SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 4)
J. Ray McDermott, S.A.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
P 64658 10 0
- -------------------------------------------------------------------------------
(CUSIP Number)
McDermott International, Inc.
Attn: S. Wayne Murphy, Senior Vice President, General Counsel and Corporate
Secretary, 1450 Poydras Street, New Orleans, LA 70112 (504) 587-5300
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 16, 1999
- -------------------------------------------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box|_|.
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 Pages)
<PAGE>
CUSIP No. P 64658 10 0___________ 13D Page 2 of 9 Pages
- ---------------------------------- -----------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
McDermott International, Inc.
I.R.S. Employer Identification No. 72-0593134
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Panama
- -------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
39,021,787(1)
SHARES
------------------------------------------------------
BENEFICIALLY
8 SHARED VOTING POWER
OWNED BY
------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
39,021,787(2)
REPORTING
------------------------------------------------------
PERSON WITH
10 SHARED DISPOSITIVE POWER
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,021,787
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
99.5%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 9 Pages
<PAGE>
(1) In connection with the contribution by McDermott International,
Inc. ("McDermott International") of its marine construction services business
to the Issuer in 1995, the Issuer issued to McDermott International 24,668,297
shares of the Issuer's common stock and 3,200,000 shares of its Series A $2.25
Cumulative Convertible Preferred Stock. The Series A preferred stock is not
registered under the Securities Exchange Act of 1934, as amended. Each share
of Series A preferred stock has one vote per share, voting as a single class
with the holders of Issuer's common stock, on all matters that are voted on by
holders of shares of common stock. Each share of Series A preferred stock is,
in certain circumstances, convertible into 1.794 shares of the Issuer's common
stock.
(2) See Items 5 and 6 of this Amendment No. 4 to the Schedule 13D.
Page 3 of 9 Pages
<PAGE>
Introduction
This Amendment No. 4 to the Schedule 13D is being filed by McDermott
International pursuant to Rule 13d-2 of the Exchange Act to amend the Schedule
13D originally filed by McDermott International on February 9, 1995 relating
to the shares of common stock, par value $.01 per share (the "Shares"), of J.
Ray McDermott, S.A, as previously amended by Amendment No. 1, filed on March
12, 1999, Amendment No. 2, filed on April 22, 1999, and Amendment No. 3, filed
on May 11, 1999.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is amended and restated as follows:
Pursuant to the Agreement and Plan of Merger dated as of May
7, 1999 (the "Merger Agreement"), between Issuer and
McDermott International, McDermott International will
acquire all Shares of the Issuer not already owned by
McDermott International for $35.62 per Share in cash. See
Item 4 below.
McDermott International, through its wholly-owned
subsidiary, McDermott Acquisition Company, Inc. ("Merger
Subsidiary"), will purchase all of the publicly-held Shares
of the Issuer from cash on hand and from borrowings under a
$525 million senior secured term loan agreement dated June
7, 1999 (the "Loan Agreement"), among McDermott
International, the lenders named therein, and Citibank,
N.A., as administrative agent. All borrowings under the Loan
Agreement will mature no later than September 30, 1999.
Item 4. Purpose of Transaction.
Item 4 is amended and restated as follows:
On May 7, 1999, McDermott International and the Issuer
executed the Merger Agreement, pursuant to which McDermott
International will acquire all Shares of the Issuer not
already owned by McDermott International for $35.62 per
Share in cash.
Pursuant to the Merger Agreement, McDermott International,
through Merger Subsidiary, commenced a tender offer on May
13, 1999 for all Shares of the Issuer (other than Shares
beneficially owned by McDermott International) at a price of
$35.62 per Share,
Page 4 of 9 Pages
<PAGE>
net to the seller in cash. The tender offer expired at 12:00
midnight, New York City time, on Thursday, June 10, 1999. A
total of 14,353,490 Shares were tendered. On June 11, 1999,
McDermott International announced that it had accepted for
payment and would promptly pay for all Shares validly
tendered pursuant to the tender offer. McDermott
International has subsequently paid for the Shares.
All Shares not purchased in the tender offer (other than
Shares beneficially owned by McDermott International) will
be acquired for the same price in cash in a second-step
merger. McDermott International anticipates that the merger
between Merger Subsidiary and the Issuer will occur shortly
after a special meeting of the shareholders of the Issuer.
The time and place of the meeting will be determined at a
later date.
Upon the terms and subject to the conditions set forth in
the Merger Agreement, at such time as the certificate of
merger is recorded by the Public Registry Office of the
Republic of Panama (the "Effective Time"), Merger Subsidiary
shall be merged with and into the Issuer in accordance with
Panama law, whereupon the separate existence of Merger
Subsidiary shall cease, and the Issuer shall continue as the
surviving corporation (the "Surviving Corporation"). As a
result, the Issuer will become a direct, wholly-owned
subsidiary of McDermott International.
The certificate of incorporation of Merger Subsidiary in
effect at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until amended in
accordance with its terms and applicable law, provided that,
at the Effective Time, such certificate of incorporation
shall be amended to provide that the name of the corporation
shall be J. Ray McDermott, S.A.
The bylaws of Merger Subsidiary in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until
amended in accordance with its terms, the certificate of
incorporation of the Surviving Corporation and applicable
law.
From and after the Effective Time, until successors are duly
elected or appointed and qualified in accordance with
applicable law, (i) the directors of Merger Subsidiary at
the Effective Time shall be the directors of the Surviving
Corporation and (ii) the
Page 5 of 9 Pages
<PAGE>
officers of the Issuer at the Effective Time shall be the
officers of the Surviving Corporation.
The Issuer currently has approximately 39.2 million Shares
outstanding. 39 million Shares (or 99.5% of the outstanding
Shares) are beneficially owned by McDermott International.
Fewer than 200,000 of the outstanding Shares of the Issuer
are publicly held.
Item 5 Interest in Securities of the Issuer.
Item 5 is amended and restated as follows:
McDermott International beneficially owns 39,021,787 Shares
of the Issuer or approximately 99.5% of the Shares
outstanding. Subject to certain restrictions contained in
the Loan Agreement and the related pledge agreement dated
June 7, 1999 (the "Pledge Agreement"), among McDermott
International, certain of its subsidiaries, and Citibank,
N.A., as collateral agent, McDermott International has the
sole power to vote or direct the vote and the sole power to
dispose or direct the disposition of all of the Shares of
the Issuer that it beneficially owns. See Item 6 below.
Sections 1, 5-9, and 14 of the Pledge Agreement and Section
6.04 of the Loan Agreement are incorporated by reference
herein.
Item 6 Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
Item 6 is amended and restated as follows:
Under the Pledge Agreement, borrowings under the Loan
Agreement are secured by a first priority pledge of all
Shares of the Issuer and securities convertible into such
Shares held or acquired by McDermott International or any of
its subsidiaries. Section 6.04 of the Loan Agreement, which
is incorporated by reference herein, restricts the ability
of McDermott International to sell or dispose of the capital
stock of the Issuer as long as any amount payable under the
Loan Agreement is outstanding and unpaid.
Item 7. Material to be Filed as Exhibits.
Page 6 of 9 Pages
<PAGE>
Item 7 is hereby supplemented and amended to add the
following exhibits:
1. Senior Secured Term Loan Agreement dated as of June
7, 1999 among McDermott International, Inc., the
lenders named therein, and Citibank, N.A., as
administrative agent.
2. Pledge Agreement dated as of June 7, 1999 among
McDermott International, Inc., the subsidiaries of
McDermott International, Inc. named therein, and
Citibank, N.A., as collateral agent.
Page 7 of 9 Pages
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this amendment is true, complete
and correct.
June 16, 1999 McDERMOTT INTERNATIONAL, INC
By: /s/ Daniel R. Gaubert
--------------------------------
Daniel R. Gaubert
Senior Vice President and Chief
Financial Officer
Page 8 of 9 Pages
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
- ------- -----------
1. Agreement and Plan of Merger dated as of June 2, 1994 (as amended) by
and among J. Ray McDermott, S.A., McDermott International, Inc., MCB
I, Inc. and Offshore Pipelines, Inc.*
2. Press Release dated March 10, 1999 of McDermott International, Inc.*
3. Press Release dated April 20, 1999 of McDermott International, Inc.*
4. Joint Press Release dated May 7, 1999 of McDermott International,
Inc. and J. Ray McDermott, S.A.*
5. Agreement and Plan of Merger dated as of May 7, 1999 between J. Ray
McDermott, S.A. and McDermott International, Inc.*
6. Commitment Letter dated May 7, 1999 among McDermott International,
Inc., Citibank, N.A., and Salomon Smith Barney, Inc.*
7. Senior Secured Term Loan Agreement dated as of June 7, 1999 among
McDermott International, Inc., the lenders named therein, and
Citibank, N.A., as administrative agent.
8. Pledge Agreement dated as of June 7, 1999 among McDermott
International, Inc., the subsidiaries of McDermott International,
Inc. named therein, and Citibank, N.A., as collateral agent.
* Previously filed.
Page 9 of 9 Pages
EXHIBIT 7
Execution Copy
===============================================================================
$525,000,000
SENIOR SECURED TERM LOAN AGREEMENT
Dated as of June 7, 1999
Among
McDERMOTT INTERNATIONAL, INC.,
THE LENDERS NAMED HEREIN,
and
CITIBANK, N.A.,
as Administrative Agent,
-----------------------
SALOMON SMITH BARNEY, INC.,
as Lead Arranger and Book Runner
===============================================================================
[CS&M Ref. No. 6558-153]
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS..................................................................................1
SECTION 1.01. Defined Terms....................................................................1
SECTION 1.02. Terms Generally.................................................................11
ARTICLE II. THE CREDITS.................................................................................11
SECTION 2.01. Commitments.....................................................................11
SECTION 2.02. Loans...........................................................................11
SECTION 2.03. Borrowing Procedure.............................................................12
SECTION 2.04. Evidence of Debt; Repayment of Loans............................................13
SECTION 2.05. Fees............................................................................13
SECTION 2.06. Interest on Loans...............................................................13
SECTION 2.07. Default Interest................................................................14
SECTION 2.08. Alternate Rate of Interest......................................................14
SECTION 2.09. Termination and Reduction of Commitments........................................14
SECTION 2.10. Prepayment......................................................................14
SECTION 2.11. Reserve Requirements; Change in Circumstances...................................15
SECTION 2.12. Change in Legality..............................................................16
SECTION 2.13. Indemnity.......................................................................16
SECTION 2.14. Pro Rata Treatment..............................................................17
SECTION 2.15. Sharing of Setoffs..............................................................17
SECTION 2.16. Payments........................................................................17
SECTION 2.17. Taxes...........................................................................17
SECTION 2.18. Assignment of Commitments Under Certain Circumstances...........................19
ARTICLE III. REPRESENTATIONS AND WARRANTIES.............................................................19
SECTION 3.01. Organization; Powers............................................................19
SECTION 3.02. Authorization...................................................................19
SECTION 3.03. Enforceability..................................................................20
SECTION 3.04. Governmental Approvals..........................................................20
SECTION 3.05. Financial Statements............................................................20
SECTION 3.06. No Material Adverse Change......................................................20
SECTION 3.07. Title to Properties; Possession Under Leases....................................20
SECTION 3.08. Subsidiaries....................................................................21
SECTION 3.09. Litigation; Compliance with Laws................................................21
SECTION 3.10. Federal Reserve Regulations.....................................................21
SECTION 3.11. Investment Company Act; Public Utility Holding Company Act......................21
SECTION 3.12. Use of Proceeds.................................................................21
SECTION 3.13. Tax Returns.....................................................................21
SECTION 3.14. No Material Misstatements.......................................................21
SECTION 3.15. Employee Benefit Plans..........................................................22
SECTION 3.16. Environmental and Safety Matters................................................22
SECTION 3.17. Absence of Limitations on JRMSA Payment and Advances by
Subsidiaries.............................................................22
SECTION 3.18. Pledge Agreement................................................................22
SECTION 3.19. Merger Agreement................................................................22
ARTICLE IV. CONDITIONS TO ALL BORROWINGS................................................................23
SECTION 4.01. All Borrowings..................................................................23
SECTION 4.02. First Borrowing.................................................................23
[
<PAGE>
Contents, p.2
ARTICLE V. AFFIRMATIVE COVENANTS........................................................................24
SECTION 5.01. Existence; Businesses and Properties............................................25
SECTION 5.02. Insurance.......................................................................25
SECTION 5.03. Obligations and Taxes...........................................................25
SECTION 5.04. Financial Statements, Reports, etc..............................................25
SECTION 5.05. Litigation and Other Notices....................................................26
SECTION 5.06. ERISA...........................................................................26
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.......................27
SECTION 5.08. Delivery of Shares..............................................................27
SECTION 5.09. Merger..........................................................................27
SECTION 5.10. JRMSA Payment...................................................................27
ARTICLE VI. NEGATIVE COVENANTS..........................................................................27
SECTION 6.01. Indebtedness....................................................................28
SECTION 6.02. Liens...........................................................................28
SECTION 6.03. Sale and Lease-Back Transactions................................................29
SECTION 6.04. Mergers, Consolidations and Sales of Assets.....................................29
SECTION 6.05. Transactions with Affiliates....................................................29
SECTION 6.06. Business of Borrower and Subsidiaries...........................................29
SECTION 6.07. Restricted Payments.............................................................29
SECTION 6.08. Minimum Consolidated Tangible Net Worth.........................................30
SECTION 6.09. Minimum Cash, Cash Equivalents and Investments in Debt Securities
of JRMSA......................................................30
SECTION 6.10. No Limitations on Dividends and Advances by Subsidiaries........................30
SECTION 6.11. No Amendment of Material Documents..............................................30
SECTION 6.12. JRMSA Credit Agreement and BWICO Credit Agreement...............................30
ARTICLE VII. EVENTS OF DEFAULT..........................................................................30
ARTICLE VIII. THE ADMINISTRATIVE AGENT..................................................................33
ARTICLE IX. MISCELLANEOUS...............................................................................35
SECTION 9.01. Notices.........................................................................35
SECTION 9.02. Survival of Agreement...........................................................35
SECTION 9.03. Binding Effect..................................................................35
SECTION 9.04. Successors and Assigns..........................................................35
SECTION 9.05. Expenses; Indemnity.............................................................37
SECTION 9.06. Right of Setoff.................................................................38
SECTION 9.07. Applicable Law..................................................................38
SECTION 9.08. Waivers; Amendment..............................................................38
SECTION 9.09. Interest Rate Limitation........................................................39
SECTION 9.10. Entire Agreement................................................................39
SECTION 9.11. Waiver of Jury Trial............................................................39
SECTION 9.12. Severability....................................................................40
SECTION 9.13. Counterparts....................................................................40
SECTION 9.14. Headings........................................................................40
SECTION 9.15 . Jurisdiction; Consent to Service of Process.....................................40
SECTION 9.16. Judgment Currency...............................................................40
SECTION 9.17. Confidentiality.................................................................41
</TABLE>
<PAGE>
Contents, p.3
EXHIBITS AND SCHEDULES
Exhibit A Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Pledge Agreement
Exhibit E-1 Form of Opinion of John S. Tsai, Assistant Corporate
Secretary, of the Borrower
Exhibit E-2 Form of Opinion of Davis Polk & Wardwell, counsel for the
Borrower
Exhibit E-3 Form of Opinion of Durling & Durling, Panamanian Counsel for
the Borrower
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.16 Environmental and Safety Matters
Schedule 6.01 Indebtedness
<PAGE>
CREDIT AGREEMENT dated as of June 7, 1999,
among McDermott International, Inc., a Panamanian
corporation (the "Borrower"), the financial
institutions from time to time party hereto,
initially consisting of those listed on Schedule
2.01 (the "Lenders"), and CITIBANK, N.A., as
administrative agent (in such capacity, the
"Administrative Agent") for the Lenders.
