FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 1-10945
OCEANEERING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-2628227
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11911 FM 529
Houston, Texas 77041
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 329-4500
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X , No .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 28, 1998
Common Stock, $.25 Par Value 22,567,301 shares
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, March 31,
1998 1998
(unaudited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $ 30,241 $ 9,064
Accounts receivable (net of allowance
for doubtful accounts of $203 and
$240) 116,048 114,923
Prepaid expenses and other 12,729 7,077
--------------------------------
Total Current Assets 159,018 131,064
--------------------------------
Property and Equipment, at cost:
Marine services equipment 256,889 221,311
Mobile offshore production equipment 54,122 52,856
Buildings, improvements and other 57,426 44,542
--------------------------------
368,437 318,709
Less: Accumulated Depreciation 160,029 149,874
--------------------------------
Net Property and Equipment 208,408 168,835
--------------------------------
Goodwill (net of amortization
of $4,984 and $4,490) 9,920 10,414
Investments and Other Assets 6,638 6,230
--------------------------------
TOTAL ASSETS $383,984 $316,543
================================
LIABILITIES and SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and current portion
of Long-term Debt $ 28,050 $ 26,364
Accrued liabilities 54,076 51,385
Income taxes payable 10,747 8,425
--------------------------------
Total Current Liabilities 92,873 86,174
Long-term Debt, net of current portion 100,458 54,626
Other Long-term Liabilities
17,797 15,421
Commitments and Contingencies
Shareholders' Equity
172,856 160,322
--------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $383,984 $316,543
================================
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the Three Months Ended
September 30,
1998 1997
(in thousands, except per
share amounts)
Revenues $110,042 $ 90,578
Cost of services 86,510 69,946
Selling, general and administrative expenses 10,305 9,580
-----------------------
Income from operations 13,227 11,052
Interest income 261 233
Interest expense, net of capitalized
interest of $694 and $48 (625) (57)
Other expense, net (126) (451)
-----------------------
Income before income taxes 12,737 10,777
Provision for income taxes (4,842) (4,063)
-----------------------
Net income $ 7,895 $ 6,714
=======================
Basic Earnings per Share $0.34 $0.29
Diluted Earnings per Share $0.34 $0.28
Weighted average number of common shares 22,813 23,346
Incremental shares from stock options 174 466
Weighted average number of common
shares and equivalents 22,987 23,812
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the Six Months Ended
September 30,
1998 1997
(in thousands, except per
share amounts)
Revenues $208,953 $185,741
Cost of services 163,934 146,176
Selling, general and administrative
expenses 20,666 18,857
--------------------
Income from operations 24,353 20,708
Interest income 345 566
Interest expense, net at capitalized
interest of $1,176 and $48 (1,192) (122)
Other expense, net (164) (516)
--------------------
Income before income taxes 23,342 20,636
Provision for income taxes (8,872) (7,958)
--------------------
Net income $ 14,470 $ 12,678
====================
Basic Earnings per Share $0.63 $0.54
Diluted Earnings per Share $0.62 $0.54
Weighted average number of common shares 22,883 23,317
Incremental shares from stock options 252 336
Weighted average number of common
shares and equivalents 23,135 23,653
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended
September 30,
1998 1997
(unaudited)
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $14,470 $12,678
Adjustments to reconcile net income to net
cash provided by/(used in)operating activities:
Depreciation and amortization 14,099 10,797
Currency translation adjustments and other (44) 4,265
(Increase)/decrease in accounts receivable (1,125) 15,736
Increase in prepaid expenses and
other current assets (5,652) (3,470)
Increase in other assets (82) (916)
Increase/(decrease) in current liabilities 6,699 (13,589)
Increase in other long-term liabilities 2,376 646
--------------------
Total adjustments to net income 16,271 13,469
--------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 30,741 26,147
--------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment and
other assets (52,257) (41,194)
Other investing activity 1,704 (221)
--------------------
NET CASH USED IN INVESTING ACTIVITIES (50,553) (41,415)
--------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowing,
net of costs 98,620 --
Net proceeds/(payments) on revolving credit
and other long-term debt (54,168) 16,000
Proceeds from issuance of common stock 1,541 3,031
Purchases of treasury stock (5,004) (12,503)
--------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 40,989 6,528
--------------------
NET INCREASE (DECREASE) IN CASH 21,177 (8,740)
--------------------
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 9,064 23,034
--------------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $30,241 $14,294
====================
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation and Significant Accounting Policies
These Consolidated Financial Statements are unaudited and have been prepared
pursuant to instructions for the Quarterly Report on Form 10- Q required to
be filed with the Securities and Exchange Commission and do not include all
information and footnotes normally included in financial statements prepared
in accordance with generally accepted accounting principles. Management has
reflected all adjustments which it believes are necessary to present fairly
the Company's financial position at September 30, 1998 and its results of
operations and cash flows for the periods presented. All such adjustments
are of a normal recurring nature. The financial statements should be read
in conjunction with the consolidated financial statements and notes thereto
included in the Registrant's Annual Report on Form 10-K for its fiscal year
ended March 31, 1998. The results for interim periods are not necessarily
indicative of annual results. Unless the context indicates otherwise,
references to years indicate fiscal years.
2. Current Assets
Cash and cash equivalents includes demand deposits and highly liquid
investments with original maturities of three months or fewer from the date
of the investment. Approximately $1.5 million of the Company's cash at
March 31, 1998 was restricted and deposited in interest bearing accounts as
security in connection with legal proceedings. Such legal proceedings were
settled in the quarter ended September 30, 1998 and the restriction was
removed.
Prepaid expenses and other current assets as of September 30 and March 31,
1998 include spare parts of $6.7 million and $3.3 million, respectively,
primarily for the Company's ROV fleet.
3. Long-term Debt
Long-term debt consisted of the following:
September 30, March 31,
1998 1998
(unaudited) (audited)
(in thousands)
6.72% Senior Notes due 2010 $100,000 $ --
Revolving Credit Facility -- 54,000
Capital Leases 757 919
------- ------
100,757 54,919
Current portion of capital leases (299) (293)
------- ------
$100,458 $ 54,626
======== ======
In September 1998, the Company issued $100 million aggregate principal
amount of 6.72% Senior Notes dues 2010. The net proceeds were $98.6 million
after issuance costs and were used to retire existing debt under the
Company's revolving credit facility. The notes have an average life of ten
years and are scheduled to be paid in five equal annual installments
beginning at the end of the eighth year.
In October 1998, the Company entered into a new $80 million revolving credit
facility to replace its prior one which was scheduled to convert to a term
loan in April 1999.
The Senior Notes and the new revolving credit facility have similar
maintenance covenants relative to the level of debt to total capitalization,
fixed charge coverages and minimum net worth.
4. Shareholders' Equity
Shareholders' Equity consisted of the following:
September 30, March 31,
1998 1998
(unaudited) (audited)
(in thousands, except
share data)
Common Stock, par value $0.25;
90,000,000 shares authorized;
24,017,046 shares issued $ 6,004 $ 6,004
Additional paid-in capital 81,610 81,442
Treasury stock, 1,400,106 and 1,075,303
shares, at average cost (20,614) (17,634)
Retained earnings 112,472 98,002
Accumulated other elements of
comprehensive income (6,616) (7,492)
------- -------
Total shareholders' equity $172,856 $160,322
======= =======
5. Income Taxes
Cash taxes paid were $5.6 million and $7.9 million for the first six months
of 1999 and 1998, respectively.
6. Earnings Per Share
The Company has computed earnings per share in accordance with Financial
Accounting Standards Board standard number ("SFAS") 128, "Earnings Per
Share", which became effective in the third quarter of 1998. Prior periods
comparative figures have been restated.
7. Comprehensive Income
Effective April 1, 1998, the Company adopted SFAS 130, "Reporting
Comprehensive Income". This statement establishes standards for reporting
and display of comprehensive income and its components in financial
statements. Comprehensive income is the total of net income and all
non-owner changes in equity. The amount of comprehensive income for each of
the three and six-month periods ended September 30, 1998 and 1997 and the
components of accumulated other elements of comprehensive income in
Shareholders' Equity at September 30, 1998 and March 31, 1998 are as follows:
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
(in thousands) (in thousands)
Net income per
Consolidated Statements
of Income $7,895 $6,714 $14,470 $12,678
Foreign currency
translation gains/(losses) 1,318 (361) 876 (1,292)
----- ----- ----- ------
Comprehensive income $9,213 $6,353 $15,346 $11,386
===== ===== ====== ======
Amounts comprising other elements of comprehensive income in Shareholders'
Equity:
September 30, 1998 March 31, 1998
(in thousands) (in thousands)
Accumulated foreign
currency translation
adjustments $(6,616) $(7,492)
===== =====
8. New Accounting Pronouncements
The FASB has issued SFAS 131, "Disclosures about Segments of an Enterprise
and Related Information", which establishes standards for the way that
public business enterprises report information about operating segments in
interim and annual financial statements. As required, the Company will
adopt SFAS 131 commencing with its 1999 Annual Report on Form 10-K.
The FASB has also issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which establishes standards for the way
derivative instruments and hedging activities are reported. It requires
that an entity recognize all derivatives as either assets or liabilities in
the statement of financial position and measure those instruments at fair
value. Changes in a derivative's fair value are to be recognized currently
in earnings unless specific hedge accounting criteria are met. The Company
has not yet quantified the impact, if any, on its financial statements that
may result from adoption of SFAS No. 133, which is required no later than
April 1, 2000.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
All statements in this Form 10-Q, other than statements of historical facts,
including, without limitation, statements regarding the Company's business
strategy, plans for future operations, and industry conditions, are
forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The Company utilizes
a variety of internal and external data and management judgment in order to
develop such forward-looking information. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, because of the inherent limitations in the forecasting process,
as well as the relatively volatile nature of the industries in which the
Company operates, it can give no assurance that such expectations will prove
to have been correct. Accordingly, evaluation of future prospects of the
Company must be made with caution when relying on forward-looking information.
Material Changes in Financial Condition
The Company considers its liquidity and capital resources adequate to
support continuing operations and capital commitments. At September 30,
1998, the Company had working capital of $66 million, including $30 million
of unrestricted cash. At September 30, 1998, the Company had utilized none
of its available $80 million credit facility and $20 million was unused
under uncommitted lines of credit.
In order to provide longer term funding, the Company issued $100 million of
6.72% Senior Notes which are repayable in five equal annual principal
installments beginning at the end of the eighth year. In October 1998, the
Company replaced its revolving credit facility with a new $80 million five
year revolving credit facility.
Capital expenditures were $52 million during the first six months of 1999,
as compared to $41 million during the corresponding period of the prior
fiscal year. Capital expenditures in 1999 consisted of additions to the
Company's fleet of remotely operated vehicles ("ROVs"), multi-service
support vessel construction and subsea products facilities expansion. Prior
fiscal year expenditures consisted of additions to the Company's fleet of
ROVs, support vessel expenditures and two out-of-service mobile offshore
platforms for potential conversion to production systems or alternative
service.
Commitments for capital expenditures at September 30, 1998 were
approximately $20 million for subsea product manufacturing facilities and
multi-service support vessel construction.
Results of Operations
Consolidated revenue and margin information is as follows:
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
(in thousands, except percentages)
Revenues $110,042 $90,578 $208,953 $185,741
Gross margin 23,532 20,632 45,019 39,565
Gross margin % 21% 23% 22% 21%
Operating margin % 12% 12% 12% 11%
The quarters ending June 30 and September 30 have generally been the
Company's peak in both revenues and net income for its Oilfield Marine
Services business. However, the Company's exit from the diving sector in
the North Sea in early 1998 and the substantial number of multi-year ROV
contracts which were entered into since 1997 should reduce the seasonality
of the Company's Oilfield Marine Services operations. Revenues and net
income in the Offshore Field Development and Advanced Technologies
businesses are generally not seasonal.
Oilfield Marine Services
Revenue and gross margin information is as follows:
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
(in thousands, except percentages)
Revenues $55,912 $47,527 $108,616 $97,088
Gross margins 12,452 12,332 24,162 22,694
Gross margin % 22% 26% 22% 23%
Revenue for the Oilfield Marine Services segment increased due to the
expansion of the company's work class ROV fleet and increased sales of
diving and engineering project management services. Gross margins showed a
slight improvement on the strength of improved profitability associated with
engineering project services.
The gross margin percentage in the three months ended September 30, 1998 was
lower than that of the comparable period of the prior year as a result of
higher ROV-related training and payroll costs, a higher subcontractor
component in work performed and inefficiencies due to an unusually high
number of tropical storms in or threatening Gulf of Mexico work areas.
Additionally the gross margin percentage from the year-earlier quarter was
unusually high as the gross margin percentage for all of 1998 was 22%.
Offshore Field Development
Revenue and gross margin information is as follows:
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
(in thousands, except percentages)
Revenues $28,697 $21,760 $56,351 $46,388
Gross margins 6,781 2,588 14,027 6,888
Gross margin % 24% 12% 25% 15%
Revenues and gross margins were higher in the 1999 periods compared to the
corresponding periods of the prior year as a result of increased product
sales and the acquisition of a production barge in January 1998. Gross
margins also benefitted from higher profitability on project management
work. The Company's FPSO OCEAN PRODUCER continued to operate offshore West
Africa under a contract which expires in January 2000.
Advanced Technologies
Revenue and gross margin information is as follows:
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
(in thousands, except percentages)
Revenues $25,433 $21,291 $43,986 $42,265
Gross margins 4,299 5,712 6,830 9,983
Gross margin % 17% 27% 16% 24%
Revenues rose on increased activity levels for subsea telecommunications
cable services and the design and assembly of large, dynamic, animated
figures for theme parks. However, gross margins declined due to a reduction
in civil engineering and construction work and lower profitability on search
and recovery services.
Other
Interest expense for the three and six month periods ended September 30,
1998 increased compared to the corresponding periods of the prior year as
the Company incurred debt to fund the acquisition of additional equipment.
