Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
48
4.8 Ownership of Property; Liens. Each of the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its material real property, and good title to, or a valid leasehold
interest in, all its other material Property, and none of such Property is
subject to any Lien except as permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all material Intellectual Property
necessary for the conduct of its business as currently conducted; no material
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does the Borrower know of any valid basis
for any such claim; and the use of such Intellectual Property by the Borrower
and its Subsidiaries does not infringe on the rights of any Person in any
material respect.
4.10 Taxes. Each of the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or its Subsidiaries, as the case may be);
and no tax Lien has been filed, and, to the knowledge of the Borrower, no claim
is being asserted, with respect to any such tax, fee or other charge (other than
any such Liens and claims in favor of taxing authorities outside of the United
States which are not, in the aggregate, material to the Borrower and its
Subsidiaries taken as a whole).
4.11 Federal Regulations. No part of the proceeds of any
Loans will be used in violation of Regulation U as now and from time to time
hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or accrued
as a liability on the books of the Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with
49
the applicable provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the Borrower
nor any Commonly Controlled Entity would become subject to any material
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. 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.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule
4.15 constitute all of the Subsidiaries of the Borrower at the date hereof.
Schedule 4.15 sets forth as of the Closing Date the name and jurisdiction of
incorporation of each such Subsidiary and, as to each, the percentage of each
class of Capital Stock owned by each Loan Party.
(b) As of the date hereof, there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as disclosed on Schedule 4.15.
4.16 Use of Proceeds. The proceeds of the Initial Term
Loans shall be used to repay, repurchase, redeem, defease or otherwise retire a
portion of the 9.75% Senior Notes and to pay related fees and expenses. The
proceeds of the Delayed Draw Term Loans shall be used to repay, repurchase,
redeem, defease or otherwise retire a portion of the Existing Convertible Notes
and to pay related fees and expenses. The proceeds of the Revolving Credit
Loans, and the Letters of Credit, shall be used for the general corporate
purposes of the Borrower and its Subsidiaries.
4.17 Environmental Matters. Other than as set forth on
Schedule 4.17 and exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in compliance with
all applicable Environmental Laws; (ii) hold all Environmental Permits (each of
which is in full force and effect) required for any of their current or intended
operations or for any property owned, leased, or otherwise operated by any of
them; (iii) are, and within the period of all applicable statutes of limitation
50
have been, in compliance with all of their Environmental Permits; and (iv)
reasonably believe that: each of their Environmental Permits will be timely
renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or operated
by the Borrower or any of its Subsidiaries, or at any other location (including,
without limitation, any location to which Materials of Environmental Concern
have been sent for re-use or recycling or for treatment, storage, or disposal)
which could reasonably be expected to (i) give rise to liability of the Borrower
or any of its Subsidiaries under any applicable Environmental Law or otherwise
result in costs to the Borrower or any of its Subsidiaries, or (ii) interfere
with the Borrower's or any of its Subsidiaries' continued operations, or (iii)
impair the fair saleable value of any real property owned or leased by the
Borrower or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the Borrower or any of its Subsidiaries
will be, named as a party that is pending or, to the knowledge of the Borrower
or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other agreement,
in any judicial, administrative, arbitral, or other forum for dispute
resolution, relating to compliance with or liability under any Environmental
Law.
(f) Neither the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities of any
kind, fixed or contingent, known or unknown, under any Environmental Law or with
respect to any Material of Environmental Concern other than indemnity
obligations in the ordinary course of business.
4.18 Accuracy of Information, etc. No written statement or
information contained in this Agreement, any other Loan Document, the
Confidential Information Memorandum or any other document, certificate or
written statement furnished to the Administrative Agent or the Lenders or any of
them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum, as
of the date of this Agreement), 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, taken as a whole, not materially misleading in
51
light of the circumstances under which made. The projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the Closing Date, there is no fact known to any Loan
Party that could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Agents and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Collateral Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when any
stock certificates representing such Pledged Stock are delivered to the
Collateral Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 4.19(a) and such other
filings as are specified on Schedule 3 to the Guarantee and Collateral Agreement
have been completed, the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.3).
(b) Upon execution and delivery thereof by the Borrower,
each of the Mortgages shall be effective to create in favor of the Collateral
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
Lien on the Mortgaged Vessels described therein and proceeds thereof; and when
the Mortgages are filed in the recording office designated by the Borrower, each
Mortgage shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Mortgaged Vessels
described therein and the proceeds thereof, as security for the Obligations (as
defined in the relevant Mortgage), in each case prior and superior in right to
any other Person (other than Persons holding Liens or other encumbrances or
rights permitted by the relevant Mortgage to have priority over the
Obligations), subject to Permitted Liens.
4.20 Solvency. As of the Closing Date, each of the
Borrower and each Loan Party that is a Material Subsidiary is, and after giving
effect to the Refinancing and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be and will continue to
be, Solvent.
4.21 Senior Indebtedness. The Obligations constitute
"Senior Indebtedness" of the Borrower under and as defined in the Existing
Convertible Notes Indenture.
52
4.22 Accounts. All Accounts of the Borrower and the
Subsidiary Guarantors on the Closing Date arise from bona fide sales or leases
by the Borrower and the Subsidiary Guarantors of goods and services.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The
agreement of each Lender to make the initial extension of credit requested to be
made by it hereunder is subject to the satisfaction, prior to or concurrently
with the making of such extension of credit on the Closing Date, of the
following conditions precedent:
(a) Loan Documents. The Administrative Agent (and, in the case
of clause (ii) below, the Collateral Agent) shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
(ii) the Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor and (iii) a
Lender Addendum executed and delivered by each Lender and accepted by the
Borrower.
(b) Refinancing, etc. The following transactions shall have
been (or shall concurrently be) consummated, in each case on terms and
conditions reasonably satisfactory to the Lenders:
(i) the Refinancing with respect to the portion
of the 9.75% Senior Notes tendered on or
prior to the Closing Date pursuant to the
Borrower's tender offer therefor shall have
been (or shall concurrently be) consummated
in part using the proceeds of the Initial
Term Loans;
(ii) the Borrower shall have launched a consent
request seeking the consent of holders of
the 10.125% Senior Notes to the prepayment
of the Existing Convertible Notes on terms
satisfactory to the Designated Agents; and
(iii) the Borrower shall have received at least
$175,000,000 in gross cash proceeds from the
issuance of the Senior Notes on terms
satisfactory to the Designated Agents.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 2001 and 2002 fiscal years and
(iii) unaudited interim consolidated financial statements of the Borrower for
each fiscal quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of this
paragraph as to which such financial statements are available; and such
financial statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition of
the Borrower, as reflected in the financial statements or projections contained
in the Confidential Information Memorandum.
53
(d) Approvals. All governmental and third party approvals
necessary in connection with this Agreement, the continuing operations of the
Borrower and its Subsidiaries and the transactions contemplated hereby shall
have been obtained and be in full force and effect.
(e) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative Agent), true
and correct copies, certified as to authenticity by the Borrower, of (i) the
Senior Note Indenture and (ii) such other documents or instruments as may be
reasonably requested by the Administrative Agent, including, without limitation,
a copy of any debt instrument, security agreement or other material contract to
which the Loan Parties may be a party.
(f) Termination of Existing Credit Facilities. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that the Existing Credit Facilities shall be simultaneously
terminated, all amounts owing thereunder (if any) shall be simultaneously paid
in full and arrangements satisfactory to the Designated Agents shall have been
made for the termination of Liens and security interests granted in connection
therewith.
(g) Fees. The Lenders, the Arrangers and the Agents shall have
received all fees required to be paid, and all expenses for which invoices have
been presented (including reasonable fees, disbursements and other charges of
counsel to the Agents), on or before the Closing Date. All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Administrative Agent on or
before the Closing Date.
(h) Business Plan. The Lenders shall have received a
satisfactory business plan for fiscal years 2003-2008 and a satisfactory written
analysis of the business and prospects of the Borrower and its Subsidiaries for
the period from the Closing Date through the final maturity of the Term Loans.
(i) Solvency Certificate. The Lenders shall have received a
reasonably satisfactory solvency certificate from the chief financial officer of
the Borrower which shall certify the solvency of the Borrower and its
Subsidiaries considered as a whole after giving effect to the transactions
contemplated hereby.
(j) Liquidity. The Borrowing Base shall be no less than
$20,000,000 on the Closing Date. After giving effect to any extensions of credit
made hereunder on the Closing Date and the use of the proceeds thereof, (i) the
sum of (A) total unrestricted cash and cash equivalents of the Borrower and its
Subsidiaries and (B) the aggregate Available Term Loan Commitments plus the
Excess Revolving Credit Availability (giving effect to assumed Borrowing Base
value in respect of the Eligible Rental Equipment as reasonably determined by
the Designated Agents), in each case as of the Closing Date, minus (ii) the
aggregate outstanding amount of Existing Convertible Notes, shall be no less
than $40,000,000.
(k) Lien Searches. The Collateral Agent shall have received
the results of a recent lien search in each of the jurisdictions in which
Uniform Commercial Code financing statement or other domestic filings or
recordations should be made to evidence or perfect security interests in all
personal property assets of the Loan Parties, and such search shall reveal
54
no liens on any of the assets of the Loan Party, except for Liens permitted by
Section 7.3 or Liens to be released in connection with this Agreement.
(l) Collateral Review. (i) The Lenders shall have received
copies of a satisfactory independent collateral field examination prepared by a
firm satisfactory to the Designated Agents, together with a letter addressed to
the Lenders entitling each of them to rely thereon and (ii) significant progress
shall have been made towards the completion of a net orderly liquidation
appraisal of the assets in respect of the Quail Tools business satisfactory to
the Designated Agents.
(m) Environmental Affairs. The Lenders shall be reasonably
satisfied with the environmental affairs of the Borrower and its Subsidiaries.
(n) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date, substantially
in the form of Exhibit C, with appropriate insertions and attachments.
(o) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P., substantially in the form of Exhibit
F-1;
(ii) the legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.,
general counsel of the Borrower and its
Subsidiaries, substantially in the form of
Exhibit F-2; and
(iii) the legal opinion of Jones, Walker, special
Louisiana counsel, substantially in the form
of Exhibit F-3.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent and
Collateral Agent may reasonably require.
(p) Pledged Stock; Stock Powers; Acknowledgment and Consent;
Pledged Notes. The Collateral Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee and
Collateral Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof, (ii) an Acknowledgment and Consent, substantially in the form of Annex
II to the Guarantee and Collateral Agreement, duly executed by any issuer of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement that is
not itself a party to the Guarantee and Collateral Agreement and (iii) each
promissory note pledged pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed transfer
form in blank satisfactory to the Collateral Agent) by the pledgor thereof.
(q) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by the
Collateral Agent to be filed, registered or recorded in order to create in favor
of the Collateral Agent, for the benefit of the Secured
55
Parties, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall have been delivered to the Collateral
Agent in proper form for filing, registration or recordation, subject to Section
6.13.
(r) Insurance. The Collateral Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement.
(s) Section 6.11. The Borrower and each Subsidiary Guarantor
shall have satisfied each of the requirements of Section 6.11 which are required
to be satisfied on or before the Closing Date.
5.2 Conditions to Each Extension of Credit. The agreement
of each Lender to make any extension of credit requested to be made by it
hereunder on any date (including, without limitation, its initial extension of
credit and the Delayed Draw Term Loans) is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. (i) Each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents which is qualified by materiality shall be true and correct and (ii)
each of the other representations and warranties made by any Loan Party in or
pursuant to the Loan Documents shall be true and correct in all material
respects, in each case on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
(c) Borrowing Base. In the case of each Revolving Extension of
Credit, the Designated Agents shall be satisfied that, after giving effect
thereto, the Borrowing Base shall not be less than the Total Revolving
Extensions of Credit.
Each borrowing by and issuance of a Letter of Credit on behalf
of the Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or any Agent hereunder, the Borrower shall and
shall cause each of its Subsidiaries (other than any Immaterial Subsidiary) to:
6.1 Financial Statements. Furnish to each Agent (to be
promptly furnished by the Administrative Agent to each Lender):
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated
56
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures as of the end of and for the previous year,
reported on without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by PricewaterhouseCoopers
LLP or other independent certified public accountants of nationally recognized
standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures as of the end of and for the
corresponding period in the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year-end audit
adjustments); and
(c) as soon as available, but in any event not later than 30
days after the end of each month occurring during each fiscal year of the
Borrower (other than the third, sixth, ninth and twelfth such month), the
unaudited consolidated balance sheets of the Borrower and its Subsidiaries as at
the end of such month and the related unaudited consolidated statements of
income and of cash flows for such month and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative form
the figures as of the end of and for the corresponding period in the previous
year, certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to each
Agent (to be promptly furnished by the Administrative Agent to each Lender), or,
in the case of clause (f), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate (it being understood that
such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their
professional standards and customs of the profession);
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be observed, performed or
satisfied by it, in each case to the extent any failure to do so would
constitute a Default or Event of Default
57
hereunder, and that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and (ii) in
the case of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by the Borrower and its Subsidiaries with the provisions
of this Agreement referred to therein as of the last day of the fiscal quarter
or fiscal year of the Borrower, as the case may be, (y) to the extent not
previously disclosed to the Collateral Agent, a listing of any Intellectual
Property material to the conduct of any Loan Party's business acquired by such
Loan Party since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since the
Closing Date) and (z) any UCC financing statements or other filings specified in
such Compliance Certificate as being required to be delivered therewith;
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following fiscal
year, and the related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to
such fiscal year (collectively, the "Projections"), which Projections shall in
each case be accompanied by a certificate of a Responsible Officer stating that
such Projections are based on reasonable estimates, information and assumptions
and that such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
(d) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Indentures;
(e) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders of any
class of its debt securities or public equity securities and, within five days
after the same are filed, copies of all financial statements and reports that
the Borrower may make to, or file with, the SEC; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Redemption of Remaining 9.75% Senior Notes . On or
prior to October 15, 2003, (i) the Borrower shall deliver to the trustee in
respect of the 9.75% Senior Notes a notice of redemption in respect of any of
such securities remaining outstanding on the Closing Date after giving effect to
the application of the Initial Term Loans in accordance with the first sentence
of Section 4.16 and (ii) the Borrower shall deposit any proceeds of the Initial
Term Loans not applied on the Closing Date in accordance with the first sentence
of Section 4.16 with the trustee in respect of the 9.75% Senior Notes for
application towards redemption of such securities.
6.4 Conduct of Business and Maintenance of Existence,
etc. (a) (i) Preserve, renew and keep in full force and effect its corporate or
other existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal
58
conduct of its business, except, in each case, as otherwise permitted by Section
7.4 and except, in the case of clause (ii) above, to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect; and
(b) comply with all Contractual Obligations and Requirements of Law, except to
the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all
Property and systems useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
6.6 Inspection of Property; Books and Records;
Discussions. (a) Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) permit any Lender (accompanied by any other Lender that so elects) to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time, upon reasonable prior notice,
and to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries and with its independent certified public
accountants (it being understood that all such notices shall be given through
the Administrative Agent and shall be coordinated with any other such notices to
the extent reasonably possible), in each case no more often than twice in any
calendar year in the aggregate for all Lenders unless an Event of Default shall
have occurred and be continuing.