The Borrower has requested that the Lenders (such term and
each other capitalized term used but not defined herein having the meaning
given it in Article I) extend credit to the Borrower during the Availability
Period, in the form of Term Loans in an aggregate principal amount not greater
than $525,000,000. The proceeds of the Term Loans will be used only to
purchase Shares pursuant to the Tender Offer and the Merger.
The Lenders are willing to extend such credit to the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean a Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Acquisition Sub" shall mean the newly organized subsidiary
of the Borrower that will merge into JRMSA pursuant to the Merger Agreement.
"Acquisition Transactions" shall mean the Tender Offer and
the Merger.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurocurrency Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/100 of 1%) equal to the product
of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory
Reserves.
"Administrative Agent Fees" shall have the meaning assigned
to such term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in
the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a
specified person, another person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the person specified, provided, that as used in Section 6.05 the term
"Affiliate" shall exclude the Borrower and the Subsidiaries.
"Alternate Base Rate" shall mean, 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%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined
<PAGE>
2
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean with respect to any
Eurocurrency Loan or ABR Loan, or with respect to the Commitment Fees, the
applicable percentage set forth in the table below under the caption
"Eurocurrency Spread", "ABR Spread" or "Commitment Fee Percentage", as the
case may be, based upon the Rating applicable on such date.
===============================================================================
Eurocurrency Commitment Fee
S&P Ratings Spread ABR Spread Percentage
----------- ---------------- ---------- --------------
Category 1
- ----------
BBB or higher 1.00% .000% .25%
Category 2
- ----------
BBB-
1.25% .250% .30%
Category 3
- ---------
BB+ 1.625% .625% .35%
Category 4
- ----------
BB 2.00% 1.00% .40%
Category 5
- ----------
BB-
2.50% 1.50% .50%
Category 6
- ----------
Lower than BB- or unrated 3.00% 2.00% .75%
===============================================================================
For purposes of the foregoing, (i) if S&P shall not have in
effect a Rating, such rating agency shall be deemed to have established a
Rating in Category 6; and (ii) if the Rating established or deemed to have
been established by S&P shall be changed (other than as a result of a change
in the rating system of S&P), such change shall be effective as of the date on
which it is first announced by S&P. If the rating system of S&P shall change,
the Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system and, pending the
effectiveness of any such amendment, the Applicable Percentage shall be
determined by reference to the ratings most recently in effect (or deemed to
be in effect) prior to such change. Each change in the Applicable Percentage
shall apply to Eurocurrency Loans and ABR Loans outstanding and Commitment
Fees accruing during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B or such other form as shall be
approved by the Administrative Agent with the consent of the Borrower (which
consent shall not be unreasonably withheld).
"Availability Period" shall mean the period from and
including the date the Tender Offer is consummated to and including the date
the Merger is consummated.
<PAGE>
3
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a group of Loans of a single Type
made by the Lenders on a single date and as to which a single Interest Period
is in effect.
"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C.
"Business Day" shall mean any day (other than a day which is
a Saturday, Sunday or legal holiday in New York City or a day on which banks
in New York City are authorized or required by law to close) on which banks
are open for business in New York City; provided, however, that, when used in
connection with a Eurocurrency Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in Dollar deposits in
the London interbank market.
"BWICO" shall mean Babcock & Wilcox Investment Company, a
Delaware corporation.
"BWICO Credit Agreement" shall mean the Revolving Credit
Facility and Letter of Credit Agreement dated as of July 9, 1998, among
Citibank, N.A., as Administrative Agent, ABN AMRO Bank N.V., as Syndicate
Issuing Bank, The Bank of Nova Scotia, as Documentation Agent, BWICO and the
other Lenders named therein, as amended to the date hereof and as hereafter
amended from time to time, and any bank credit agreement which, in the opinion
of Citibank N.A., replaces such Agreement.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock" shall mean, with respect to any person, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or nonvoting) of capital stock, partnership
interests (whether general or limited) or equivalent ownership interests in or
issued by such person, that in each case are outstanding or issued on or after
the date of this Agreement.
A "Change in Control" shall be deemed to have occurred if
(a) a majority of the seats (other than vacant seats) on the board of
directors of the Borrower shall be occupied by persons who are not Continuing
Directors of the Borrower; or (b) any person or group (within the meaning of
Rule 13d-5 of the Securities and Exchange Commission as in effect on the date
hereof) shall acquire Control of the Borrower (provided that under no
circumstances shall the ownership or control of less than 20% of the issued
and outstanding Capital Stock of the Borrower be deemed to constitute
Control).
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" means any and all "Collateral" as defined in the
Pledge Agreement.
"Collateral Agent" means Citibank, N.A. in its capacity as
collateral agent for the Secured Parties under the Pledge Agreement.
<PAGE>
4
"Commitment" shall mean, (i) with respect to any Lender, the
commitment of such Lender set forth in Schedule 2.01 hereto under the heading
"Commitment" or in the Assignment and Acceptance pursuant to which such Lender
assumed its Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09, and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 9.04
or 2.18.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Consolidated Shareholders' Equity" shall mean, at any date,
the shareholders' equity of the Borrower at such date, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean at any date,
Consolidated Shareholders' Equity at such date minus the sum at such date of
all Intangible Assets of the Borrower and its consolidated subsidiaries.
"Continuing Director" shall mean, with respect to any
corporation, any member of the board of directors of such corporation on the
date of this Agreement and any other member of the board of directors of such
corporation nominated or selected by a majority of the Continuing Directors,
or by the nominating committee of the board of directors of such corporation,
serving at the time of such nomination or election.
"Contractual Obligation" means, 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" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Creole" means Creole Insurance Company, Ltd., a Bermuda
corporation.
"Default" shall mean any event or condition which upon
notice, lapse of time or both would constitute an Event of Default.
"Dollars" or "$" shall mean lawful money of the United States
of America.
"Effective Date" shall mean the first Business Day on which
all conditions set forth in Sections 4.01 and 4.02 are satisfied.
"Environmental Laws" shall have the meaning assigned to such
term in Section 3.16.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.
"Eurocurrency Borrowing" shall mean a Borrowing comprised of
Eurocurrency Loans.
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5
"Eurocurrency Loan" shall mean a Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VII.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender or any other recipient (an "Other Recipient") of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a)
income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender or Other Recipient, in which its applicable lending office
is located or any political subdivision of any such jurisdiction, (b) any
branch profits taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (c)
in the case of a Foreign Lender, any withholding tax that (i) is in effect and
would apply to amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agree ment (or designates a new lending
office), except to the extent that such Foreign Lender (or its assignor, if
any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
any withholding tax pursuant to Section 2.17(a), or (ii) is attributable to
such Foreign Lender's failure to comply with Section 2.17(e).
"Federal Funds Effective Rate" shall mean, 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 that is a Business
Day, the average of the quotations for the day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fees" shall mean the Commitment Fees and the Administrative
Agent Fees.
"Final Eurodollar Interest Period" shall mean the Interest
Period for the last Eurocurrency Borrowing made or continued under this
Agreement.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer or controller of
such corporation.
"Foreign Lender" means any Lender that is organized under
the laws of a jurisdiction other than that in which the Borrower is located,
the United States of America, any State thereof and the District of Columbia.
"GAAP" shall mean generally accepted accounting principles
in the United States of America applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state,
local or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness or (c) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the term
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6
Guarantee shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
"Indebtedness" of any person shall mean, without
duplication, (a) all obligations of such person for borrowed money or with
respect to deposits or advances of any kind (other than deposits or advance
payments on contracts entered into in the ordinary course of business) , (b)
all obligations of such person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such person under conditional sale
or other title retention arrangements relating to property or assets purchased
by such person (but in no event including operating leases), (d) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and deferred
compensation to officers and employees in the ordinary course of business),
(e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (f) all Guarantees by such
person of Indebtedness of others, (g) all Capital Lease Obligations of such
person, (h) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest
or exchange rate hedging arrangements (the amount of any such obligation to be
the amount that would be payable upon the acceleration, termination or
liquidation thereof) and (i) all obligations of such person as an account
party in respect of letters of credit and bank guarantees. The Indebtedness of
any person (i) shall include the Indebtedness of any partnership in which such
person is a general partner, (ii) shall not include the Indebtedness of such
person to any of its subsidiaries or of any such subsidiary to such person or
any other such subsidiary and (iii) shall include any amounts representing the
purchase price of accounts receivable under one or more Receivables
Facilities. For the purposes of Section 6.01, the term "Indebtedness" shall
exclude (w) obligations in respect of agreements and arrangements referred to
in clause (h) above to the extent (and only to the extent) such agreements and
arrangements are entered into to protect the Borrower and its subsidiaries
against interest or exchange rate risks to which they are exposed in the
conduct of their businesses and not for speculative purposes, (x) obligations
referred to in clause (i) above, (y) Non-Recourse Indebtedness of Single
Project Entities and (z) obligations in the nature of performance bonds or
performance guarantees of contracts entered into in the ordinary course of
business.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intangible Assets" shall mean (i) goodwill, organizational
expenses, research and development expenses, trademarks, trade names,
copyrights, patents, patent applications, licenses and rights in any thereof,
and other similar intangibles, (ii) prepaid expenses, deferred charges or
unamortized debt discount and expense, (iii) reserves carried and not deducted
from assets, (iv) treasury stock, (v) any write-up in the book value of any
asset resulting from a revaluation thereof subsequent to December 31, 1998,
and (vi) any items not included in clauses (i) through (v) above which are
required to be treated as intangibles under GAAP.
"Interest Payment Date" shall mean, with respect to any
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurocurrency Borrowing with an
Interest Period of more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest Periods of three months'
duration been applicable to such Borrowing, and, in addition, the date of any
refinancing of such Borrowing with a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the Interest Period most recently in effect therefor and ending (i) one
week thereafter or (ii) on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the calendar month that
is 1, 2, or 3 months thereafter, in each case as the Borrower may elect, and
(b) as to any ABR Borrowing, the period commencing on the date of such
Borrowing or on the last day of the
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7
Interest Period most recently in effect therefor and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31, (ii)
the Maturity Date and (iii) the date such Borrowing is prepaid in accordance
with Section 2.10; provided, however, that (x) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless, in the case of a Eurocurrency
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (y) the Final Eurodollar Interest Period may, at
the Borrower's option, commence on the date of such Borrowing (which shall be
a date at least seven days and not more than three months prior to the
Maturity Date) and shall end on the Maturity Date. Interest shall accrue from
and including the first day of an Interest Period to but excluding the last
day of such Interest Period.
"Investment" shall have the meaning assigned to such term in
Section 6.04.
"Joint Venture" shall mean, as to any person, any other
person of which 20% or more of the Capital Stock is held directly or
indirectly by such first person but which is not a subsidiary of such first
person.
"JRMHI" shall mean J. Ray McDermott Holdings, Inc., a Delaware
corporation.
"JRMI" shall mean J. Ray McDermott, Inc., a Delaware
corporation.
"JRMSA" shall mean J. Ray McDermott, S.A., a Panamanian
corporation.
"JRMSA Credit Agreement" shall mean the Letter of Credit and
Revolving Credit Agreement dated as of June 29, 1998, among JRMSA, certain
other Subsidiaries, Citibank, N.A., as administrative agent, ABN AMRO Bank,
N.V., as syndicate issuing bank and the Bank of Nova Scotia, as documentation
agent, and the other Lenders named therein, as amended to the date hereof and
as hereafter amended from time to time, and any bank credit agreement which,
in the opinion of Citibank, N.A., replaces such Agreement.
"JRMSA Payment" shall mean the payment of cash dividends
and/or the making of loans by JRMSA or subsidiaries of JRMSA or Creole or
MIICO to the Borrower promptly following the Merger, in an amount that,
together with any cash of the Borrower available for such purpose, will be
sufficient to repay all amounts outstanding under this Agreement.
"LIBO Rate" shall mean, with respect to any Eurocurrency
Borrowing, the rate (rounded upwards, if necessary, to the next 1/16 of 1%) at
which Dollar deposits approximately equal in principal amount to the
Administrative Agent's portion of such Eurocurrency Borrowing, and for a
maturity comparable to such Interest Period are offered to the principal
London office of the Administrative Agent or, if the Administrative Agent does
not at the time maintain a London office, the principal London office of any
Affiliate of the Administrative Agent, in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security
interest in or on such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement or
any financing lease having substantially the same economic effect as any of
the foregoing relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities; provided, however, that there shall be excluded from the foregoing
any lien arising under Section 412 of the Code, Section 302(f) of ERISA or
Title IV of ERISA.
"Loan Documents" shall mean this Agreement, the Pledge
Agreement, the Notes and the Fee Letter.
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8
"Loan Parties" shall mean the Borrower and any Subsidiary
party to the Pledge Agreement.
"Loans" shall mean the Term Loans made hereunder.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially
adverse effect on the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and the Subsidiaries taken as a whole,
(b) material impairment of the ability of the Borrower to perform any of its
obligations under any Loan Document to which it is or will be a party or to
complete the Merger or make the JRMSA Payment as required hereunder or (c)
material impairment of the rights of or benefits available to the Lenders
under any Loan Document. It is agreed that the establishment of a reserve for
asbestos-related liabilities by BWICO and its subsidiaries that does not
result in a violation of Section 6.08 will not in and of itself constitute a
Material Adverse Effect.
"Material Indebtedness" shall mean Indebtedness (other than
the Loans) of any one or more of the Borrower and its Subsidiaries in an
aggregate principal amount exceeding $10,000,000 (or its equivalent in any
foreign currency).
"Material Subsidiary" shall mean (a) JRMSA, JRMHI, JRMI,
BWICO and Acquisition Sub, (b) any other subsidiary that directly or
indirectly owns or Controls any Material Subsidiary and (c) any other
subsidiary (i) the consolidated net revenues of which for the most recent
fiscal year of the Borrower for which audited financial statements have been
delivered pursuant to Section 3.05 or 5.04 were greater than 5% of the
Borrower's consolidated net revenues for such fiscal year or (ii) the
consolidated tangible assets of which as of the end of such fiscal year were
greater than 5% of the Borrower's consolidated tangible assets as of such
date; provided that if at any time the aggregate amount of the consolidated
net revenues or consolidated tangible assets of all Subsidiaries that are not
Material Subsidiaries exceeds 10% of the Borrower's consolidated net revenues
for any such fiscal year or 10% of the Borrower's consolidated tangible assets
as of the end of any such fiscal year, the Borrower (or, in the event the
Borrower has failed to do so within 10 days, the Administrative Agent) shall
designate sufficient Subsidiaries as "Material Subsidiaries" to eliminate such
excess, and such designated Subsidiaries shall for all purposes of this
Agreement constitute Material Subsidiaries. For purposes of making the
determinations required by this definition, revenues and assets of Foreign
Subsidiaries shall be converted into Dollars at the rates used in preparing
the consolidated balance sheet of the Borrower included in the applicable
financial statements.
"Maturity Date" shall mean September 30, 1999.
"Merger" shall mean the merger of Acquisition Sub with and
into JRMSA in accordance with the terms of the Merger Agreement in connection
with which the Borrower will acquire any Shares not purchased in the Tender
Offer.
"Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of May 7, 1999 between JRMSA and the Borrower, as amended by
any amendment thereof made in compliance with Section 6.11 hereof.