The provisions for income taxes were related to U.S. income taxes which were
provided at estimated annual effective rates using assumptions as to
earnings and other factors which would affect the tax calculation for the
remainder of the fiscal year, and to the operations of foreign branches and
subsidiaries which were subject to local income and withholding taxes.
Year 2000.
The Year 2000 problem is the result of computer programs which were written
using two digits rather than four to define the applicable year. Programs
that have time sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. The Company has been reviewing its
computer systems to identify potential problem areas. Based upon its
assessment to date, much of the cost of compliance is included in regular
system and equipment upgrades which are planned or are in progress. The
Company does not expect the cost of compliance to have a material effect on
its financial position, results of operations or liquidity. The Company
will also be working with its major trading partners to avoid operational
disruptions. However, there is no assurance that the systems of other
companies on which the Company relies will be converted timely and will not
have an adverse effect on the Company.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to aVote of Security Holders.
(a) The Company held its Annual Meeting of Shareholders on
August 21, 1998.
The following matters were voted upon at the Annual Meeting.
Election of Directors.
Nominee Shares For Shares Withheld
David S Hooker 19,636,850 272,644
Harris J. Pappas 19,572,375 337,119
Ratification of the appointment of Arthur Andersen LLP as independent
auditors of the Company.
Shares For Shares Against Shares Abstained
19,814,100 9,216 86,178
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
4 Instruments defining the rights of security holders,
including indentures.
4.01 Note Purchase Agreement dated as of
September 8, 1998 relating to
$100,000,000 6.72% Senior Notes due
September 8, 2010
4.02 Loan Agreement ($80,000,000 Revolving
Credit Facility) dated as of
October 23, 1998
27 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during
the quarter for which this report is filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OCEANEERING INTERNATIONAL, INC.
(Registrant)
Date: November 12, 1998 By: //s// JOHN R. HUFF
John R. Huff, Chief Executive Officer
Date: November 12, 1998 By: //s// MARVIN J. MIGURA
Marvin J. Migura, Senior Vice
President and Chief Financial Officer
Date: November 12, 1998 By: //s// JOHN L. ZACHARY
John L. Zachary, Controller
and Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements filed as part of the Company's 10Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> SEP-30-1998
<CASH> 30,241
<SECURITIES> 0
<RECEIVABLES> 116,251
<ALLOWANCES> 203
<INVENTORY> 0
<CURRENT-ASSETS> 159,018
<PP&E> 368,437
<DEPRECIATION> 160,029
<TOTAL-ASSETS> 383,984
<CURRENT-LIABILITIES> 92,873
<BONDS> 100,458
0
0
<COMMON> 6,004
<OTHER-SE> 166,852
<TOTAL-LIABILITY-AND-EQUITY> 383,984
<SALES> 208,953
<TOTAL-REVENUES> 208,953
<CGS> 163,934
<TOTAL-COSTS> 163,934
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,192
<INCOME-PRETAX> 23,342
<INCOME-TAX> 8,872
<INCOME-CONTINUING> 14,470
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,470
<EPS-PRIMARY> .63
<EPS-DILUTED> .62
</TABLE>
OCEANEERING INTERNATIONAL, INC.
$100,000,000 6.72% Senior Notes due September 8, 2010
______________
NOTE PURCHASE AGREEMENT
_____________
Dated as of September 1, 1998
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES...........................1
SECTION 2. SALE AND PURCHASE OF NOTES.......................1
SECTION 3. CLOSING..........................................2
SECTION 4. CONDITIONS TO CLOSING............................2
Section 4.1. Representations and Warranties ................2
Section 4.2. Performance; No Default. ......................2
Section 4.3. Compliance Certificates .......................2
Section 4.4. Opinions of Counsel ...........................3
Section 4.5. Purchase Permitted By Applicable Law,
Etc ...........................................3
Section 4.6. Sale of Other Notes ...........................3
Section 4.7. Payment of Special Counsel Fees. ..............3
Section 4.8. Private Placement Number ......................3
Section 4.9. Changes in Corporate Structure ................4
Section 4.10. Funding Instructions ..........................4
Section 4.11. Proceedings and Documents .....................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY..........................................4
Section 5.1. Organization; Power and Authority .............4
Section 5.2. Authorization, Etc ............................4
Section 5.3. Disclosure ....................................5
Section 5.4. Organization and Ownership of Shares
of Restricted Subsidiaries; Affiliates ........5
Section 5.5. Financial Statements ..........................6
Section 5.6. Compliance with Laws, Other
Instruments, Etc ..............................6
Section 5.7. Governmental Authorizations, Etc ..............7
Section 5.8. Litigation; Observance of Agreements,
Statutes and Orders ...........................7
Section 5.9. Taxes .........................................7
Section 5.10. Title to Property; Leases .....................7
Section 5.11. Licenses, Permits, Etc ........................8
Section 5.12. Compliance with ERISA .........................8
Section 5.13. Private Offering by the Company................9
Section 5.14. Use of Proceeds; Margin Regulations ...........9
Section 5.15. Existing Indebtedness; Future Liens ..........10
Section 5.16. Foreign Assets Control Regulations,
Etc ..........................................10
Section 5.17. Status under Certain Statutes ................10
-i-
Section 5.18. Notes Rank Pari Passu ........................10
Section 5.19. Environmental Matters ........................10
SECTION 6. REPRESENTATIONS OF THE PURCHASER................11
Section 6.1. Purchase for Investment ......................11
Section 6.2. Source of Funds ..............................11
SECTION 7. INFORMATION AS TO THE COMPANY...................13
Section 7.1. Financial and Business Information ...........13
Section 7.2. Officer's Certificate.........................16
Section 7.3. Inspection ...................................17
SECTION 8. PREPAYMENT OF THE NOTES.........................18
Section 8.1. Required Prepayments .........................18
Section 8.2. Optional Prepayments with Make-Whole
Amount........................................18
Section 8.3. Change in Control ............................18
Section 8.4. Allocation of Partial Prepayments ............21
Section 8.5. Maturity; Surrender, Etc .....................21
Section 8.6. Purchase of Notes ............................22
Section 8.7. Make-Whole Amount ............................22
SECTION 9. AFFIRMATIVE COVENANTS...........................23
Section 9.1. Compliance with Law ..........................23
Section 9.2. Insurance ....................................24
Section 9.3. Maintenance of Properties ....................24
Section 9.4. Payment of Taxes and Claims ..................24
Section 9.5. Corporate Existence, Etc .....................25
Section 9.6. Notes to Rank Pari Passu .....................25
Section 9.7. NAIC Certificate .............................25
SECTION 10. NEGATIVE COVENANTS..............................25
Section 10.1. Consolidated Adjusted Net Worth ..............25
Section 10.2. EBITDA Interest Expense Coverage Ratio .......25
Section 10.3. Fixed Charges Coverage Ratio .................26
Section 10.4. Certain Indebtedness Ratios ..................26
Section 10.5. Limitations on Indebtedness and
Preferred Stock of Restricted
Subsidiaries .................................26
Section 10.6. Priority Liabilities .........................27
Section 10.7. Limitation on Liens ..........................28
Section 10.8. Dividends, Stock Purchases, Restricted
Investments ..................................31
Section 10.9. Mergers, Consolidations and Sales of
Assets .......................................33
Section 10.10.Limitations on Restricted Agreements..........38
Section 10.11.Nature of Business........................... 39
Section 10.12.Transactions with Affiliates..................39
Section 10.13.Designation of Subsidiaries...................39
-ii-
SECTION 11. EVENTS OF DEFAULT...............................41
SECTION 12. REMEDIES ON DEFAULT, ETC........................44
Section 12.1. Acceleration .................................44
Section 12.2. Other Remedies ...............................44
Section 12.3. Rescission ...................................45
Section 12.4. No Waivers or Election of Remedies,
Expenses, Etc ................................45
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF
NOTES...........................................45
Section 13.1. Registration of Notes ........................45
Section 13.2. Transfer and Exchange of Notes ...............46
Section 13.3. Replacement of Notes .........................46
SECTION 14. PAYMENTS ON NOTES...............................47
Section 14.1. Place of Payment .............................47
Section 14.2. Home Office Payment ..........................47
SECTION 15. EXPENSES, ETC...................................47
Section 15.1. Transaction Expenses .........................47
Section 15.2. Survival .....................................48
SECTION 16. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; ENTIRE AGREEMENT....................48
SECTION 17. AMENDMENT AND WAIVER............................48
Section 17.1. Requirements .................................48
Section 17.2. Solicitation of Holders of Notes .............49
Section 17.3. Binding Effect, Etc ..........................49
Section 17.4. Notes Held by Company, Etc ...................49
SECTION 18. NOTICES.........................................50
SECTION 19. REPRODUCTION OF DOCUMENTS.......................50
SECTION 20. CONFIDENTIAL INFORMATION........................51
SECTION 21. SUBSTITUTION OF PURCHASER.......................52
SECTION 22. MISCELLANEOUS...................................52
Section 22.1. Successors and Assigns .......................52
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Section 22.2. Payments Due on Non-Business Days ............52
Section 22.3. Severability .................................52
Section 22.4. Construction .................................53
Section 22.5. Counterparts .................................53
Section 22.6. Governing Law.................................53
Signature................................................................54
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SCHEDULE A _ INFORMATION RELATING TO PURCHASERS
SCHEDULE B _ DEFINED TERMS
SCHEDULE C _ EXISTING INVESTMENTS
SCHEDULE 5.4 _ Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE 5.5 _ Financial Statements
SCHEDULE 5.14 _ Use of Proceeds
SCHEDULE 5.15 _ Existing Indebtedness
SCHEDULE 8.3 _ Existing Affiliates
SCHEDULE 9.7 _ Form of NAIC Certificate
EXHIBIT 1 _ Form of 6.72% Senior Note due September 8,
2010
EXHIBIT 4.4(a) _ Form of Opinion of General Counsel for the
Company
EXHIBIT 4.4(b) _ Form of Opinion of Special Counsel for the
Company
EXHIBIT 4.4(c) _ Form of Opinion of Special Counsel for the
Purchasers
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OCEANEERING INTERNATIONAL, INC.
11911 FM 529
Houston, Texas 77041
6.72% Senior Notes due September 8, 2010
Dated as of September 1, 1998
TO THE PURCHASER LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
OCEANEERING INTERNATIONAL, INC., a Delaware corporation (the
"Company" ), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
$100,000,000 aggregate principal amount of its 6.72% Senior Notes
due September 8, 2010 (the "Notes", such term to include any
such notes issued in substitution therefor pursuant toSection 13
of this Agreement or the Other Agreements (as hereinafter
defined)). The Notes shall be substantially in the form set out
in Exhibit 1, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used
in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to
a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at
the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company
is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the
other purchasers named in Schedule A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other
Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder, and the
obligations of the Other Purchasers under the Other Agreements,
are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any
Person for the performance or nonperformance by any Other
Purchaser thereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you
and the Other Purchasers shall occur at the offices of Chapman
and Cutler, 111 West Monroe Street, Chicago, IL 60603, at 10:00
A.M. Chicago time, at a closing (the "Closing") on September 8,
1998. At the Closing the Company will deliver to you the Notes
to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least $100,000 as
you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to
account number 3880 0759 at Citibank Delaware, One Penn's Way,
New Castle, Delaware 19720, ABA #031100209. If at the Closing
the Company shall fail to tender such Notes to you as provided
above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations
under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties. The
representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have
performed and complied with all agreements and conditions
contained in this Agreement required to be performed or complied
with by it prior to or at the Closing, and after giving effect to
the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Schedule 5.14), no Default or
Event of Default shall have occurred and be continuing. Neither
the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been
prohibited by Section 10 hereof had such Section applied since
such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
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(b) Secretary's Certificate. The Company shall have
delivered to you a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and the
Agreements.
Section 4.4. Opinions of Counsel. You shall have received
opinions in form and substance satisfactory to you,dated the
date of the Closing (a) from George R. Haubenreich, Jr., Esq.,
General Counsel of the Company, covering the matters set forth in
Exhibit 4.4(a), (b) from Baker & Botts, L.L.P., counsel for the
Company, covering the matters set forth in Exhibit 4.4(b) and
covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such
opinion to you) and (c) from Chapman and Cutler, your special
counsel in connection with such transactions, substantially in
the form set forth in Exhibit 4.4(c) and covering such other
matters incident to such transactions as you may reasonably
request.
Section 4.5. Purchase Permitted By Applicable Law, Etc. On the
date of the Closing your purchase of Notes shall (a) be permitted
by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as
Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as
to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such
purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the
Closing, the Company shall sell to the Other Purchasers, and the
Other Purchasers shall purchase, the Notes to be purchased by
them at the Closing as specified in Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting
the provisions of Section 15.1, the Company shall have paid on or
before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Company
at least three Business Days prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement
Number issued by Standard & Poor's CUSIP Service Bureau (in
cooperation with the Securities Valuation Office of the National
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Association of Insurance Commissioners) shall have been obtained
for the Notes.
Section 4.9. Changes in Corporate Structure. The Company shall
not have changed its jurisdiction of incorporation or been a
party to any merger or consolidation and shall not have succeeded
to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent
financial statements referred to in Schedule 5.5.
Section 4.10. Funding Instructions. At least three Business Days
prior to the date of the Closing, you shall have received written
instructions executed by a Responsible Officer of the Company
directing the manner of the payment of funds and setting forth
(1) the name and address of the transferee bank, (2) such
transferee bank's ABA number, (3) the account name and number
into which the purchase price for the Notes is to be deposited,
and (4) the name and telephone number of the account
representative responsible for verifying receipt of such funds.
Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by
this Agreement and all documents and instruments incident to such
transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all
such counterpart originals or certified or other copies of such
documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform
the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other
Agreements and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this
Agreement constitutes, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by
-4-
(a) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors'
rights generally and (b) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Chase
Securities, Inc., has delivered to you and each Other Purchaser a
copy of a Confidential Private Placement Offering Memorandum,
dated June 1, 1998 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the
business and principal properties of the Company and its
Subsidiaries. This Agreement, the Memorandum, the documents,
certificates or other writings delivered to you by or on behalf
of the Company in connection with the transactions contemplated
hereby and the financial statements listed in Schedule 5.5, taken
as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances
under which they were made. Since March 31, 1998, there has been
no change in the financial condition, operations, business or
properties of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the
Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other
writings delivered to you by or on behalf of the Company
specifically for use in connection with the transactions
contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Restricted
Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as
noted therein) complete and correct lists (i) of the Company's
Restricted Subsidiaries, showing, as to each Restricted
Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its
capital stock or similar equity interests outstanding owned by
the Company and each other Restricted Subsidiary, (ii) of the
Company's Affiliates, other than Subsidiaries, and (iii) of the
Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or
similar equity interests of each Restricted Subsidiary shown in
Schedule 5.4 as being owned by the Company and its Restricted
Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Restricted
Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Restricted Subsidiary identified in Schedule 5.4 is
a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction
-5-
of organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. Each such Restricted Subsidiary has the corporate or
other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact
the business it transacts and proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise
subject to, any legal restriction or any agreement (other than
this Agreement, the agreements listed on Schedule 5.4, customary
limitations imposed by corporate law statutes and other
limitations permitted by Section 10.10) restricting the ability
of such Subsidiary to pay dividends out of profits or make any
other similar distributions of profits to the Company or any of
its Restricted Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Restricted
Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to
each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5. All of said
financial statements (including in each case the related
schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such
financial statements and the consolidated results of their
operations and cash flows for the respective periods so specified
and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments and the inclusion of
abbreviated footnotes or exclusion thereof).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any
breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Company or
any Restricted Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which
the Company or any Restricted Subsidiary is bound or by which the
Company or any Restricted Subsidiary or any of their respective
properties may be bound or affected, (ii) conflict with or result
in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any
Restricted Subsidiary or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
-6-
Section 5.7. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the
Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders. (a) There are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or
affecting the Company or any Restricted Subsidiary or any
property of the Company or any Restricted Subsidiary in any court
or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is in
default under any term of any agreement or instrument to which it
is a party or by which it is bound, or any order, judgment,
decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental
Laws) of any Governmental Authority, which default or violation,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries
have filed all tax returns that are required to have been filed
in any jurisdiction, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become
due and payable and before they have become delinquent, except
for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested
in good faith by appropriate proceedings and with respect to
which the Company or a Restricted Subsidiary, as the case may be,
has established adequate reserves in accordance with GAAP. The
Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Company
and its Restricted Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have
been determined by the Internal Revenue Service and paid for all
fiscal years up to and including the fiscal year ended March 31,
1993.
Section 5.10. Title to Property; Leases. The Company and its
Restricted Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted
-7-
Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material
respects.
Section 5.11. Licenses, Permits, Etc. (a) The Company and its
Restricted Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually
or in the aggregate are Material, without known conflict with the
rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit,
franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person;
and
(c) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or
any of its Restricted Subsidiaries with respect to any patent,
copyright, service mark, trademark, trade name or other right
owned or used by the Company or any of its Restricted
Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each
ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien
on any of the rights, properties or assets of the Company or any
ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan
year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets
of such Plan allocable to such benefit liabilities. The term
"benefit liabilities" has the meaning specified in Section 4001
-8-
of ERISA and the terms "current value" and "present value"
have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under Section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the
aggregate are Material.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Company's most recently
ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by Section 4980B
of the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant
to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made
in reliance upon and subject to the accuracy of your
representation in Section 6.2 as to the sources of the funds used
to pay the purchase price of the Notes to be purchased by you.
Section 5.13. Private Offering by the Company. Neither the
Company nor anyone acting on its behalf has offered the Notes or
any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than you, the Other
Purchasers and not more than 80 other Institutional Investors,
each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company
will apply the proceeds of the sale of the Notes as set forth in
Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose
of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve
the Company in a violation of Regulation X of said Board (12 CFR
224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). The Company and its
Subsidiaries do not hold any margin stock and the Company does
not have any present intention of holding any margin stock. As
used in this Section, the terms _ margin stock_ and _purpose of
buying or carrying_ shall have the meanings assigned to them in
said Regulation U.
-9-
Section 5.15. Existing Indebtedness; Future Liens.
(a) Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Restricted
Subsidiaries as of August 31, 1998, since which date there has
been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturity of the Indebtedness of
the Company or its Restricted Subsidiaries. Neither the Company
nor any Restricted Subsidiary is in default and no waiver of
default is currently in effect, in the payment of any principal
or interest on any Indebtedness of the Company or such Restricted
Subsidiary and no event or condition exists with respect to any
Indebtedness of the Company or any Restricted Subsidiary that
would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the
Company nor any Restricted Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien, other than a Lien
permitted under Section 10.7(a) through (e) and (k).
Section 5.16. Foreign Assets Control Regulations, Etc. Neither
the sale of the Notes by the Company hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V,
as amended) or any enabling legislation or executive order
relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company
nor any Restricted Subsidiary is an _ investment company_
registered or required to be registered subject to regulation
under the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company
Act of 1935, as amended, the ICC Termination Act of 1995, as
amended, or the Federal Power Act, as amended.
Section 5.18. Notes Rank Pari Passu. The obligations of the
Company under this Agreement and the Notes rank pari passu in
right of payment with all other senior unsecured Indebtedness
(actual or contingent) of the Company, including, without
limitation, all senior unsecured Indebtedness of the Company
described in Schedule 5.15 hereto.
Section 5.19. Environmental Matters. Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received
any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Restricted
Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of
-10-
any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Restricted Subsidiary
has knowledge of any facts which would give rise to any
claim, public or private, of violation of Environmental Laws
or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned,
leased or operated by any of them or to other assets or
their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse
Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any
of them or has disposed of any Hazardous Materials in a
manner contrary to any Environmental Laws in each case in
any manner that could reasonably be expected to result in a
Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Restricted
Subsidiaries are in compliance with applicable Environmental
Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. You represent that you
are purchasing the Notes for your own account or for one or more
separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the
distribution thereof; provided that the disposition of your or
their property shall at all times be within your or their
control. You understand that the Notes have not been registered
under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under
circumstances where neither such registration nor such an
exemption is required by law, and that the Company is not
required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one
of the following statements is an accurate representation as to
each source of funds (a _ Source_) to be used by you to pay the
purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an _insurance company general
account_ within the meaning of Department of Labor
Prohibited Transaction Exemption (_ PTE_ ) 95-60 (issued
July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same
-11-
employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for
all contracts held by or on behalf of such plan, exceed ten
percent (10%) of the total reserves and liabilities of such
general account (exclusive of separate account liabilities)
plus surplus, as set forth in the NAIC Annual Statement
filed with your state of domicile; or
(b) the Source is either (i) an insurance company
pooled separate account, within the meaning of PTE 90-1
(issued January 29, 1990), or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of the QPAM Exemption)
managed by a "qualified professional asset manager" or
"QPAM" (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan's assets that are
included in such investment fund, when combined with the
assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part l(c) and (g) of
the QPAM Exemption are satisfied, neither the QPAM nor a
Person controlling or controlled by the QPAM (applying the
definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to
the Company in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of
ERISA.
If you or any subsequent transferee of the Notes indicates
that you or such transferee are relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall
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deliver on the date of Closing or on the date of transfer, as
applicable, a certificate, which shall state whether that (i) it
is a party in interest or a "disqualified person" (as defined
in Section 4975(e)(2) of the Code), with respect to any plan
identified pursuant to paragraphs (b) or (e) above, or (ii) with
respect to any plan, identified pursuant to paragraph (c) above,
it or any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has at such time, and during the immediately preceding
one year, exercised the authority to appoint or terminate said
QPAM as manager of any plan identified in writing pursuant to
paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan.
As used in this Section 6.2, the terms "employee benefit
plan", "governmental plan", "party in interest" and
"separate account" shall have the respective meanings assigned
to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE COMPANY.
Section 7.1. Financial and Business Information. The Company
shall deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements - within 60 days after the
end of each quarterly fiscal period in each fiscal year of
the Company (other than the last quarterly fiscal period of
each such fiscal year), duplicate copies of:
(i) (1) a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such
quarter and (2) a consolidated balance sheet of the
Company and its Restricted Subsidiaries as at the end
of such quarter, and
(ii) (1) consolidated statements of income,
changes in shareholders' equity and cash flows of the
Company and its Subsidiaries for such quarter and (in
the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
and (2) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Restricted Subsidiaries for such quarter and (in
the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the companies
being reported on and their results of operations and cash flows, subject
to changes resulting from year-end adjustments; provided that
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delivery within the time period specified above of copies of the
Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements
of this Section 7.1(a);
(b) Annual Statements _ within 105 days after the end
of each fiscal year of the Company, duplicate copies of,
(i) (1) a consolidated balance sheet of the
Company and its Subsidiaries, as at the end of such
year, and (2) a consolidated balance sheet of the
Company and its Restricted Subsidiaries, as at the end
of such year, and
(ii) (1) consolidated statements of income,
changes in shareholders' equity and cash flows of the
Company and its Subsidiaries, for such year, and (2)
consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Restricted Subsidiaries, for such year, setting forth
in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, and accompanied by:
(1) an opinion thereon of independent
certified public accountants of recognized
national standing, which opinion shall state that
such financial statements present fairly, in all
material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared
in conformity with GAAP, and that the examination
of such accountants in connection with such
financial statements has been made in accordance
with generally accepted auditing standards, and
that such audit provides a reasonable basis for
such opinion in the circumstances, and
(2) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their audit,
they have become aware of any condition or event
that then constitutes a Default or an Event of
Default, and, if they are aware that any such
condition or event then exists, specifying the
nature and period of the existence thereof (it
being understood that such accountants shall not
be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of
Default unless such accountants should have
obtained knowledge thereof in making an audit in
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accordance with generally accepted auditing
standards or did not make such an audit),
provided that the delivery within the time period specified
above of the Company's Annual Report on Form 10-K for such
fiscal year prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commission,
together with the accountant's certificate described in clause
(2) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC and Other Reports - promptly upon their
becoming available, one copy of (i) each financial statement
(including without limitation, the Company's annual report
to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act), report, notice or proxy statement
sent by the Company or any Subsidiary to public securities
holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and
all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission (but
excluding reports relating to registration statements for
employee benefit plans (S-8), shelf registration statements
(Rule 415) and annual reports for employee benefit plans
(Form 11-K)) and of all press releases and other statements
made available generally by the Company or any Subsidiary to
the public concerning developments that are Material;
(d) Notice of Default or Event of Default _ promptly,
and in any event within five days after a Responsible
Officer becoming aware of the existence of any Default or
Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Company is
taking or proposes to take with respect thereto;
(e) ERISA Matters _ promptly, and in any event within
five days after a Responsible Officer becoming aware of any
of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in Section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of,
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proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of
the Code relating to the funding of employee benefit
plans, or in the imposition of any Lien on any of the
rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority - promptly,
and in any event within 30 days of receipt thereof, copies
of any notice to the Company or any Subsidiary from any
Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
and
(g) Requested Information _ with reasonable
promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets
or properties of the Company or any of its Restricted
Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as
from time to time may be reasonably requested by any such
holder of Notes, including without limitation, such
information as is required by SEC Rule 144A under the
Securities Act to be delivered to the prospective transferee
of the Notes.
Section 7.2. Officer's Certificate. Each set of financial
statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance _ the information (including
detailed calculations) required in order to establish
whether the Company was in compliance with the requirements
of Section 10.1 through Section 10.6 and Section 10.8 and
Section 10.9 hereof, inclusive, during the quarterly or
annual period covered by the statements then being furnished
(including with respect to each such Section, where
applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible
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under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default _ a statement that such officer
has reviewed the relevant terms hereof and has made, or
caused to be made, under his or her supervision, a review of
the transactions and conditions of the Company and its
Restricted Subsidiaries from the beginning of the quarterly
or annual period covered by the statements then being
furnished to the date of the certificate and that such
review shall not have disclosed the existence during such
period of any condition or event that constitutes a Default
or an Event of Default or, if any such condition or event
existed or exists (including, without limitation, any such
event or condition resulting from the failure of the Company
or any Restricted Subsidiary to comply with any
Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the
representatives of each holder of Notes that is an Institutional
Investor:
(a) No Default _ if no Default or Event of Default
then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers, and
(with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants,
and (with the consent of the Company, which consent will not
be unreasonably withheld) to visit the other offices and
properties of the Company and each Restricted Subsidiary,
all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default _ if a Default or Event of Default then
exists, at the expense of the Company, to visit and inspect
any of the offices or properties of the Company or any
Restricted Subsidiary, to examine all their respective books
of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their
respective officers and independent public accountants (and
by this provision the Company authorizes said accountants to
discuss the affairs, finances and accounts of the Company
and its Restricted Subsidiaries), all at such times and as
often as may be requested.
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SECTION 8. PREPAYMENT OF THE NOTES
Section 8.1. Required Prepayments. In addition to paying the
entire outstanding principal amount and interest due on the Notes
on the maturity date thereof, the Company agrees that on
September 8, 2006 and on each September 8 thereafter to and
including September 8, 2009 the Company will prepay $20,000,000
principal amount (or such lesser principal amount as shall then
be outstanding) of the Notes at par and without payment of the
Make-Whole Amount or any premium; provided that upon any partial
prepayment of the Notes pursuant to Section 8.2 or purchase of
the Notes permitted by Section 8.6 the principal amount of each
required prepayment of the Notes becoming due under this
Section 8.1 on and after the date of such prepayment or purchase
shall be reduced in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such
prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount The
Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in
an amount not less than 5% of the aggregate principal amount of
the Notes then outstanding in the case of a partial prepayment,
at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment,plus the
Make-Whole Amount determined for the prepayment date with respect
to such principal amount. The Company will give each holder of
Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior
to the date fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Notes to
be prepaid on such date, the principal amount of each Note held
by such holder to be prepaid (determined in accordance with
Section 8.4), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the
date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-
Whole Amount as of the specified prepayment date.