6.7 Notices. Promptly give notice to the Administrative
Agent (which shall promptly furnish such notice to the Lenders) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect or (ii) litigation, investigation or
proceeding which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority that, if adversely determined, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries (i) in which the amount involved is $5,000,000 or more and
not covered by insurance or (ii) in which injunctive or similar relief is sought
which, if granted, could reasonably be expected to have a Material Adverse
Effect;
(d) the following events, as soon as possible and in any event
within 10 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of
59
any other action by the PBGC or the Borrower or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.
6.8 Environmental Laws. Comply in all respects with, and
take all reasonable action to ensure compliance in all respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all respects with and maintain, and take all reasonable action to
ensure that all tenants and subtenants obtain and comply in all respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except to the extent that any
failures to so comply or maintain could not, in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
6.9 Additional Collateral, etc. (a) With respect to any
Specified Personal Property acquired after the Closing Date by the Borrower or
any Subsidiary Guarantor (other than (x) any Property described in paragraph (b)
of this Section and (y) any Property subject to a Lien expressly permitted by
Section 7.3(g) or 7.3(j)) as to which the Collateral Agent, for the benefit of
the Secured Parties, does not have a perfected Lien, promptly (i) execute and
deliver to the Collateral Agent such amendments to the Guarantee and Collateral
Agreement or such other documents as the Collateral Agent reasonably deems
necessary to grant to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in such Property and (ii) take all actions
necessary or advisable to grant to the Collateral Agent, for the benefit of the
Secured Parties, a perfected first priority security interest in such Property,
subject to Permitted Liens, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Collateral Agent.
(b) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Foreign Subsidiary), by the Borrower or any of the Subsidiary
Guarantors, promptly (i) execute and deliver to the Collateral Agent such
amendments to the Guarantee and Collateral Agreement as the Collateral Agent
deems necessary or advisable to grant to the Collateral Agent, for the benefit
of the Secured Parties, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of the
Subsidiary Guarantors, (ii) deliver to the Collateral Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary Guarantor, as the case may be, (iii) in the case of any Material
Subsidiary, cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement and (B) to take such actions necessary or advisable to
grant to the Collateral Agent for the benefit of the Secured
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Parties a perfected first priority security interest in the Collateral described
in the Guarantee and Collateral Agreement with respect to such new Subsidiary
(subject to Permitted Liens), including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Collateral Agent, and (iv) if requested by the Administrative
Agent or the Collateral Agent, deliver to the Designated Agents legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Designated Agents.
(c) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of the
Subsidiary Guarantors, promptly (i) execute and deliver to the Collateral Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Collateral Agent deems necessary or advisable in order to grant
to the Collateral Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of the Subsidiary Guarantors, (provided
that in no event shall more than 65% of the total outstanding Capital Stock of
any such new Excluded Foreign Subsidiary be required to be so pledged), (ii)
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Subsidiary Guarantor, as the
case may be, and take such other action as may be necessary or, in the opinion
of the Collateral Agent, desirable to perfect the Lien of the Collateral Agent
thereon, and (iii) if requested by the Administrative Agent or the Collateral
Agent, deliver to the Designated Agents legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Designated Agents.
6.10 Borrowing Base Certificate. In the case of the
Borrower, deliver or cause to be delivered, at the Borrower's expense, the
following:
(a) to the Designated Agents, the following documents in a
form satisfactory to each of them:
(i) on a monthly basis and in no event later
than 20 days after the end of each such
month or more frequently as the Collateral
Agent or the Administrative Agent may
reasonably request (but in no event more
often than weekly so long as no Default or
Event of Default shall exist and
Consolidated Liquidity shall be no less than
$25,000,000) or as the Borrower shall elect,
a Borrowing Base Certificate, accompanied by
such supporting detail and documentation as
is contemplated by the Borrowing Base
Certificate and/or as shall be requested by
the Collateral Agent or the Administrative
Agent in its reasonable discretion (in a
form and detail satisfactory to the
Designated Agents);
(ii) on a monthly basis and in no event later
than twenty days after the end of each such
month or more frequently as the Collateral
Agent or the Administrative Agent may in
good faith request (but in no
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event more often than weekly so long as no
Default or Event of Default shall exist and
Consolidated Liquidity shall be no less than
$25,000,000), detailed agings of Accounts
and a detailed listing of the inventory of
Quail Tools (together with a reconciliation
to its general ledger);
(iii) upon the Collateral Agent's or the
Administrative Agent's request in good faith
(but in no event more often than weekly so
long as no Default or Event of Default shall
exist and Consolidated Liquidity shall be no
less than $25,000,000), (A) copies of
customer statements and credit memos,
remittance advices and reports, and copies
of deposit slips and bank statements, and
(B) a statement of the outstanding loans and
payments made, and Accounts owing to,
Affiliates as of the last day of the
immediately preceding month.
(b) To the Designated Agents such other reports, statements
and reconciliations with respect to the Borrowing Base or the Collateral as
either of them shall from time to time request in its reasonable discretion.
6.11 Cash Management Systems. (a) On or before the Closing
Date, deliver to the Designated Agents a schedule (the "Initial Account
Identification Schedule") identifying, for the Borrower and each Subsidiary
Guarantor, (i) the name and location of each bank and securities intermediary at
which the Borrower or such Subsidiary Guarantor maintains a deposit account,
securities account, lockbox account, concentration account, collection account
or disbursement account in the United States and (ii) the account number and
account name or other relevant descriptive data with respect to each such
account and such other information with respect to each such account as the
Designated Agents shall reasonably request. Within 10 days after the opening of
any deposit account, securities account, lockbox account, concentration account,
collection account or disbursement account in the United States not identified
in the Initial Account Identification Schedule, deliver to the Designated Agents
a schedule (a "Supplemental Account Identification Schedule") which provides, in
respect of each such account opened since the date of the Initial Account
Identification Schedule, the information set forth in clauses (i) and (ii) of
the preceding sentence.
(b) Within 10 Business Days of the Closing Date, cause to be
delivered to the Collateral Agent a Control Agreement and/or a Lockbox
Agreement, as appropriate, with respect to each account (other than any
Immaterial Account) described in the Initial Account Identification Schedule
which the Designated Agents require, in their sole discretion, to be subject to
such an agreement, in each case duly executed and delivered by the Borrower or
the relevant Subsidiary Guarantor and by the bank or securities intermediary
that maintains such account. On or before the date which is 30 days after the
delivery of any Supplemental Account Identification Schedule, cause to be
delivered to the Collateral Agent a Control Agreement and/or a Lockbox Agreement
with respect to each account (other than any Immaterial Account) described in
such Supplemental Account Identification Schedule which the Designated Agents
require, in their sole discretion, to be subject to such an agreement, in each
case duly executed and delivered by the Borrower or the relevant Subsidiary
Guarantor and by the bank or securities intermediary that maintains such
account.
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(c) Cause all proceeds of any Revolving Credit Facility
Collateral in every form, including, without limitation, cash, checks, wire
transfers and other forms of receipts, to be deposited promptly in a collection
account or lockbox account (i) in respect of which a Control Agreement and/or
Lockbox Agreement, as appropriate, is in effect and (ii) which, at any time
after a Dominion Event or a Default or Event of Default has occurred, is used
solely for the purpose of receiving proceeds of Revolving Credit Facility
Collateral.
6.12 Inspection of Revolving Credit Facility Collateral.
The Borrower agrees that the Collateral Agent or its agents may, as the
Collateral Agent shall deem necessary or appropriate in the exercise of its sole
discretion, enter upon the premises of the Borrower or any Subsidiary Guarantor
at any time and from time to time, during normal business hours and upon
reasonable notice under the circumstances, and at any time whatsoever on and
after the occurrence of a Default or Event of Default, for the purposes of
conducting field examinations and appraisals and inspecting, evaluating and
verifying the Collateral, all of the above to be at the Borrower's expense
during the existence of an Event of Default; if no Event of Default exists, only
one such examination and one such appraisal per fiscal quarter shall be at the
Borrower's expense; provided, that the Collateral Agent and the Borrower agree
that the Collateral Agent shall in any event conduct at least one such
examination and one such appraisal in each calendar year of the Borrower.
6.13 Mortgages. Within 60 days of the Closing Date, (a)
deliver to the Collateral Agent fully executed counterparts of Mortgages
covering all of the Mortgaged Vessels, (b) cause such Mortgages to be promptly
recorded in the recording offices required for the perfection of the mortgage
lien created thereby and (c) deliver to the Designated Agents such legal
opinions with respect to the Mortgages as they shall reasonably request.
6.14 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Designated Agents may
reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Agents and the Lenders with respect to
the Collateral (or with respect to any additions thereto or replacements or
proceeds thereof or with respect to any other property or assets hereafter
acquired by the Borrower or any Subsidiary which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by any Agent or any
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
such Agent or such Lender may be required to obtain from the Borrower or any of
its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or
63
any Agent hereunder, the Borrower shall not, and shall not permit any of its
Subsidiaries (other than any Immaterial Subsidiary) to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ4 2003 5.75:1.00
FQ1 2004 5.75:1.00
FQ2 2004 5.75:1.00
FQ3 2004 5.50:1.00
FQ4 2004 and 5.25:1.00
thereafter
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to be
less than the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ4 2003 1.75:1.00
FQ1 2004 1.75:1.00
FQ2 2004 1.75:1.00
FQ3 2004 2.00:1.00
FQ4 2004 2.00:1.00
FQ1 2005 2.00:1.00
FQ2 2005 and 2.25:1.00
thereafter
(c) Consolidated Senior Secured Leverage Ratio. Permit the
Consolidated Senior Secured Leverage Ratio as at the last day of any period of
four consecutive fiscal quarters of the Borrower to exceed 1.25:1.00.
(d) Consolidated Liquidity Ratio. Prior to the later to occur
of (i) the repayment in full of the Term Loans and (ii) the repayment in full of
the Existing Convertible Notes, permit the Consolidated Liquidity Ratio of the
Borrower as of the last day of any fiscal quarter of the Borrower to be less
than 1.25:1.00.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
64
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness (i) of the Borrower to any Subsidiary and of
any Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary
and (ii) of any Subsidiary to any Loan Party or other Subsidiary so long as such
Indebtedness arises from a loan or advance that is an Investment permitted under
Section 7.8;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof or any shortening of the
maturity of any principal amount thereof);
(e) (i) Guarantee Obligations of the Borrower or any
Subsidiary in respect of Indebtedness permitted under this Section 7.2 to the
extent that such Guarantee Obligations would be permitted as Investments under
Section 7.8 and (ii) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the
Borrower or any Subsidiary Guarantor;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Notes and (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of
such Indebtedness;
(g) Indebtedness represented by agreements of the Borrower or
any Subsidiary providing for indemnification, adjustment of purchase price, or
similar obligations, in each case, incurred or assumed in connection with the
Disposition of any business, assets, or Capital Stock of the Borrower or any
Subsidiary; provided that the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received by the
Borrower and its Subsidiaries in connection with such Disposition; and
(h) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $10,000,000 at any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes, assessments or governmental charges or
claims not yet due or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto are maintained
on the books of the Borrower or its Subsidiaries, as the case may be, in
conformity with GAAP;
(b) Landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or that are
being contested in good faith by appropriate proceedings;
65
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the payment or performance of bids,
tenders, government contracts, trade contracts (other than for borrowed money),
leases, statutory or regulatory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the aggregate,
are not substantial in amount and which do not in any case materially detract
from the value of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided that no such
Lien is spread to cover any additional Property after the Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition of
fixed or capital assets, provided that (i) such Liens shall be created within 90
days after the acquisition of such fixed or capital assets, (ii) such Liens do
not at any time encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased;
(j) Liens not otherwise permitted by this Section 7.3 so long
as neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined, in the
case of each such Lien, as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to the Borrower and all Subsidiaries) $10,000,000 at
any one time;
(k) judgment Liens not giving rise to an Event of Default so
long as any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired;
(l) Liens upon specific items of inventory or other goods of
the Borrower or any Subsidiary securing such Person's obligations in respect of
bankers acceptances issued or created for the account of such Person to
facilitate the purchase, shipment, or storage of such inventory or other goods;
and
66
(m) Liens securing reimbursement obligations with respect to
commercial letters of credit that encumber documents and other property or
assets relating to such letters of credit and products and proceeds thereof.
7.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Subsidiary Guarantor
(provided that (i) the Subsidiary Guarantor shall be the continuing or surviving
corporation or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Subsidiary Guarantor and the Borrower shall
comply with Section 6.10 in connection therewith);
(b) any Subsidiary may merge with any other Subsidiary so long
as, in the case of any merger involving a Subsidiary Guarantor, the surviving
Subsidiary shall be a Subsidiary Guarantor and such merger could not reasonably
be expected to have a material adverse effect on the business, assets, property
or financial condition of the surviving Subsidiary; and
(c) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor and may be dissolved following such Disposition.
7.5 Limitation on Disposition of Property. Dispose of any
of its Property (including, without limitation, accounts receivables, rental
equipment and leasehold interests), whether now owned or hereafter acquired, or,
in the case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property, or
property that is no longer used or useful in such Person's business, in the
ordinary course of business;
(b) the Disposition of inventory or other assets in the
ordinary course of business or consistent with past practice, or the sale of
inventory to any joint venture, in which the Borrower owns directly or
indirectly at least 50% of the Capital Stock, for resale by such joint venture
to its customers in the ordinary course of its business;
(c) Dispositions permitted by Section 7.4(c);
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor;
(e) the Disposition of Property described in a letter, dated
October 10, 2003, from the Borrower to the Designated Agents and the Lenders;
(f) following the repayment in full of the Term Loans and the
Existing Convertible Notes, the Disposition of other assets having a fair market
value not to exceed $25,000,000 in the aggregate for any fiscal year of the
Borrower;
67
(g) transfers of assets between or among the Borrower and the
Subsidiary Guarantors;
(h) Dispositions of cash or Cash Equivalents;
(i) the sale of a rig built by the Borrower or any Subsidiary
for the purpose of sale to a customer where the sale proceeds are recorded in
the Borrower's financial statements as operating income in accordance with GAAP;
(j) any trade or exchange by the Borrower or any Subsidiary of
one or more drilling rigs for one or more other drilling rigs owned or held by
another Person, provided that (A) the fair market value of the drilling rig or
rigs traded or exchanged by the Borrower or such Subsidiary (including any cash
or Cash Equivalents to be delivered by the Borrower or such Subsidiary) is
reasonably equivalent to the fair market value of the drilling rig or rigs
(together with any cash or Cash Equivalents) to be received by the Borrower or
such Subsidiary;
(k) any sale by the Borrower or any Subsidiary to its
customers of drill pipe, tools, and associated drilling equipment utilized in
connection with a drilling contract for the employment of a drilling rig in the
ordinary course of business and consistent with past practice;
(l) any Restricted Payment or Investment permitted under,
respectively, Section 7.6 or 7.8; and
(m) any Dispositions constituted by the granting of Liens
permitted by Section 7.3.