"MIICO" means McDermott International Investments Co., Inc.,
a Panamanian corporation.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code)
<PAGE>
9
is making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Non-Recourse Indebtedness" shall mean Indebtedness incurred
in connection with the financing of an operating or construction project which
will be serviced solely through the revenues of the project being financed and
the obligees of which will have recourse solely against such revenues and the
assets comprising such project.
"Notes" shall have the meaning assigned thereto in Section
2.04.
"Offer Documents" shall mean the Offer to Purchase the
Shares by the Borrower dated May 13, 1999 and the related Letter of
Transmittal, each as amended by any amendments thereof made in compliance with
Section 6.11 hereof.
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, property or similar taxes, charges or levies
arising from any payment made under any Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"person" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership, limited
liability company or government, or any agency or political subdivision
thereof.
"Plan" shall mean any pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code that is maintained by the Borrower or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit D, between the Borrower, Acquisition Sub,
each other Subsidiary from time to time owning shares of common stock of JRMSA
or securities convertible into such shares and the Collateral Agent for the
benefit of the Secured Parties.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York, New York. Each change in
the Prime Rate shall be effective on the date such change is publicly
announced as being effective.
"Rating" shall mean the corporate credit rating assigned on
such date by S&P to the Borrower.
"Receivables Facility" shall mean any agreement or series of
agreements under which Borrower or its subsidiaries sell accounts receivable
to unrelated third parties (or to special purpose subsidiaries for resale to
unrelated third parties) for cash on a non-recourse basis (subject to
exposures and liabilities customarily retained by sellers in transactions of
that type) and on terms (including discounts) customary for transactions of
that type.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
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10
"Reportable Event" shall mean any reportable event as
defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
"Required Lenders" shall mean, at any time, Lenders having
an aggregate principal amount of Loans and unused Commitments representing at
least 66-2/3% of the total aggregate principal amount of Loans and unused
Commitments at such time.
"Requirement of Law" shall mean, as to any person, the
certificate of incorporation and by-laws, the partnership agreement or other
organizational or governing documents of such person, and any law, treaty,
rule or regulation, or determination, judgment, writ, injunction, decree or
order 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" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other
officer or similar official thereof responsible for the administration of the
obligations of such corporation in this Agreement.
"Restricted Payment" shall have the meaning assigned to such
term in Section 6.07.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc.
"Secured Parties" shall mean (a) the Lenders, (b) the
Collateral Agent, (c) the beneficiaries of each indemnification obligation
undertaken by each Pledgor (as defined in the Pledge Agreement) under any Loan
Document and (d) the successors and assigns of each of the foregoing.
"Shares" shall mean all shares of common stock of JRMSA that
are not on the date hereof owned directly or indirectly by the Borrower.
"Single Project Entity" shall mean a person, other than an
individual, that (a) is organized solely for the purpose of holding, directly
or indirectly, an ownership interest in one entity or property or in a group
of related properties (real or personal, tangible or intangible) used for a
single project, that is acquired, purchased or constructed or, in the case of
previously undeveloped, non-income generating property of the Borrower or any
of its subsidiaries, developed by the Borrower or any of its subsidiaries, (b)
does not engage in any business unrelated to such entity or property or the
financing thereof and (c) does not have any material assets or Indebtedness
other than those related to its interest in such entity or property or the
financing thereof.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board and any other banking
authority, domestic or foreign, to which the Administrative Agent or any
Lender (including any branch, Affiliate, or other fronting office making or
holding a Loan) is subject, with respect to the Adjusted LIBO Rate, for
Eurocurrency Liabilities (as defined in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans shall be deemed to constitute Eurocurrency Liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to
any Lender under such Regulation D. Statutory Reserves
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11
shall be adjusted automatically on and as of the effective date of any change
in any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association or
other business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or more than 50% of the general partnership interests are, at the
time any determination is being made, owned, controlled or held, or (b) that
is, at the time any determination is made, required by GAAP to be consolidated
by the parent or one or more subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Tender Offer" shall mean the offer to purchase all the
Shares by Acquisition Sub pursuant to the Offer Documents and in accordance
with the Merger Agreement.
"Term Loans" shall mean the term loans made by the Lenders
to the Borrower pursuant to Section 2.01. Each Term Loan shall be a
Eurocurrency Loan or an ABR Loan.
"Total Commitment" shall mean at any time the aggregate
amount of the Lenders' Commitments at such time.
"Transactions" shall have the meaning assigned to such term
in Section 3.02.
"Transferee" shall have the meaning assigned to such term in
Section 2.17(f).
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term "Rate"
shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title
IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section
1.01 shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any reference in
this Agreement to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time and (b) all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided, however, that, if GAAP
shall change after the date of this Agreement in a manner affecting any of the
covenants set forth in Article VI, then, at the request of the Borrower or the
Required Lenders, the parties hereto shall negotiate in good faith in an
effort to agree upon appropriate adjustments to such covenants and, following
the execution of an amendment hereto giving effect to any such agreement, such
accounting or financial terms shall for purposes of determining compliance
with such covenants be construed in accordance with GAAP as so changed (it
being understood that such terms shall be construed in accordance with GAAP as
in
<PAGE>
12
effect prior to such change at all times following any such request and before
the execution of any such amendment).
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, to make Term Loans to
the Borrower at any time during the Availability Period in an aggregate
principal amount not exceeding such Lender's Commitment. Amounts repaid in
respect of Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commit ments; provided, however, that the failure of any
Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). The Loans comprising any Borrowing
shall be in an aggregate principal amount that is (i) in the case of a
Eurocurrency Borrowing, an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) in the case of an ABR Borrowing (x) an integral multiple
of $1,000,000 and not less than $5,000,000 or (y) equal to the remaining
available balance of the applicable Commitments.
(b) Subject to Section 2.12, each Borrowing shall be
comprised entirely of ABR Loans or Eurocurrency Loans, as the Borrower may
request pursuant to Section 2.02. Each Lender may at its option make any
Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that the Borrower shall not
be entitled to request any Borrowing which, if made, would result in more than
ten Eurocurrency Borrowings outstanding hereunder at any time. For purposes of
the foregoing, Borrowings having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate
Borrowings.
(c) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds in Dollars to such account as the Administrative Agent may
designate not later than 12:00 noon, New York time, and the Administrative
Agent shall by 4:00 p.m., New York time, credit the amounts so received to an
account with the Administrative Agent or an Affiliate of the Administrative
Agent designated by the Borrower in the Borrowing Request, which account must
be in the name of the Borrower and in New York or, if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon in such currency, for each
day from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent at (i) in the case of the
Borrower, the interest rate applicable at the time to
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13
the Loans comprising such Borrowing and (ii) in the case of such Lender, a
rate determined by the Administrative Agent to represent its cost of overnight
or short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part
of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Borrowing Procedure. In order to request a
Borrowing, the Borrower shall hand deliver or telecopy to the Administrative
Agent a duly completed Borrowing Request (i) in the case of a Eurocurrency
Borrowing, not later than 4:00 p.m., New York time, three Business Days before
a proposed Borrowing, and (ii) in the case of an ABR Borrowing, not later than
12:00 noon, New York time, one Business Day before a proposed Borrowing;
provided, however, that Borrowing Requests with respect to Borrowings to be
made on the Effective Date may, at the discretion of the Administrative Agent,
be delivered later than the times specified above. Each Borrowing Request
shall be irrevocable, shall be signed by or on behalf of the Borrower and
shall specify the following information: (A) whether the Borrowing then being
requested is to be a Eurocurrency Borrowing or an ABR Borrowing; (B) the date
of such Borrowing (which shall be a Business Day); (C) the number and location
of the account to which funds are to be disbursed (which shall be an account
that complies with the requirements of Section 2.02(c) and shall be an office
of the Administrative Agent in New York); (D) the amount of such Borrowing;
and (E) if such Borrowing is to be a Eurocurrency Borrowing, the Interest
Period with respect thereto; provided, however, that, notwithstanding any
contrary specification in any Borrowing Request, each requested Borrowing
shall comply with the requirements set forth in Section 2.02. If no election
as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurocurrency Borrowing is specified in any such notice, then
the Borrower shall be deemed to have selected an Interest Period of one
month's duration. The Administrative Agent shall promptly (and in any event on
the same day that the Administrative Agent receives such notice, if received
by 1:00 p.m., New York time, on such day) advise the applicable Lenders of any
notice given pursuant to this Section 2.03 (and the contents thereof) and of
each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans.
(a) The outstanding principal balance of each Loan shall be payable on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid such Lender
from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence
and amounts of the obligations therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligations of the
Borrower to repay the Loans in accordance with their terms.
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14
(e) The Loans made by each Lender shall be evidenced by one
or more promissory Notes ("Notes") payable to such Lender and its registered
assigns and the interests represented by such Notes shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more Notes payable to the payee named
therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on June 30 and each date on which
the Commitment of such Lender shall be terminated or reduced as provided
herein, a commitment fee (a "Commitment Fee") accruing at a rate equal to the
Applicable Percentage per annum in effect from time to time, in each case on
the average daily unused amount of the Commitment of such Lender during the
preceding quarter (or shorter period commencing with the date hereof or ending
with the Maturity Date or the date on which the Commitment of such Lender
shall expire or be terminated). All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The
Commitment Fee due to each Lender shall commence to accrue on the date of this
Agreement and shall cease to accrue on the date on which the Commitment of
such Lender shall expire or be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, the administrative fees set forth in the Fee Letter at
the times and in the amounts specified therein (the "Administrative Agent
Fees").
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the
provisions of Section 2.07, the Loans comprising each ABR Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurocurrency Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable on the Interest
Payment Dates appli cable to such Loan except as otherwise provided in this
Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each
Interest Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall
default in the payment of the principal of or interest on any Loan or any
other amount becoming due hereunder, by acceleration or otherwise, or under
any other Loan Document, such Borrower shall on demand from time to time pay
interest, to the extent permitted by law, on such defaulted amount to but
excluding the date of actual payment (after as well as before judgment) (a) in
the case of overdue principal, at the rate otherwise applicable to such Loan
pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a
rate per annum (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when determined by
reference to the Prime Rate and over a year of 360 days at all other times)
equal to the Alternate Base Rate plus 2.00% per annum.
<PAGE>
15
SECTION 2.08. Alternate Rate of Interest. In the event, and
on each occasion, that on the day two Business Days prior to the commencement
of any Interest Period for a Eurocurrency Borrowing the Administrative Agent
shall have determined that Dollar deposits in the principal amounts of the
Loans comprising such Borrowing are not generally available in the London
interbank market or that the rates at which such deposits are being offered
will not adequately and fairly reflect the cost to a majority in interest of
the Lenders of making or maintaining their Eurocurrency Loans during such
Interest Period, or that reasonable means do not exist for ascertaining the
Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable
thereafter, give written or telecopy notice of such determination to the
Borrower and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any request by the
Borrower for a Eurocurrency Borrowing pursuant to Section 2.03 shall be deemed
to be a request for an ABR Borrowing. Each determination by the Administrative
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments.
(a) The Commitments shall automatically terminate on the earlier of (i) the
date five Business Days after the Merger is consummated and (ii) the Maturity
Date.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the Borrower may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments; provided, however, that each partial
reduction of the Commitments shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $10,000,000.
(c) Each reduction in the Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective
Commitments. The Borrower shall pay to the Administrative Agent for the
account of the Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to the date of such termination or reduction.
SECTION 2.10. Prepayment. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or
in part, upon at least one Business Day's prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent before 11:00 a.m., New York time; provided, however, that
each partial prepayment shall be in an amount that is an integral multiple of
$1,000,000 and not less than $10,000,000. Each notice of prepayment shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein.
(b) In the event the Merger is consummated, the Borrower
shall promptly and in any event within five Business Days prepay all amounts
outstanding hereunder.
(c) All prepayments under this Section 2.10 shall be subject
to Section 2.13 but otherwise without premium or penalty. All prepayments
under this Section 2.10 shall be accompanied by accrued interest on the
principal amount being prepaid to the date of payment.
SECTION 2.11. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if after the date
of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurocurrency Loan made by such Lender or
any Fees or other amounts payable hereunder (other than changes in respect of
taxes imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or
<PAGE>
16
applicable lending office or by any political subdivision or taxing authority
therein and other than changes addressed by Section 2.17), or shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by
such Lender (except any such reserve requirement which is reflected in the
Adjusted LIBO Rate) or shall impose on such Lender or the London interbank
market (or other relevant interbank market) any other condition affecting this
Agreement or Eurocurrency Loans made by such Lender, and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurocurrency Loan or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be material, then the
Borrower will pay to such Lender upon demand such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction
suffered.
(b) If any Lender shall have determined that the adoption
after the date hereof of any law, rule, regulation, agreement or guideline
regarding capital adequacy, or any change after the date hereof in any such
law, rule, regulation, agreement or guideline or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or admini stration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any
request or directive issued after the date hereof regarding capital adequacy
(whether or not having the force of law) of any Governmental Authority has or
would have the effect of reducing the rate of return on such Lender's capital
or on the capital of such Lender's holding company, if any, as a consequence
of this Agreement or the Loans made by such Lender pursuant hereto to a level
below that which such Lender or such Lender's holding company could have
achieved but for such applicability, adoption, change or compliance (taking
into consideration such Lender's policies and the policies of such Lender's
holding company with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered. No Lender shall
demand compensation for such reductions if it shall not at the time be the
general practice of such Lender to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if any.
(c) A certificate of a Lender setting forth in reasonable
detail the amount or amounts (and the method of determination of such amount
or amounts) necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay each Lender
the amount shown as due on any such certificate delivered by it within 10 days
after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any period shall not constitute
a waiver of such Lender's right to demand such compensation with respect to
such period; provided, however, that no Lender shall be entitled to
compensation for any such increased costs or reduction in amounts received or
receivable with respect to any date unless it shall have notified the Borrower
that it will demand compensation therefor not more than 90 days after the
later of such date and the date on which the circumstances giving rise to such
increased costs or reduction in amounts so received or receivable shall take
effect. The Borrower shall not be entitled to raise as a defense to payment
pursuant to this Section 2.11 any assertion that any Lender could have
contested the validity or applicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed.
SECTION 2.12. Change in Legality. (a) Notwithstanding any
other provision of this Agreement, if after the date of this Agreement any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any
<PAGE>
17
Eurocurrency Loan or to give effect to its obligations as contemplated hereby
with respect to any Eurocurrency Loan, then, by written notice to the Borrower
and to the Administrative Agent:
(i) such Lender may declare that Eurocurrency Loans, will
not thereafter (for the duration of such unlawfulness) be made by
such Lender hereunder (or be continued for additional interest
periods and ABR Loans will not thereafter (for such duration) be
converted into Eurocurrency Loans), whereupon any request for a
Eurocurrency Borrowing or to convert an ABR Borrowing into a
Eurocurrency Borrowing or to continue a Eurocurrency Borrowing for an
additional Interest Period, shall, as to such Lender only, be deemed
a request for an ABR Loan or a request to continue an ABR Loan as
such for an additional Interest Period or to convert a Eurocurrency
Loan into an ABR Loan, as the case may be, unless such declaration
shall be subsequently withdrawn (or, if Loans to the Borrower cannot
be made for the reasons specified above, such request shall be deemed
to have been withdrawn); and
(ii) such Lender may require that all outstanding
Eurocurrency Loans made by it be converted to ABR Loans in which
event all such Eurocurrency Loans shall be automatically converted to
ABR Loans as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepay ments of principal that would otherwise have been applied
to repay the Eurocurrency Loans that would have been made by such Lender or
the converted Eurocurrency Loans, of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurocurrency Loans.