Section 8.3. Change in Control. (a) Notice of Change in Control
or Control Event. The Company will, within five Business Days
after any Responsible Officer has knowledge of the occurrence of
any Change in Control or Control Event, give written notice of
such Change in Control or Control Event to each holder of Notes
unless notice in respect of such Change in Control (or the Change
in Control contemplated by such Control Event) shall have been
given pursuant to subparagraph (b) of this Section. If a Change
in Control has occurred, such notice shall contain and constitute
an offer to prepay Notes as described in subparagraph (c) of this
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Section and shall be accompanied by the certificate described in
subparagraph (g) of this Section.
(b) Condition to Company Action. The Company will not take
any action that consummates or finalizes a Change in Control
unless (i) at least 30 days prior to such action it shall have
given to each holder of Notes written notice containing and
constituting an offer to prepay Notes as described in
subparagraph (c) of this Section, accompanied by the certificate
described in subparagraph (g) of this Section, and
(ii) contemporaneously with such action, it prepays all Notes
required to be prepaid in accordance with this Section.
(c) Offer to Prepay Notes. The offer to prepay Notes
contemplated by subparagraphs (a) and (b) of this Section shall
be an offer to prepay, in accordance with and subjec to this
Section, all, but not less than all, the Notes held by each
holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial
owner shall mean such beneficial owner) on a date specified in
such offer (the "Proposed Prepayment Date" ). Such offer shall
make reference to this Section 8.3, the date by which a holder of
the Notes must reply to such offer pursuant to Section 8.3(d)
hereof and that any failure to so reply shall be deemed a
rejection of such offer. If such Proposed Prepayment Date is in
connection with an offer contemplated by subparagraph (a) of this
Section, such date shall be not less than 30 days and not more
than 120 days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the
Proposed Prepayment Date shall be the first Business Day after
the 45th day after the date of such offer).
(d) Acceptance. A holder of Notes may accept the offer to
prepay made pursuant to this Section by causing a notice of such
acceptance to be delivered to the Company not later than 15 days
after receipt by such holder of the most recent offer of
prepayment. A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this Section shall be deemed to
constitute a rejection of such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid
pursuant to this Section shall be at 100% of the principal amount
of such Notes, together with interest on such Notes accrued to
the date of prepayment, but without Make-Whole Amount or other
premium. The prepayment shall be made on the Proposed Prepayment
Date except as provided in subparagraph (f) of this Section.
(f) Deferral Pending Change in Control. The obligation of
the Company to prepay Notes pursuant to the offers required by
subparagraph (c) and accepted in accordance with subparagraph (d)
of this Section is subject to the occurrence of the Change in
Control in respect of which such offers and acceptances shall
have been made. In the event that such Change in Control has not
occurred on the Proposed Prepayment Date in respect thereof, the
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prepayment shall be deferred until, and shall be made on, the
date on which such Change in Control occurs. The Company shall
keep each holder of Notes reasonably and timely informed of
(i) any such deferral of the date of prepayment, (ii) the date on
which such Change in Control and the prepayment are expected to
occur, and (iii) any determination by the Company that efforts to
effect such Change in Control have ceased or been abandoned (in
which case the offers and acceptances made pursuant to this
Section in respect of such Change in Control shall be deemed
rescinded). In the event that such Change in Control has not
occurred within six months of the Proposed Prepayment Date in
respect thereof and no determination by the Company pursuant to
clause (iii) of the preceding sentence has been made that results
in any offer's rescission, the Company shall again offer to
prepay the Notes pursuant to subparagraph (c), which offer may be
accepted or rejected pursuant to this Section 8.3.
(g) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated
the date of such offer, specifying: (i) the Proposed Prepayment
Date; (ii) that such offer is made pursuant to this Section 8.3;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Prepayment Date; (v) that the
conditions of this Section have been fulfilled; and (vi) in
reasonable detail, the nature and date or proposed date of the
Change in Control.
(h) Certain Definitions. "Change in Control" shall be
deemed to have occurred if any person (as such term is used in
Section 13(d) and Section 14(d)(2) of the Exchange Act as in
effect on the date of the Closing) or related persons
constituting a group (as such term is used in Rule 13d-5 under
the Exchange Act), other than an Affiliate described on
Schedule 8.3,
(i) become the "beneficial owners" (as such term is
used in Rule 13d-3 under the Exchange Act as in effect on
the date of the Closing), directly or indirectly, of more
than 50% of the total voting power of all classes then
outstanding of the Company's Voting Stock, or
(ii) acquire after the date of the Closing (x) the
power to elect, appoint or cause the election or appointment
of at least a majority of the members of the board of
directors of the Company, through beneficial ownership of
the capital stock of the Company or otherwise, or (y) all or
substantially all of the properties and assets of the
Company.
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"Control Event" means:
(i) the execution by the Company or any of its
Restricted Subsidiaries or Affiliates of any agreement or
letter of intent with respect to any proposed transaction or
event or series of transactions or events which,
individually or in the aggregate, would, if consummated as
therein contemplated, result in a Change in Control,
(ii) the execution by the Company or any of its
Restricted Subsidiary of any written agreement which, when
fully performed by the parties thereto, would result in a
Change in Control, or
(iii) the making of any written offer by any person (as
such term is used in Section 13(d) and Section 14(d)(2) of
the Exchange Act as in effect on the date of the Closing) or
related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the
date of the Closing) to the holders of the common stock of
the Company, which offer, if accepted by the requisite
number of holders, would result in a Change in Control.
(i) All calculations contemplated in this Section 8.3
involving the capital stock of any Person shall be made with the
assumption that all convertible Securities of such Person then
outstanding and all convertible Securities issuable upon the
exercise of any warrants, options and other rights outstanding at
such time were converted at such time and that all options,
warrants and similar rights to acquire shares of capital stock of
such Person were exercised at such time.
Section 8.4. Allocation of Partial Prepayments. In the case of
each partial prepayment of the Notes pursuant to Section 8.2, the
principal amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment. All prepayments
made pursuant to Section 8.3 and Section 10.9(b) or (c) shall be
applied only to the Notes of the holders who have elected to
participate in such prepayment.
Section 8.5. Maturity; Surrender, Etc. In the case of each
prepayment of Notes pursuant to this Section 8, the principal
amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the
applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when
so due and payable, together with the interest and Make-Whole
Amount, if any, as aforesaid, interest on such principal amount
shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and cancelled and shall not be
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reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will
not permit any Affiliate to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance
with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of Notes pursuant
to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount"
means, with respect to any Note, an amount equal to the excess,
if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over
the amount of such Called Principal; provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the
following meanings:
"Called Principal" means, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context
requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that
on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the
Called Principal of any Note, 0.50% over the yield to
maturity implied by (a) the yields reported, as of 10:00
A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page PX" of the
Bloomberg Financial Markets Services Screen (or, if not
available, any other national recognized trading screen
reporting on-line intraday trading in the U.S. Treasury
securities) for actively traded on-the-run U.S. Treasury
securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or
(b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of
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the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date.
Such implied yield will be determined, if necessary, by
(i) converting U.S. Treasury bill quotations to bond-
equivalent yields in accordance with accepted financial
practice and (ii) interpolating linearly between (1) the
actively traded on-the-run U.S. Treasury security with the
maturity closest to and greater than the Remaining Average
Life and (2) the actively traded on-the-run U.S. Treasury
security with the maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (a) such
Called Principal into (b) the sum of the products obtained
by multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(ii) the number of years (calculated to the nearest one-
twelfth year) that will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to
the Called Principal of any Note, all payments of such
Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made
prior to its scheduled due date; provided that if such
Settlement Date is not a date on which interest payments are
due to be made under the terms of the Notes, then the amount
of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
Section 9.1. Compliance with Law. The Company will, and will
cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of
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them is subject, including, without limitation, ERISA and
applicable laws in respect of Non-U.S. Pension Plans and all
Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 9.2. Insurance. The Company will, and will cause each
of its Restricted Subsidiaries to, maintain, with financially
sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is
customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and
will cause each of its Restricted Subsidiaries to, maintain and
keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times;
provided that this Section shall not prevent the Company or any
Restricted Subsidiary from discontinuing the operation and the
maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and
will cause each of its Subsidiaries to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed
on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for
which sums have become due and payable that have or might become
a Lien on properties or assets of the Company or any Subsidiary;
provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (a) the amount, applicability
or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books
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of the Company or such Subsidiary or (b) the nonpayment of all
such taxes and assessments in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. Subject to Section 10.9,
the Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Section 10.9, the
Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or a Restricted
Subsidiary) and all rights and franchises of the Company and its
Restricted Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a
Material Adverse Effect.
Section 9.6. Notes to Rank Pari Passu. The Notes and all other
obligations under this Agreement of the Company are and at all
times shall remain direct obligations of the Company ranking pari
passu as against the assets of the Company with all other Notes
from time to time issued and outstanding hereunder without any
preference among themselves and pari passu with all other present
and future unsecured Indebtedness (actual or contingent) of the
Company which is not expressed to be subordinate or junior in
rank to any other unsecured Indebtedness of the Company.
Section 9.7. NAIC Certificate. Within fifteen Business Days
after the date of the Closing, the Company shall deliver to each
of the Holders a certificate certifying as to the answers to the
questions set forth in Schedule 9.7 regarding the status of
Company's internal computer systems and the impact that advent of
the year 2000 will have on such computer systems, which
certificate may be filed by the holders with the National
Association of Insurance Commissioners.
SECTION 10.NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
Section 10.1. Consolidated Adjusted Net Worth. The Company will
at all times keep and maintain Consolidated Adjusted Net Worth at
not less than the sum of (a) $125,000,000 plus (b) 50% of
Consolidated Net Income computed on a cumulative basis for each
of the elapsed fiscal quarters ending after March 31, 1998;
provided that notwithstanding that Consolidated Net Income for
any such elapsed fiscal quarter may be a deficit figure, no
reduction as a result thereof shall be made in the sum to be
maintained pursuant hereto.
Section 10.2. EBITDA Interest Expense Coverage Ratio. The
Company will at all times keep and maintain the ratio of (a)
Consolidated EBITDA for the immediately preceding four
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consecutive fiscal quarter period to (b) Consolidated Interest
Expense for such four consecutive fiscal quarter period at not
less than 2.5 to 1.0.
Section 10.3. Fixed Charges Coverage Ratio. The Company will at
all times keep and maintain the ratio of (a) Consolidated EBITDA
Available for Fixed Charges for the immediately preceding four
consecutive fiscal quarter period to (b) Consolidated Fixed
Charges for such four consecutive fiscal quarter period at not
less than 2.0 to 1.0.
Section 10.4. Certain Indebtedness Ratios. (a) The Company will
at all times keep and maintain the ratio of (i) Consolidated
Indebtedness to (ii) Consolidated Total Capitalization at not
more than 0.55 to 1.00.
(b) The Company will not at any time permit the ratio of (i)
the sum of, determined on a consolidated basis in accordance with
GAAP, (A) the aggregate amount of all Indebtedness of the Company
secured by Liens within the limitations of clauses (f) through
(m) of Section 10.7 plus (B) the aggregate amount of all
Indebtedness of Restricted Subsidiaries (other than Indebtedness
permitted pursuant to Section 10.5(a)(ii)) plus (C) the
aggregate liquidation value of all Preferred Stock of Restricted
Subsidiaries (other than Preferred Stock permitted pursuant to
Section 10.5(a)(ii)) to (ii) Consolidated Adjusted Net Worth to
exceed 0.30 to 1.00.
Section 10.5. Limitations on Indebtedness and Preferred Stock of
Restricted Subsidiaries. (a) The Company will not permit any
Restricted Subsidiary to create, issue, assume, guarantee or
otherwise incur or in any manner become liable in respect of any
Indebtedness or Preferred Stock, except:
(i) Indebtedness or Preferred Stock of a Restricted
Subsidiary outstanding as of the date of Closing and
described on Schedule 5.15 hereto;
(ii) Indebtedness or Preferred Stock of a Restricted
Subsidiary owing or issued to the Company or to a Wholly-
owned Restricted Subsidiary; and
(iii) additional Indebtedness or Preferred Stock of a
Restricted Subsidiary created, issued, assumed, guaranteed
or incurred within the limitations provided in
Sections 10.6(b) and 10.4(b) hereof.
(b) Indebtedness or Preferred Stock existing within the
limitations of Section 10.5(a)(i) may be renewed, extended or
refinanced (without increase in principal amount or liquidation
value, as the case may be, at the time of such renewal, extension
or refunding and subject only to covenants or restrictions which
are not materially more onerous than those applicable to such
Indebtedness or Preferred Stock, as the case may be, at the time
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of original issuance thereof) without regard to the limitations
of Section 10.5(a)(iii), except that no such Indebtedness or
Preferred Stock may in any event be renewed, extended or
refinanced if at the time thereof and after the concurrent giving
effect thereto and to the application of the proceeds thereof, a
Default or Event of Default would exist.