7.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating the
Borrower or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of any such Capital Stock (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary (a "Paying Subsidiary") may make Restricted
Payments (i) to the Borrower or any Subsidiary Guarantor, (ii) in the case of
any Paying Subsidiary that is a partnership or a limited liability company,
ratably to the partners or members thereof, as the case may be, so long as at
least one such partner or member, as the case may be, is a Subsidiary Guarantor
and (iii) if such Paying Subsidiary is not a Subsidiary Guarantor, to any other
Subsidiary which is the parent of such Paying Subsidiary;
(b) the Borrower may make Restricted Payments in the form of
common stock of the Borrower;
68
(c) so long as no Event of Default has occurred and is
continuing or would be caused thereby, the Borrower or any Subsidiary may
repurchase, redeem, or otherwise acquire or retire any Capital Stock of the
Borrower or any Subsidiary held by any existing or former officer or employee of
the Borrower or any Subsidiary pursuant to any equity subscription agreement,
stock option agreement, or similar agreement, provided, that the aggregate
amount of payments under this paragraph subsequent to the date hereof (net of
any proceeds received by the Borrower subsequent to the date hereof in
connection with resales of any common stock or common stock options so
purchased) shall not exceed $2,000,000 in any 12 month period; and
(d) the Borrower may acquire Capital Stock in connection with
the exercise of stock options or stock appreciation rights by way of cashless
exercise or in connection with the satisfaction of withholding tax obligations.
7.7 Limitation on Capital Expenditures. Make or commit to
make any Capital Expenditure, except (a) Capital Expenditures made with the
proceeds of any Reinvestment Deferred Amount, (b) Capital Expenditures of the
Borrower and its Subsidiaries in the ordinary course of business not exceeding
$50,000,000 for any fiscal year of the Borrower; provided, that (i) up to
$10,000,000 of any such amount referred to above in this clause (b), if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
made pursuant to this clause (b) during any fiscal year shall be deemed made,
first, in respect of amounts permitted for such fiscal year as provided above
and second, in respect of amounts carried over from the prior fiscal year
pursuant to subclause (i) above, and (c) upon the repayment in full of the
Existing Convertible Notes and the Term Loans, and subject to the Consolidated
Liquidity being not less than $50,000,000 after giving effect to such Capital
Expenditure, the Borrower may make Capital Expenditures in an aggregate amount
for any fiscal year not to exceed $80,000,000.
7.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b)(i), (d), (e) and (f)(ii);
(d) (i) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and Subsidiaries of the Borrower not to exceed
$2,000,000 at any one time outstanding and (ii) payroll, travel, and similar
advances to cover matters that are expected at the time of such advances
ultimately to be treated as expensed for accounting purposes and that are made
in the ordinary course of business;
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(e) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 7.8(c)) by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such Investment, is a
Subsidiary Guarantor;
(f) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $10,000,000 for any one
Investment and $25,000,000 in the aggregate for all such Investments during the
term of this Agreement; provided that, after giving effect to each such
Investment, Consolidated Liquidity is not less than $50,000,000;
(g) Investments existing on the date hereof and listed on
Schedule 7.8(g);
(h) [RESERVED];
(i) Investments made as a result of the receipt of non-cash
consideration from a Disposition of Property that was made in compliance with
Section 7.5, provided that no more than 25% of the total consideration received
from any such Disposition (except in the case of transactions permitted by
Section 7.5(j)) shall be non-cash consideration;
(j) any acquisition of assets solely in exchange for the
issuance of Capital Stock of the Borrower;
(k) any Investments received (i) in satisfaction of judgments
or compromise of obligations of trade creditors or customers that were incurred
in the ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of any
trade creditor or customer or (ii) as a result of a foreclosure by the Borrower
or a Subsidiary with respect to any Secured Investment in default; and
(l) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries in joint
ventures and Subsidiaries that are not Subsidiary Guarantors in an aggregate
amount not exceeding at any time the Unused Investment Basket Amount at such
time.
7.9 Limitation on Optional Payments and Modifications of
Debt Instruments, etc. (a) Make or offer to make any optional or voluntary
payment, prepayment, repurchase or redemption of, or otherwise voluntarily or
optionally defease, the Senior Notes or the 10.125% Senior Notes, or segregate
funds for any such payment, prepayment, repurchase, redemption or defeasance, or
enter into any derivative or other transaction with any Derivatives Counterparty
obligating the Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of the Senior Notes or
the 10.125% Senior Notes, (b) except as contemplated in connection with the
Refinancing, amend, modify or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Senior Notes, the Existing Convertible Notes or the 10.125% Senior Notes to the
extent that any such amendment, modification, waiver or other change would
shorten the maturity or increase the amount of any payment of principal thereof,
increase the rate or shorten the date for payment of interest thereon or make
any covenant or other restriction applicable to the Borrower or any of its
Subsidiaries materially more restrictive) or (c) amend its certificate of
incorporation in any manner adverse to the Administrative Agent or the Lenders.
For the avoidance of doubt,
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each of the parties hereto hereby acknowledge and agree that the provisions of
this Section 7.9 shall not apply to any prepayment of the Existing Convertible
Notes in connection with the Refinancing.
7.10 Limitation on Transactions with Affiliates. Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person that is not an Affiliate, except for transactions permitted by the
following sentence. This Section 7.10 shall not apply to the following
transactions: (i) any employment agreement entered into by the Borrower or any
of its Subsidiaries in the ordinary course of business and consistent with past
practices, (ii) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of the Borrower, (iii) sales of Capital Stock of the
Borrower to Affiliates of the Borrower, (iv) any Restricted Payment or
Investment otherwise permitted under, respectively, Section 7.6 or 7.8, (v)
indemnification agreements with, and payments made, to officers, directors, and
employees of the Borrower or any Subsidiary pursuant to charter, bylaw,
statutory, or contractual provisions, and (vi) the performance of obligations of
the Borrower or any Subsidiary under the terms of any agreement to which the
Borrower or any Subsidiary is a party as of the date of this Agreement, and any
amendments, modifications, supplements, extensions, or renewals of such
agreements; provided that any such amendments, modifications, supplements,
extensions, or renewals of such agreements are no more disadvantageous, taken as
a whole, to the Agents and the Lenders than the terms of such agreements as in
effect on the date of this Agreement.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Guarantee and Collateral Agreement, other
than (a) this Agreement and the other Loan Documents, (b) the Indentures, (c)
any agreements governing any purchase money Liens or Capital Lease Obligations
or other secured Indebtedness otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby or securing such Indebtedness), (d) customary non assignment provisions
in any contract or lease entered into in the ordinary course of business and
consistent with past
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practices, (e) applicable law or any applicable rule, regulation, or order of
any Governmental Authority, (f) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset sale
agreements, stock sale agreements, and other similar agreements entered into in
the ordinary course of business, and (g) restrictions on cash or other deposits
or net worth imposed by customers under contracts entered into in the ordinary
course of business.
7.14 Limitation on Restrictions on Subsidiary
Distributions. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary, (iii) any restrictions imposed pursuant to agreements governing any
purchase money Liens or Capital Lease Obligations or other secured Indebtedness
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective as to transfers of the assets financed thereby or securing
such Indebtedness), (iv) customary non assignment provisions in any contract or
lease entered into in the ordinary course of business and consistent with past
practices, (v) applicable law or any applicable rule, regulation, or order of
any Governmental Authority, (vi) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset sale
agreements, stock sale agreements, and other similar agreements entered into in
the ordinary course of business, provided that such provisions apply only to the
assets subject to such agreements, and (vii) restrictions on cash or other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business.
7.15 Limitation on Lines of Business. Enter into any
material business except for those businesses in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement or that are incidental or
reasonably related thereto or that are a reasonable extension thereof, as
determined in good faith by the Borrower or applicable Subsidiary.
7.16 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates or foreign exchange rates.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
three Business Days after any such interest or other amount becomes due in
accordance with the terms hereof or thereof; or
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(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or in any certificate, document
or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made or furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section 6.4(a)
(with respect to the Borrower only), Section 6.7(a) or Section 7, or in Section
5 of the Guarantee and Collateral Agreement or (ii) any Loan Party shall default
in the observance or performance of any agreement contained in Section 6.1 or in
clause (i) of Section 6.10(a) and such default shall continue unremedied for a
period of 10 days; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including, without
limitation, but without duplication of the Indebtedness guaranteed thereby, any
Guarantee Obligation, but excluding the Loans and Reimbursement Obligations) on
the scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or to become subject to or mandatory offer to
purchase by the obligor thereunder or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or conditions of the type described in
clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal amount of
which exceeds in the aggregate $7,500,000; or
(f) (i) The Borrower or any of its Subsidiaries (other than
any Immaterial Subsidiary) shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
(other than any Immaterial Subsidiary) shall make a general assignment for the
73
benefit of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries (other than any Immaterial Subsidiary) any case,
proceeding or other action of a nature referred to in clause (i) above that (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries (other than any Immaterial Subsidiary) any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any of its Subsidiaries (other than any Immaterial
Subsidiary) shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving for the Borrower and its
Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage)
of $7,500,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal by the earlier of (i) the
date which 30 days from the entry thereof and (ii) the date on which the
relevant judgment creditor(s) has begun to enforce such judgment(s) or
decree(s); or
(i) Any of the Security Documents shall cease, for any reason
(other than by reason of the express release thereof pursuant to Section 10.15),
to be in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien on a material portion of the Collateral
created by any of the Security Documents shall cease (other than by reason of
the express release thereof pursuant to Section 10.15) to be enforceable and of
the same effect and priority purported to be created thereby; or
74
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than by reason of the
express release thereof pursuant to Section 10.15), to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or
(k) Any Change of Control shall occur; or
(l) The Existing Convertible Notes shall cease, for any
reason, to be validly subordinated to the Obligations as provided in the
Existing Convertible Notes Indenture;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; (ii)
with the consent of the Majority Term Loan Facility Lenders, the Administrative
Agent may, or upon the request of the Majority Term Loan Facility Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Term Loan
Commitments to be terminated forthwith, whereupon the Term Loan Commitments
shall immediately terminate; and (iii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. In the case of all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
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SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably
designates and appoints the Agents as the agents of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
each Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to such Agent by the
terms of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Agents. Each Agent shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 10.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any
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other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.
9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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9.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), for, and to save each Agent
harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Agents. The Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Collateral Agent may, at any time, by notice to
the Lenders and the Administrative Agent, resign as Collateral Agent hereunder,
whereupon (i) its duties, rights,
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obligations and responsibilities hereunder shall automatically be assumed by,
and inure to the benefit of, the Administrative Agent, without any further act
by the Collateral Agent, the Administrative Agent or any Lender, (ii) the
resigning Collateral Agent shall deliver to the Administrative Agent any
Collateral held by it prior to such resignation, (iii) any liens in favor of the
resigning Collateral Agent shall be assigned by it to the Administrative Agent
and (iv) the Collateral Agent shall take any other action reasonably requested
by the Administrative Agent in connection with such resignation. After any
retiring Agent's resignation as Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens and Guarantees. Each
of the Administrative Agent and the Collateral Agent is hereby irrevocably
authorized by each of the Lenders to effect any release of Liens or guarantee
obligations contemplated by Section 10.15.
9.11 The Arrangers; the Syndication Agent; the
Documentation Agent. The Arrangers, the Syndication Agent nor the Documentation
Agent, in their respective capacities as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement and the
other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders, the Designated Agents and each Loan Party
party to the relevant Loan Document may, or (with the written consent of the
Required Lenders) the Agents and each Loan Party party to the relevant Loan
Document may, from time to time, (a) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents (including amendments
and restatements hereof or thereof) for the purpose of adding any provisions to
this Agreement or the other Loan Documents or changing in any manner the rights
of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as may be specified in the instrument of waiver, any
of the requirements of this Agreement or the other Loan Documents or any Default
or Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan
or Reimbursement Obligation, extend the
scheduled date of any amortization payment
in respect of any Term Loan, reduce the
stated rate of any interest or fee payable
hereunder or extend the scheduled date of
any payment thereof, or increase the amount
or extend the expiration date of any
Commitment of any Lender, in each case
without the consent of each Lender directly
affected thereby;
(ii) amend, modify or waive any provision of this
Section or reduce any percentage specified
in the definition of Required Lenders or
Required Prepayment Lenders, consent to the
assignment or
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transfer by the Borrower of any of its
rights and obligations under this Agreement
and the other Loan Documents, release a
material portion of the Collateral or
release any material Subsidiary Guarantor
from its guarantee obligations under the
Guarantee and Collateral Agreement, in each
case without the consent of all Lenders;
(iii) release a material portion of the Revolving
Credit Facility Collateral without the
consent of all Revolving Credit Lenders or
release a material portion of the Term Loan
Facility Collateral without the consent of
all Term Loan Lenders;
(iv) amend, modify or waive any condition
precedent to any extension of credit under
the Revolving Credit Facility set forth in
Section 5.2 (including, without limitation,
the waiver of an existing Default or Event
of Default required to be waived in order
for such extension of credit to be made)
without the consent of the Majority
Revolving Credit Facility Lenders;
(v) reduce the percentage specified in the
definition of Majority Facility Lenders with
respect to any Facility without the written
consent of all Lenders under such Facility;
(vi) amend, modify or waive any provision of
Section 9, or any other provision affecting
the rights, duties or obligations of any
Agent, without the consent of any Agent
directly affected thereby;
(vii) amend, modify or waive any provision of
Section 2.17 without the consent of each
Lender directly affected thereby;
(viii) amend, modify or waive any provision of
Section 3 without the consent of each
Issuing Lender affected thereby;
(ix) impose restrictions on assignments and
participations that are more restrictive
than, or additional to, those set forth in
Section 10.6 without the consent of all
Lenders;
(x) increase the Advance Rates under the
Borrowing Base or increase the L/C
Commitment without the consent of all
Revolving Credit Lenders; or
(xi) amend, modify or waive (A) any provision of
(I) the definition of "Borrowing Base", (II)
any of the capitalized terms used in such
definition, (III) the definition of
"Dominion Event", (IV) the definition of
"Dominion Termination Event" or (B) the
requirements with respect to Consolidated
Liquidity in Section 2.10 or 2.11, in each
case without the consent of Revolving Credit
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Lenders whose Revolving Credit Percentages
are no less than 75% in the aggregate.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower and the Agents, as follows
and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or on Schedule I to the
Lender Addendum to which such Lender is a party or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:
The Borrower: ▇▇▇▇▇▇ Drilling Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
The Collateral Agent: Deutsche Bank Trust Company
Americas
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Mail Drop CHI05-2900
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
The Administrative Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
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▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Issuing Lender: As notified by such Issuing Lender
to the Administrative Agent and the
Borrower
provided that any notice, request or demand to or upon the any Agent, any
Issuing Lender or any Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay
or reimburse the Designated Agents for all their reasonable out-of-pocket costs
and expenses incurred in connection with the syndication of the Facilities
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel to the
Administrative Agent and the Collateral Agent and the charges of Intralinks, (b)
to pay or reimburse each Lender and the Agents for all their costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and disbursements and
other charges of in-house counsel) to each Lender and of counsel to the Agents,
(c) to pay, indemnify, or reimburse each Lender and the Agents for, and hold
each Lender and the Agents harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify or reimburse each Lender, each Agent, their
respective affiliates, and
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their respective officers, directors, trustees, employees, advisors, agents and
controlling persons (each, an "Indemnitee") for, and hold each Indemnitee
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower any of its Subsidiaries or any of the Properties and
the fees and disbursements and other charges of legal counsel in connection with
the foregoing (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities have resulted from the gross negligence or
willful misconduct of such Indemnitee, and provided further that the Borrower
shall have no obligation hereunder to any Indemnitee which is such an advisor
with respect to losses, damages, liabilities or related expenses of such advisor
in respect of any claims brought by any other Indemnitee against such advisor
arising from the negligence of such advisor in the provision of services to such
other Indemnitee. No Indemnitee shall be liable for any damages arising from the
use by unauthorized persons of Information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facilities. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this Section
shall be payable not later than 30 days after written demand therefor.