(b) For purposes of this Section 2.12, a notice to the
Borrower by any Lender shall be effective as to each Eurocurrency Loan, if
lawful, on the last day of the Interest Period currently applicable to such
Eurocurrency Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrower.
SECTION 2.13. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense that such Lender may reasonably sustain or
incur as a consequence of (a) any event, other than a default by such Lender
in the performance of its obligations hereunder, which results in (i) such
Lender receiving or being deemed to receive any amount on account of the
principal of any Eurocurrency Loans prior to the end of the Interest Period in
effect therefor or (ii) any Eurocurrency Loan to be made by such Lender not
being made after notice of such Loan shall have been given by the Borrower
hereunder (any of the events referred to in this clause (a) being called a
"Breakage Event") or (b) any default in the making of any payment or prepay
ment required to be made hereunder. In the case of any Breakage Event, such
loss shall include an amount equal to the excess, as reasonably determined by
such Lender, of (i) its cost of obtaining funds for the Eurocurrency Loan that
is the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or which
would have been in effect) for such Loan over (ii) the amount of interest
likely to be realized by such Lender in redeploying the funds released or not
utilized by reason of such Breakage Event for such period. A certificate of
any Lender setting forth any amount or amounts which such Lender is entitled
to receive pursuant to this Section 2.13 shall be delivered to the Borrower
and shall be conclusive absent manifest error.
SECTION 2.14. Pro Rata Treatment. Except as required under
Section 2.12, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees, each refinancing of any Borrowing with a Borrowing of any
Type and each reduction of the Commitments shall be allocated pro rata among
the Lenders in accordance with their respective applicable Commitments or, if
such Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). Each Lender agrees
that in computing such Lender's
<PAGE>
18
portion of any Borrowing to be made hereunder, the Administrative Agent may,
in its discretion, round each Lender's percentage of such Borrowing, computed
in accordance with Section 2.01, to the next higher or lower whole Dollar
amount.
SECTION 2.15. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan as a result of which the unpaid principal portion of its Loans shall be
less relative to the unpaid principal portion of the Loans of any other Lender
than immediately before such payment, it shall be deemed simultaneously to
have purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the Loans of such
other Lender, so that the aggregate unpaid principal amount of the Loans and
participations in Loans held by each Lender shall be in the same proportion to
the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker's lien, setoff
or counterclaim or other event was to the principal amount of all Loans
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that, if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.15 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees, to the fullest
extent permitted by applicable law, that any Lender holding a participation in
a Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by the Borrower to such Lender by reason thereof as fully as if such Lender
had made a Loan directly to or on behalf of the Borrower in the amount of such
participation.
SECTION 2.16. Payments. (a) The Borrower shall make each
payment (including each payment of principal of or interest on any Borrowing
or any Fees or other amounts) hereunder and under any other Loan Document not
later than 12:00 (noon), New York time at the place of payment, on the date
when due in immediately available funds. Each such payment shall be made to
the Administrative Agent at its designated offices in the United States.
Each such payment shall be made in Dollars.
(b) Whenever any payment (including any payment of principal
of or interest on any Borrowing or any Fees or other amounts) hereunder or
under any other Loan Document shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.17. Taxes. (a) Any and all payments by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deduc tions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent or Lender receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
<PAGE>
19
(c) The Borrower shall indemnify the Administrative Agent
and each Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent or such Lender, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrower hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrower by a
Lender or by the Administrative Agent on its own behalf or on behalf of a
Lender shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of
a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of 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, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate; provided, that
such Foreign Lender has received written notice from the Borrower advising it
of the availability of such exemption or reduction and containing applicable
documentation to be completed by such Foreign Lender.
(f) If the Administrative Agent or a Lender (or a transferee
or assignee thereof, including a participation holder (any such entity a
"Transferee")) shall become aware that it is entitled to claim a refund from a
Governmental Authority in respect of Indemnified Taxes or Other Taxes as to
which it has been indemnified by the Borrower, or with respect to which the
Borrower has paid additional amounts, pursuant to this Section 2.17, it shall
promptly notify the Borrower of the availability of such refund claim and
shall, within 30 days after receipt of a request by the Borrower, make a claim
to such Governmental Authority for such refund at the Borrower's expense. If
the Administrative Agent or a Lender (or Transferee) receives a refund
(including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower, or with respect to which the Borrower has
paid additional amounts, pursuant to this Section 2.17, it shall within 30
days from the date of such receipt pay over such refund to the Borrower (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 2.17 with respect to the Indemnified Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender (or Transferee) and without interest
(other than interest paid by the relevant Governmental Authority with respect
to such refund); provided, however, that the Borrower, upon the request of the
Administrative Agent or such Lender (or Transferee), agrees to repay the
amount paid over to the Borrower (plus penalties, interest or other charges,
if any, imposed by the relevant Governmental Authority in respect of such
repayment) to the Administrative Agent or such Lender (or Transferee) in the
event the Administrative Agent or such Lender (or Transferee) is required to
repay such refund to such Governmental Authority. Nothing contained in this
Section 2.17 shall require any Lender (or any Transferee) or the
Administrative Agent to make available any of its tax returns (or any other
information that it deems to be confidential or proprietary).
(g) Any Lender (or Transferee) claiming any indemnity
payment or additional amounts payable pursuant to this Section 2.17 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested in writing by
<PAGE>
20
the Borrower or to change the jurisdiction of its applicable lending office if
the making of such a filing or change would avoid the need for or reduce the
amount of any such indemnity payment or additional amounts that may thereafter
accrue and would not, in the sole determination of such Lender (or
Transferee), be otherwise disadvantageous to such Lender (or Transferee).
(h) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section
2.17 shall survive the payment in full of the principal of and interest on all
Loans made hereunder.
SECTION 2.18. Assignment of Commitments Under Certain
Circumstances. In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.11 or 2.12, or the Borrower shall be
required to make additional payments to any Lender under Section 2.17, the
Borrower shall have the right (unless such Lender shall designate another
lending office for any Loans affected by the circumstances giving rise to the
operation and after the date of such redesignation, eliminate such
circumstances), at its own expense, upon notice to such Lender and the
Administrative Agent, to require such Lender to transfer and assign without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04) all its interests, rights and obligations under this Agreement
to another financial institution which shall assume such obligations; provided
that (i) no such assignment shall conflict with any law, rule or regulation or
order of any Governmental Authority to which such Lender is subject and (ii)
the Borrower or the assignee, as the case may be, shall pay to the affected
Lender in immediately available funds on the date of such termination or
assignment the principal of and interest accrued to the date of payment on the
Loans made by it hereunder and all other amounts accrued for its account or
owed to it hereunder.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders
that:
SECTION 3.01. Organization; Powers. The Borrower and each
Material Subsidiary (a) is duly incorporated or organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to own its property and assets and
to carry on its business as now conducted and as proposed to be conducted, (c)
is qualified to do business in every jurisdiction where such qualification is
required and (d) in the case of each Loan Party, has the corporate power and
authority to execute, deliver and perform its obligations under each of the
Loan Documents and each other agreement or instrument contemplated thereby to
which it is or will be a party and, in the case of the Borrower, to borrow
hereunder, except, in the case of clause (c) above and in the case of clauses
(a) and (b) above insofar as they relate to Material Subsidiaries that are not
Loan Parties, for failures that would not individually or in the aggregate
result in a Material Adverse Effect.
SECTION 3.02. Authorization. The execution, delivery and
performance by the Borrower of each of the Loan Documents, the borrowings
hereunder, the creation of the security interest granted by the Pledge
Agreement, the Acquisition Transactions and the JRMSA Payment (collectively,
the "Transactions") (a) have been duly authorized by all requisite corporate
and, if required, stockholder action (or, in the case of the JRMSA Payment and
the Merger, will have been so authorized prior to the time at which they are
to be made or completed) and (b) will not (i) violate (A) any provision of
law, statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of the Borrower or
any Material Subsidiary, (B) any order of any Governmental Authority or (C)
any provision of any indenture, agreement or other instrument to which the
Borrower or any Material Subsidiary is a party or by which any of them or any
of their property is or may be bound, except for violations relating to
Material Subsidiaries, and not to the Borrower, that would not individually or
in the aggregate result in a Material Adverse Effect, (ii) be in conflict
with, result in a breach of or constitute
<PAGE>
21
(alone or with notice or lapse of time or both) a default or prepayment event
under any such indenture, agreement or other instrument, except for conflicts,
defaults or prepayment events relating to Material Subsidiaries, and not to
the Borrower, that would not individually or in the aggregate result in a
Material Adverse Effect or (iii) result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Material Subsidiary.
SECTION 3.03. Enforceability. Each of this Agreement and the
other Loan Documents has been duly executed and delivered by each Loan Party
thereto and constitutes a legal, valid and binding obligation of such Loan
Party enforceable against 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.
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority (collectively, "Governmental Actions") is or will be
required in connection with the Transactions, except (a) Governmental Actions
that have been made or obtained and are in full force and effect, (b)
Governmental Actions the failure to make or obtain which will not result in a
Material Adverse Effect (c) reports required to be filed with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
and (d) Governmental Actions not yet required to have been made or obtained
which the Borrower has no reason to believe will not be made or obtained on or
prior to the date such Governmental Actions will be required in connection
with the Transactions.
SECTION 3.05. Financial Statements. The Borrower has
heretofore furnished to the Lenders (a) consolidated balance sheet of the
Borrower and its consolidated subsidiaries as of March 31, 1998, and
consolidated statements of income and cash flows of the Borrower for the years
ended March 31, 1998, 1997 and 1996, audited by and accompanied by the opinion
of Ernst & Young LLP, independent public accountants; (b) unaudited
consolidated balance sheet of the Borrower and its consolidated subsidiaries
as of December 31, 1998, and consolidated statements of income and cash flows
for the Borrower for the fiscal quarter and nine-month period then ended; and
(c) unaudited consolidating balance sheets and unaudited consolidating
statements of income of JRMSA as of and for the nine months ended December 31,
1998, showing the financial condition of JRMSA, JRMHI and JRMI as of the close
of such year and the results of operations of JRMHI, JRMSA and JRMI during
such year. The financial statements referred to in clauses (a), (b) and (c)
above present fairly the financial condition and results of operations of the
corporations or businesses to which they relate as of the dates and for the
periods indicated in accordance with GAAP consistently applied (subject to
year-end adjustments in the case of the interim financial statements).
SECTION 3.06. No Material Adverse Change. There has been no
material adverse change in the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and the Subsidiaries, taken
as a whole, since March 31, 1999 (it being agreed that the establishment of a
reserve for asbestos-related liabilities by BWICO and its subsidiaries that
does not result in a violation of Section 6.08 will not in and of itself
constitute such a material adverse change).
SECTION 3.07. Title to Properties; Possession Under Leases.
The Borrower and each Material Subsidiary has good and valid title to, or
valid leasehold interests in, all its material properties and assets, except
for minor defects in title that do not interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets
for their intended purposes and except for defects in title which are not,
individually or in the aggregate, material to the Borrower and the
Subsidiaries taken as a whole. All such material properties and assets are
free and clear of Liens, other than Liens expressly permitted by Section 6.02.
<PAGE>
22
SECTION 3.08. Subsidiaries. JRMSA is a Subsidiary at least
62% owned by the Borrower. JRMHI is a wholly owned subsidiary of JRMSA. JRMI
is a wholly owned subsidiary of JRMHI. BWICO is a wholly owned subsidiary of
the Borrower. Schedule 3.08 sets forth as of the date hereof a list of all
Subsidiaries that would be required to be listed in Exhibit 21 to an Annual
Report on Form 10-K filed by the Borrower with the Securities and Exchange
Commission and the percentage ownership interest of the Borrower therein.
SECTION 3.09. Litigation; Compliance with Laws. (a) There
are not any actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary or any
business, property or rights of any such person (i) which involve any Loan
Document or the Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and which, if adversely determined,
could, individually or in the aggregate, result in a Material Adverse Effect,
except as disclosed in (A) Item 3, "Legal Proceedings", of the Annual Report
on Form 10-K of the Borrower dated March 31, 1998, (B) Item 3, "Legal
Proceedings", of the Quarterly Report on Form 10-Q of the Borrower dated
December 31, 1998, and (C) Item 10(e), "Additional Information", of the
Schedule 14D-1 of the Borrower dated May 13, 1999 (and the Borrower represents
and warrants that there has been no material adverse change in the matters so
disclosed).
(b) Neither the Borrower nor any of the Subsidiaries is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.10. Federal Reserve Regulations. (a) Neither the
Borrower nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of, or which is
inconsistent with, the provisions of the Regulations of the Board, including
Regulation U or X.
SECTION 3.11. Investment Company Act; Public Utility Holding
Company Act. Neither the Borrower nor any other Loan Party is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.12. Use of Proceeds. The Borrower will use the
proceeds of the Loans only for the purposes specified in the preamble to this
Agreement.
SECTION 3.13. Tax Returns. The Borrower and each of the
Material Subsidiaries has filed or caused to be filed all Federal, state and
material local tax returns required to have been filed by it in the United
States or Panama, and all material tax returns required to have been filed by
it in other jurisdictions, and has paid or caused to be paid all taxes shown
to be due and payable on such returns or on any assessments received by it,
except taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower shall have set aside on its books adequate reserves
to the extent required by GAAP.
SECTION 3.14. No Material Misstatements. No information,
report, financial statement, exhibit or schedule ("Evaluation Material")
furnished by or on behalf of any officer of the Borrower to the Administrative
Agent, any of its Affiliates or any Lender in connection with the negotiation
of any Loan Document or included therein or delivered pursuant thereto
contained or will contain as of the time it was or is furnished, any material
misstatement of fact or omitted
<PAGE>
23
or will omit as of such time to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were or are
made, not misleading (taken together as a whole with all other information
furnished by the Borrower); provided that, with respect to Evaluation Material
consisting of statements, estimates and projections regarding the future
performance of the Borrower and the Subsidiaries ("Projections"), no
representation or warranty is made other than that such Projections have been
prepared in good faith utilizing due and careful consideration and the best
information available to the Borrower at the time of preparation thereof.
SECTION 3.15. Employee Benefit Plans. The Borrower and each
of its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to each Plan. Since January 1, 1996,
no Reportable Event has occurred as to which the Borrower or any ERISA
Affiliate was required to file a report with the PBGC. As of March 31, 1998,
the present value of all benefit liabilities under such Plans (and neither the
Borrower nor any ERISA Affiliate has any actual ro potential liability with
respect to a Reportable Event that occurred before January 1, 1996, based on
the assumptions used to fund such Plans) where benefit liabilities exceed
assets did not, in the aggregate, exceed by more than $16,989,000 the value of
the assets of such Plans. No Borrower nor any ERISA Affiliate has incurred any
Withdrawal Liability that could result in a Material Adverse Effect. No
Borrower nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization or has been terminated within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated where such reorganization or
termination has resulted or could reasonably be expected to result, through
increases in the contributions required to be made to such Plan or otherwise,
in a Material Adverse Effect.
SECTION 3.16. Environmental and Safety Matters. The Borrower
and each Material Subsidiary has complied in all material respects with all
Federal, state, local and other statutes, ordinances, orders, judgments,
rulings and regulations relating to environmental pollution or to
environmental or nuclear regulation or control or to employee health or safety
(collectively, "Environmental Laws") except to the extent such non-compliance
has not resulted and could not reasonably be expected to result in a Material
Adverse Effect. The Borrower's and the Material Subsidiaries' plants do not
manage, treat, store or dispose of and have not managed, treated, stored or
disposed of any hazardous wastes, hazardous substances, hazardous materials,
toxic substances, toxic pollutants or substances similarly denominated (as
those terms or similar terms are used in any Environmental Law) or any nuclear
fuel or other radioactive materials, in violation of any Environmental Law
where such violation could reasonably be expected to result in a Material
Adverse Effect on the part of the Borrower and its Subsidiaries, taken as a
whole. Except as set forth in Schedule 3.16, no Borrower is aware of any
event, condition or circumstance involving environmental pollution or
contamination (including contamination related to any nuclear fuel or other
radioactive material) or employee health or safety that could reasonably be
expected to result in a Material Adverse Effect on the part of the Borrower or
any Subsidiary.