Section 10.6. Priority Liabilities. The Company will not, and
will not permit any Restricted Subsidiary to create, issue,
assume, guarantee or otherwise incur or in any manner become
liable in respect of any Priority Liability, unless:
(a) in the case of Indebtedness of the Company or any
Restricted Subsidiary secured by any Lien created pursuant
to Section 10.7(l), at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after the
concurrent giving effect thereto and to the application of
the proceeds thereof:
(i) no Default, including, without limitation, a
Default under Section 10.4(b), or Event of Default
would exist;
(ii) the aggregate amount of all Indebtedness of
the Company or any Restricted Subsidiary (other than
such Indebtedness permitted pursuant to
Section 10.5(a)(ii)) secured by Liens created pursuant
to Section 10.7(l) (including the Indebtedness then to
be created, issued, assumed, guaranteed or incurred,
but excluding MARAD Indebtedness) would not exceed 15%
of Consolidated Adjusted Net Worth; and
(iii) the aggregate amount of all Indebtedness of
the Company or any Restricted Subsidiary (other than
such Indebtedness permitted pursuant to
Section 10.5(a)(ii)) secured by Liens created pursuant
to Section 10.7(l) (including the Indebtedness then to
be created, issued, assumed, guaranteed or incurred and
any MARAD Indebtedness) would not exceed 25% of
Consolidated Adjusted Net Worth;
(b) in the case of Indebtedness or any Preferred Stock
of a Restricted Subsidiary (other than Indebtedness
permitted pursuant to Section 10.5(a)(i) or (ii) hereof), at
the time of creation, issuance, assumption, guarantee or
incurrence thereof and after the concurrent giving effect
thereto and to the application of the proceeds thereof:
(i) no Default, including, without limitation, a
Default under Section 10.4(b), or Event of Default
would exist; and
(ii) the aggregate amount of all Indebtedness of
Restricted Subsidiaries (other than Indebtedness
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permitted pursuant to Section 10.5(a)(ii) hereof) plus
the aggregate liquidation value of all Preferred Stock
of Restricted Subsidiaries (including the Indebtedness
or Preferred Stock then to be created, issued, assumed,
guaranteed or incurred) would not exceed 15% of
Consolidated Adjusted Net Worth.
Section 10.7. Limitation on Liens. The Company will not, and
will not permit any Restricted Subsidiary to, create or incur, or
suffer to be incurred or to exist, any Lien on its or their
property or assets, whether now owned or hereafter acquired, or
upon any income or profits therefrom, or transfer any property
for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general
creditors, or acquire or agree to acquire, or permit any
Restricted Subsidiary to acquire, any property or assets upon
conditional sales agreements or other title retention devices,
except:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or
demands of mechanics, materialmen, vendors, carriers and
warehousemen and other like Persons; provided that payment
thereof is not at the time required by Section 9.4;
(b) Liens of or resulting from any judgment or award,
the time for the appeal or petition for rehearing of which
shall not have expired, or in respect of which the Company
or a Restricted Subsidiary shall at any time in good faith
be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in
connection with worker's compensation, unemployment
insurance and other like laws, maritime, warehousemen's and
attorneys' liens, statutory landlords' liens and deposits
made to obtain insurance), customary statutory, common law
and contractual rights of a bank to set-off claims of such
bank against cash on deposit with such bank, and Liens to
secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds
or other Liens of like general nature, in any such case
incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each
case, the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor defects,
irregularities in title, encumbrances, easements,
restrictions or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or
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zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or
which customarily exist on properties of corporations
engaged in similar activities and similarly situated and
which do not in any event materially impair their use in the
operation of the business of the Company and its Restricted
Subsidiaries;
(e) Liens securing Indebtedness of a Restricted
Subsidiary to the Company or to another Wholly-owned
Restricted Subsidiary;
(f) Liens existing as of date of the Closing and
described on Schedule 5.15 hereto;
(g) Liens on the capital stock, partnership or other
equity interests held, directly or indirectly, by the
Company or any Restricted Subsidiary in a joint venture,
provided that the proceeds of Indebtedness of the Company or
such Restricted Subsidiary secured by such Liens are in
their entirety contributed or advanced to such joint
venture; provided, further, that (i) at the time of the
creation, issuance, assumption, guarantee or incurrence of
any such Indebtedness by the Company or any Restricted
Subsidiary and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of
Default would exist, (ii) any such Indebtedness, created,
issued, assumed, guaranteed or incurred by the Company or
any Restricted Subsidiary shall have been created within the
applicable limitations of Section 10.6, (iii) with respect
to any such Indebtedness neither the Company or any
Restricted Subsidiary, nor any of the property or assets of
the Company or any Restricted Subsidiary, other than
proceeds realized from the sale or other disposition of such
capital stock, partnership or other equity interests shall,
directly or indirectly, be liable for or secure in any
manner whatsoever the payment thereof and (iv) such
Indebtedness shall be incurred within the limitations
provided in Section 10.4(b) and Section 10.6(b) hereof;
(h) Liens on the capital stock, partnership or other
equity interests held, directly or indirectly, by the
Company or any Restricted Subsidiary in a joint venture,
provided that the proceeds of Indebtedness created by an
Unrestricted Subsidiary or any other Affiliate secured by
such Liens are in their entirety contributed or advanced to
such joint venture; provided, further, that with respect to
any such Indebtedness neither the Company nor any Restricted
Subsidiary, nor any of the property or assets of the Company
or any Restricted Subsidiary, other than proceeds realized
from the sale or other disposition of such capital stock,
partnership or other equity interests shall, directly or
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indirectly, be liable for or secure in any manner whatsoever
the payment thereof;
(i) Liens created or incurred after the date of the
Closing given to secure the payment of the purchase price
incurred in connection with the acquisition or purchase of
assets useful and intended to be used in carrying on the
business of the Company or a Restricted Subsidiary, so long
as such Liens were not incurred, extended or renewed in
contemplation of such acquisition or purchase; provided that
(i) the Lien shall attach solely to the assets acquired or
purchased, (ii) such Lien shall have been created or
incurred within 180 days of the date of acquisition or
purchase, (iii) at the time of acquisition or purchase of
such assets, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets, whether or not
assumed by the Company or a Restricted Subsidiary, shall not
exceed an amount equal to the lesser of the total purchase
price or fair market value at the time of acquisition or
purchase of such assets (as determined in good faith by the
Board of Directors of the Company), (iv) if the Indebtedness
secured by such Lien shall have been incurred by a
Restricted Subsidiary, then and in such event such
Indebtedness shall be incurred within the limitations
provided in Section 10.4(b) and Section 10.6(b) hereof, and
(v) at the time of the creation, issuance, assumption,
guarantee or incurrence of such Indebtedness and after
giving effect thereto and to the application of the proceeds
thereof, no Default, including, without limitation, a
Default under Section 10.4(b), or Event of Default would
exist;
(j) Liens created or incurred after the date of the
Closing existing on such assets at the time of acquisition
thereof or at the time of acquisition or purchase by the
Company or a Restricted Subsidiary of any business entity
then owning such fixed assets, so long as such Liens were
not incurred, extended or renewed in contemplation of such
acquisition or purchase; provided that (i) the Lien shall
attach solely to the assets acquired or purchased, (ii) if
the Indebtedness secured by such Lien shall have been
assumed by a Restricted Subsidiary, then and in such event
such Indebtedness shall be incurred within the limitations
provided in Section 10.4(b) and Section 10.6(b) hereof, and
(iii) at the time of the assumption of such Indebtedness and
after the concurrent giving effect thereto, no Default,
including, without limitation, a Default under Section
10.4(b), or Event of Default would exist;
(k) Liens created under charters entered into by the
Company or any Restricted Subsidiary in the ordinary course
of its business, as owner or lessor of an asset, creating
leasehold interests therein; provided that the creation of
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such Liens is otherwise permitted within the terms of this
Agreement;
(l) Liens created or incurred after the date of the
Closing given to secure Indebtedness of the Company or any
Restricted Subsidiary in addition to the Liens permitted by
the preceding clauses (a) through (k) hereof; provided that
all Indebtedness secured by such Liens shall have been
incurred within the applicable limitations provided in
Section 10.6; and
(m) any extension, renewal or refunding of any Lien
permitted by the preceding clauses (f) through (k) of this
Section 10.7 in respect of the same property theretofore
subject to such Lien in connection with the extension,
renewal or refunding of the Indebtedness secured thereby;
provided that (i) such extension, renewal or refunding of
the Indebtedness to which such Lien relates shall be without
increase in the principal amount remaining unpaid as of the
date of such extension, renewal or refunding, (ii) such Lien
shall attach solely to the same such property and (iii) at
the time of the extension, renewal or refunding of such
Indebtedness and after giving effect thereto and to the
application of the proceeds thereof, no Default, including,
without limitation, a Default under Section 10.4(b), or
Event of Default would exist.
Section 10.8. Dividends, Stock Purchases, Restricted Investments.
(a) The Company will not and the Company will not permit any of
its Restricted Subsidiaries to, directly or indirectly, or
through any Affiliate, declare or make or incur any liability to
declare or make any Distribution (other than redemptions,
acquisitions or retirements of common stock to the extent of net
cash proceeds received from the substantially concurrent sale or
exchange of common stock of the Company) and neither the Company
nor any of its Restricted Subsidiaries will make orauthorize any
Restricted Investment, unless, immediately after giving effect to
the proposed Distribution or Restricted Investment, the aggregate
amount of Distributions declared in the case of dividends or made
in the case of other Distributions plus the aggregate amount of
Restricted Investments then held by the Company and its
Restricted Subsidiaries (valued immediately after the making of
such Restricted Investment as provided in the definition thereof)
during the period from and after the date of this Agreement to
and including the date of declaration in the case of a dividend,
the date of payment in the case of any other Distribution and the
date such Restricted Investment is made, would not exceed the sum
of:
(i) $25,000,000; plus
(ii) 50% of Consolidated Net Income (or if such
Consolidated Net Income is a deficit figure, then minus 100%
of such deficit) for such period determined on a cumulative
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basis commencing on April 1, 1998, to and including the date
of such declaration, payment or commitment; plus
(iii) an amount equal to the aggregate net cash proceeds
received by the Company from the sale on or after the date
of the Closing of shares of its common stock or other
Securities convertible into common stock of the Company or
the amount that Indebtedness of the Company owing to a
Person other than a Subsidiary is reduced by the conversion
or exchange after the date of the Closing of such
Indebtedness into common stock of the Company; plus
(iv) to the extent not included in the determination of
Consolidated Net Income any repayments of or returns in cash
on any Restricted Investment previously made within the
limitations of this Section 10.8(a), including the
reissuance of treasury stock or issuance of new stock of the
Company in satisfaction of usual and customary employee
benefit and other like obligations of the Company and its
Subsidiaries that could otherwise be settled in cash; plus
(v) an amount equal to the aggregate cash paid by the
Company for shares of common stock of the Company to the
extent additional shares of common stock of the Company were
issued by the Company in connection with the acquisition by
the Company of assets within the twelve calendar month
period immediately preceding the date of determination under
this Section 10.8.
(b) For the purposes of making computations under
paragraph (a) of this Section 10.8, the amount of any
Distribution declared, paid or distributed or Restricted
Investment made in property or assets of the Company or a
Restricted Subsidiary shall be deemed to be the book value of
such property or assets as of the date of declaration in the case
of a dividend, the date of payment in the case of any other
Distribution and the date the Restricted Investment is made.
Any corporation which becomes a Restricted Subsidiary after
the date of this Agreement shall be deemed to have made, at the
time it becomes a Restricted Subsidiary, all Restricted
Investments of such corporation existing immediately after it
becomes a Restricted Subsidiary.
(c) The Company will not authorize a Distribution on its
capital stock which is not payable within 60 days of
authorization. The Company may make any Distribution within 60
days after the declaration thereof if at the time of declaration
such Distribution would have complied with this Section 10.8.
(d) The Company will not authorize or make a Distribution on
its capital stock and neither the Company nor any Restricted
Subsidiary will make any Restricted Investment if after giving
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effect to the proposed Distribution or Restricted Investment a
Default or an Event of Default would exist.
Section 10.9. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, consolidate with or be a party to a merger with
any other Person, or sell, lease or otherwise dispose of all or
substantially all of its assets; provided that:
(i) any Restricted Subsidiary may merge or consolidate
with or into the Company or any Wholly-owned Restricted
Subsidiary so long as in (1) any merger or consolidation
involving the Company, the Company shall be the surviving or
continuing corporation and (2) in any merger or
consolidation involving a Wholly-owned Restricted Subsidiary
(and not the Company), the Wholly-owned Restricted
Subsidiary shall be the surviving or continuing corporation;
(ii) the Company may consolidate or merge with or into
any other corporation if (1) the corporation which results
from such consolidation or merger (the "surviving
corporation") is organized under the laws of any state of
the United States or the District of Columbia, (2) the due
and punctual payment of the principal of and premium, if
any, and interest on all of the Notes, according to their
tenor, and the due and punctual performance and observation
of all of the covenants in the Notes and in this Agreement
to be performed or observed by the Company are expressly
assumed in writing by the surviving corporation and the
surviving corporation shall furnish to the holders of the
Notes an opinion of counsel satisfactory to such holders to
the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of the
surviving corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, and (3) at
the time of such consolidation or merger and immediately
after giving effect thereto, (A) no Default or Event of
Default would exist and (B) the surviving corporation would
be permitted by the provisions of Section 10.6(a) to incur
at least $1.00 of additional Indebtedness;
(iii) the Company may sell or otherwise dispose of all
or substantially all of its assets (other than stock and
Indebtedness of a Restricted Subsidiary, which may only be
sold or otherwise disposed of pursuant to Section 10.9(c))
to any Person for consideration which represents the fair
market value of such assets (as determined in good faith by
the Board of Directors of the Company) at the time of such
sale or other disposition if (1) the acquiring Person is a
corporation organized under the laws of any state of the
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United States or the District of Columbia, (2) the due and
punctual payment of the principal of and premium, if any,
and interest on all the Notes, according to their tenor, and
the due and punctual performance and observance of all of
the covenants in the Notes and in this Agreement to be
performed or observed by the Company are expressly assumed
in writing by the acquiring corporation and the acquiring
corporation shall furnish to the holders of the Notes an
opinion of counsel satisfactory to such holders to the
effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of such
acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, and (3) at
the time of such sale or disposition and immediately after
giving effect thereto, (A) no Default or Event of Default
would exist and (B) the acquiring corporation would be
permitted by the provisions of Section 10.6(a) to incur at
least $1.00 of additional Indebtedness.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon as obsolete or
otherwise dispose of assets (except assets sold, leased or
otherwise disposed of in the ordinary course of business for fair
market value and except as provided in Section 10.9 (a)(iii) and
(c); provided that the foregoing restrictions do not apply to:
(i) the sale, lease, transfer or other disposition of
assets of a Restricted Subsidiary to the Company or a
Wholly-owned Restricted Subsidiary; or
(ii) the sale, lease, transfer or other disposition of
assets for cash or other property to a Person or Persons if
all of the following conditions are met:
(1) in the opinion of (i) the Board of Directors
of the Company if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer, the sale is for fair value and is in the best
interests of the Company;
(2) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the
Company would be permitted by the provisions of
Section 10.6(a) to incur at least $1.00of additional
Indebtedness; and
(3) the entirety of the proceeds (net of expenses
and taxes arising in connection therewith) ("Net
Proceeds") from any such sale or other disposition
-34-
shall be applied within 360 days of receipt thereof by
the Company or a Restricted Subsidiary either (A) to
the acquisition (directly or through acquisition of a
Restricted Subsidiary) of assets (other than cash, cash
equivalents or Securities) useful and intended to be
used in the operation of the business of the Company
and its Restricted Subsidiaries as described in
Section 9.6 and having a fair market value (as
determined in good faith by (i) the Board of Directors
of the Company if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer) at least equal to that of the assets so
disposed of or (B) towards the offer of prepayment at
any applicable prepayment premium of Senior
Indebtedness of the Company owing to any Person other
than a Restricted Subsidiary or Affiliate upon the
terms and conditions hereinafter provided; provided,
that if for any reason whatsoever the Company does not
apply all of the Net Proceeds from any such sale in
compliance with clause (A) or (B) of this Section
10.9(b)(ii)(3) within such 360 day period, then and in
such event when the aggregate Net Proceeds from all
sales or other dispositions not so applied exceed
$5,000,000 in the aggregate (the "Asset Sale
Prepayment Amount"), the Company shall, not less than
10 days nor more than 30 days following the date on
which the aggregate Net Proceeds from all sales or
other dispositions not so applied exceed the Asset Sale
Prepayment Amount and to the extent provided in the
foregoing proviso of this Section 10.9(b), offer
pursuant to a written notice (the "Asset Disposition
Prepayment Notice") to apply on a pro rata basis the
Asset Sale Prepayment Amount towards the prepayment of
all outstanding Notes. Such Asset Disposition
Prepayment Notice shall specify (y) a date (the "Asset
Disposition Prepayment Date"), which shall be not less
than 120 days nor more than 180 days following the date
of such Asset Disposition Prepayment Notice, on which
the Company will apply such Asset Sale Prepayment
Amount to the prepayment on a pro rata basis of all of
the outstanding Notes held by any Person which accepts
such offer of prepayment and (z) a date, which shall be
not more than 60 days nor less than 30 days prior to
such Asset Disposition Prepayment Date, on which each
holder of the Notes must accept or decline such offer
of prepayment.