Statements payable by the Borrower pursuant to this Section shall be submitted
to the Borrower at the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
notice to the Administrative Agent. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Agents, all future holders of the Loans and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the
83
other Loan Documents, and the Borrower and the Agents shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of the Lender from whom such
Participant purchased such participation pursuant to Section 10.1. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if such Participant were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the benefits of Sections 2.18, 2.19
and 2.20 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if such Participant were a Lender; provided
that, in the case of Section 2.19, such Participant shall have complied with the
requirements of said Section, and provided, further, that no Participant shall
be entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of the Borrower and
the Administrative Agent and, in the case of any assignment of Revolving Credit
Commitments, the written consent of the Issuing Lender (which, in each case,
shall not be unreasonably withheld or delayed) (provided (x) that no such
consent need be obtained by the Administrative Agent or any of its Affiliates
and (y) the consent of the Borrower need not be obtained with respect to any
assignment of Term Loans or if an Event of Default shall have occurred and be
continuing), to an additional bank, financial institution or other entity that
is not a competitor of the Borrower or its Subsidiaries (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E, executed by
such Assignee and such Assignor (and, where the consent of the Borrower, the
Administrative Agent or the Issuing Lender is required pursuant to the foregoing
provisions, by the Borrower and such other Persons) and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that ((i) no such assignment to an Assignee (other than any Lender or any
affiliate thereof) shall be in an aggregate principal amount of less than
$2,500,000 (in the case of assignments of the Revolving Credit Facility) or
$1,000,000 (in the case of assignments of the Term Loan Facility) and (ii) after
giving effect thereto, the assigning Lender shall have Revolving Credit
Commitments and Revolving Credit Loans aggregating at least $2,500,000 (in the
case of the Revolving Credit Facility) or Term Loan Commitments and Term Loans
aggregating at least $1,000,000 (in the case of the Term Loan Facility), unless
otherwise agreed by the Borrower and the Administrative Agent (in each case
other than in the case of an assignment of all of a Lender's interests under
such Facility),
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unless otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto, except as to Section 2.18, 2.19 and 10.5 in
respect of the period prior to such effective date). Notwithstanding any
provision of this Section, the consent of the Borrower shall not be required for
any assignment that occurs at any time when any Event of Default shall have
occurred and be continuing. For purposes of the minimum assignment amounts set
forth in this paragraph, multiple assignments by or to two or more Related
Funds, or to two or more funds that will be Related Funds after giving effect to
such assignments, shall be aggregated.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled". The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (treating multiple, simultaneous assignments by or to two or more Related
Funds, or to two or more funds that will be Related Funds after giving effect to
such assignments, as a single assignment) (except that no such registration and
processing fee shall be payable in the case of an Assignee which is already a
Lender or is an affiliate or Related Fund of a Lender or a Person under common
management with a Lender), the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Revolving
Credit Note and/or Term Note, as the case
85
may be, of the assigning Lender) a new Revolving Credit Note and/or Term Note,
as the case may be, to the order of such Assignee in an amount equal to the
Revolving Credit Commitment and/or Term Loans, as the case may be, assumed or
acquired by it pursuant to such Assignment and Acceptance and, if the Assignor
has retained a Revolving Credit Commitment and/or Term Loans, as the case may
be, upon request, a new Revolving Credit Note and/or Term Note, as the case may
be, to the order of the Assignor in an amount equal to the Revolving Credit
Commitment and/or Term Loans, as the case may be, retained by it hereunder. Such
new Note or Notes shall be dated the Closing Date and shall otherwise be in the
form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Loans and Notes, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note to
any Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to a particular Lender, if
any Lender (a "Benefitted Lender") shall at any time receive any payment of all
or part of the Obligations owing to it under any Facility, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's
Obligations under such Facility, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Obligations under such Facility, or shall provide such other
Lenders with the benefits of any such collateral, as shall be necessary to cause
such Benefitted Lender to share the excess payment or benefits of such
collateral ratably with each of the Lenders under such Facility; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an
86
executed signature page of this Agreement or of a Lender Addendum by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Borrower, the Agents, the
Arranger and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Arranger, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
87
10.13 Acknowledgments. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arranger, the Agents and the Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Arranger, the Agents and the Lenders or among the Borrower and the
Lenders.
10.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section or substantially equivalent provisions, (c) to any of
its employees, directors, agents, attorneys, accountants and other professional
advisors, (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section), (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar proceeding,
(h) that has been publicly disclosed other than in breach of this Section, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (j) in connection with the exercise of any
remedy hereunder or under any other Loan Document. Notwithstanding anything to
the contrary in the foregoing sentence or any other express or implied
agreement, arrangement or understanding, the parties hereto hereby agree that,
from the commencement of discussions with respect to the financing provided
hereunder, any party hereto (and each of its employees, representatives, or
agents) is permitted to disclose to any and all persons, without limitation of
any kind, the tax structure and tax aspects of the transactions contemplated
hereby, and all materials of any kind (including opinions or other tax analyses)
related to such tax structure and tax aspects.
10.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, promptly upon request of the Borrower in
connection with any Disposition of Property permitted by the Loan Documents, the
Collateral Agent shall (without notice to, or vote
88
or consent of, any Lender, or any party to any Bank Product) take such actions
as shall be required to release its security interest in any Collateral being
Disposed of in such Disposition (including, in the case of a Disposition of any
Person, all Capital Stock of such Person and all Property of such Person), and
the Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any party to any Bank Product) take such actions as shall be required
to release any guarantee and other obligations under any Loan Document of any
Person being Disposed of in such Disposition. In addition, upon ▇▇▇▇▇▇ Drilling
Offshore International, Inc., ceasing to guaranty the Senior Notes and the
10.125% Senior Notes, ▇▇▇▇▇▇ Drilling Offshore International, Inc., shall
automatically be released from its guaranty obligations and any other
obligations under the Loan Documents, and the Administrative Agent shall
(without notice to, or vote or consent of, any Lender or any party to any Bank
Product) take such actions as shall be required or reasonably requested by the
Borrower to evidence such release. At such time as the Term Loans shall have
been repaid in full, the Existing Convertible Notes shall have been repaid in
full and the Consolidated Liquidity shall be not less than an amount to be
agreed upon by the Designated Agents at such time, promptly upon the request of
the Borrower, the Eligible Rental Equipment shall be removed from the Borrowing
Base, the Collateral Agent shall (without notice to, or vote or consent of, any
Lender, or any party to any Bank Product) take such actions as shall be required
to release its security interest in the Quail Rental Assets and the
Administrative Agent shall (without notice to, or vote or consent of, any Lender
or any party to any Bank Product) take such actions as shall be required or
reasonably requested by the Borrower to evidence such release.
(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all Obligations (other than obligations in
respect of any Bank Product) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon request
of the Borrower, the Collateral Agent shall (without notice to, or vote or
consent of, any Lender, or any party to any Bank Product) take such actions as
shall be required to release its security interest in all Collateral, and the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any party to any Bank Product) take such actions as shall be required
to release all guarantee obligations under any Loan Document, whether or not on
the date of such release there may be outstanding Obligations in respect of Bank
Products. Any such release of guarantee obligations shall be deemed subject to
the provision that such guarantee obligations shall be reinstated if after such
release any portion of any payment in respect of the Obligations guaranteed
thereby shall be rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payment had not been made.
10.16 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an
89
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
10.17 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
10.18 Usury Not Intended. It is the intent of the Borrower
and each Lender in the execution and performance of this Agreement and the other
Loan Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, from time-to-time in effect governing the
Loans of each Lender. In furtherance thereof, the Lenders and the Borrower
stipulate and agree that none of the terms and provisions contained in this
Agreement or the other Loan Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the maximum nonusurious interest rate
under applicable law (the "Maximum Rate") and that for purposes hereof
"interest" shall include the aggregate of all charges which constitute interest
under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Loans, include amounts which by applicable law are deemed interest which
would exceed the Maximum Rate, then such excess shall be deemed to be a mistake
and each Lender receiving same shall credit the same on the principal of its
Loans (or if such Loans shall have been paid in full, refund said excess to the
Borrower). In the event that the maturity of any Loans is accelerated by reason
of any election of the holder thereof resulting from any Event of Default under
this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the Maximum Rate and excess interest, if any, 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 be credited on the
applicable Loans (or, if the applicable Loans shall have been paid in full,
refunded to the Borrower). In determining whether or not the interest paid or
payable under any specific contingencies exceeds the Maximum Rate, the Borrower
and the Lenders shall to the maximum extent permitted under applicable law
amortize, prorate, allocate and spread in equal parts during the period of the
full stated term of the Loans all amounts considered to be interest under
applicable law at any time contracted for, charged, received or reserved in
connection with the Obligations. The provisions of this Section 10.18 shall
control over all other provisions of this Agreement or the other Loan Documents
which may be in apparent conflict herewith.
10.19 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
90
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
▇▇▇▇▇▇ DRILLING COMPANY
By: _______________________________________
Name:
Title:
▇▇▇▇▇▇ BROTHERS INC., as Arranger
By: _______________________________________
Name:
Title:
DEUTSCHE BANK SECURITIES INC., as
Arranger and as Syndication Agent
By: _______________________________________
Name:
Title:
By: _______________________________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent
By: _______________________________________
Name:
Title:
91
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
By: _______________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Documentation Agent
By: _______________________________________
Name:
Title:
Annex A
PRICING GRID FOR REVOLVING CREDIT LOANS
===========================================================================================================
APPLICABLE MARGIN APPLICABLE MARGIN FOR BASE RATE
CONSOLIDATED LEVERAGE RATIO FOR EURODOLLAR LOANS LOANS
-----------------------------------------------------------------------------------------------------------
> or = 5.50:1.00 3.00% 2.00%
-----------------------------------------------------------------------------------------------------------
> or = 4.50:1.00 and <5.50:1.00 2.75% 1.75%
-----------------------------------------------------------------------------------------------------------
> or = 3.50:1.00 and <4.50:1.00 2.50% 1.50%
-----------------------------------------------------------------------------------------------------------
<3.50:1.00 2.00% 1.00%
===========================================================================================================
Changes in the Applicable Margin with respect to Revolving Credit Loans
resulting from changes in the Consolidated Leverage Ratio shall become effective
on the date (the "Adjustment Date") on which financial statements are delivered
to the Lenders pursuant to Section 6.1(a) or 6.1(b) (but in any event not later
than the 45th day after the end of each of the first three quarterly periods of
each fiscal year or the 90th day after the end of each fiscal year, as the case
may be) and shall remain in effect until the next change to be effected pursuant
to this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 5.50 to 1:00. Each determination of
the Consolidated Leverage Ratio pursuant to this Pricing Grid shall be made for
the periods and in the manner contemplated by Section 7.1(a).
Annex B
EXISTING LETTERS OF CREDIT
SCHEDULE 1.1(a)
BORROWING BASE PROVISIONS
SCHEDULE 1.1(b)
MORTGAGED VESSELS
SCHEDULE 4.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
SCHEDULE 4.15
SUBSIDIARIES
SCHEDULE 4.17
ENVIRONMENTAL MATTERS
SCHEDULE 4.19(a)
UCC FILING JURISDICTIONS
__________________ ___________________
Loan Party Filing Office
[Borrower to list name of each Loan Party which is a party to
any Security Document and each filing office in which a UCC financing statement
must be filed in respect of such Loan Party and its collateral]
SCHEDULE 7.2(d)
EXISTING INDEBTEDNESS
SCHEDULE 7.3(f)
EXISTING LIEN
EXHIBIT A
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
▇▇▇▇▇▇ DRILLING COMPANY
and certain of its Subsidiaries
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent
Dated as of October 10, 2003
================================================================================
TABLE OF CONTENTS
Page
----
Section 1. DEFINED TERMS......................................................................... 2
1.1 DEFINITIONS.................................................................... 2
1.2 OTHER DEFINITIONAL PROVISIONS.................................................. 9
Section 2. GUARANTEE............................................................................. 9
2.1 GUARANTEE...................................................................... 9
2.2 RIGHT OF CONTRIBUTION.......................................................... 10
2.3 SUBROGATION.................................................................... 11
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS...................... 11
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL........................................... 12
2.6 REINSTATEMENT.................................................................. 14
2.7 PAYMENTS....................................................................... 14
Section 3. GRANTS OF SECURITY INTERESTS.......................................................... 14
3.1 GRANTS OF SECURITY INTERESTS................................................... 14
3.2 SEPARATE SECURITY INTERESTS.................................................... 15
Section 4. REPRESENTATIONS AND WARRANTIES........................................................ 15
4.1 REPRESENTATIONS IN CREDIT AGREEMENT............................................ 15
4.2 TITLE; NO OTHER LIENS.......................................................... 15
4.3 PERFECTED FIRST PRIORITY LIENS................................................. 15
4.4 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE........................... 16
4.5 FARM PRODUCTS.................................................................. 16
4.6 INVESTMENT PROPERTY............................................................ 16
4.7 RECEIVABLES.................................................................... 16
4.8 INTELLECTUAL PROPERTY.......................................................... 17
Section 5. COVENANTS............................................................................. 17
5.1 COVENANTS IN CREDIT AGREEMENT.................................................. 17
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER...................................... 17
5.3 MAINTENANCE OF INSURANCE....................................................... 17
5.4 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION.............. 18
5.5 CHANGES IN NAME, ETC........................................................... 18
5.6 NOTICES........................................................................ 19
5.7 INVESTMENT PROPERTY............................................................ 19
5.8 RECEIVABLES.................................................................... 20
5.9 INTELLECTUAL PROPERTY.......................................................... 20
5.10 CASH MANAGEMENT SYSTEMS........................................................ 22
Section 6. REMEDIAL PROVISIONS................................................................... 23
6.1 CERTAIN MATTERS RELATING TO RECEIVABLES........................................ 23
6.2 CONCENTRATION ACCOUNTS......................................................... 23
6.3 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE........................... 23
6.4 PLEDGED STOCK.................................................................. 24
6.5 PROCEEDS TO BE TURNED OVER TO COLLATERAL AGENT................................. 25
i
Page
----
6.6 APPLICATION OF PROCEEDS........................................................ 25
6.7 CODE AND OTHER REMEDIES........................................................ 28
6.8 REGISTRATION RIGHTS............................................................ 28
6.9 DEFICIENCY..................................................................... 30
Section 7. THE COLLATERAL AGENT.................................................................. 30
7.1 COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC........................ 30
7.2 DUTY OF COLLATERAL AGENT....................................................... 31
7.3 EXECUTION OF FINANCING STATEMENTS.............................................. 32
7.4 AUTHORITY OF COLLATERAL AGENT.................................................. 32
Section 8. MISCELLANEOUS......................................................................... 32
8.1 AMENDMENTS IN WRITING.......................................................... 32
8.2 NOTICES........................................................................ 33
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES............................ 33
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION.......................................... 33
8.5 SUCCESSORS AND ASSIGNS......................................................... 33
8.6 SET-OFF........................................................................ 34
8.7 COUNTERPARTS................................................................... 34
8.8 SEVERABILITY................................................................... 34
8.9 SECTION HEADINGS............................................................... 34
8.10 INTEGRATION.................................................................... 34
8.11 GOVERNING LAW.................................................................. 35
8.12 SUBMISSION TO JURISDICTION; WAIVERS............................................ 35
8.13 ACKNOWLEDGEMENTS............................................................... 35
8.14 ADDITIONAL GRANTORS............................................................ 35
8.15 RELEASES....................................................................... 36
8.16 ▇▇▇▇▇▇ INTERNATIONAL........................................................... 37
8.17 WAIVER OF JURY TRIAL........................................................... 37
SCHEDULES
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security Interest
Schedule 4 Jurisdiction of Organization, Identification Number and Location
of Chief Executive Office
Schedule 5 Intellectual Property
ANNEXES
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
ii
GUARANTEE AND COLLATERAL AGREEMENT, dated as of October 10,
2003, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the "Grantors"), in favor of
(i) DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (in such capacity,
the "Collateral Agent") for the Lenders from time to time parties to the Credit
Agreement described below and (ii) ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent under such Credit Agreement.