SECTION 3.17. Absence of Limitations on JRMSA Payment and
Advances by Subsidiaries. No Requirement of Law or Contractual Obligation
applicable to JRMSA or any of its subsidiaries or to Creole or MIICO could
reasonably be expected to (a) limit the ability of JRMSA, Creole or MIICO to
make the JRMSA Payment or (b) limit the ability of JRMHI or JRMI to pay
dividends or to make distributions or advances to JRMSA or any subsidiary of
JRMSA as necessary to permit JRMSA to make the JRMSA Payment.
SECTION 3.18. Pledge Agreement. The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in
the Collateral and, when the stock certificates and other instruments
evidencing such Collateral are delivered (with appropriate notations being
made in the share registry of JRMSA and Acquisition Sub) to the Collateral
Agent, the Pledge Agreement
<PAGE>
24
shall constitute a fully perfected first priority Lien on, and security
interest in, all right, title and interest of the pledgors thereunder in such
Collateral, in each case prior and superior in right to any other Person.
SECTION 3.19. Merger Agreement. The Borrower (i) is in
compliance in all material respects with the terms and conditions of the
Merger Agreement and (ii) has not terminated, or taken any action which could
result in the termination of, the Merger Agreement.
ARTICLE IV. CONDITIONS TO ALL BORROWINGS
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each Borrowing:
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03.
(b) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and
as of the date of such Borrowing with the same effect as though made
on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Borrowing no
Event of Default or Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Borrowing. On the date of the initial
Borrowing:
(a) The Administrative Agent shall have received, and each
Lender shall have received copies of, the favorable written opinions
of (i) John S. Tsai, Esq., Assistant Corporate Secretary of the
Borrower, to the effect set forth in Exhibit E-1 hereto, (ii) Davis,
Polk & Wardwell, counsel for the Borrower, to the effect set forth in
Exhibit E-2 hereto, and (iii) Durling & Durling, Panamanian counsel
for the Borrower, to the effect set forth in Exhibit E-3 hereto, in
each case dated the date hereof and addressed to the Lenders.
(b) All legal matters incident to this Agreement and the
borrowings hereunder shall be reasonably satisfactory to the Lenders
and to Cravath, Swaine & Moore, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received, and each
Lender shall have received copies of, (i) a copy of the certificate
or articles of incorporation, including all amendments thereto, of
the Borrower, certified as of a recent date in a manner customary
under Panamanian Law, and a certificate as to the good standing of
the Borrower as of a recent date; (ii) a certificate of the Secretary
or Assistant Secretary of the Borrower dated the date hereof and
certifying (A) that attached thereto is a true and complete copy of
the by-laws of the Borrower as in effect on the date hereof and at
all times since a date prior to the date of the resolutions described
in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors of the
Borrower authorizing the execution, delivery and performance of the
Loan Documents and the borrowings hereunder, and that such
resolutions have not been modified,
<PAGE>
25
rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of the Borrower have not
been amended since the date of the last amendment thereto shown on
the certificate of good standing furnished pursuant to clause (i)
above, and (D) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document delivered
in connection herewith on behalf of the Borrower; (iii) a certificate
of another officer of the Borrower as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders or Cravath, Swaine & Moore, counsel for the
Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received, and each
Lender shall have received a copy of, a certificate, dated the date
hereof and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b)
and (c) of Section 4.01.
(e) The Administrative Agent and the Lenders shall have
received all Fees and other amounts due and payable on or prior to
the date hereof, including all fees described in a letter dated as of
May 7, 1999 among Citibank, N.A., Salomon Smith Barney Inc.
and the Borrower (the "Fee Letter").
(f) Except as otherwise agreed by the Administrative Agent,
the terms of the Tender Offer (including, without limitation, the per
Share price to be offered therein and the conditions to the
Borrower's obligations to purchase Shares) shall be those set forth
in the Offer Documents and the Merger Agreement, each in the form
heretofore delivered to the Administrative Agent.
(g) The Administrative Agent shall be satisfied that no
legal, contractual or other impediment will exist that could
reasonably be expected to prevent the completion of the Merger
promptly following the purchase of Shares pursuant to the Tender
Offer.
(h) The Administrative Agent shall be satisfied that JRMSA,
JRMHI, JRMI, Creole and MIICO hold, free of any Liens, cash, cash
equivalents and investments in debt securities available for the
making of the JRMSA Payment in an amount at least equal to
$575,000,000 and that no legal, contractual or other impediment will
exist that could reasonably be expected to prevent the making by
JRMSA, JRMHI, JRMI, Creole and MIICO of the JRMSA Payment promptly
following the Merger.
(i) The conditions to the purchase of Shares pursuant to the
Tender Offer shall have been satisfied without any amendment or
waiver (except for amendments and waivers that do not affect the
price paid for the Shares and otherwise comply with Section 6.11),
and at least a majority of the Shares shall have been or shall on the
Effective Date simultaneously with the first Borrowing hereunder be
accepted for purchase pursuant to the Tender Offer on the terms set
forth therein and in accordance with applicable law.
(j) The Collateral Agent shall have received (i)
counterparts of the Pledge Agreement signed on behalf of each Loan
Party, (ii) certificates (with appropriate notations being made in
the share registry) representing all the outstanding shares of
capital stock of Acquisition Sub and JRMSA, and all other securities
convertible into or exchangeable for shares of capital stock of
Acquisition Sub or JRMSA, owned by or on behalf of any Loan Party and
(iii) stock powers and instruments of transfer, endorsed in blank,
with respect to such certificates; provided that the requirements of
the preceding clauses (ii) and (iii) shall be deemed satisfied
insofar as they relate to Shares purchased in the Tender Offer if
arrangements satisfactory to the Collateral Agent shall be in effect
<PAGE>
26
for the perfection of the Collateral Agent's security interest in
such Shares promptly following the acceptance of such Shares pursuant
to the Tender Offer.
(k) The Borrower shall have delivered to the Administrative
Agent for each Lender a statement on Federal Reserve Form U-1 in
compliance with Regulation U of the Board of Governors of the Federal
Reserve System and each Lender shall be satisfied, on the basis of
the information contained in such statement, that the Loans will
comply with Regulation U.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so
long as this Agreement shall remain in effect or the principal of or interest
on any Loan, any Fees or any other expenses or amounts payable under any Loan
Document shall be unpaid, unless the Required Lenders shall otherwise consent
in writing, it will, and will cause each of the Subsidiaries (except
Subsidiaries not material individually or in the aggregate to the consolidated
financial position or results of operations of the Borrower and the
Subsidiaries taken as a whole, to the extent the failure of such Subsidiaries
to comply with the covenants set forth in this Article V could not result in a
Material Adverse Effect) to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except as otherwise expressly permitted
under Section 6.04.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights, trademarks
and trade names material to the conduct of its business; comply in all
material respects with all material applicable laws, rules, regulations and
orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 5.02. Insurance. Maintain such property, liability
and other insurance to such extent and against such risks as shall be
customary with companies in the same or similar businesses or as shall be
required by law, such insurance to be maintained with financially sound and
reputable insurers or, to the extent customary with companies in the same or
similar businesses, through self-insurance.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness
and other obliga tions promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise which, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower and such Subsidiaries shall have set aside on
their books adequate reserves with respect thereto.
<PAGE>
27
SECTION 5.04. Financial Statements, Reports, etc. In the
case of the Borrower, furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year, a
consolidated balance sheet and related consolidated statements of
income and retained earnings and of cash flows of the Borrower
showing the financial condition of the Borrower and its consolidated
subsidiaries as of the close of such fiscal year and the results of
the operations of the Borrower and its consolidated subsidiaries
during such year, audited by PricewaterhouseCoopers LLP or other
independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the
Borrower on a consolidated basis;
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year, a consolidated balance sheet and
related consolidated statements of income and retained earnings and
of cash flows of the Borrower, showing the financial condition of the
Borrower and the consolidated subsidiaries as of the close of such
fiscal quarter and the results of the operations of the Borrower and
the consolidated subsidiaries during such fiscal quarter and then
elapsed portion of the fiscal year, all certified by one of its
Financial Officers to the effect that such consolidated financial
statements present fairly in all material respects the financial
condition and results of operations of the Borrower on a consolidated
basis in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments;
(c) concurrently with any delivery of financial statements
under (b) above, a certificate of the Financial Officer (i)
certifying that no Event of Default or Default has occurred or, if an
Event of Default or Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) in the case of each delivery of
statements, setting forth computations in reasonable detail
satisfactory to the Administrative Agent (and accompanied by any
supporting information which shall have been reasonably requested by
the Administrative Agent or the Required Lenders) demonstrating
compliance with the covenants contained in Sections 6.08 and 6.09;
(d) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials filed by it or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any
of or all the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as the case
may be (other than registration statements relating to employee
benefit plans or to the registration of securities for selling
security holders or pre-effective amendments, that shall not be
declared effective, to registration statements); and
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower and the Subsidiaries, or compli ance with the terms of
any Loan Document (including a certificate with respect thereto), as
the Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent prompt written notice upon becoming aware of the
following:
(a) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
<PAGE>
28
(b) any action, suit or proceeding, whether at law or in
equity or by or before any Governmental Authority, filed, commenced
or threatened against the Borrower or any Subsidiary as to which
there is a reasonable possibility of an adverse determination and
which, if adversely determined, could result in a Material Adverse
Effect; and
(c) any development that has resulted in, or could
reasonably be anticipated to result in, a Material Adverse Effect.
SECTION 5.06. ERISA. Furnish to the Administrative Agent and
each Lender (a) as soon as possible, and in any event within 30 days after any
Responsible Officer of the Borrower or any ERISA Affiliate either knows or has
reason to know that any Reportable Event has occurred that alone or together
with any other Reportable Event could reasonably be expected to result in
liability of the Borrower or any Subsidiary to the PBGC in an aggregate amount
exceeding $20,000,000, a statement of a Financial Officer setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such
Reportable Event given to the PBGC, (b) promptly after receipt thereof, a copy
of any notice the Borrower or any ERISA Affiliate may receive from the PBGC
relating to the intention of the PBGC to terminate any Plan or Plans (other
than a Plan maintained by an ERISA Affiliate which is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code)
or to appoint a trustee to administer any Plan or Plans, (c) within 10 days
after the due date for filing with the PBGC pursuant to Section 412(n) of the
Code or Section 302(f) of ERISA of a notice of failure to make a required
installment or other payment with respect to a Plan, a statement of a
Financial Officer setting forth details as to such failure and the action
proposed to be taken with respect thereto, together with a copy of such notice
given to the PBGC and (d) promptly and in any event within 30 days after
receipt thereof by the Borrower or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by the Borrower or any
ERISA Affiliate concerning (i) the imposition of Withdrawal Liability or (ii)
a determination that a Multiemployer Plan is, or is expected to be, terminated
or in reorganization, in each case within the meaning of Title IV of ERISA.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records to the extent necessary to prepare
its financial statements in accordance with GAAP and arrange with the
Administrative Agent for (a) any representatives designated by any Lender to
visit and inspect the financial records and the properties of the Borrower or
any Subsidiary at reasonable times and as often as reasonably requested and
(b) at the request of any Lender, any representatives designated by such
Lender to discuss the affairs, finances and condition of the Borrower or any
Subsidiary with the senior officers of the Borrower and independent
accountants therefor.
SECTION 5.08. Delivery of Shares. The Borrower shall
promptly deliver or cause to be delivered certificates evidencing any Shares
or securities convertible into or exchangeable for Shares owned or acquired by
the Borrower or any Subsidiary and related stock powers to the Collateral
Agent under arrangements satisfactory to the Collateral Agent.
SECTION 5.09. Merger. Use its best efforts to complete the
Merger in accordance with the terms of the Merger Agreement promptly following
the consummation of the Tender Offer.
SECTION 5.10. JRMSA Payment. Make the JRMSA Payment promptly
and in any event within five Business Days after the consummation of the
Merger.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect or the principal of or interest
on any Loan, any Fees or any
<PAGE>
29
other expenses or amounts payable under any Loan Document shall be unpaid,
unless the Required Lenders shall otherwise consent in writing, the Borrower
will not, and will not cause or permit any Subsidiary (except, in the case of
Sections 6.01 through 6.06 below, JRMSA and BWICO and their subsidiaries) to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit
to exist any Indebtedness, except:
(i) Indebtedness existing on the date hereof that is set
forth in Schedule 6.01;
(ii) Indebtedness the proceeds of which are used to
refinance any Indebtedness permitted under clause (i) above so long
as (A) the obligor or obligors in respect of such refinancing
Indebtedness are the same as those in respect of the Indebtedness
being refinanced, (B) the principal amount of such refinancing
Indebtedness does not exceed that of the Indebtedness being
refinanced and (C) in the case of any Indebtedness being refinanced
which is subordinated in whole or in part to the obligations of the
Borrower hereunder, such refinancing Indebtedness shall be
subordinated to such obligations to at least the same extent as the
Indebtedness being refinanced, shall mature or be required to be
prepaid, redeemed or repurchased no earlier than the date that is 90
days after the Maturity Date and shall be on terms no less favorable
to the Lenders than the Indebtedness being refinanced, and the
Borrower shall have notified the Administrative Agent of such
refinancing and furnished to the Administrative Agent a copy of each
agreement or instrument governing the refinancing Indebtedness;
(iii) Indebtedness under the Loan Documents;
(iv) Letters of Credit entered into in the ordinary course
of business in an aggregate stated amount not to exceed $75,000,000;
(v) repurchase agreements in an aggregate amount not to
exceed $150,000,000, provided that (i) all proceeds therefrom are
used only to pay amounts outstanding under this Agreement and (ii)
such repurchase agreements are entered into not more than one week
prior to the payment of all amounts outstanding hereunder; and
(vi) other Indebtedness in an aggregate principal amount not
in excess of $50,000,000.
SECTION 6.02. Liens. Create, incur, assume or permit to
exist any Lien on any property or assets (including stock or other securities
of any person, including any Subsidiary) now owned or hereafter acquired by
it, or sell or transfer or create any Lien on any income or revenues or rights
in respect of any thereof, except:
(a) Liens for taxes that are not yet due or that are being
contested in compliance with Section 5.03;
(b) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business of the Borrower and the Subsidiaries and securing
obligations that are not due or that are being contested in
compliance with Section 5.03;
(c) pledges and deposits made in the ordinary course of
business of the Borrower and the Subsidiaries in compliance with
workmen's compensation, unemployment insurance and other social
security laws or regulations,
(d ) Liens to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety
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30
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business of the Borrower
and the Subsidiaries;
(e) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower and the Subsidiaries; and
(f) Liens securing purchase money indebtedness not in excess
of $25,000,000;
(g) Liens securing obligations in respect of repurchase
agreements not in excess of $50,000,000;
(h) Liens securing obligations in respect of reinsurance
trust agreements not in excess of $55,000,000; and
(i) Liens securing obligations in respect of repurchase
agreements permitted by Section 6.01(v) in an amount not to exceed
$150,000,000.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into
or be party to any arrangement, directly or indirectly, with any person
consisting of the sale or transfer of any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and the
rental or lease of such property or other property which it intends to use for
substantially the same purpose or purposes as the property sold or transferred
(a "Sale and Lease- Back Transaction").