On such Asset Disposition Prepayment Date, the
Company shall apply the Asset Sale Prepayment Amount to
the prepayment of the Notes held by each holder thereof
which has accepted such offer to the prepayment of the
Notes as and to the extent herein contemplated. It is
understood and agreed by the Company and each holder of
the Notes, by its acceptance thereof, that any such
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holder may decline any such offer of prepayment, that
the failure of any such holder to accept or decline any
such offer of prepayment shall be deemed to be a
rejection by such holder to accept such prepayment and
that if any such offer is accepted, the Asset Sale
Prepayment Amount so offered towards the prepayment of
the Notes and accepted shall be prepaid pursuant to
Section 8.2 hereof, excepting only that such prepayment
shall be at par and together with interest accrued on
the amount to be so prepaid to the date of prepayment,
but without premium or Make-Whole Amount. To the
extent that any holder of the Notes declines such offer
of prepayment, the Company and its Restricted
Subsidiaries may use the remaining amount of such
declined Asset Sale Prepayment Amount for general
corporate purposes, and the amount of Asset Sale
Prepayment Amount shall be reset at zero.
Computations pursuant to this Section 10.9(b) shall include
dispositions made pursuant to Section 10.9(c) and computations
pursuant to Section 10.9(c) shall include dispositions made
pursuant to this Section 10.9(b).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, pledge or otherwise dispose of any shares of
the stock or other ownership interests (including as "stock"
for the purposes of this Section 10.9(c) any options or warrants
to purchase stock or other Securities exchangeable for or
convertible into stock or other ownership interests) of a
Restricted Subsidiary (said stock, options, warrants and other
Securities herein called "Subsidiary Stock") or any
Indebtedness of any Restricted Subsidiary, nor will any
Restricted Subsidiary issue, sell, pledge or otherwise dispose of
any shares of its own Subsidiary Stock, provided that the
foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares or
Regulatory Shares; or
(ii) the issue of Subsidiary Stock to the Company; or
(iii) the sale or transfer by the Company or a
Restricted Subsidiary of any Subsidiary Stock to the Company
or to a Wholly-owned Restricted Subsidiary; or
(iv) any other sale or other disposition at any one
time to a Person (other than directly or indirectly to an
Affiliate) of the entire Investment of the Company and its
other Restricted Subsidiaries in any Restricted Subsidiary
if all of the following conditions are met:
(1) in the opinion of (i) the Company's Board of
Directors if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
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Officer, the sale is for fair value and is in the best
interests of the Company;
(2) immediately after the consummation of the
transaction and after giving effect thereto, such
Restricted Subsidiary shall have no Indebtedness of or
continuing Investment in the capital stock of the
Company or of any Restricted Subsidiary and any such
Indebtedness or Investment shall have been discharged
or acquired, as the case may be, by the Company or a
Restricted Subsidiary; and
(3) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the
Company would be permitted by the provisions of
Section 10.6(a) to incur at least $1.00 of additional
Indebtedness; and
(4) the entirety of the Net Proceeds from any
such sale or other disposition shall be applied within
360 days of receipt thereof by the Company or a
Restricted Subsidiary either (A) to the acquisition
(directly or through acquisition of a Restricted
Subsidiary) of assets (other than cash, cash
equivalents or Securities) useful and intended to be
used in the operation of the business of the Company
and its Restricted Subsidiaries as described in
Section 9.6 and having a fair market value (as
determined in good faith by (i) the Board of Directors
of the Company if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer) at least equal to that of the assets so
disposed of or (B) towards the offer of prepayment at
any applicable prepayment premium of Senior
Indebtedness of the Company owing to any Person other
than a Restricted Subsidiary or Affiliate upon the
terms and conditions hereinafter provided; provided,
that if for any reason whatsoever the Company does not
apply all of the Net Proceeds from any such sale in
compliance with clause (A) or (B) of this Section
10.9(c)(iv)(4) within such 360 day period, then and in
such event when the aggregate Net Proceeds from all
sales or other dispositions not so applied exceed the
Asset Sale Prepayment Amount, the Company shall, not
less than 10 days nor more than 30 days following the
date on which the aggregate Net Proceeds from all sales
or other dispositions not so applied exceed the Asset
Sale Prepayment Amount and to the extent provided in
the foregoing proviso of this Section 10.9(c), offer
pursuant to an Asset Disposition Prepayment Notice to
apply on a pro rata basis the Asset Sale Prepayment
Amount towards the prepayment of all outstanding Notes.
Such Asset Disposition Prepayment Notice shall specify
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(y) an Asset Disposition Prepayment Date which shall
be not less than 120 days nor more than 180 days
following the date of such Asset Disposition Prepayment
Notice, on which the Company will apply such Asset Sale
Prepayment Amount to the prepayment on a pro rata basis
of all of the outstanding Notes held by any Person
which accepts such offer of prepayment and (z) a date,
which shall be not more than 60 days nor less than 30
days prior to such Asset Disposition Prepayment Date,
on which each holder of the Notes must accept or
decline such offer of prepayment.
On such Asset Disposition Prepayment Date, the
Company shall apply the Asset Sale Prepayment Amount to
the prepayment of the Notes held by each holder thereof
which has accepted such offer to the prepayment of the
Notes as and to the extent herein contemplated. It is
understood and agreed by the Company and each holder of
the Notes, by its acceptance thereof, that any such
holder may decline any such offer of prepayment, that
the failure of any such holder to accept or decline any
such offer of prepayment shall be deemed to be a
rejection by such holder to accept such prepayment and
that if any such offer is accepted, the Asset Sale
Prepayment Amount so offered towards the prepayment of
the Notes and accepted shall be prepaid pursuant to
Section 8.2 hereof, excepting only that such prepayment
shall be at par and together with interest accrued on
the amount to be so prepaid to the date of prepayment,
but without premium or Make-Whole Amount. To the
extent that any holder of the Notes declines such offer
of prepayment, the Company and its Restricted
Subsidiaries may use the remaining amount of such
declined Asset Sale Prepayment Amount for general
corporate purposes, and the amount of Asset Sale
Prepayment Amount shall be reset at zero.
Computations pursuant to this Section 10.9(c) shall include
dispositions made pursuant to Section 10.9(b) and computations
pursuant to Section 10.9(b) shall include dispositions made
pursuant to this Section 10.9(c).
Section 10.10. Limitations on Restricted Agreements. The Company
will not, nor will it permit any Restricted Subsidiary to, enter
into, or suffer to exist, any agreement with any Person which,
directly or indirectly, prohibits or limits the ability of any
Restricted Subsidiary to (a) pay dividends or make other
distributions to the Company or prepay any Indebtedness owed to
the Company, (b) make loans or advances to the Company or
(c) transfer any of its properties or assets to the Company other
than for such restrictions existing under or by reason of
(i) applicable law or any order or ruling by any governmental
authority; (ii) the Credit Agreement or any agreement relating to
any Indebtedness permitted under this Agreement; (iii) customary
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non-assignment provisions of any contract; (iv) customary
restrictions on cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business;
(v) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the
property so acquired; (vi) contracts for the sale of assets,
including, without limitation, customary restrictions with
respect to a Restricted Subsidiary pursuant to an agreement that
has been entered into for the sale of all or substantially all of
the capital stock or assets of such Restricted Subsidiary;
(vii) any agreement or other instrument governing Indebtedness of
a Person acquired by the Company or any Restricted Subsidiary (or
of a Restricted Subsidiary of such Person) in existence at the
time of such acquisition (but not created in contemplation
thereof), which restriction is not applicable to the Company or
any Restricted Subsidiary, or assets of any such Person, other
than the Person, or assets or Subsidiaries of the Person, so
acquired; or (viii) provisions contained in agreements relating
to Indebtedness which prohibit the transfer of all or
substantially al of the assets of the obligor thereunder unless
the transferee shall assume the obligations of the obligor under
such agreement or instrument.
Section 10.11. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a
result, the general nature of the business, taken on a
consolidated basis, which would then be engaged in by the Company
and its Restricted Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company
and its Restricted Subsidiaries on the date of this Agreement and
businesses related thereto.
Section 10.12. Transactions with Affiliates. The Company will
not, and will not permit any Restricted Subsidiary to, enter into
or be a party to any transaction or arrangement with any
Affiliate (including, without limitation, the purchase from, sale
to or exchange of property with, or the rendering of any service
by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and reasonable
terms not significantly less favorable to the Company or such
Restricted Subsidiary than would obtain in a comparable arm's-
length transaction with a Person other than an Affiliate.
Section 10.13. Designation of Subsidiaries. The Company may
designate or redesignate any Unrestricted Subsidiary as a
Restricted Subsidiary and may designate or redesignate any
Restricted Subsidiary as an Unrestricted Subsidiary; provided
that:
(a) the Company shall have given not less than 10
days' prior written notice to the holders of the Notes that
a Senior Financial Officer has made such determination,
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(b) at the time of such designation or redesignation
and immediately after giving effect thereto: (i) no Default
or Event of Default would exist and (ii) the Company would
be permitted by the provisions of Section 10.6(a) to incur
at least $1.00 of additional Indebtedness,
(c) in the case of the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary and after giving
effect thereto, (i) such Unrestricted Subsidiary so
designated shall not, directly or indirectly, own any
Indebtedness or capital stock of the Company or any
Restricted Subsidiary, (ii) such designation shall be deemed
a sale of assets and shall be permitted by the provisions of
Section 10.9(b)(ii), (iii) neither the Company nor any
Restricted Subsidiary shall be liable for any Indebtedness
of such Unrestricted Subsidiary so designated (other than
Indebtedness which at the time of incurrence shall be
permitted within the limitations of Section 10.6(b) or at
the time of such designation shall be permitted within the
limitations of Section 10.8(a) and 10.6(b)), (iv) no default
or condition in respect of any Indebtedness of such
Unrestricted Subsidiary so designated could as a consequence
of such default or condition cause or permit any
Indebtedness of the Company or any Restricted Subsidiary to
become, or to be declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment,
(v) any continuing Investment in the capital stock of such
Subsidiary held by the Company or of any Restricted
Subsidiary shall at the time of such designation be
permitted (without reference to paragraph (a) of the
definition of _Restricted Investments_ ), within the
limitations of Section 10.8, and (vi) such designation shall
not result in the imposition of a Lien on the assets of the
Company or any Restricted Subsidiary, other than a Lien
permitted within the limitations of Section 10.7,]
(d) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary and after giving
effect thereto: (i) all outstanding Indebtedness and
Preferred Stock of such Restricted Subsidiary so designated
shall be permitted within the applicable limitations of
Section 10.6(b) and (ii) all existing Liens of such
Restricted Subsidiary so designated shall be permitted
within the applicable limitations of Section 10.7, other
than Section 10.7(f) notwithstanding that any such Lien
existed as of the date of Closing), and
(e) in the case of the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary, such Restricted
Subsidiary shall not at any time after the date of this
Agreement have previously been designated as an Unrestricted
Subsidiary more than once, and
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(f) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary, such Unrestricted
Subsidiary shall not at any time after the date of this
Agreement have previously been designated as a Restricted
Subsidiary more than once.