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇ DRILLING COMPANY, a Delaware corporation (the
"Borrower"), is a party to the Credit Agreement, dated as of October 10, 2003
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with the Lenders parties thereto, ▇▇▇▇▇▇ BROTHERS INC. and DEUTSCHE
BANK SECURITIES INC., as Arrangers, DEUTSCHE BANK SECURITIES INC., as
Syndication Agent, BANK OF AMERICA, N.A., as Documentation Agent, DEUTSCHE BANK
TRUST COMPANY AMERICAS, as Collateral Agent and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, certain of the Lenders or their affiliates may enter
into Bank Products with one or more of the Grantors;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the extensions of credit under the Credit Agreement and from the
Bank Products; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent;
NOW, THEREFORE, in consideration of the premises and to induce
the Arrangers, the Agents and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Collateral Agent, for
the benefit of the Secured Parties, as follows:
2
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement and the following terms are used herein as defined
in the New York UCC: Accounts, Certificated Security, Chattel Paper, Commercial
Tort Claims, Documents, Equipment, Farm Products, General Intangibles, Goods,
Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.
(b) The following terms shall have the following meanings:
"ACH Transactions": any cash management or related services
including controlled disbursement accounts and the automated clearinghouse
transfer of funds by any Lender for the account of the Borrower or any of its
Subsidiaries pursuant to agreement or overdrafts.
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Bank Products": all (a) ACH Transactions and credit card
facilities extended to the Borrower or any of its Subsidiaries by any Lender (or
any Affiliate of any Lender in reliance on such Lender's agreement to indemnify
such Affiliate), and any instruments governing any of the foregoing and (b)
Specified Hedge Agreements.
"Borrower Bank Product Obligations": the collective reference
to all obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in any Bank
Product after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Bank Product
or any other document made, delivered or given in connection therewith, in each
case whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the relevant Qualified Counterparty that
are required to be paid by the Borrower pursuant to the terms of any Bank
Product).
"Borrower Credit Agreement Obligations": the collective
reference to the unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent, to the Collateral Agent or to any Lender, whether direct or indirect,
absolute or
3
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, this
Agreement (other than Section 2.1(a)(ii)), or the other Loan Documents, or any
Letter of Credit, or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent,
to the Collateral Agent or to the Lenders that are required to be paid by the
Borrower pursuant to the terms of any of the foregoing agreements), but
excluding any Borrower Bank Product Obligations.
"Borrower Guarantee Obligations": the collective reference to
the obligations of the Borrower which may arise under, out of, or in connection
with Section 2.1(a)(ii) of this Agreement.
"Borrower Obligations": the collective reference to (i) the
Borrower Credit Agreement Obligations, and (ii) to the extent that, and only so
long as, the Borrower Credit Agreement Obligations are secured and guaranteed
pursuant hereto, the Borrower Bank Product Obligations and the Borrower
Guarantee Obligations.
"Collateral": the collective reference to the Revolving Credit
Facility Collateral and the Term Loan Facility Collateral.
"Concentration Account": one or more bank accounts maintained
by the Collateral Agent, over which the Collateral Agent shall have sole
dominion and control, into which proceeds of Revolving Credit Facility
Collateral and any other amounts on deposit shall be transferred from other
accounts maintained by the Borrower and the Guarantors, in the event that the
Collateral Agent requires such transfer after a Dominion Event has occurred;
provided, that if a Dominion Termination Event has occurred, then the Collateral
Agent shall cease to require such transfers so long as such Dominion Termination
Event is continuing.
"Control Account": any account in respect of which a Control
Agreement has been delivered in accordance with Section 6.11 of the Credit
Agreement.
"Control Agreement": in respect of each account identified as
provided in Section 5.11(a), a Control Agreement, in form and substance
reasonably satisfactory to the Designated Agents, pursuant to which (a) the
Borrower or the Guarantor, as the case may be, that is the owner of such account
irrevocably instructs the bank or securities intermediary that maintains such
account that such bank or securities intermediary shall follow the instructions
or entitlement orders, as the case may be, of the Collateral Agent without
further consent of the Borrower or such Guarantor and (b) the Collateral Agent
agrees that it will not give any instructions or entitlement orders, as the case
may be, in respect of such account unless a Dominion Event has occurred. Each
Control Agreement shall contain such other terms as shall be customary for
agreements of such type.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 5), all registrations and
recordings thereof, and all applications in connection therewith, including,
4
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in Schedule
5), granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
"Excluded Assets": the collective reference to (i) any
contract, General Intangible, Copyright License, Patent License or Trademark
License ("Intangible Assets"), in each case to the extent the grant by the
relevant Grantor of a security interest pursuant to this Agreement in such
Grantor's right, title and interest in such Intangible Asset (A) is prohibited
by legally enforceable provisions of any contract, agreement, instrument or
indenture governing such Intangible Asset, (B) would give any other party to
such contract, agreement, instrument or indenture a legally enforceable right to
terminate its obligations thereunder or (C) is permitted only with the consent
of another party, if the requirement to obtain such consent is legally
enforceable and such consent has not been obtained; provided, that in any event
any Receivable or any money or other amounts due or to become due under any such
contract, agreement, instrument or indenture shall not be Excluded Assets to the
extent that any of the foregoing is (or if it contained a provision limiting the
transferability or pledge thereof would be) subject to Section 9-406 of the New
York UCC, (ii) Foreign Subsidiary Voting Stock excluded from the definition of
"Pledged Stock" set forth in this Section 1.1., (iii) any Property to the extent
that the Grantors are prohibited from granting a security interest in, pledge
of, or lien upon any such Property by reason of (A) an existing and enforceable
negative pledge provision to the extent such provision does not violate the
terms of the Credit Agreement or (B) applicable law or regulation to which such
Grantors are subject, except (in the case of either of the foregoing clauses (A)
and (B)) to the extent such prohibition is ineffective under Sections 9-406,
9-407, 9-408 or 9-409 of the New York UCC, (iv) permits and licenses to the
extent the grant of a security interest therein is prohibited under applicable
law or regulation or by their express terms, except to the extent such
prohibition is ineffective under Section 9-408 of the New York UCC, (v) Deposit
Accounts exclusively used for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of any Grantor's salaried employees in
each case as long as such account remains a zero-balance account, and (vi) the
Capital Stock of AralParker, CJSC, SaiPar Drilling Company, B.V. and ▇▇▇▇▇▇ TNK
Drilling Company, CJSC owned by the Grantors.
"First Priority Interests": as defined in Section 3.1(c).
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"Guarantor Bank Product Obligations": the collective reference
to all obligations and liabilities of a Guarantor (including, without
limitation, interest accruing at the then applicable rate provided in any Bank
Product after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to such Guarantor,
5
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Bank Product
or any other document made, delivered or given in connection therewith, in each
case whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the relevant Qualified Counterparty that
are required to be paid by such Guarantor pursuant to the terms of any Bank
Product).
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) any Guarantor Bank Product Obligations of such
Guarantor, but only to the extent that, and only so long as, the obligations of
such Guarantor described in clause (ii) below are secured and guaranteed
pursuant hereto, and (ii) all obligations and liabilities of such Guarantor
(other than Guarantor Bank Product Obligations) which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any
other Loan Document to which such Guarantor is a party, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Collateral Agent, the Administrative Agent or
any other Secured Party that are required to be paid by such Guarantor pursuant
to the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Hedge Agreements": as to any Person, all interest rate swaps,
currency exchange agreements, commodity swaps, caps or collar agreements or
similar arrangements entered into by such Person providing for protection
against fluctuations in interest rates, currency exchange rates or commodity
prices or the exchange of nominal interest obligations, either generally or
under specific contingencies. For avoidance of doubt, Hedge Agreements shall
include any interest rate swap or similar agreement that provides for (i) the
payment by the Borrower or any of its Subsidiaries of amounts based upon a
floating rate in exchange for receipt by the Borrower or such Subsidiary of
amounts based upon a fixed rate or (ii) the payment by the Borrower or any of
its Subsidiaries of amounts based upon a fixed rate in exchange for receipt by
the Borrower or such Subsidiary of amounts based on a floating rate.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all
rights to ▇▇▇ at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to the Borrower or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49) of the New
York UCC (other than any Foreign Subsidiary Voting Stock excluded from the
definition of "Pledged Stock" in this Section 1.1)
6
and (ii) whether or not constituting "investment property" as so defined, all
Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property that constitutes Collateral.
"Lockbox": any U.S. Postal Service lockbox maintained by a
Lockbox Bank pursuant to a Lockbox Agreement.
"Lockbox Account": any account in respect of which a Lockbox
Agreement has been delivered in accordance with Section 6.11 of the Credit
Agreement.
"Lockbox Agreement": in respect of each lockbox account, and
related lockbox and collection account, an agreement, in form and substance
reasonably satisfactory to the Designated Agents, pursuant to which the bank
that maintains such account and the Borrower or the Guarantor, as the case may
be, that is the named owner of such account shall agree with the Collateral
Agent (a) that such lockbox and accounts shall be used solely for the collection
and deposit of proceeds of Revolving Credit Facility Collateral, (b) that, upon
notice from the Collateral Agent, such bank shall transfer at the end of each
business day all collected funds in any such account to a Concentration Account
and (c) the Collateral Agent agrees that it will not give the notice described
in the foregoing clause (b) unless a Dominion Event has occurred. Each Lockbox
Agreement shall contain such other terms as shall be customary for agreements of
such type.
"Lockbox Bank": any bank maintaining a Lockbox and Lockbox
Account pursuant to a Lockbox Agreement.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"▇▇▇▇▇▇ International": ▇▇▇▇▇▇ Drilling Offshore
International, Inc., a Cayman Islands corporation.
"Patents": (i) all letters patent of the United States, any
other country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without limitation,
any of the foregoing referred to in Schedule 5, (ii) all applications for
letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing referred to in Schedule 5, and (iii) all rights to obtain
any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 5.
7
"Pledged Notes": [all promissory notes listed on Schedule 2,]
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options or
rights of any nature whatsoever in respect of the Capital Stock of any Person
that may be issued or granted to, or held by, any Grantor while this Agreement
is in effect; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, including, without limitation, all
dividends or other income from the Investment Property that constitutes
Collateral, collections thereon or distributions or payments with respect
thereto.
"Quail Tools": Quail Tools, L.P., an Oklahoma limited
partnership.
"Qualified Counterparty": with respect to any Bank Product,
any counterparty thereto that, at the time such Bank Product was entered into,
was a Lender or an affiliate of a Lender.
"Receivable": any right to payment for goods sold, leased,
licensed, assigned or otherwise disposed of, or for services rendered, whether
or not such right is evidenced by an Instrument or Chattel Paper and whether or
not it has been earned by performance (including, without limitation, any
Account), that constitutes, or arises out of or in connection with, the
Collateral.
"Revolver Collateral Junior Interests": as defined in Section
3.1(b).
"Revolver Collateral Priority Interests": as defined in
Section 3.1(a).
"Revolving Credit Facility Collateral": (i) with respect to
each Grantor (other than ▇▇▇▇▇▇ International), all Accounts in which such
Grantor now has or may hereafter acquire any right, title or interest and, to
the extent not otherwise included in the foregoing, all Proceeds and products of
any and all of the foregoing, all books and records relating to any of the
foregoing and all collateral, guarantees and other Supporting Obligations given
by any Person with respect to any of the foregoing, (ii) with respect to each
Grantor (other than ▇▇▇▇▇▇ International), all Control Accounts, Concentration
Accounts and Lockbox Accounts in which such Grantor now has or may hereafter
acquire any right, title or interest and, to the extent not otherwise included
in the foregoing, all Proceeds and products of any and all of the foregoing, and
all collateral, guarantees and other Supporting Obligations given by any Person
with respect to any of the foregoing and (iii) with respect to Quail Tools only,
all Equipment in which Quail Tools now has or may hereafter acquire any right,
title or interest and, to the extent not otherwise included in the foregoing,
all Proceeds and products of any and all of the foregoing, and all
8
collateral, guarantees and other Supporting Obligations given by any Person with
respect to any of the foregoing; provided that the Revolving Credit Facility
Collateral shall not include any Excluded Assets.
"Revolving Credit Facility Obligations": without duplication,
(a) with respect to the Borrower, all Borrower Obligations in respect of the
Revolving Credit Loans, Reimbursement Obligations, interest on Revolving Credit
Loans and Reimbursement Obligations, commitment fees payable in respect of the
Revolving Credit Facility pursuant to Section 2.8 of the Credit Agreement, fees
payable to the Collateral Agent pursuant to Section 2.8 of the Credit Agreement,
Letter of Credit fees and other amounts payable pursuant to Section 3 of the
Credit Agreement and any amounts payable to any Agent or Lender pursuant to
Section 10.5 of the Credit Agreement and/or Section 8.4 of this Agreement, in
each case to the extent such amounts relate to the Revolving Credit Facility and
(b) with respect to each Guarantor, all Guarantor Obligations of such Guarantor
in respect of the amounts described in the foregoing clause (a).
"Second Priority Interests": as defined in Section 3.1(d).
"Secured Parties": the collective reference to the Designated
Agents, the Lenders (including any Issuing Lender in its capacity as Issuing
Lender) and any Qualified Counterparties.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any Subsidiary Guarantor and any Qualified Counterparty which
has been designated as a Specified Hedge Agreement pursuant to a notice given by
the Borrower and such Qualified Counterparty to the Designated Agents within 60
days after such Hedge Agreement is entered into.