SECTION 6.04. Mergers, Consolidations and Sales of Assets.
Merge into or consolidate with any other person, or permit any other person to
merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all its assets (whether now owned or hereafter acquired) or any
capital stock of any Material Subsidiary held by it, except that (a)
Acquisition Sub may merge with and into JRMSA, (b) any Subsidiary may merge
into or dispose of all or substantially all its assets to the Borrower in a
transaction in which the Borrower is the surviving corporation or the
transferee of such assets and (c) any Subsidiary may merge with or into or
dispose of all or substantially all its assets to one or more other
Subsidiaries in a transaction in which the surviving person or the transferee
of such assets is a Subsidiary.
SECTION 6.05. Transactions with Affiliates. (a)(i) Sell or
transfer any property or assets to any of its Affiliates or (ii) purchase or
acquire any property or assets from, or otherwise engage in any other
transaction with, any of its Affiliates; provided that as long as no Default
or Event of Default shall have occurred and be continuing, the Borrower and
the Subsidiaries may engage in any of the foregoing transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower and the Subsidiaries than could be obtained on an
arm's-length basis from unrelated third parties.
(b) Engage in any material transaction with any of its
Affiliates unless such transaction shall be fully documented under appropriate
written agreements or instruments and true and complete records shall be
maintained by the Borrower in respect thereof.
SECTION 6.06. Business of Borrower and Subsidiaries. Cease
to engage in the businesses conducted by it on the date hereof (to the extent
such businesses are material to the Borrower and the Subsidiaries taken as a
whole), or engage to any extent material to the Borrower and the Subsidiaries
taken as a whole in any other business which shall not be reasonably related
to one or more of such businesses.
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31
SECTION 6.07. Restricted Payments. In the case of the
Borrower, pay any dividend or make any distribution in respect of, or redeem,
retire, repurchase or otherwise acquire, any shares of any class of its
Capital Stock, or any warrant, option or right to acquire any such shares (all
the foregoing being collectively called "Restricted Payments"); provided that,
so long as no Default or Event of Default shall have occurred and be
continuing or would occur as a result thereof, (a) the Borrower may declare
and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock and (b) the Borrower may make Restricted
Payments not exceeding $10,000,000.
SECTION 6.08. Minimum Consolidated Tangible Net Worth. Permit
Consolidated Tangible Net Worth to be less than $250,000,000.
SECTION 6.09. Minimum Cash, Cash Equivalents and Investments
in Debt Securities of JRMSA. Permit the sum of (a) the cash, cash equivalents
and investments in debt securities held by JRMSA, JRMHI, JRMI, Creole and
MIICO free of any Lien, and (b) the cash, cash equivalents and investments in
debt securities held by the Borrower free of any Lien, to be less than
$575,000,000 at any time prior to the making of the JRMSA Payment.
SECTION 6.10. No Limitations on Dividends and Advances by
Subsidiaries. In the case of any Subsidiary, enter into or suffer to exist any
covenant or agreement or other consensual restriction that would directly or
indirectly restrict the ability of JRMSA, JRMHI, JRMI, Creole or MIICO to pay
dividends or make other distributions on any of its Capital Stock or make
loans or advances to the Borrower or any Subsidiary, in each case as part of
the JRMSA Payment; provided, that the foregoing will not prohibit the Borrower
or any Subsidiary from (i) entering into an agreement, otherwise permitted by
this Agreement, the JRMSA Credit Agreement and the BWICO Credit Agreement, for
the sale or disposition of all or substantially all the assets or Capital
Stock of a Subsidiary, which agreement contains temporary restrictions with
respect to such Subsidiary pending the closing of such sale or disposition or
(ii) suffering to exist restrictions in effect on the date hereof in existing
debt agreements of Subsidiaries (including the JRMSA Credit Agreement and the
BWICO Credit Agreement) (it being agreed that no such permitted restriction
may restrict or impair (A) the ability of JRMHI or JRMI to transfer to JRMSA
amounts required in order for it to make the JRMSA Payment or (B) the ability
of JRMSA, Creole and MIICO to make the JRMSA Payment).
SECTION 6.11. No Amendment of Material Documents. Amend,
modify or waive any of its rights under the Offer Documents or the Merger
Agreement (prior to the consummation of the Merger) or permit JRMSA to amend
or modify its certificate of incorporation, by-laws or other organizational,
documents, in each case in a manner adverse to the rights or interests of the
Lenders.
SECTION 6.12. JRMSA Credit Agreement and BWICO Credit
Agreement. Permit the JRMSA Credit Agreement or the BWICO Credit Agreement or
commitments of the lenders under either thereof to cease to be in full force
and effect.
SECTION 6.13 Business of Acquisition Sub. Prior to the
consummation of the Merger, the Borrower shall cause Acquisition Sub not to
engage in any business or to incur any liabilities other than the business of
acquiring and holding the Shares and other than liabilities incurred in
connection with the Loan Documents, the Merger Agreement or the Offer
Documents.
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32
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or
in connection with any Loan Document or the Borrowings hereunder, or
any certificate furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished,
(b) default shall be made in the payment of any principal of
any Loan when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or
by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or any other amount (other than an amount
referred to in (b) above) due under any Loan Document, when and as
the same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a), 5.05, 5.08, 5.09
or 5.10 or in Article VI;
(e) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than
those specified in (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent or any Lender to the Borrower;
(f) the Borrower or any Subsidiary (which term, as used in
this paragraph and in paragraphs (g) and (h) below, shall exclude
special purpose corporations owning individual operating or
construction projects to the extent (x) such corporations are not,
individually or in the aggregate, material to the consolidated
financial position or results of operations of the Borrower and (y)
the holders of obligations of such corporations have recourse only
against such corporations and the respective projects owned by them
and not against the Borrower or any other Subsidiary or any assets of
the Borrower or any other Subsidiary) shall (i) fail to pay any
principal or interest, or to make any other required payment,
regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable or (ii) fail to
observe or perform any other term, covenant, condition or agreement
contained in, or permit to occur any Change of Control or similar
event described in, any agreement or instrument evidencing or
governing any Material Indebtedness if the effect of any failure
referred to in this clause (ii) or any such Change of Control or
similar event is to cause or require, or to permit the holder or
holders of any Indebtedness or a trustee on its or their behalf (with
or without the giving of notice, the lapse of time or both) to cause
or require, such Material Indebtedness to become due or to be
redeemed or repurchased prior to its stated maturity (or to cause or
require any offer to be made to effect such redemption or
repurchase);
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Subsidiary or of a substantial part of the property or assets of the
Borrower or any Subsidiary, under Title II of the United States Code,
as now constituted or hereafter amended, or any other Federal, state
or foreign bankruptcy, insolvency, receivership or similar law, (ii)
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of the property or assets of the Borrower or
any Subsidiary or (iii) the
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33
winding up or liquidation of the Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under
Title II of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in (g)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of the
property or assets of the Borrower or any Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount not covered by insurance in excess of $10,000,000
shall be rendered against the Borrower or any Subsidiary or any
combination thereof and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed, or a judgment creditor shall levy upon assets or
properties of the Borrower or any Subsidiary to enforce any such
judgment;
(j) a Reportable Event or Reportable Events, or a failure to
make a required installment or other payment (within the meaning of
Section 412(n)(1) of the Code or Section 302(f)(1) of ERISA), shall
have occurred with respect to any Plan or Plans that reasonably could
be expected to result in liability of the Borrower and the
Subsidiaries to the PBGC or to a Plan in an aggregate amount
exceeding $20,000,000 and, within 30 days after the reporting of any
such Reportable Event to the Administrative Agent or after the
receipt by the Administrative Agent of the statement required
pursuant to Section 5.06(c), the Administrative Agent shall have
notified the Borrower in writing that (i) the Required Lenders have
made a reasonable determination in good faith that, on the basis of
such Reportable Event or Reportable Events or the failure to make a
required payment, it is reasonably likely that (A) the PBGC will take
action to terminate such Plan or Plans, (B) a trustee will be
appointed by the appropriate United States District Court to
administer such Plan or Plans or (C) a lien will be imposed in favor
of a Plan and (ii) as a result thereof an Event of Default exists
hereunder, or a trustee shall be appointed by a United States
District Court to administer any such Plan or Plans; or the PBGC
shall institute proceedings to terminate any such Plan or Plans;
(k) (i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) such Borrower
or such ERISA Affiliate does not have reasonable grounds for
contesting such Withdrawal Liability or is not in fact contesting
such Withdrawal Liability in a timely and appropriate manner and
(iii) the amount of the Withdrawal Liability specified in such
notice, when aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with Withdrawal Liabilities
(determined as of the date or dates of such notification), exceeds
$30,000,000 or requires payments exceeding $10,000,000 in any year;
(l) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if solely as a result of
such reorganization or termination the aggregate annual contributions
of the Borrower and their ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or have
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34
been or are being terminated have been or will be increased over the
amounts required to be contributed to such Multiemployer Plans for
their most recently completed plan years, by an amount exceeding
$10,000,000;
(m) there shall have occurred a Change in Control;
(n) there shall have occurred any Event of Default under and
as defined in the JRMSA Credit Agreement or the BWICO Credit
Agreement;
(o) any Loan Document shall cease to be, or shall be
asserted by the Borrower not to be, in full force and effect and
enforceable in all material respects in accordance with its terms;
(p) any Lien purported to be created under the Pledge
Agreement shall cease to be, or shall be asserted by any Loan Party
not to be, a valid and perfected Lien on any Collateral, with the
priority required by the Pledge Agreement, except as a result of the
Collateral Agent's failure to maintain possession of any stock
certificates or other instruments delivered to it under the Pledge
Agreement;
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Administrative Agent, at the request
of the Required Lenders, shall, by notice to the Borrower, take either or both
of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith
due and payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary
notwithstanding, and in any event with respect to the Borrower described in
paragraph (g) or (h) above, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall automatically
become due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
ARTICLE VIII. THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, Citibank, N.A., is hereby appointed to act as Administrative Agent
on behalf of the Lenders. Each of the Lenders and each assignee of any such
Lender hereby irrevocably authorizes the Administrative Agent to take such
actions on behalf of such Lender or holder and to exercise such powers as are
specifically delegated to the Administrative Agent by the terms and provisions
hereof and of the other Loan Documents, together with such actions and powers
as are reasonably incidental thereto. The Administrative Agent is hereby
expressly authorized by the Lenders, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders all payments of principal
of and interest on the Loans and all other amounts due to the Lenders
hereunder, and promptly to distribute to each Lender its proper share of each
payment so received; (b) to give notice on behalf of each of the Lenders to
the Borrower of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by the Borrower pursuant to
this Agreement as received by the Administrative Agent.
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35
Neither the Administrative Agent, any of its Affiliates nor
any of their directors, officers, employees or agents shall be liable as such
for any action taken or omitted by any of them except for its or his own gross
negligence or wilful misconduct, or be responsible for any statement, warranty
or representation herein or the contents of any document delivered in
connection herewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrower of any of the terms,
conditions, covenants or agreements contained in any Loan Document. Neither
the Administrative Agent nor any of its Affiliates shall be responsible to the
Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents or other
instruments or agreements (other than as applied to or against the
Administrative Agent). The Administrative Agent shall in all cases be fully
protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Administrative Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure of or
delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in
performance or breach by any other Lender or the Borrower of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The Administrative Agent may execute any and
all duties hereunder by or through agents or employees and shall be entitled
to rely upon the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken
by it pursuant to the provisions of this Agreement unless it shall be
requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by notifying the Lenders and the Borrower. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor, subject to
the approval of the Borrower (which approval shall not be unreasonably
withheld) if no Default or Event of Default shall have occurred and be
continuing. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, subject to the approval of the Borrower (which
approval shall not be unreasonably with held) if no Default or Event of
Default shall have occurred and be continuing, which shall be a bank with an
office in New York, New York, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative
Agent and each of its Affiliates shall have the same rights and powers as any
other Lender and may exercise the same as though it were not the
Administrative Agent, and the Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any Subsidiary or other Affiliate thereof as if
it were not the Administrative Agent.
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36
Each Lender agrees (i) to reimburse the Administrative
Agent, on demand, in the amount of its pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent or any of its Affiliates, including counsel fees and
compensation of agents and employees paid for services rendered on behalf of
the Lenders, which shall not have been reimbursed by the Borrower and (ii) to
indemnify and hold harmless the Administrative Agent, any of its Affiliates
and any of their directors, officers, employees or agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against it in its capacity as the
Administrative Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; provided that no
Lender shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
wilful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent, any of its Affiliates or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent, any of its Affiliates or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan Document,
any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, graphic scanning or
other telegraphic communications equipment of the sending party, as follows:
(a) if to the Borrower, to them at 1450 Poydras Street, New
Orleans, Louisiana 70112, Attention of Robert A. Jolliff, Treasurer
(Telecopy No. (504) 587-6062);
(b) if to the Administrative Agent, (i) with respect to
Extensions of Credit, to it at 2 Penns Way, Suite 200 New Castle
Delaware 19720, Global Loan Support Service, Attn: Heather Morgan,
(Telecopy No. (302) 894-6120) and (ii) with respect to any other
matters, to it at 399 Park Avenue 4th Floor, New York, New York
Attention of Global Energy and Mining (Telecopy No. (212) 832-9857
with a copy to Citigroup/Salomon Smith Barney Inc, 1200 Smith Street,
Suite 2000, Houston, Texas 77002, Attention of Gregory S. Morzano
(Telecopy No. (713) 654-2849); and
(c) if to any other Lender, in any capacity, to it at its
address (or telecopy number) set forth in its completed
Administrative Questionnaire or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt if delivered by hand or overnight
courier service or sent by telecopy, graphic scanning or other telegraphic
communications equipment of the sender, or on the date five Business bays
after dispatch by certified or registered mail if mailed, in each case
delivered, sent or mailed (properly
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37
addressed) to such party as provided in this Section 9.01 or in accordance
with the latest unrevoked direction from such party given in accordance with
this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the Lenders and shall survive the making by the
Lenders of the Loans and other extensions of credit, and the execution and
delivery to the Lenders of such Loans, regardless of any investigation made by
the Lenders or on their behalf, and shall continue in full force and effect as
long as, the principal of or any accrued interest on any Loan or any Fee or
any other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid and so long as the Commitments have not been
terminated.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, and when the
Administrative Agent shall have received copies hereof which, when taken
together, bear the signatures of each Lender, and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior consent of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party, and all covenants,
promises and agreements by or on behalf of the Borrower, the Administrative
Agent or the Lenders that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commit ment and the Loans at the time owing
to it); provided, however, that (i) except in the case of an assignment to a
Lender or an Affiliate of such Lender or to any Federal Reserve Bank, each of
the Borrower and the Administrative Agent must give its prior written consent
to such assignment (which consents shall not be unreasonably withheld), (ii)
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent), and, if
the assigning Lender shall not have assigned its entire Commitment, the amount
of the Commitment of such assigning Lender after giving effect to such
assignment, shall not be less than the lesser of (x) $5,000,000 and (y) 2.5%
of the Total Commitment, (iii) the parties to each such assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance
and a processing and recordation fee of $3,500 and (iv) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.11, 2.12 and 2.17 in respect of prior periods and of Section 9.05, as well
as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder shall
be deemed to confirm to and agree with each
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38
other and the other parties hereto as follows: (i) such assigning Lender
warrants that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and that its Commitment,
and the outstanding balances of its Loans, in each case without giving effect
to assignments thereof which have not become effective, are as set forth in
such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of their
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.04 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Administrative Agent, any of its
Affiliates, such assigning Lender 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 decisions in taking or not taking action under this
Agreement; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its
offices in New York, New York, a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the Loans owing
to, each Lender pursuant to the terms hereof from time to time (the "Register
"). The entries in the Register shall be conclusive in the absence of manifest
error and the Borrower, the Administrative Agent and the Lenders may treat
each person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower
and the Administrative Agent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders.