SECTION 11.EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any
principal or Make-Whole Amount, if any, on any Note when the
same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any
interest on any Note for more than five Business Days after
the same becomes due and payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Sections 10.1 through
10.9; or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those
referred to in paragraphs (a), (b) and (c) of this
Section 11) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a
_notice of default_ and to refer specifically to this
paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by
or on behalf of the Company or by any officer of the Company
in this Agreement or in any writing furnished in connection
with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date
as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in
default (as principal or as guarantor or other surety) in
the payment of any principal of or premium or make-whole
amount or interest on any Indebtedness (other than the Notes
and other than Indebtedness, the payments for which have
been made into an escrow or court appointed trustee or
account pending settlement of a dispute) that is outstanding
in an aggregate principal amount of at least, in the case of
any single default, $3,000,000 and, in the case of all
defaults collectively, $5,000,000 beyond any period of grace
provided with respect thereto, or
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(ii) the Company or any Restricted Subsidiary is
in default in the performance of or compliance with any
term of any evidence of any Indebtedness (other than
the Notes and other than Indebtedness outstanding under
the Credit Agreement, provision for which is made in
Section 11(g)) that is outstanding in an aggregate
principal amount of at least, in the case of any single
default, $3,000,000 and, in the case of all defaults
collectively, $5,000,000 or of any mortgage, indenture
or other agreement relating thereto or any other
condition exists, and as a consequence of such default
or condition such Indebtedness has become, or has been
declared (or one or more Persons are entitled to
declare such Indebtedness to be), due and payable
before its stated maturity or before its regularly
scheduled dates of payment, or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the
passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity
interests), (1) the Company or any Restricted
Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its
regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least, in the case
of any single default, $3,000,000 and, in the case of
all defaults collectively, $5,000,000, or (2) one or
more Persons have the right to require the Company or
any Restricted Subsidiary so to purchase or repay such
Indebtedness; or
(g) default or the happening of any event shall occur
under the Credit Agreement and such default or event shall
continue for a period of time sufficient to permit the
acceleration of the maturity of any Indebtedness for
borrowed money of the Company or any Restricted Subsidiary
outstanding thereunder; or
(h) the Company or any Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property,
(v) is adjudicated as insolvent or to be liquidated, or
(vi) takes corporate action for the purpose of any of the
foregoing; or
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(i) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by
the Company or any of its Restricted Subsidiaries, a
custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Restricted
Subsidiaries, or any such petition shall be filed against
the Company or any of its Restricted Subsidiaries and such
petition shall not be dismissed within 60 days; or
(j) a final judgment or judgments for the payment of
money aggregating in excess of $5,000,000 (excluding for
purposes of such determination such amount of any insurance
proceeds paid by or on behalf of the Company or any of its
Restricted Subsidiaries in respect of such judgment or
judgments or unconditionally acknowledged in writing to be
payable by the insurance carrier that issued the related
insurance policy) are rendered against one or more of the
Company and its Restricted Subsidiaries and which judgments
are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of
any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA Section 4042 to terminate or appoint
a trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a Plan may
become a subject of any such proceedings, (iii) the
aggregate "amount of unfunded benefit liabilities" (within
the meaning of Section 4001(a)(18) of ERISA) under all
Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to
incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the
Company or any Restricted Subsidiary establishes or amends
any employee welfare benefit plan that provides post-
employment welfare benefits in a manner that would increase
the liability of the Company or any Restricted Subsidiary
thereunder; and any such event or events described in
clauses (i) through (vi) above, either individually or
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together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
SECTION 12.REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with
respect to the Company described in paragraph (h) or (i) of
Section 11 (other than an Event of Default described in clause
(i) of paragraph (h) or described in clause (vi) of paragraph (h)
by virtue of the fact that such clause encompasses clause (i) of
paragraph (h)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 50% in principal
amount of the Notes at the time outstanding may at any time at
its or their option, by notice or notices to the Company, declare
all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or
(b) of Section 11 has occurred and is continuing, any holder or
holders of Notes at the time outstanding affected by such Event
of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by it or them
to be immediately due and payable.
Upon any Note's becoming due and payable under this
Section 12.1, whether automatically or by declaration, such Note
will forthwith mature and the entire unpaid principal amount of
such Note, plus (i) all accrued and unpaid interest thereon and
(ii) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every
case without presentment, demand, protest or further notice, all
of which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right to
maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for), and that
the provision for payment of a Make-Whole Amount by the Company
in the event that the Notes are prepaid or are accelerated as a
result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such
circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any
Notes have become or have been declared immediately due and
payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate
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proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or
otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of
Section 12.1, the holders of not less than 66-2/3% in principal
amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on
the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by
reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of
the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have
been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant
hereto or to the Notes. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of
Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein
or therein or now or hereafter available at law, in equity, by
statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of
each Note on demand such further amount as shall be sufficient to
cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and
disbursements.
SECTION 13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at
its principal executive office a register for the registration
and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall
be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company
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shall give to any holder of a Note that is an Institutional
Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of
Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of
any Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by
the registered holder of such Note or its attorney duly
authorized in writing and accompanied by the address for notices
of each transferee of such Note or part thereof), the Company
shall execute and deliver, at the Company's expense (except as
provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of
Exhibit 1. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less
than $100,000; provided that if necessary to enable the
registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000.
Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made
the representation set forth in Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company
of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which
evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and
such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if
the holder of such Note is, or is a nominee for, an original
Purchaser or another holder of a Note with a minimum net
worth of at least $10,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory),
or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen,
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destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have
been paid thereon.
SECTION 14.PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2,
payments of principal, Make-Whole Amount, if any, and interest
becoming due and payable on the Notes shall be made in New York,
New York at the principal office of Chase Manhattan Bank in such
jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal
office of the Company in such jurisdiction or the principal
office of a bank or trust company in such jurisdiction.
Section 14.2. Home Office Payment. So long as you or your
nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note
for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your
name in Schedule A, or by such other method or at such other
address as you shall have from time to time specified to the
Company in writing for such purpose, without the presentation or
surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently
with or reasonably promptly after payment or prepayment in full
of any Note, you shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1.
Prior to any sale or other disposition of any Note held by you or
your nominee you will, at your election, either endorse thereon
the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to
Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such
Note as you have made in this Section 14.2.
SECTION 15.EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the
transactions contemplated hereby are consummated, the Company
will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or
other counsel) incurred by you and each Other Purchaser or holder
of a Note in connection with such transactions and in connection
with any amendments, waivers or consents under or in respect of
this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, without
-47-
limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the costs and
expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or
any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other
than those retained by you).
Section 15.2. Survival. The obligations of the Company under
this Section 15 will survive the payment or transfer of any Note,
the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.
SECTION 16.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the
Notes, the purchase or transfer by you of any Note or portion
thereof or interest therein and the payment of any Note, and may
be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the
Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and
the Notes embody the entire agreement and understanding between
you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 17.AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes
may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required
Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you
unless consented to by you in writing, and (b) no such amendment
or waiver may, without the written consent of the holder of each
Note at the time outstanding affected thereby, (i) subject to the
provisions of Section 12 relating to acceleration or rescission,
change the amount or time of any prepayment or payment of
principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on,
-48-
the Notes, (ii) change the percentage of the principal amount of
the Notes the holders of which are required to consent to any
such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of
the Notes (irrespective of the amount of Notes then owned by it)
with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or
true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which
it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly
pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant
any security, to any holder of Notes as consideration for or as
an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder
of Notes then outstanding even if such holder did not consent to
such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver
consented to as provided in this Section 17 applies equally to
all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to
whether such Note has been marked to indicate such amendment or
waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder
of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this Agreement"
and references thereto shall mean this Agreement as itmay from
time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose
of determining whether the holders of the requisite percentage of
the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given
under this Agreement or the Notes, or have directed the taking of
any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes
-49-
directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
SECTION 18.NOTICES.
All notices and communications provided for hereunder shall
be in writing and sent (a) by telefacsimile if the sender on the
same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by
registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or
at such other address as you or it shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, to such holder
at such address as such other holder shall have specified to
the Company in writing, or
(iii) if to the Company, to the Company at its address
set forth at the beginning hereof to the attention of Chief
Financial Officer, or at such other address as the Company
shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when
actually received.
SECTION 19.REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents
received by you at the Closing (except the Notes themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may
destroy any original document so reproduced. The Company agrees
and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not
such reproduction was made by you in the regular course of
business) and any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the same
extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.
-50-
SECTION 20.CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf
of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified in writing
when received by you as being confidential information of the
Company or such Subsidiary; provided that such term does not
include information that (a) was publicly known or otherwise
known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any Person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial
statements delivered to you under Section 7.1 that are otherwise
publicly available. You will maintain the confidentiality of
such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information
of third parties delivered to you; provided that you may deliver
or disclose Confidential Information to (i) your directors,
trustees, officers, employees, agents, authorized
representatives, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you
sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (v) any Person from which you
offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you, (vii) the National Association of
Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other
Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default
has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the
rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of
this Section 20 as though it were a party to this Agreement. On
-51-
reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered
to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the
Company embodying the provisions of this Section 20.
SECTION 21.SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which
notice shall be signed by both you and such Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement
and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in
Section 6. Upon receipt of such notice, wherever the word
_you_ is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate
in lieu of you. In the event that such Affiliate is so
substituted as a purchaser hereunder and such Affiliate
thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word _you_ is used in this Agreement
(other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and
you shall have all the rights of an original holder of the Notes
under this Agreement.
SECTION 22.MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of
the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation,
any subsequent holder of a Note) whether so expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding, any
payment of principal of or Make-Whole Amount or interest on any
Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest
payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent
permitted by law) not invalidate or render unenforceable such
provision in any other jurisdiction.
-52-
Section 22.4. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being
independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person.
Where the character or amount of any asset or liability or
item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be
made by the Company for the purposes of this Agreement, the same
shall be done by the Company in accordance with GAAP, to the
extent applicable, except where such principles are inconsistent
with the requirements of this Agreement.
Section 22.5. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original
but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed
by less than all, but together signed by all, of the parties
hereto.
Section 22.6. Governing Law. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties
shall be governed by, the law of the State of New York, excluding
choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than
such State.
* * * * *
-53-
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this
Agreement and return it to the Company, whereupon the foregoing
shall become a binding agreement between you and the Company.
Very truly yours,
OCEANEERING INTERNATIONAL, INC.
By ______________________________
Title
Accepted as of ____________________.
[VARIATION]
By ______________________________
Its
-54-
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE NORTHWESTERN MUTUAL LIFE $31,000,000
INSURANCE COMPANY
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Bankers Trust Company (ABA #0210-01033)
16 Wall Street
Insurance Unit, 4th Floor
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance
Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment to be addressed, Attention:
Investment Operations, Fax Number: (414) 299-5714.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY $17,000,000
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Citibank, N.A. (ABA #021000089)
111 Wall Street
New York, New York 10043
for credit to: MassMutual Long Term Pool Account Number
4067-3488
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance
Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments, to be addressed
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-2
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $3,000,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
4 Chase MetroTech Center
New York, New York 10081
for credit to: MassMutual Pension Management Account No.
910-2594018
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and
Collection Department of Massachusetts Mutual Life Insurance
Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments, to be addressed
Attention: Securities Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-3
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY $11,376,654
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 014752
OBI PFGSE (S) B0061666 () [Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3]
With sufficient information (including interest rate,
maturity date, interest amount, principal amount and premium
amount, if applicable) to identify the source and
application of such funds.
Notices
All notices with respect to payments to:
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Re: Bond No. B0061666
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 42-0127290
A-4
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY $7,123,346
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department - Securities
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds to:
ABA #073000228
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
For credit to Principal Life Insurance Company
Account No. 014752
OBI PFGSE (S) B0061666 () [Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3]
With sufficient information (including interest rate,
maturity date, interest amount, principal amount and premium
amount, if applicable) to identify the source and
application of such funds.
Notices
All notices with respect to payments to:
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Re: Bond No. B0061666
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 42-0127290
A-5
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
COMMERCIAL UNION LIFE INSURANCE COMPANY $1,500,000
OF AMERICA
c/o Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department-Securities
Jon Davidson
Telefacsimile: (515) 248-2490
Confirmation: (515) 247-3495
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
CoreStates Bank (Philadelphia)
1500 Market Street
Philadelphia, PA 19102-2509
ABA #031-0000-11
OBI PFGSE(S) B0061666
For Credit to Commercial Union Life Insurance Company of
America/Principal Account No. 060073-02-4
Notices
All notices with respect to payments to:
Principal Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Accounting - Securities
Telefacsimile: (515) 248-2643
Confirmation: (515) 247-0689
All other notices and communications to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Tax Identification No.: 04-2235236
A-6
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE TRAVELERS INSURANCE COMPANY $9,000,000
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Securities Department Private
Placement Division 10PB
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
One Chase Manhattan Plaza
New York, New York 10004
for credit to: The Travelers Insurance Company
Consolidated Private Placement Account Number 910-2-587434
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payment and written
confirmation of each such payment, to be addressed Attention:
Cashier_ Securities Department 10PB.
Name of Nominee in which Notes are to be issued: TRAL & CO.
Taxpayer I.D. Number: 06-0566090
A-7
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE TRAVELERS LIFE AND ANNUITY COMPANY $2,000,000
One Tower Square
Hartford, Connecticut 06183-2030
Attention: Securities Department Private
Placement Division 10PB
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
One Chase Manhattan Plaza
New York, New York 10004
for credit to: The Travelers Life and Annuity Company
Consolidated Private Placement Account Number 910-2-587434
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payment and written
confirmation of each such payment, to be addressed Attention:
Cashier-Securities Department 10PB.
Name of Nominee in which Notes are to be issued: TRAL & CO.
Taxpayer I.D. Number: 06-0904249
A-8
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
RELIASTAR LIFE INSURANCE COMPANY $4,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5257
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
U.S. Bank N.A./Mpls.
601 2nd Avenue South
Minneapolis, Minnesota
ABA #091000022
Account Name: ReliaStar Life Insurance Co.
Account #1102-4001-4461
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon, Maturity and P&I Breakdown
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0451140
A-9
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
NORTHERN LIFE INSURANCE COMPANY $2,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5773
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
U.S. Bank N.A./Mpls.