"Specified Personal Property": any Property of the Borrower or
any Guarantor as to which the security interest of the Collateral Agent may be
perfected by (i) filing financing statements under the Uniform Commercial Code,
(ii) filings in the U.S. Patent and Trademark Office or the U.S. Copyright
Office, (iii) recording of a U.S. vessel mortgage or (iv) possession or
"Control" (as defined in Section 8-106 of the New York Uniform Commercial Code)
thereof in the United States, with respect to any personal property (other than
"Goods", as defined in Section 9-102 of the New York Uniform Commercial Code) in
which a security interest may be so perfected.
"Term Loan Collateral Junior Interests": as defined in Section
3.1(d).
"Term Loan Collateral Priority Interests": as defined in
Section 3.1(c).
"Term Loan Facility Collateral": with respect to each Grantor
(other than ▇▇▇▇▇▇ International), all of the following in which such Grantor
now has or may hereafter acquire any right, title or interest, to the extent
such Property constitutes Specified Personal Property: all Chattel Paper,
Documents, General Intangibles, Instruments, Intellectual Property, Equipment,
Inventory, Investment Property, Goods, all books and records relating to any and
all of the
9
foregoing, and all collateral, guarantees and other Supporting Obligations with
respect to any of the foregoing; provided, that Term Loan Facility Collateral
shall in any event exclude (a) all Revolving Credit Facility Collateral, (b) all
Excluded Assets, (c) all rolling stock, and (d) all Property listed in the
letter described in Section 7.5(e) of the Credit Agreement.
"Term Loan Facility Obligations": without duplication, (a)
with respect to the Borrower, all Borrower Obligations and (b) with respect to
each Guarantor, all Guarantor Obligations of such Guarantor; provided, that Term
Loan Facility Obligations shall in any event exclude all Revolving Credit
Facility Obligations.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in Schedule 5, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule 5.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" 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 Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) (i) The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at stated maturity, by acceleration or otherwise) of
the Borrower Obligations (other than, in the case of each Guarantor, Borrower
Obligations arising pursuant to clause (ii) of this Section 2.1(a) in respect of
Guarantor Bank Product Obligations in respect of which such Guarantor is a
primary obligor).
(ii) The Borrower hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective
10
successors and assigns, the prompt and complete payment and performance by each
Guarantor when due (whether at stated maturity, by acceleration or otherwise) of
the Guarantor Bank Product Obligations of such Guarantor.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, (i) the maximum liability of each Guarantor hereunder
and under the other Loan Documents shall in no event exceed the amount which can
be guaranteed by such Guarantor under applicable federal and state laws relating
to fraudulent conveyances or transfers or the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2) and (ii)
the maximum liability of the Borrower under this Section 2 shall in no event
exceed the amount which can be guaranteed by the Borrower under applicable
federal and state laws relating to fraudulent conveyances or transfers or the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) (i) Each Guarantor agrees that the Borrower Obligations
may at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee of such Guarantor contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any Secured Party hereunder.
(ii) The Borrower agrees that the Guarantor Bank Product
Obligations may at any time and from time to time exceed the amount of the
liability of the Borrower under this Section 2 without impairing the guarantee
of the Borrower contained in this Section 2 or affecting the rights and remedies
of the Administrative Agent or any Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until this Agreement terminates pursuant to Section 8.15,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Borrower Obligations and any or all of the
Guarantors may be free from their respective Guarantor Bank Product Obligations.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by any Agent or
any Secured Party from the Borrower, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations or the Guarantor Bank Product Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of
the Borrower or any Guarantor under this Section 2 which shall, notwithstanding
any such payment (other than any payment made by the Borrower or such Guarantor
in respect of the Borrower Obligations or the Guarantor Bank Product Obligations
or any payment received or collected from the Borrower or such Guarantor in
respect of the Borrower Obligations or the Guarantor Bank Product Obligations),
remain liable for the Borrower Obligations and the Guarantor Bank Product
Obligations up to the maximum liability of the Borrower or such Guarantor
hereunder until this Agreement terminates pursuant to Section 8.15.
2.2 Right of Contribution. (a) Each Guarantor hereby agrees
that to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder or the Guarantor Bank Product Obligations,
such Guarantor shall be entitled to seek
11
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment.
(b) The Borrower and each Guarantor agrees that to the extent
that the Borrower or any Guarantor shall have paid more than its proportionate
share of any payment made hereunder in respect of any Guarantor Bank Product
Obligation of any other Guarantor, the Borrower or such Guarantor, as the case
may be, shall be entitled to seek and receive contribution from and against the
Borrower and any other Guarantor which has not paid its proportionate share of
such payment.
(c) The Borrower's and each Guarantor's right of contribution
under this Section 2.2 shall be subject to the terms and conditions of Section
2.3. The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of the Borrower or any Guarantor to the Agents and
the Secured Parties, and the Borrower and each Guarantor shall remain liable to
the Agents and the Secured Parties for the full amount guaranteed by the
Borrower or such Guarantor hereunder.
(d) The rights and obligations of the Grantors under this
Section 2.2 shall survive termination of this Agreement.
2.3 Subrogation. Notwithstanding any payment made by the
Borrower or any Guarantor hereunder or any set-off or application of funds of
the Borrower or any Guarantor by any Agent or any Secured Party, neither the
Borrower nor any Guarantor shall be entitled to be subrogated to any of the
rights of any Agent or any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Agent or any Secured Party for the payment of the Borrower Obligations or the
Guarantor Bank Product Obligations, nor shall the Borrower or any Guarantor seek
or be entitled to seek any contribution or reimbursement from the Borrower or
any other Guarantor in respect of payments made by the Borrower or such
Guarantor hereunder, until this Agreement terminates pursuant to Section 8.15.
If any amount shall be paid to the Borrower or any Guarantor on account of such
subrogation rights at any time prior to termination of this Agreement pursuant
to Section 8.15, such amount shall be held by the Borrower or such Guarantor in
trust for the Agents and the Secured Parties, segregated from other funds of the
Borrower or such Guarantor, and shall, forthwith upon receipt by the Borrower or
such Guarantor, be turned over to the Administrative Agent in the exact form
received by the Borrower or such Guarantor (duly indorsed by the Borrower or
such Guarantor to the Administrative Agent, if required), to be applied against
the Obligations, whether matured or unmatured, in the order prescribed by the
Credit Agreement.
2.4 Amendments, etc. with Respect to the Borrower Obligations.
The Borrower and each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Borrower or any Guarantor
and without notice to or further assent by the Borrower or any Guarantor, any
demand for payment of any of the Borrower Obligations or Guarantor Bank Product
Obligations made by any Agent or any Secured Party may be rescinded by any Agent
or such Secured Party and any of the Borrower Obligations or Guarantor Bank
Product Obligations continued, and the Borrower Obligations or Guarantor Bank
Product Obligations, or the liability of any other Person upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised,
12
waived, surrendered or released by any Agent or any Secured Party (to the extent
permitted by the Loan Documents and the Bank Products), and the Bank Products,
the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Agents (or the relevant
group of Lenders in accordance with the Credit Agreement, as the case may be)
may (to the extent permitted by the Loan Documents and the Bank Products) deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by any Agent or any Secured Party for the payment of the
Borrower Obligations or Guarantor Bank Product Obligations may (to the extent
permitted by the Loan Documents and the Bank Products) be sold, exchanged,
waived, surrendered or released. Neither any Agent nor any Secured Party shall,
except to the extent set forth in, and for the benefit of the parties to, the
agreements and instruments governing such Lien or guarantee, have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Borrower Obligations or Guarantor Bank Product Obligations or
for the guarantees contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations (other than any notice with respect to any Guarantor
Bank Product Obligation with respect to which such Guarantor is a primary
obligor and to which it is entitled pursuant to the applicable Bank Product) and
notice of or proof of reliance by any Agent or any Secured Party upon the
guarantee contained in this Section 2 or acceptance of the guarantee contained
in this Section 2; the Borrower Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Borrower and any of the Guarantors, on the one
hand, and the Agents and the Secured Parties, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations (other than any diligence, presentment, protest, demand or notice
with respect to any Guarantor Bank Product Obligation with respect to which such
Guarantor is a primary obligor and to which it is entitled pursuant to the
applicable Bank Product). Each Guarantor understands and agrees that the
guarantee of such Guarantor contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
any Agent or any Secured Party, or (c) any other circumstance whatsoever (with
or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee of such Guarantor contained in this Section 2, in bankruptcy
or in any other instance. When making any demand hereunder or otherwise pursuing
its rights and remedies hereunder against any Guarantor, any Agent or any
Secured Party may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any
13
other Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by any
Agent or any Secured Party to make any such demand, to pursue such other rights
or remedies or to collect any payments from the Borrower, any other Guarantor or
any other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of the Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of any Agent or any
Secured Party against any Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
(b) The Borrower waives any and all notice of the creation,
renewal, extension or accrual of any of the Guarantor Bank Product Obligations
and notice of or proof of reliance by the Administrative Agent or any Secured
Party upon the guarantee by the Borrower contained in this Section 2 or
acceptance of the guarantee by the Borrower contained in this Section 2; the
Guarantor Bank Product Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee by the Borrower contained in
this Section 2; and all dealings between the Borrower and any of the Guarantors,
on the one hand, and the Agents and the Secured Parties, on the other hand, with
respect to any Guarantor Bank Product Obligation likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee by the
Borrower contained in this Section 2. The Borrower waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower with respect to the Guarantor Bank Product Obligations. The
Borrower understands and agrees that the guarantee by the Borrower contained in
this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Guarantor Bank Product Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any Person against any Agent or any
Secured Party, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Borrower or any Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the applicable
Guarantor for the applicable Guarantor Bank Product Obligations, or of the
Borrower under its guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand under this Section 2 or otherwise
pursuing its rights and remedies under this Section 2 against the Borrower, any
Agent or any Secured Party may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as it may have
against any Guarantor or any other Person or against any collateral security or
guarantee for the Guarantor Bank Product Obligations or any right of offset with
respect thereto, and any failure by any Agent or any Secured Party to make any
such demand, to pursue such other rights or remedies or to collect any payments
from any Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of any Agent or any
Secured
14
Party against the Borrower under this Section 2. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations or
Guarantor Bank Product Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made. The provisions of this Section 2.6 shall
survive termination of this Agreement.
2.7 Payments. The Borrower and each Guarantor hereby
guarantees that payments by it hereunder will be paid (i) in the case of
obligations in respect of Borrower Obligations arising under the Credit
Agreement or any other Loan Document, to the Administrative Agent without
set-off or counterclaim in Dollars at the Payment Office specified in the Credit
Agreement and (ii) in the case of obligations in respect of any Borrower Bank
Product Obligations or any Guarantor Bank Product Obligations, to the relevant
Secured Party in the currency and at the place specified in the applicable Bank
Product.
SECTION 3. GRANTS OF SECURITY INTERESTS
3.1 Grants of Security Interests. (a) Each Grantor (other than
▇▇▇▇▇▇ International) hereby grants to the Collateral Agent, as security for
such Grantor's Obligations in respect of the Revolving Credit Facility
Obligations, a first priority security interest (collectively, the "Revolver
Collateral Priority Interests") in all right, title and interest of such Grantor
in all Revolving Credit Facility Collateral, whether now existing or hereafter
acquired.
(b) Each Grantor (other than ▇▇▇▇▇▇ International) hereby
grants to the Collateral Agent, as security for such Grantor's Obligations in
respect of the Term Loan Facility Obligations, a second priority security
interest (collectively, the "Revolver Collateral Junior Interests") in all
right, title and interest of such Grantor in all Revolving Credit Facility
Collateral, whether now existing or hereafter acquired.
(c) Each Grantor (other than ▇▇▇▇▇▇ International) hereby
grants to the Collateral Agent, as security for such Grantor's Obligations in
respect of the Term Loan Facility Obligations, a first priority security
interest (collectively, the "Term Loan Collateral Priority Interests" and,
together with the Revolver Collateral Priority Interests, the "First Priority
Interests") in all right, title and interest of such Grantor in all Term Loan
Facility Collateral, whether now existing or hereafter acquired.
(d) Each Grantor (other than ▇▇▇▇▇▇ International) hereby
grants to the Collateral Agent, as security for such Grantor's Obligations in
respect of the Revolving Credit Facility Obligations, a second priority security
interest (collectively, the "Term Loan Collateral Junior Interests" and,
together with the Revolver Collateral Junior Interests, the "Second Priority
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Interests") in all right, title and interest of such Grantor in all Term Loan
Facility Collateral, whether now existing or hereafter acquired.
(e) (i) The Revolver Collateral Junior Interests are junior in
priority to the Revolver Collateral Priority Interests and (ii) the Term Loan
Collateral Junior Interests are junior in priority to the Term Loan Collateral
Priority Interests.
3.2 Separate Security Interests. The security interests
created pursuant to each of Section 3.1(a), Section 3.1(b), Section 3.1(c) and
Section 3.1(d) are separate and distinct security interests in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Agents and each Lender that:
4.1 Representations in Credit Agreement. (a) In the case of
each Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are (i) if qualified by materiality, true and correct, and (ii) if
not so qualified, true and correct in all material respects, and the Agents and
each Lender shall be entitled to rely on each of them as if they were fully set
forth herein, provided that each reference in each such representation and
warranty to the Borrower's knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interests
granted to the Collateral Agent for the benefit of the Secured Parties pursuant
to this Agreement and the other Liens permitted to exist on the Collateral by
the Credit Agreement, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or as are permitted by the Credit Agreement.
4.3 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 will constitute valid perfected security
interests in all of the Collateral in favor of the Collateral Agent, for the
benefit of the Secured Parties, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) (i) in the case of the First Priority Interests, are
prior to all other Liens on the Collateral in existence on the date hereof
except for the Liens permitted by the Credit Agreement and (ii) in the case of
the Second Priority Interests, are prior to all other Liens on the Collateral in
existence on the date hereof except for (A) the First Priority Interests, and
(B) the other Liens permitted by the Credit Agreement; provided that no
representations are made with respect to the requirements of any laws of any
jurisdiction other than the United States or any State thereof.
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4.4 Jurisdiction of Organization; Chief Executive Office. On
the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Designated Agents a certified charter, certificate of
incorporation or other organization document and good standing certificate as of
a date which is recent to the date hereof.
4.5 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor
or, in the case of Foreign Subsidiary Voting Stock, if less, 65% of the
outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good title to the Investment Property pledged by it hereunder, free of any
and all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement and other Liens permitted by the
Credit Agreement; provided, that no representations are made with respect to the
requirements of any laws of any jurisdiction other than the United States or any
State thereof.
4.7 Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Collateral Agent to the extent
required by Section 5.2.
(b) None of the obligors on any Receivable is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Secured
Parties from time to time as owing to such Grantor in respect of the Receivables
will at such times be accurate in all material respects.
(d) All Receivables of such Grantor existing on the Closing
Date arise from bona fide sales or leases by such Grantor of goods and services.
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4.8 Intellectual Property. (a) Schedule 5 lists all
Intellectual Property necessary for the conduct of its business as currently
conducted that is owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property of
such Grantor described on Schedule 5 is valid, subsisting, unexpired and
enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person in any material respect.