(f) Each Lender may without the consent of the Borrower or
the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that no Lender shall without the consent of the Borrower (which
consent shall not be unreasonably withheld) sell any participation to any
entity known by such Lender to be an Affiliate of any person engaged to a
material extent in competition with the Borrower; provided further, however,
that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.11, 2.13 and 2.17 to the
same extent as if they were Lenders (provided, that the amount of such benefit
shall be limited to the amount in respect of the interest sold to which the
seller of such participation would have been
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39
entitled had it not sold such interest) and (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right
to enforce the obligations of the Borrower relating to the Loans and to
approve any amendment, modifications or waiver of any provision of this
Agreement (except that any participating bank may be granted approval rights
with respect to amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which interest
is payable on the Loans, extending any scheduled principal payment date or
date fixed for the payment of interest on the Loans or changing the amount of
or extending the Commitments, in each case to the extent that any of the
foregoing shall affect such participating bank).
(g) Any Lender or participant may, in connection with any
assignment or partici pation or proposed assignment or participation pursuant
to this Section 9.04, disclose to the assignee or participant or proposed
assignee or participant any information relating to the Borrower furnished to
such Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure of information designated by the Borrower as confidential, each
such proposed assignee or participant shall execute an agreement whereby such
proposed assignee or participant shall agree to preserve the confidentiality
of such confidential information in accordance with Section 9.17.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank; provided that no
such assignment shall release a Lender from any of its obligations hereunder.
In order to facilitate such an assignment to a Federal Reserve Bank, the
Borrower shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a promissory note or notes evidencing the
Loans made to the Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees
to pay all reasonable out-of-pocket expenses incurred by the Administrative
Agent or any of its Affiliates in connection with the preparation of this
Agreement and the other Loan Documents or in connection with any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not
the transactions hereby contemplated shall be consummated) or incurred by the
Administrative Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other
Loan Documents or in connection with the Loans made hereunder, including the
fees, charges and disbursements of Cravath, Swaine & Moore, counsel for the
Administrative Agent, and, in connection with any such enforcement or
protection, the fees, charges and disbursements of any other counsel for the
Administrative Agent or any Lender.
(b) The Borrower agrees to indemnify the Administrative
Agent, each of its Affiliates, each Lender and each of their respective
directors, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of or as a result of any claim, litigation,
investigation or proceeding (including any claim, litigation, investigation or
proceeding with respect to any Environmental Law or tax matters) relating to
(i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated thereby, the performance by the
parties thereto of their respective obligations thereunder or the consummation
of the Transactions and the other transactions contemplated thereby or (ii)
the use of the proceeds of the Loans, whether or not such Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are
<PAGE>
40
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Indemnitee.
(c) The provisions of this Section 9.05 shall remain
operative and in full force and effect regardless of the expiration of the
term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the invalidity or unenforceability of any term or provision of this Agreement
or any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent or any Lender. All amounts due under this Section 9.05
shall be payable promptly after written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any of and
all the obligations of the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
such other Loan Document and although such obligations may be unmatured. The
rights of each Lender under this Section 9.06 are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
Promptly after making such set off and application, such Lender shall give
notice to the Borrower thereof.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent, any of its Affiliates or any Lender in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent, any of its Affiliates and the
Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies which they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Document or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of any scheduled principal payment date or date for the
payment of any interest on any Loan, or waive or excuse any such payment or
any part thereof, or decrease the rate of interest on any Loan, without the
prior written consent of each Lender affected thereby, (ii) change or extend
the Commitment or decrease the Fees of any Lender without the prior written
consent of such Lender, or (iii) amend or modify the provisions of Section
2.14 or Section 2.15, the provisions of this Section 9.08 or the definition of
"Required Lenders", without the prior written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges which
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41
are treated as interest under applicable law (collectively the "Charges"), as
provided for herein or in any other document executed in connection herewith,
or otherwise contracted for, charged, received, taken or reserved by any
Lender, shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by such Lender in
accordance with applicable law, the rate of interest payable in respect of
such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate. In the event that the amount of interest
and Charges charged, received, taken or reserved by any Lender during any
period shall exceed the amount to be accrued during such period at the Maximum
Rate by operation of this Section 9.09, or in the event that any unearned
interest is charged, received, taken or reserved by any Lender in the event
the principal of any Loan is prepaid or the maturity thereof is accelerated,
then any such excess or unearned interest, as the case may be, shall be
canceled automatically and shall not be collectible, and if paid, shall be
credited by such Lender to the unpaid balance of such Loan or refunded to the
Borrower at the Borrower's option. All calculations of interest contracted
for, charged, received, taken or reserved by any Lender in connection with any
Loan, for the purpose of determining whether the relevant interest rate
(together with the applicable portion of all Charges) exceeds the Maximum
Rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, spreading, and allocating in equal parts over the full term of such
Loan (including all prior and future renewals and extensions thereof) all
interest at any time contracted for, charged, received, taken, or reserved in
connection with such Loan.
SECTION 9.10. Entire Agreement. This Agreement and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other
than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 9.13. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original but
all of which when taken together shall constitute but one contract, and shall
become effective as provided in Section 9.03. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually-signed counterpart of this Agreement.
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42
SECTION 9.14. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.
SECTION 9.15 . Jurisdiction; Consent to Service of Process.
(a) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the non-exclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
County, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final and nonappealable judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law
to the full extent permitted by law. Nothing in this Agreement shall affect
any right that any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower or
its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this agreement or the
other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents, to
the fullest extent it may legally and effectively do so, to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 9.16. Judgment Currency. (a) The Borrower's
obligations hereunder and under the other Loan Documents to make payments in
Dollars shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other
than Dollars, except to the extent that such tender or recovery results in the
effective receipt by the Administrative Agent or a Lender of the full amount
of Dollars expressed to be payable to the Administrative Agent or such Lender
under this Agreement or the other Loan Documents. If, for the purpose of
obtaining or enforcing judgment against the Borrower or in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than Dollars (such other currency being hereinafter referred to as the
"Judgment Currency") an amount due in Dollars, the conversion shall be made at
the rate of exchange (as quoted by the Administrative Agent or if the
Administrative Agent does not quote a rate of exchange on such currency, by a
known dealer in such currency designated by the Administrative Agent) deter
mined. in each case, as of the date immediately preceding the day on which the
judgment is given (such Business Day being hereinafter referred to as the
"Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment
of the amount due, the Borrower covenants and agrees to pay, or cause to be
paid, as a separate obligation and notwithstanding any judgment, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of Dollars which could have been purchased with the amount
of Judgment Currency stipulated in the judgment or judicial award at the rate
of exchange prevailing on the Judgment Currency Conversion Date.
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43
(c) For purposes of determining the rate of exchange for
this Section 9.16, such amounts shall include any premium and costs payable in
connection with the purchase of Dollars.
SECTION 9.17. Confidentiality. (a) Each Lender agrees to
keep confidential and not to disclose (and to cause its officers, directors,
employees, agents and representatives to keep confidential and not to
disclose) all Information (as defined below), except that such Lender shall be
permitted to disclose Information (i) to such of its or its Affiliates'
officers, directors, employees, agents, representatives as need to know such
Information in connection with the servicing and protection of its interests
in respect of its Loans and Commitments, the Loan Documents and the
Transactions; (ii) to the extent required by applicable laws and regulations
or by any subpoena or similar legal process or requested by any bank
regulatory authority; (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Agreement, (B)
becomes available to such Lender on a nonconfidential basis from a source
other than the Borrower or their Affiliates or the Administrative Agent or (C)
was available to such Lender on a nonconfidential basis prior to its
disclosure to such Lender by the Borrower or its Affiliates or the
Administrative Agent; (iv) as provided in Section 9.04(g); or (v) to the
extent the Borrower shall have consented to such disclosure in writing. As
used in this Section 9.17, "Information" shall mean the Confidential
Information Memorandum and any other materials, documents and information
which the Borrower or any of its Affiliates may have furnished or made
available or may hereafter furnish or make available to the Administrative
Agent or any Lender in connection with this Agreement.
(b) Each Lender agrees that, except to the extent the
conditions referred to in subclause (A), (B) or (C) of clause (iii) of
paragraph (a) above have been met, (i) it will use the Information only in
connection with the servicing and protection of its interests in respect of
its Loans and Commitment, the Loan Documents and the Transactions; and (ii) it
will not use the Information in connection with any other matter or in a
manner prohibited by any law, including, without limitation, the securities
laws of the United States.
(c) Each assignee of or purchaser of a participation from a
Lender shall be deemed, by accepting an assignment or participation hereunder,
to have agreed to be bound by this Section 9.17.
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44
IN WITNESS WHEREOF, the Borrower, the Administrative Agent,
the Issuing Agent, the Documentation Agent and the Lenders have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
McDERMOTT INTERNATIONAL, INC.,
by:___________________________________
Name
Title:
CITIBANK, N.A., as Administrative Agent
and in its individual capacity,
by:___________________________________
Name:
Title:
Execution Copy
PLEDGE AGREEMENT dated as of June 7, 1999, among McDERMOTT
INTERNATIONAL, INC., a Panamanian corporation (the "Borrower"), each
Subsidiary of the Borrower listed on Schedule I hereto or becoming a
party hereto as provided in Section 24 (each such Subsidiary
individually a "Subsidiary Pledgor" and, collectively, the "Subsidiary
Pledgors"; the Borrower and the Subsidiary Pledgors are referred to
collectively herein as the "Pledgors") and CITIBANK, N.A. ("CitiBank"),
as collateral agent (in such capacity, the "Collateral Agent").
Reference is made to (a) the Credit Agreement dated as of June 7, 1999
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the lenders party thereto (the "Lenders"),
Citibank, as administrative agent (in such capacity, the "Administrative
Agent"), and Salomon Smith Barney, Inc., as lead arranger and book runner (the
"Lead Arranger and Book Runner") and (b) the Loan Documents referred to in the
Credit Agreement. Capitalized terms used herein and not defined herein shall
have meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, pursuant to, and
upon the terms and subject to the conditions specified in, the Credit Agreement.
The obligations of the Lenders to make Loans are conditioned upon, among other
things, the execution and delivery by the Pledgors of a Pledge Agreement in the
form hereof to secure (a) the due and punctual payment of (i) the principal of
and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans made to the Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise and (ii)
all other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrower to the Lenders under the Credit
Agreement or any other Loan Document and (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of the Borrower under or
pursuant to the Credit Agreement or any other Loan Document (all the monetary
and other obligations referred to in the preceding clauses (a) and (b) being
referred to collectively called the "Obligations"). Each Pledgor agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that the security interest granted hereunder and
the obligations of each Pledgor will survive any extension or renewal of any
Obligation.
Accordingly, the Pledgors and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns)
hereby agree as follows:
SECTION 1. Pledge. As security for the payment and performance, as the
case may be, in full of the Obligations, each Pledgor hereby transfers, grants,
bargains, sells, conveys, hypothecates, pledges, sets over and delivers unto the
Collateral Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in all of such Pledgor's right, title and
interest in, to and under (a) all shares of Capital Stock of Acquisition Sub and
JRMSA and all securities convertible into or exchangeable for shares of such
Capital Stock owned by it as of the date hereof, all of which are listed on
Schedule II hereto, and any shares of Capital Stock of Acquisition Sub and JRMSA
and all securities convertible into or exchangeable for shares of such Capital
Stock obtained in the future by such Pledgor and the certificates representing
all such shares of Capital Stock or securities (the "Pledged Securities"); (b)
subject to Section 5, all payments of principal or interest, dividends, cash,
instruments and other property from time to
<PAGE>
2
time received, receivable or otherwise distributed, in respect of, in exchange
for or upon the conversion of the securities referred to in clause (a) above;
(c) subject to Section 5, all rights and privileges of the Pledgor with respect
to the securities and other property referred to in clauses (a) and (b) above;
and (d) all proceeds of any of the foregoing (the items referred to in clauses
(a) through (d) above being collectively referred to as the "Collateral"). Upon
delivery to the Collateral Agent, (a) any stock certificates or other securities
now or hereafter included in the Collateral shall be accompanied by stock powers
duly executed in blank or other instruments of transfer satisfactory to the
Collateral Agent and by such other instruments and documents as the Collateral
Agent may reasonably request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Pledgor and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities theretofore and
then being pledged hereunder, which schedule shall be attached hereto as
Schedule II and made a part hereof. Each schedule so delivered shall supersede
any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. Each Pledgor agrees promptly to
deliver or cause to be delivered to the Collateral Agent any and all Pledged
Securities, and any and all certificates or other instruments or documents
representing the Collateral.
SECTION 3. Representations, Warranties and Covenants. Each Pledgor
hereby represents, warrants and covenants, as to itself and the Collateral
pledged by it hereunder, to and with the Collateral Agent that:
(a) the Pledged Securities represent that percentage as set
forth on Schedule II of the issued and outstanding shares of each class
of the Capital Stock of the issuer with respect thereto;
(b) except for the security interest granted hereunder, each
Pledgor (i) is and will at all times continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on
Schedule II, (ii) holds the same free and clear of all Liens, (iii)
will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on,
the Collateral, other than pursuant hereto, and (iv) subject to Section
5, will cause any and all Collateral, whether for value paid by the
Pledgor or otherwise, to be forthwith deposited with the Collateral
Agent and pledged or assigned hereunder;
(c) such Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will
defend its title or interest thereto or therein against any and all
Liens (other than the Lien created by this Agreement), however arising,
of all persons whomsoever;
(d) no consent of any other person (including stockholders or
creditors of any Pledgor) and no consent or approval of any
Governmental Authority or any securities exchange was or is necessary
to the validity of the pledge effected hereby, and there is no
provision in the charter or other organizational documents of any
issuer of Pledged Securities that would limit or otherwise be
inconsistent with the rights granted to the Collateral Agent hereunder
in respect of such Pledged Securities;
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3
(e) by virtue of the execution and delivery by the Pledgors of
this Agreement, when the Pledged Securities, certificates or other
documents representing or evidencing the Collateral are delivered (with
appropriate notations being made in the share registry of JRMSA and
Acquisition Sub) to the Collateral Agent in accordance with this Agree
ment, the Collateral Agent will obtain, a valid and perfected first
lien upon and security interest in such Pledged Securities as security
for the payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the
Collateral Agent, on behalf of the Secured Parties, the rights of the
Collateral Agent in the Collateral as set forth herein;
(g) all of the Pledged Securities have been duly authorized
and validly issued and is fully paid and nonassessable;
(h) all information set forth herein relating to the Pledged
Securities is accurate and complete in all material respects as of the
date hereof; and
(i) the pledge of the Pledged Securities pursuant to this
Agreement does not violate Regulation T, U or X of the Federal Reserve
Board or any successor thereto as of the date hereof.
SECTION 4. Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in the name of the Pledgors
(or, upon the occurrence and during the continuance of an Event of Default, in
its own name as pledgee or in the name of its nominee as pledgee or as
sub-agent) endorsed or assigned in blank or in favor of the Collateral Agent.