(c) Except as set forth in Schedule 5, on the date hereof,
none of such Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any such Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any such Intellectual Property or such Grantor's
ownership interest therein, or (ii) which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Agents and the
Secured Parties that, from and after the date of this Agreement until this
Agreement terminates in accordance with Section 8.15:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the
Collateral Agent, to be held as Collateral pursuant to this Agreement; provided,
that the Grantors shall not be obligated to deliver to the Collateral Agent any
Instruments or Chattel Paper held by any Grantor at any time to the extent that
(a) the aggregate face amount of all such Instruments and Chattel Paper held by
all Grantors at such time does not exceed $5,000,000, and (b) the face amount of
any individual Instrument or Chattel Paper held by such Grantor at such time
does not exceed $1,000,000.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain
or cause to be maintained, with financially sound and reputable companies,
insurance on all its Property in at
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least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
(b) Within a reasonable period of time (as determined by the
Designated Agents), such Grantor shall cause the Collateral Agent to be named as
insured party or loss payee in respect of such insurance on the Collateral.
(c) The Borrower shall deliver to the Designated Agents and
the Lenders a report of a reputable insurance broker with respect to such
insurance substantially concurrently with the delivery by the Borrower to the
Designated Agents of its audited financial statements for each fiscal year and
such supplemental reports with respect thereto as the Designated Agents may from
time to time reasonably request.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Designated Agents and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection with the Collateral as the Designated Agents may reasonably request,
all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction in the United States with respect to the
security interests created hereby and (ii) in the case of Investment Property
that constitutes Collateral, taking any actions necessary to enable the
Collateral Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.5 Changes in Name, etc.. Such Grantor will not, except upon
15 days' prior written notice to the Designated Agents and delivery to the
Collateral Agent of all additional executed financing statements and other
documents reasonably requested by the Designated Agents to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or the
location of its chief executive office or sole place of business or
principal residence, as the case may be, from that referred to in
Section 4.3; or
(ii) change its name.
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5.6 Notices. Such Grantor will advise the Designated Agents
and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Collateral Agent to exercise any of its
remedies hereunder; and
(b) the occurrence of any other event which could reasonably
be expected to have a Material Adverse Effect.
5.7 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Collateral Agent and the Secured Parties, hold the same
in trust for the Collateral Agent and the Secured Parties and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed by
such Grantor to the Collateral Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Designated Agents so request, signature guaranteed, to be held by
the Collateral Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Investment
Property that constitutes Collateral upon the liquidation or dissolution of any
Issuer shall be paid over to the Collateral Agent to be held by it hereunder as
additional collateral security for the Obligations, and in case any distribution
of capital shall be made on or in respect of such Investment Property, or any
property shall be distributed upon or with respect to such Investment Property
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the
Collateral Agent, be delivered to the Collateral Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Investment Property
that constitutes Collateral shall be received by such Grantor, such Grantor
shall, until such money or property is paid or delivered to the Collateral
Agent, hold such money or property in trust for the Secured Parties, segregated
from other funds of such Grantor, as additional collateral security for the
Obligations. Notwithstanding the foregoing, the Grantors shall not be required
to pay over to the Collateral Agent or deliver to the Collateral Agent as
Collateral any proceeds of any liquidation or dissolution of any Issuer, or any
distribution of capital or property in respect of any Investment Property, to
the extent that (i) such liquidation, dissolution or distribution, if treated as
a Disposition of the relevant Issuer, would be permitted by the Credit Agreement
and (ii) the proceeds thereof are applied toward prepayment of Loans and
reduction of Commitments to the extent required by the Credit Agreement.
(b) Such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other
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equity securities of any nature of any Issuer, unless such securities are
delivered to the Collateral Agent, concurrently with the issuance thereof, to be
held by the Collateral Agent as Collateral, or (ii) without the prior written
consent of the Designated Agents, (x) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Investment
Property that constitutes Collateral or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (y) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property that constitutes Collateral or
Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement and the other Liens permitted by the Credit Agreement
or (z) enter into any agreement or undertaking restricting the right or ability
of such Grantor or the Collateral Agent to sell, assign or transfer any of the
Pledged Securities or Proceeds thereof.
(c) In the case such Grantor is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Pledged Securities issued by it and (iii) it will comply with
instructions received by it pursuant to the terms of Section 6.4(c) with respect
to the Pledged Securities issued by it.
(d) In the case such Grantor is an Issuer that is a
partnership or a limited liability company, such Issuer (i) confirms that none
of the terms of any equity interest issued by it provides that such equity
interest is a "security" within the meaning of Sections 8-102 and 8-103 of the
New York UCC (a "Security"), (ii) agrees that it will take no action to cause or
permit any such equity interest to become a Security, (iii) agrees that it will
not issue any certificate representing any such equity interest and (iv) agrees
that if, notwithstanding the foregoing, any such equity interest shall be or
become a Security, such Issuer will (and the Grantor that holds such equity
interest hereby instructs such Issuer to) comply with instructions originated by
the Collateral Agent without further consent by such Grantor.
5.8 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Designated Agents a copy
of each material written demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of more than 5% of
the aggregate amount of the then outstanding Receivables.
5.9 Intellectual Property. With respect to Intellectual
Property that constitutes Collateral:
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(a) Such Grantor will (i) continue to use each Trademark
necessary to the conduct of its business as currently conducted on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past substantially the same quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and substantially all other notices and legends required
by applicable Requirements of Law, (iv) not knowingly adopt or use any ▇▇▇▇
which is confusingly similar or a colorable imitation of such Trademark unless
the Collateral Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such ▇▇▇▇ pursuant to this Agreement,
and (v) not (and not knowingly permit any licensee or sublicensee thereof to) do
any act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way;
(b) Such Grantor will not do any act, or omit to do any act,
whereby any Patent necessary for the conduct of its business as currently
conducted may become forfeited, abandoned or dedicated to the public;
(c) Such Grantor (i) will employ each Copyright necessary for
the conduct of its business as currently conducted and (ii) will not (and will
not knowingly permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of such Copyrights may
become invalidated or otherwise impaired. Such Grantor will not (either itself
or through licensees) do any act whereby any material portion of such Copyrights
may fall into the public domain;
(d) Such Grantor will not do any act that knowingly uses any
Intellectual Property necessary for the conduct of its business as currently
conducted to infringe the intellectual property rights of any other Person;
(e) Such Grantor will notify the Agents and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any Intellectual Property necessary for the conduct of
its business as currently conducted may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office) regarding such Grantor's ownership of, or the validity
of, any such Intellectual Property or such Grantor's right to register the same
or to own and maintain the same;
(f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property necessary for the conduct of its
business as currently conducted with the United States Patent and Trademark
Office, the United States Copyright Office, such Grantor shall report such
filing to the Designated Agents within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Upon request of the Designated
Agents, such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Designated Agents may
request to evidence the Collateral Agent's and the Secured Parties' security
interest in any Copyright, Patent or Trademark necessary for the conduct of its
business as currently conducted and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.
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(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office, to maintain and pursue
each application relating to any Intellectual Property necessary for the conduct
of its business as currently conducted (and to obtain the relevant registration)
and to maintain each registration of such material Intellectual Property,
including, without limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability; and
(h) In the event that any Intellectual Property necessary for
the conduct of its business as currently conducted is infringed, misappropriated
or diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Designated Agents after it learns thereof
and take such actions as such Grantor shall reasonably deem appropriate under
the circumstances, including filing suit for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any and all
damages for infringement, misappropriation or dilution.
5.10 Cash Management Systems. (a) On or before the Closing
Date, such Grantor shall deliver to the Designated Agents a schedule (the
"Initial Account Identification Schedule") identifying the name and location of
each bank and securities intermediary at which such Grantor maintains a deposit
account, securities account, lockbox account, concentration account, collection
account or disbursement account in the United States and (ii) the account number
and account name or other relevant descriptive data with respect to each such
account and such other information with respect to each such account as the
Designated Agents shall reasonably request. Within 10 days after the opening of
any deposit account, securities account, lockbox account, concentration account,
collection account or disbursement account in the United States not identified
in the Initial Account Identification Schedule, such Grantor shall deliver to
the Designated Agents a schedule (a "Supplemental Account Identification
Schedule") which provides, in respect of each such account opened since the date
of the Initial Account Identification Schedule, the information set forth in
clauses (i) and (ii) of the preceding sentence.
(b) Within 10 Business Days of the Closing Date, such Grantor
shall cause to be delivered to the Collateral Agent a Control Agreement and/or a
Lockbox Agreement, as appropriate, with respect to each account described in the
Initial Account Identification Schedule which the Designated Agents require, in
their sole discretion, to be subject to such an agreement, in each case duly
executed and delivered by such Grantor and by the bank or securities
intermediary that maintains such account. On or before the date which is 30 days
after the delivery of any Supplemental Account Identification Schedule, such
Grantor shall cause to be delivered to the Collateral Agent a Control Agreement
and/or a Lockbox Agreement with respect to each account described in such
Supplemental Account Identification Schedule which the Designated Agents
require, in their sole discretion, to be subject to such an agreement, in each
case duly executed and delivered by such Grantor and by the bank or securities
intermediary that maintains such account.
(c) Such Grantor shall cause all proceeds of any Revolving
Credit Facility Collateral received by it in every form, including, without
limitation, cash, checks wire transfers and other forms or receipts, to be
deposited promptly in a Control Account or Lockbox Account
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(i) in respect of which a Control Agreement and/or Lockbox Agreement, as
appropriate, is in effect and (ii) which, at any time after a Dominion Event or
a Default or Event of Default has occurred, is used solely for the purpose of
receiving proceeds of Revolving Credit Facility Collateral.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Designated Agents shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Designated Agents may require in connection with such test verifications. At
any time and from time to time after the occurrence and during the continuance
of an Event of Default, upon the Designated Agents' request and at the expense
of the relevant Grantor, such Grantor shall cause independent public accountants
or others satisfactory to the Designated Agents to furnish to the Designated
Agents reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Collateral Agent's direction
and control after the occurrence and during the continuance of an Event of
Default, and the Designated Agents may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
Each Grantor shall cause all payments in respect of Accounts to be made either
by check delivered to a Lockbox or by funds transfer to a Lockbox Account or
Control Account.
(c) At the Designated Agents' request at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
deliver to the Designated Agents all original and other documents evidencing,
and relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all original orders, invoices and
shipping receipts.
6.2 Concentration Accounts. If required by the Collateral
Agent at any time after a Dominion Event has occurred, any collected funds or
other cash amounts held in any Lockbox Account or Control Account shall be
forthwith at the end of each Business Day transferred to a Concentration
Account. To the extent that Revolving Credit Loans are outstanding on any day,
amounts held in any Concentration Account on such day shall be transferred to
the Administrative Agent and applied to repay such Loans as more particularly
provided in the Control Agreement in effect with respect to such Concentration
Account.
6.3 Communications with Obligors; Grantors Remain Liable. (a)
if an Event of Default shall occur and be continuing, the Collateral Agent in
its own name or in the name of others may at any time communicate with obligors
under the Receivables to verify with them to the Designated Agents' satisfaction
the existence, amount and terms of any Receivables.
(b) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, all in
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accordance with the terms of any agreement giving rise thereto. Neither any
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by any Agent or any Secured Party of any payment
relating thereto, nor shall any Agent or any Secured Party be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6.4 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 6.4(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice or
otherwise in accordance with the terms of the Pledged Notes, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Securities; provided, however, that no vote
shall be cast or corporate right exercised or other action taken in a manner
which would impair the Collateral or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Agreement or any
other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Collateral Agent (in consultation with the Administrative Agent) shall give
notice of its intent to exercise such rights to the relevant Grantor or
Grantors, (i) the Collateral Agent shall have the right to receive any and all
cash dividends, payments or other Proceeds paid in respect of the Pledged
Securities and make application thereof to the Obligations in the order set
forth in Section 6.6, and (ii) any or all of the Pledged Securities shall be
registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Collateral Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Designated Agents may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Collateral Agent in writing that (x)
states that an Event of Default has occurred and is
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continuing and (y) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and each Grantor
agrees that each Issuer shall be fully protected in so complying, and (ii)
unless otherwise expressly permitted hereby, pay any dividends or other payments
with respect to the Pledged Securities directly to the Collateral Agent.
6.5 Proceeds to be Turned Over To Collateral Agent. In
addition to the rights of the Designated Agents and the Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds of Collateral other than
Accounts received by any Grantor consisting of cash, checks and Instruments
shall be held by such Grantor in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Collateral Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the Collateral
Agent, if required). All Proceeds received by the Collateral Agent hereunder
shall be held by the Collateral Agent in a Control Account maintained under its
sole dominion and control. All Proceeds while held by the Collateral Agent in a
Control Account (or by such Grantor in trust for the Collateral Agent and the
Secured Parties) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.6.
6.6 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Designated Agents, or, if an Event of
Default shall have occurred and be continuing, at any time at the Designated
Agents' election, the Collateral Agent shall apply all or any part of Proceeds
constituting Collateral, whether or not held in any Control Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
(i) with respect to any such Proceeds of Revolving Credit
Facility Collateral:
(a) FIRST, to reimburse the Collateral Agent for any
theretofore unreimbursed costs or expenses incurred
by it in connection with the Revolving Credit
Facility Collateral and to reimburse the
Administrative Agent for any theretofore unreimbursed
costs and expenses incurred by it in connection with
the Revolving Credit Facility;
(b) SECOND, to pay accrued and unpaid interest, Letter of
Credit fees and commitment fees owing with respect to
the Revolving Credit Facility;
(c) THIRD, to repay (i) the principal amount of any
outstanding Revolving Credit Loans and (ii) any
Reimbursement Obligations, ratably among the holders
of the Obligations described in the foregoing
provisions of this clause THIRD;
(d) FOURTH, in an amount equal to the aggregate undrawn
amount of all outstanding Letters of Credit, to be
deposited in a collateral account under the sole
dominion and control of the Collateral Agent to be
held as collateral for such obligations;
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(e) FIFTH, to repay any Borrower Bank Product Obligations
and Guarantor Bank Product Obligations;
(f) SIXTH, to pay any other Revolving Credit Facility
Obligations not described above;
(g) SEVENTH, to reimburse the Collateral Agent for any
theretofore unreimbursed costs or expenses incurred
by it in connection with the Term Loan Facility
Collateral and to reimburse the Administrative Agent
for any theretofore unreimbursed costs and expenses
incurred by it in connection with the Term Loan
Facility;
(h) EIGHTH, to pay accrued and unpaid interest and
commitment fees owing with respect to the Term Loan
Facility;
(i) NINTH, to repay the principal amount of any
outstanding Term Loans;
(j) TENTH, to pay any other Term Loan Facility
Obligations not described above; and
(k) ELEVENTH, to be delivered to the Borrower or as
otherwise may be required by applicable law.