Each Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. The Collateral Agent shall at all times
have the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and
until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Credit Agreement and the other Loan
Documents; provided, however, that such Pledgor will not be entitled to
exercise any such right if the result thereof could materially and
adversely affect the rights inuring to a holder of the Pledged
Securities or the rights and remedies of any of the Secured Parties
under this Agreement or the Credit Agreement or any other Loan Document
or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to each Pledgor, all
such proxies, powers of attorney and other instruments as such Pledgor
may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph (iii)
below.
(iii) Each Pledgor shall be entitled to receive and retain any
and all cash dividends, interest and principal paid on the Pledged
Securities to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and otherwise paid
in
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4
accordance with, the terms and conditions of the Credit Agreement, the
other Loan Documents and applicable laws. All noncash dividends,
interest and principal, and all dividends, interest and principal paid
or payable in cash or otherwise in connection with a partial or total
liquidation or dissolution, return of capital, capital surplus or
paid-in surplus, and all other distributions (other than distributions
referred to in the preceding sentence) made on or in respect of the
Pledged Securities, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or reclassification
of the outstanding Capital Stock of the issuer of any Pledged
Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the
Collateral, and, if received by any Pledgor, shall not be commingled by
such Pledgor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of
the Collateral Agent and shall be forthwith delivered to the Collateral
Agent in the same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to dividends, interest or principal that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest or principal. All dividends, interest or
principal received by the Pledgor contrary to the provisions of this Section 5
shall be held in trust for the benefit of the Collateral Agent, shall be
segregated from other property or funds of such Pledgor and shall be forthwith
delivered to the Collateral Agent upon demand in the same form as so received
(with any necessary endorsement). Any and all money and other property paid over
to or received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 7. After all
Events of Default have been cured or waived, the Collateral Agent shall, within
five Business Days after all such Events of Default have been cured or waived,
repay to each Pledgor all cash dividends, interest or principal (without
interest), that such Pledgor would otherwise be permitted to retain pursuant to
the terms of paragraph (a)(iii) above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to exercise the voting and consensual rights
and powers it is entitled to exercise pursuant to paragraph (a)(i) of this
Section 5, and the obligations of the Collateral Agent under paragraph (a)(ii)
of this Section 5, shall cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall have the sole and exclusive right
and authority to exercise such voting and consensual rights and powers, provided
that, unless otherwise directed by the Required Lenders, the Collateral Agent
shall have the right from time to time following and during the continuance of
an Event of Default to permit the Pledgors to exercise such rights. After all
Events of Default have been cured or waived, such Pledgor will have the right to
exercise the voting and consensual rights and powers that it would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, subject to applicable regulatory and legal
requirements, the Collateral Agent may sell the Collateral, or any part thereof,
at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery as the Collateral Agent
shall deem appropriate. The Collateral Agent shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale the
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or
<PAGE>
5
purchasers thereof the Collateral so sold. Each such purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part
of any Pledgor, and, to the extent permitted by applicable law, the Pledgors
hereby waive all rights of redemption, stay, valuation and appraisal any Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior written notice
(which each Pledgor agrees is reasonable notice within the meaning of Section
9-504(3) of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any sale of such Pledgor's Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice of such sale. At any such sale, the Collateral, or portion thereof, to be
sold may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the sale price is paid in full by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 6, any Secured Party
may bid for or purchase, free from any right of redemption, stay or appraisal on
the part of any Pledgor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to it from such Pledgor
as a credit against the purchase price, and it may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to such Pledgor therefor. For purposes hereof, (a) a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof, (b) the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and (c) such Pledgor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose upon the Collateral and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 6 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-504(3) of the Uniform
Commercial Code as in effect in the State of New York or its equivalent in other
jurisdictions.
<PAGE>
6
SECTION 7. Application of Proceeds of Sale. The proceeds of any sale of
Collateral pursuant to Section 6, as well as any Collateral consisting of cash,
shall be applied by the Collateral Agent as follows:
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent in connection with such sale or otherwise in
connection with this Agreement, any other Loan Document or any of the
Obligations, including all court costs and the reasonable fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document
on behalf of any Pledgor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under
any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent. (a) Each Pledgor agrees
to pay upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, other charges and disbursements of its
counsel and of any experts or agents, that the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent hereunder or (iv) the failure by such Pledgor to perform or
observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Pledgor agrees to indemnify the Collateral Agent and
the Indemnitees (as defined in Section 9.05 of the Credit Agreement) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of any claim, litigation, investigation
or proceeding (including any claim, litigation, investigation or proceeding with
respect to any Environmental Law or tax matters) relating to (i) the execution
or delivery of this Agreement or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby or (ii) the use of
proceeds of the Loans, whether or not any Indemnitee is a party thereto,
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby. The provisions of this Section 8 shall remain
operative and in full force and effect
<PAGE>
7
regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 8 shall be
payable on written demand therefor and shall bear interest at the rate specified
in Section 2.07 of the Credit Agreement.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, to ask for, demand,
sue for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral, to endorse checks, drafts,
orders and other instruments for the payment of money payable to the Pledgor
representing any interest or dividend or other distribution payable in respect
of the Collateral or any part thereof or on account thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Collateral Agent to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Collateral Agent,
or to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or consent to any departure by any
Pledgor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Pledgor in any case shall entitle such Pledgor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Collateral Agent and the Pledgor or Pledgors with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Section 9.08 of the Credit Agreement.
SECTION 11. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Securities, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Securities permitted hereunder. Each Pledgor
understands that compliance with the
<PAGE>
8
Federal Securities Laws might very strictly limit the course of conduct of the
Collateral Agent if the Collateral Agent were to attempt to dispose of all or
any part of the Pledged Securities, and might also limit the extent to which or
the manner in which any subsequent transferee of any Pledged Securities could
dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Collateral Agent in any attempt to dispose of all or
part of the Pledged Securities under applicable Blue Sky or other state
securities laws or similar laws analogous in purpose or effect. Each Pledgor
recognizes that in light of such restrictions and limitations the Collateral
Agent may, with respect to any sale of the Pledged Securities, limit the
purchasers to those who will agree, among other things, to acquire such Pledged
Securities for their own account, for investment, and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges and agrees that in
light of such restrictions and limitations, the Collateral Agent, in its sole
and absolute discretion, (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Securities or
part thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale.
Each Pledgor acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale were a public
sale without such restrictions. In the event of any such sale, the Collateral
Agent shall incur no responsibility or liability for selling all or any part of
the Pledged Securities at a price that the Collateral Agent, in its sole and
absolute discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
11 will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed sub stantially the price at
which the Collateral Agent sells.
SECTION 12. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default hereunder, if for
any reason the Collateral Agent desires to sell any of the Pledged Securities at
a public sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its best efforts to take or to cause the
issuer of such Pledged Securities to take such action and prepare, distribute
and/or file such documents, as are required or advisable in the reasonable
opinion of counsel for the Collateral Agent to permit the public sale of such
Pledged Securities. Each Pledgor further agrees to indemnify, defend and hold
harmless the Collateral Agent, each other Secured Party, any underwriter and
their respective officers, directors, affiliates and controlling persons from
and against all loss, liability, expenses, costs of counsel (including, without
limitation, reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Pledgor or the issuer of such Pledged Securities by the Collateral Agent
or any other Secured Party expressly for use therein. Each Pledgor further
agrees, upon such written request referred to above, to use its best efforts to
qualify, file or register, or cause the issuer of such Pledged Securities to
qualify, file or register, any of the Pledged Securities under the Blue Sky or
other securities laws of such states as may be requested by the Collateral Agent
and keep effective, or cause to be kept effective, all such qualifications,
filings or registrations. Each Pledgor will bear all costs and expenses of
carrying out its obligations under this Section 12. Each Pledgor acknowledges
that there is no adequate remedy at law for failure by it to comply with the
provisions of this Section 12 and that such failure would not be adequately
compensable in damages, and therefore agrees that its agreements contained in
this Section 12 may be specifically enforced.
<PAGE>
9
SECTION 13. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the grant of a security interest in the Collateral and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to any of the foregoing,
(c) any exchange, release or nonperfection of any other collateral, or any
release or amendment or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Pledgor in
respect of the Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all the Obligations).
SECTION 14. Termination or Release. (a) This Agreement and the security
interests granted hereby shall terminate when all the Obligations have been paid
in full and the Lenders have no further commitment to lend under the Credit
Agreement.
(b) In connection with any termination or release pursuant to paragraph
(a), the Collateral Agent shall execute and deliver to any Pledgor, at such
Pledgor's expense, all documents that such Pledgor shall reasonably request to
evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 14 shall be without recourse to or warranty by the
Collateral Agent.
SECTION 15. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to any Subsidiary Pledgor shall be given to
it in care of the Borrower at the address set forth in the Credit Agreement.
SECTION 16. Further Assurances. Each Pledgor agrees to do such further
acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order
better to assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 17. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Pledgor that are contained in
this Agreement shall bind and inure to the benefit of its successors and
assigns. This Agreement shall become effective as to any Pledgor when a
counterpart hereof executed on behalf of such Pledgor shall have been delivered
to the Collateral Agent and a counterpart hereof shall have been executed on
behalf of the Collateral Agent, and thereafter shall be binding upon such
Pledgor and the Collateral Agent and their respective successors and assigns,
and shall inure to the benefit of such Pledgor, the Collateral Agent and the
other Secured Parties, and their respective successors and assigns, except that
no Pledgor shall have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment shall be void),
except as expressly contemplated by this Agreement or the other Loan Documents.
This Agreement shall be construed as a separate agreement with respect to each
Pledgor and may be amended, modified, supplemented, waived or released with
respect to any Pledgor without the approval of any other Pledgor and without
affecting the obligations of any other Pledgor hereunder.
SECTION 18. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Pledgor herein and in
the certificates or other
<PAGE>
10
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Collateral Agent and the other Secured Parties and shall survive the
making by the Lenders of the Loans, regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full force and effect
(in the case of representations and warranties, when and as made) as long as the
principal of or any accrued interest on any Loan or any other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and as long as the Commitments have not been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute a single contract, and shall become effective
as provided in Section 17. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 21. Rules of Interpretation. The rules of interpretation
specified in Section 1.02 of the Credit Agreement shall be applicable to this
Agreement. Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting this Agreement.
SECTION 22. Jurisdiction; Consent to Service of Process. (a) Each
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final and nonappealable judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law to the full extent permitted by law. Nothing in this Agreement shall affect
any right that the Collateral Agent or any other Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against any Pledgor or its properties in the courts of any
jurisdiction.
(b) Each Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
<PAGE>
11
(c) Each party to this Agreement irrevocably consents, to the fullest
extent it may legally and effectively do so, to service of process in the manner
provided for notices in Section 15. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 24. Additional Pledgors. Pursuant to Section 5.08 of the Credit
Agreement, each Subsidiary of the Borrower is required to enter in this
Agreement as a Subsidiary Pledgor if such Subsidiary owns or possesses property
of a type that would be considered Collateral hereunder. Upon execution and
delivery by the Collateral Agent and a Subsidiary of an instrument in the form
of Annex 1, such Subsidiary shall become a Subsidiary Pledgor hereunder with the
same force and effect as if originally named as a Subsidiary Pledgor herein. The
execution and delivery of such instrument shall not require the consent of any
Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new
Subsidiary Pledgor as a party to this Agreement.
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
MCDERMOTT INTERNATIONAL, INC., as
Borrower,
By /s/ R. A. Jolliff
---------------------------------
Name: R. A. Jolliff
Title: Treasurer
McDERMOTT ACQUISITION COMPANY,
INC.,
By /s/ D. R. Gaubert
----------------------------------
Name: D. R. Gaubert
Title: Treasurer
CITIBANK, N.A., as Collateral Agent,
By /s/ Gregory S. Morzano
----------------------------------
Name: Gregory S. Morzano
Title: Attorney-in-Fact
<PAGE>
Schedule I to the
Pledge Agreement
SUBSIDIARY PLEDGORS
Name Address
- ---- -------
McDermott Acquisition Company, Inc. 1540 Poydras Street
New Orleans, LA 70112
<PAGE>
14
Schedule II to the
Pledge Agreement
<TABLE>
CAPITAL STOCK
PERCENTAGE
NUMBER OF REGISTERED NUMBER AND (OF CLASS)
ISSUER CERTIFICATE OWNER CLASS OF SHARES OF SHARES
------ ----------- --------- --------------- ---------
<S> <C> <C> <C> <C>
JRMSA CS 0052 MII 24,668,297 common 63%
JRMSA 1 MII 3,200,000 Series A 100%
Preferred
McDermott 1 MII 500 common 100%
Acquisition
Company, Inc.
</TABLE>
<PAGE>
1
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. dated as of , to the PLEDGE
AGREEMENT dated as of June 7, 1999, among McDERMOTT
INTERNATIONAL, INC., a Panamanian corporation (the
"Borrower"), and each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary
individually a "Subsidiary Pledgor" and collectively,
the "Subsidiary Pledgors"; the Borrower and the
Subsidiary Pledgors are referred to collectively
herein as the "Pledgors") and CITIBANK, N.A.
("Citibank"), as collateral agent (in such capacity,
the "Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below)
A. Reference is made to (a) the Credit Agreement dated as of June 7,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and Citibank, as administrative agent for the Lenders
and Collateral Agent, and (b) the other Loan Documents.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
C. The Pledgors have entered into the Pledge Agreement in order to
induce the Lenders to make Loans. Pursuant to Section 5.08 of the Credit
Agreement, each Subsidiary of the Borrower is required to enter into the Pledge
Agreement as a Subsidiary Pledgor if such Subsidiary owns or possesses property
of a type that would be considered Collateral under the Pledge Agreement.
Section 24 of the Pledge Agreement provides that such Subsidiaries may become
Subsidiary Pledgors under the Pledge Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the "New
Pledgor") is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Subsidiary Pledgor under the Pledge Agreement
in order to induce the Lenders to make additional Loans and as consideration for
Loans previously made.
Accordingly, the Collateral Agent and the New Pledgor agree as follows:
SECTION 1. In accordance with Section 24 of the Pledge Agreement, the
New Pledgor by its signature below becomes a Pledgor under the Pledge Agreement
with the same force and effect as if originally named therein as a Pledgor and
the New Pledgor hereby agrees (a) to all the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Pledgor
thereunder are true and correct on and as of the date hereof except for
representations and warranties which by their terms refer to a specific date. In
furtherance of the foregoing, the New Pledgor, as security for the payment and
performance in full of the Obligations (as defined in the Pledge Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Pledgor's right, title and
interest in and to the Collateral (as defined in the Pledge Agreement) of the
New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in the
Pledge Agreement shall be deemed to include the New Pledgor. The Pledge
Agreement is hereby incorpo rated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally.
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Pledgor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
<PAGE>
2
SECTION 4. The New Pledgor hereby represents and warrants that set
forth on Schedule I attached hereto is a true and correct schedule of all its
Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unen forceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 15 of the Pledge Agreement. All communications
and notices hereunder to the New Pledgor shall be given to it in care of the
Borrower as set forth in the Credit Agreement.
SECTION 9. The New Pledgor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
<PAGE>
3
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have duly
executed this Supplement to the Pledge Agreement as of the day and year first
above written.
[NAME OF NEW PLEDGOR],
By_______________________________
Name:
Title:
CITIBANK, N.A., as
Collateral Agent,
By_______________________________
Name:
Title:
<PAGE>
Schedule I to
Supplement No. [ ]
to the Pledge Agreement
Pledged Securities of the New Pledgor
-------------------------------------
CAPITAL STOCK OR OTHER EQUITY INTEREST
Number and Percentage of
Class of Shares Shares
Number of Registered or Other or Other
Issuer Certificate Owner Equity Interest Equity Interest
- ------ ----------- ---------- --------------- ---------------