(ii) with respect to any such Proceeds of Term Loan
Facility Collateral:
(l) FIRST, to reimburse the Collateral Agent for any
theretofore unreimbursed costs or expenses incurred
by it in connection with the Term Loan Facility
Collateral and to reimburse the Administrative Agent
for any theretofore unreimbursed costs and expenses
incurred by it in connection with the Term Loan
Facility;
(m) SECOND, to pay accrued and unpaid interest and
commitment fees owing with respect to the Term Loan
Facility;
(n) THIRD, to repay the principal amount of any
outstanding Term Loans;
(o) FOURTH, to pay any other Term Loan Facility
Obligations not described above;
(p) FIFTH, to reimburse the Collateral Agent for any
theretofore unreimbursed costs or expenses incurred
by it in connection with the Revolving Credit
Facility Collateral and to reimburse the
Administrative Agent for any theretofore unreimbursed
costs and expenses incurred by it in connection with
the Revolving Credit Facility;
(q) SIXTH, to pay accrued and unpaid interest, Letter of
Credit fees and commitment fees owing with respect to
the Revolving Credit Facility;
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(r) SEVENTH, to repay (i) the principal amount of any
outstanding Revolving Credit Loans and (ii) any
Reimbursement Obligations, ratably among the holders
of the Obligations described in the foregoing
provisions of this clause THIRD;
(s) EIGHTH, in an amount equal to the aggregate undrawn
amount of all outstanding Letters of Credit, to be
deposited in a collateral account under the sole
dominion and control of the Collateral Agent to be
held as collateral for such obligations;
(t) NINTH, to repay any Borrower Bank Product Obligations
and Guarantor Bank Product Obligations;
(u) TENTH, to pay any other Revolving Credit Facility
Obligations not described above; and
(v) ELEVENTH, to be delivered to the Borrower or as
otherwise may be required by applicable law.
(iii) with respect to any such proceeds of the guarantee
set forth in Section 2:
(w) FIRST, (i) to reimburse the Collateral Agent for any
theretofore unreimbursed costs or expenses incurred
by it in connection with the Collateral and (ii) to
reimburse the Administrative Agent for any
theretofore unreimbursed costs and expenses incurred
by it in connection with the Facilities, ratably
among the Collateral Agent and the Administrative
Agent in accordance with the amounts of such
Obligations described in the foregoing clauses (i)
and (ii) then owing to each thereof;
(x) SECOND, (i) to pay accrued and unpaid interest and
commitment fees owing with respect to the Term Loan
Facility and (ii) to pay accrued and unpaid interest,
Letter of Credit fees and commitment fees owing with
respect to the Revolving Credit Facility, ratably
among the holders of the Obligations described in the
foregoing clauses (i) and (ii) in accordance with the
amounts of such Obligations then owing to each
thereof;
(y) THIRD, to repay the principal amount of any
outstanding Loans and Reimbursement Obligations,
ratably among the holders of such Obligations in
accordance with the amounts of such Obligations then
held by each thereof;
(z) FOURTH, in an amount equal to the aggregate undrawn
amount of all outstanding Letters of Credit, to be
deposited in a collateral account under the sole
dominion and control of the Collateral Agent to be
held as collateral for such obligations;
(aa) FIFTH, to repay Borrower Bank Product Obligations and
Guarantor Bank Product Obligations;
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(bb) SIXTH, to pay any other Revolving Credit Facility
Obligations and Term Loan Facility Obligations not
described above; and
(cc) SEVENTH, to be delivered to the Borrower or as
otherwise may be required by applicable law.
6.7 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Agents, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except notice
pursuant to Section 6.4(b) and any notice required by law referred to below) to
or upon any Grantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Collateral Agent or any Secured Party or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. Any Agent or any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the
Collateral Agent's request, to assemble the Collateral and make it available to
the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Collateral Agent
shall apply the net proceeds of any action taken by it pursuant to this Section
6.7 with respect to any Grantor's Collateral, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral of such Grantor or in any
way relating to the Collateral of such Grantor or the rights of the Agents and
the Secured Parties hereunder with respect thereto, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations of such Grantor, in the order specified in
Section 6.6, and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Collateral Agent account for the surplus, if any, to any Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and demands
it may acquire against any Agent or any Secured Party arising out of the
exercise by them of any rights hereunder, to the extent such exercise does not
constitute gross negligence or willful misconduct. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.
6.8 Registration Rights. (a) If the Designated Agents shall
determine to exercise the right to sell any or all of the Pledged Stock pursuant
to Section 6.7, and if in the opinion of the Designated Agents it is necessary
or advisable to have the Pledged Stock, or that portion
29
thereof to be sold, registered under the provisions of the Securities Act, the
relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Designated Agents, necessary or advisable to register
the Pledged Stock, or that portion thereof to be sold, under the provisions of
the Securities Act, (ii) use its best efforts to cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the Pledged
Stock, or that portion thereof to be sold, and (iii) make all amendments thereto
and/or to the related prospectus which, in the opinion of the Designated Agents,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Designated Agents shall designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Designated
Agents shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.8 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.8 will cause irreparable injury to the Designated Agents and the
Secured Parties, that the Designated Agents and the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.8 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
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6.9 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Designated Agents or any Secured Party to collect such
deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other Collateral
and file any claim or take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Designated
Agents for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever
payable;
(ii) in the case of any material Intellectual Property
that constitutes Collateral, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the
Designated Agents may request to evidence the Collateral Agent's and
the Secured Parties' security interest in such Intellectual Property
and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.7 or 6.8, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral;
(v) (1) direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Collateral Agent or as the
Designated Agents shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in
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connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (5) defend
any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Designated Agents may deem appropriate;
(7) assign any Copyright, Patent or Trademark that constitutes
Collateral (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the
Designated Agents shall in their sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof for all
purposes, and do, at the Designated Agents' option and such Grantor's
expense, at any time, or from time to time, all acts and things which
the Designated Agents deem necessary to protect, preserve or realize
upon the Collateral and the Collateral Agent's and the Secured Parties'
security interests therein and to effect the intent of this Agreement,
all as fully and effectively as such Grantor might do; and
(vi) license or sublicense whether on an exclusive or
non-exclusive basis, any Intellectual Property that constitutes
Collateral for such term and on such conditions and in such manner as
the Designated Agents shall in their sole judgment determine.
Anything in this Section 7.1 (a) to the contrary
notwithstanding, the Collateral Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option (in
consultation with the Administrative Agent), but without any obligation so to
do, may perform or comply, or otherwise cause performance or compliance, with
such agreement.
(c) The expenses of each Designated Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by such
Designated Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to such Designated Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Collateral Agent. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account. Neither the Collateral Agent,
32
any Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Designated Agents
and the Secured Parties hereunder are solely to protect the Collateral Agent's
and the Secured Parties' interests in the Collateral and shall not impose any
duty upon the Designated Agents or any Secured Party to exercise any such
powers. The Collateral Agent and the Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. . Pursuant to any
applicable law, each Grantor authorizes each of the Designated Agents to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Designated Agents determine appropriate
to perfect the security interests of the Collateral Agent under this Agreement.
Each Grantor authorizes the Administrative Agent to use the collateral
description "all personal property" in any such financing statements. Each
Grantor hereby ratifies and authorizes the filing by the Collateral Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.
7.4 Authority of Collateral Agent. Each Grantor acknowledges
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and the
Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Grantors, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority. Notwithstanding any other provision herein or in any Loan Document,
the only duty or responsibility of the Collateral Agent to any Qualified
Counterparty under this Agreement is the duty to remit to such Qualified
Counterparty any amounts to which it is entitled pursuant to Section 6.6.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 10.1 of the Credit Agreement. No consent of any
Qualified Counterparty shall be required for any waiver, amendment, supplement
or other modification to this Agreement.
33
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent, the Administrative Agent or any Grantor hereunder shall be
effected in the manner provided for in Section 10.2 of the Credit Agreement;
provided that any such notice, request or demand to or upon any Guarantor shall
be addressed to such Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Collateral Agent, the Administrative Agent nor any Secured Party
shall by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the Collateral
Agent, the Administrative Agent or any Secured Party, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent, the Administrative Agent or any Secured Party
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Collateral Agent, the Administrative Agent
or such Secured Party would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay, or reimburse each Secured Party and each Designated Agent for,
all its costs and expenses incurred in collecting against such Guarantor under
the guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Guarantor
is a party, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Secured
Party and of counsel to each Designated Agent.
(b) Each Guarantor agrees to pay, and to save the Designated
Agents and the Secured Parties harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Designated
Agents and the Secured Parties harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent, the Administrative Agent and the Secured Parties and
their successors and assigns; provided that no
34
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Designated Agents.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes each
Designated Agent and each Secured Party at any time and from time to time while
an Event of Default pursuant to Section 8(a) of the Credit Agreement shall have
occurred and be continuing, without notice to such Grantor or any other Grantor,
any such notice being expressly waived by each Grantor, to set-off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Designated
Agent or such Secured Party to or for the credit or the account of such Grantor,
or any part thereof in such amounts as such Designated Agent or such Secured
Party may elect, against and on account of the obligations and liabilities of
such Grantor to such Designated Agent or such Secured Party hereunder and claims
of every nature and description of such Designated Agent or such Secured Party
against such Grantor, in any currency, whether arising hereunder, under the
Credit Agreement, any other Loan Document or otherwise, as such Designated Agent
or such Secured Party may elect, whether or not such Designated Agent or any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Designated Agent and
each Secured Party shall notify such Grantor promptly of any such set-off and
the application made by such Designated Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Designated
Agent and each Secured Party under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which such
Designated Agent or such Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Designated Agents and the Secured
Parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Designated Agents
or any Secured Party relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
35
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address of
which the Collateral Agent or Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party;
(b) neither the Collateral Agent, the Administrative Agent nor
any other Secured Party has any fiduciary relationship with or duty to any
Grantor arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Grantors, on the one hand, and
the Designated Agents and Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Secured Parties or among the Grantors and the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 6.9 of the
Credit Agreement shall become
36
a Grantor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than Borrower Bank
Product Obligations, Guarantor Bank Product Obligations, the Borrower Guarantee
Obligations and the obligations of the Guarantors in respect of such Borrower
Guarantee Obligations that arise under Section 2.1(a)(i)) shall have been paid
in full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than the provisions of this Agreement
and the obligations hereunder that are herein expressly stated to survive such
termination) of the Designated Agents and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Collateral Agent shall (without notice to, or vote or consent of, any Lender, or
any party to any Bank Product) take such actions as shall be required to release
its security interest in all Collateral, and the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any party to any Bank
Product) take such actions as shall be required to release all guarantee
obligations under any Loan Document, whether or not on the date of such release
there may be outstanding Obligations in respect of Bank Products. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payment had not been made
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Collateral Agent, at the request and sole expense of such
Grantor, shall (without notice to, or vote or consent of, any Lender, or any
party to any Bank Product) take such actions as shall be required to release its
security interest in any Collateral being Disposed of in such Disposition
(including, in the case of a Disposition of any Person, all Capital Stock of
such Person and all Property of such Person), and the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any party to any Bank
Product) take such actions as shall be required to release any guarantee and
other obligations under any Loan Document of any Person being Disposed of in
such Disposition; provided that the Borrower shall have delivered to the
Designated Agents, at least ten Business Days prior to the date of the proposed
release of any Guarantor in connection with the Disposition of all of its
Capital Stock, a written request for release identifying the relevant Guarantor
and the terms of the sale or other disposition in reasonable detail, including
the price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents. At such time as the Term
Loans shall have been repaid in full, the Existing Convertible Notes shall have
been repaid in full and the Consolidated Liquidity shall be not less than an
amount to be agreed upon by the Designated Agents at such time, promptly upon
the request of the Borrower, the Eligible Rental Equipment shall be removed from
the Borrowing
37
Base, the Collateral Agent shall (without notice to, or vote or consent of, any
Lender, or any party to any Bank Product) take such actions as shall be required
to release its security interest in the Quail Rental Assets and the
Administrative Agent shall (without notice to, or vote or consent of, any Lender
or any party to any Bank Product) take such actions as shall be required or
reasonably requested by the Borrower to evidence such release. In addition,
▇▇▇▇▇▇ International shall be automatically released from its obligations under
this Agreement at the time and pursuant to the conditions set forth in Section
10.15(a) of the Credit Agreement.
(c) No consent of any Qualified Counterparty shall be required
for any release of Collateral or Guarantors pursuant to this Section.
8.16 ▇▇▇▇▇▇ International. For avoidance of doubt, the parties
hereto confirm that ▇▇▇▇▇▇ International is not hereby creating a security
interest in any of its assets; that the Collateral does not include any assets
of ▇▇▇▇▇▇ International; and that ▇▇▇▇▇▇ International is not hereby making any
representations and warranties with respect to any Collateral.
8.17 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF
THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
[NAME OF GRANTOR]
By: ____________________________
Name:
Title:
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares
------------------------------------------------------------------------------------
PLEDGED NOTES:
Issuer Payee Principal Amount
----------------------------------------------------------
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a is financing statement to be filed]
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Other Actions
[Describe other actions to be taken]
Schedule 4
JURISDICTION OF ORGANIZATION, IDENTIFICATION NUMBER AND
LOCATION OF CHIEF EXECUTIVE OFFICE
Jurisdiction of Identification Location of Chief
Grantor Organization Number Executive Office
------- --------------- -------------- -----------------
Schedule 5
INTELLECTUAL PROPERTY
I. Copyrights and Copyright Licenses:
II. Patents and Patent Licenses:
III. Trademarks and Trademark Licenses:
Annex I
to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200__,
made by ______________________________, a ______________ corporation (the
"Additional Grantor"), in favor of (i) DEUTSCHE BANK TRUST COMPANY AMERICAS, as
collateral agent (in such capacity, the "Collateral Agent") for the banks and
other financial institutions (the "Lenders") parties to the Credit Agreement
referred to below and (ii) ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Administrative Agent
pursuant to such Credit Agreement (in such capacity, the "Administrative
Agent"). All capitalized terms not defined herein shall have the meaning
ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, ▇▇▇▇▇▇ DRILLING COMPANY (the "Borrower"), the
Lenders, the Administrative Agent and the Collateral Agent have entered into a
Credit Agreement, dated as of October 10, 2003 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") with ▇▇▇▇▇▇
Brothers Inc. and Deutsche Bank Securities Inc., as Arrangers, Deutsche Bank
Securities Inc., as Syndication Agent, and Bank of America, N.A., as
Documentation Agent;
WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of its Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of October 10, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Collateral Agent for the benefit of
the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
_____ to the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.
Annex I-2
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: _____________________________
Name:
Title:
Annex II
to
Guarantee and Collateral Agreement
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of October [__], 2003 (the "Agreement"), made
by the Grantors parties thereto for the benefit of (i) DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Collateral Agent and (ii) ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent. The undersigned agrees for the benefit of the Collateral
Agent, the Administrative Agent and the Secured Parties as follows:
1. The undersigned will notify the Administrative Agent promptly
in writing of the occurrence of any of the events described in Section 5.7(a) of
the Agreement with respect to the Pledged Securities issued by the undersigned.
2. The undersigned will comply with any instructions received by
it pursuant to Section 6.4(c) of the Agreement with respect to the Pledged
Securities issued by the undersigned.
[NAME OF ISSUER]
By: _____________________________
Name:
Title:
Address for Notices:
_______________________________
_______________________________
_______________________________
Fax: ____________________________