ABA #091000022
601 2nd Avenue South
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: Northern Life Insurance Company
Account #1602-3237-6105
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-1295933
A-10
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
RELIASTAR UNITED SERVICES LIFE $2,000,000
INSURANCE COMPANY
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5257
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Bankers Trust
New York, New York
ABA #021001033
A/C #99000739
FBO ReliaStar United Service Life Ins
Account #92574
Ref: Cusip, Security Description, Principal Amount,
Interest Amount
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: SALKELD & CO.
Taxpayer I.D. Number: 53-0159267
A-11
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
SECURITY CONNECTICUT LIFE INSURANCE COMPANY $2,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Steve Nelson
Phone: (612) 372-5257
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
Chase Manhattan Bank
New York, New York
ABA #021-000-021
Beneficiary Account #544755102
Reference: Sigler & Co., Tax I.D. #13-3641527
F/C #G54426
Ref: Cusip, Security Description, Principal Amount,
Interest Amount
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above and any written notices to Bank
for payment collection to:
Sigler & Co.
c/o Chase Manhattan Bank
Dept. #3492
P.O. Box 50000
Newark, New Jersey 07101-8006
Name of Nominee in which Notes are to be issued: SIGLER & CO.
Taxpayer I.D. Number: 35-1468921
A-12
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
AMERICAN UNITED LIFE INSURANCE COMPANY $2,000,000
One American Square $2,000,000
Post Office Box 368
Indianapolis, Indiana 46206
Attention: Christopher D. Pahlke, Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3" and identifying
the breakdown of principal and interest and the payment date) to:
Bank of New York
Attention: P&I Department
One Wall Street, 3rd Floor
Window A
New York, New York 10286
ABA #021000018, BNF:IOC566
Account #186683/AUL
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0145825
A-13
PRINCIPAL AMOUNT
NAMES AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PROVIDENT MUTUAL LIFE INSURANCE COMPANY $4,000,000
P.O. Box 1717
Valley Forge, Pennsylvania 19482-1717
Attention: Securities Investment Department
Telefacsimile: (610) 407-1322
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "Oceaneering International, Inc.,
6.72% Senior Notes due 2010, PPN 675232 A* 3, principal, premium
or interest") to:
PNC Bank (ABA #031-000-053)
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
for credit to: Provident Mutual Life Insurance Company
Account Number 85-4084-2176
Notices
All notices and communications requiring overnight express
delivery service should be addressed to:
1205 Westlakes Drive
Berwyn, PA 19312-2405
Attention: Treasurer
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 23-0990450
A-14
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
"Affiliate" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first
Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or
equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity
interests. As used in this definition, "Control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of
the Company.
"Asset Disposition Prepayment Date" is defined in
Section 10.9(b).
"Asset Disposition Prepayment Notice" is defined in
Section 10.9(b).
"Asset Sale Prepayment Amount" is defined in Section
10.9(b).
"Business Day" means (a) for the purposes of Section 8.7
only, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to
be closed, and (b) for the purposes of any other provision of
this Agreement, any day other than a Saturday, a Sunday or a day
on which commercial banks in Houston, Texas or New York, New York
are required or authorized to be closed.
"Capitalized Lease" means any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its subsidiaries in
accordance with GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
"Company" means Oceaneering International, Inc., a
Delaware corporation.
"Company Notice" is defined in Section 8.3.
"Confidential Information" is defined in Section 20.
"Consolidated Adjusted Net Worth" means as of the date of
any determination thereof Consolidated Net Worth excluding, to
the extent included in the determination of Consolidated Net
Worth, any translation gains or losses affecting cumulative
foreign currency translation adjustments as determined in
accordance with GAAP.
"Consolidated EBITDA" for any period means the sum of
(a)(i) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (ii) all
provisions for any Federal, state or local income taxes made by
the Company and its Restricted Subsidiaries during such period,
(iii) all provisions for depreciation and amortization (other
than amortization of debt discount) made by the Company and its
Restricted Subsidiaries during such period, (iv) any other
non-cash charge to the extent such non-cash charge reduces
Consolidated Net Income (as reduced by any adjustment for the
amount of cash pay-outs of non-cash charges from prior fiscal
periods), and (v) Consolidated Interest Expense during such
period, minus (b) any gains or losses on the sale or other
disposition of Investments or fixed or capital investments (other
than gains or losses in the ordinary course of business as
determined in accordance with GAAP), and any taxes on such
excluded gains and any tax deductions or credits on account of
any such excluded losses, all determined on a consolidated basis
in accordance with GAAP.
"Consolidated EBITDA Available for Fixed Charges" for any
period means the sum of (a) Consolidated EBITDA during such
period plus (to the extent not included in determining
Consolidated EBITDA) (b) one-third of all Rentals (other than
Rentals on Capitalized Leases) payable during such period by the
Company and its Restricted Subsidiaries pursuant to Long-Term
Leases.
"Consolidated Fixed Charges" for any period means on a
consolidated basis the sum of (a) one-third of all Rentals (other
than Rentals on Capitalized Leases) payable during such period by
the Company and its Restricted Subsidiaries pursuant to Long-Term
Leases, and (b) Consolidated Interest Expense payable during such
period.
"Consolidated Indebtedness" means all Indebtedness of the
Company and its Restricted Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
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"Consolidated Interest Expense" means for any period all
interest (including the interest component on Rentals on
Capitalized Leases) and all amortization of debt discount and
expense on any particular Indebtedness (including, without
limitation, payment-in-kind, zero coupon and other like
Securities) of the Company and its Restricted Subsidiaries for
which such calculations are being made as determined in
accordance with GAAP. Computations of Consolidated Interest
Expense on a pro-forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the
date of any determination.
"Consolidated Net Income" for any period means the gross
revenues of the Company and its Restricted Subsidiaries for such
period less all expenses and other proper charges (including
taxes on income), determined on a consolidated basis after
eliminating earnings or losses attributable to outstanding
Minority Interests, but excluding in any event:
(a) the proceeds of any life insurance policy;
(b) net earnings and losses of any Restricted
Subsidiary accrued prior to the date it became a Restricted
Subsidiary;
(c) net earnings and losses of any corporation (other
than a Restricted Subsidiary), substantially all the assets
of which have been acquired in any manner by the Company or
any Restricted Subsidiary, realized by such corporation
prior to the date of such acquisition;
(d) net earnings and losses of any corporation (other
than a Restricted Subsidiary) with which the Company or a
Restricted Subsidiary shall have consolidated or which shall
have merged into or with the Company or a Restricted
Subsidiary prior to the date of such consolidation or
merger;
(e) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any
Restricted Subsidiary has an ownership interest unless such
net earnings shall have actually been received by the
Company or such Restricted Subsidiary in the form of cash
distributions;
(f) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment
of dividends to the Company or any other Restricted
Subsidiary;
(g) earnings and losses resulting from any
reappraisal, revaluation, write-up or write-down of assets
other than in the ordinary course of business;
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(h) any reversal of any contingency reserve to the
extent such contingency reserve was taken prior to the date
of the Closing, but including in any determination of
Consolidated Net Income changes in estimates made in
accordance with GAAP; and
(i) any other extraordinary gain or loss, including,
without limitation, the cumulative effect of changes to
GAAP.
"Consolidated Net Worth" means, as of the date of any
determination thereof the amount of the capital stock accounts
(net of treasury stock, at cost) plus (or minus in the case of a
deficit) the surplus in retained earnings of the Company and its
Restricted Subsidiaries as determined in accordance with GAAP.
"Consolidated Total Capitalization" means as of the date
of the end of the most recent prior fiscal quarter, the sum of
(a) Consolidated Indebtedness plus (b) Consolidated Adjusted Net
Worth.
"Credit Agreement" means the Amended and Restated Credit
Agreement dated June 12, 1996 with Morgan Guaranty Trust Company
of New York, as Agent, including any amendment or supplement
thereto and any (one or more) renewal, extension, replacement or
refunding thereof.
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"Default Rate" means that rate of interest that is the
greater of (i) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of the Notes or (ii) 2% over
the rate of interest publicly announced by Morgan Guaranty Trust
Company of New York in New York City, New York as its "base" or
"prime" rate.
"Distribution" in respect of the Company and its
Restricted Subsidiaries means:
(a) dividends or other distributions on capital stock
(including, without limitation, preferred stock) of a
corporation (except dividends or other distributions payable
solely in shares of common stock of such corporation and
dividends of a Restricted Subsidiary to the Company); and
(b) redemption, acquisition or retirement of any
shares of its capital stock or warrants, rights or other
options to purchase any shares of its capital stock (other
than the redemption, acquisition or retirement of any shares
of capital stock of a Restricted Subsidiary by the Company
or a Restricted Subsidiary).
B-4
"Environmental Laws" means any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or
the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes,
air emissions and discharges to waste or public systems
applicable to such Person.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that is treated as a single employer together
with the Company under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"GAAP" means generally accepted accounting principles as
in effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Restricted Subsidiary conducts all or any part of its
business, or which asserts jurisdiction over any
properties of the Company or any Restricted Subsidiary,
or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
"Guaranty" means, with respect to any Person, any
obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of
such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation (other than
performance obligations (other than obligations for the payment
of borrowed money)) of any other Person in any manner, whether
directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or
otherwise, by such Person:
B-5
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such Indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet
condition or any income statement condition of any other
Person or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of any other
Person to make payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness
or obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of
the obligor under any Guaranty, the Indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic
or hazardous wastes or any other substances, including all
substances listed in or regulated in any Environmental law that
might pose a hazard to health or safety, the removal of which may
be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, regulated,
prohibited or penalized by any applicable law (including, without
limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by
the Company pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any
time, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capitalized Leases;
B-6
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable
for such liabilities);
(e) all its liabilities in respect of standby letters
of credit or instruments serving a similar function issued
or accepted for its account by banks and other financial
institutions (other than those representing obligations for
performance guarantees);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities (other than performance guaranties) of a type
described in any of clauses (a) through (f) hereof;
provided, that in the case of computations of "Indebtedness" of
the Company or any Restricted Subsidiary, notwithstanding clause
(d) hereof, "Indebtedness" shall not include Indebtedness
secured by Liens permitted under Section 10.7(h).
"Institutional Investor" means (a) any original purchaser
of a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and
(c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any
other similar financial institution or entity, regardless of
legal form.
"Investments" shall mean all investments, in cash or by
delivery of property, made directly or indirectly in any property
or assets or in any Person, whether by acquisition of shares of
capital stock, Indebtedness or other obligations or Securities or
by loan, advance, capital contribution or otherwise; provided
that "Investments" shall not mean or include routine
investments in property to be used or consumed in the ordinary
course of business.
"Lien" means any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner
of the property, whether such interest is based on the common
law, statute or contract, and including but not limited to the
security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" shall
include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances (including, with respect
to stock, stockholder agreements, voting trust agreements, buy-
back agreements and all similar arrangements) affecting property.
For the purposes of this Agreement, the Company or a Subsidiary
shall be deemed to be the owner of any property which it has
B-7
acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person
for security purposes and such retention or vesting shall
constitute a Lien.
"Long-Term Lease" means any lease of real or personal
property (other than a Capitalized Lease) having an original
term, including any period for which the lease may be renewed or
extended at the option of the lessor, of more than one year.
"Make-Whole Amount" is defined in Section 8.7.
"MARAD Indebtedness" means Indebtedness of the Company or
any Restricted Subsidiary owed to, or guaranteed by, the U.S.
Maritime Administration and incurred in connection with the
acquisition or purchase of fixed assets useful and intended to be
used in carrying on the business of the Company or a Restricted
Subsidiary, provided that with respect to such Indebtedness, none
of the property or assets of the Company or any Restricted
Subsidiary, other than the fixed asset so acquired, shall be,
directly or indirectly, liable for or secure in any manner
whatsoever the payment thereof.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets or properties of
the Company and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect
on (a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Restricted
Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the
Notes.
"Memorandum" is defined in Section 5.3.
"Minority Interests" means any shares of stock of any
class of a Restricted Subsidiary (other than directors'
qualifying shares or Regulatory Shares as required by law) that
are not owned by the Company and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary
or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the
foregoing method of valuing Minority Interests in preferred
stock.
B-8
"Multiemployer Plan" means any Plan that is a
"multiemployer plan" (as such term is defined in
Section 4001(a)(3) of ERISA).
"Net Proceeds" is defined in Section 10.9(b).
"Non-U.S. Pension Plan" means any plan, fund, or other
similar program established or maintained outside the United
States of America by the Company or any one or more of the
Subsidiaries primarily for the benefit of employees of the
Company or such Subsidiaries residing outside the United States
of America, which plan, fund or other similar program provides
for retirement income for such employees or a deferral of income
for such employees in contemplation of retirement and is not
subject to ERISA or the Code.
"Noteholder Notice" is defined in Section 8.3(a).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such
certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation,
joint venture, limited liability company, association, trust,
unincorporated organization, or a government or agency or
political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in
Section 3(3) of ERISA) that is or, within the preceding five
years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a
corporation that is preferred over any other class of capital
stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.
"Priority Liability" means, as of the date of any
determination thereof, (a) any Indebtedness of the Company
secured by a Lien created pursuant to Section 10.7(l) hereof and
B-9
(b) any Indebtedness and any Preferred Stock of Restricted
Subsidiaries other than Indebtedness or Preferred Stock permitted
under Section 10.5(a)(ii).
"property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
"Proposed Prepayment Date" is defined in Section 8.3(c).
"QPAM Exemption" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Regulatory Shares" means, with respect to any Person,
shares of the capital stock of such Person required to be issued
as qualifying shares to directors or shares issued to Persons
other than Company in response to regulatory requirements of
foreign jurisdictions pursuant to a resolution of the Board of
Directors of such Person.
"Required Holders" means, at any time, the holders of at
least 50% in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any
of its Affiliates).
"Responsible Officer" means any Senior Financial Officer
and any other officer of the Company with responsibility for the
administration of the relevant portion of this Agreement.
"Rentals" means and include as of the date of any
determination thereof all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by
the Company or a Restricted Subsidiary, as lessee or sublessee
under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a
Restricted Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of
the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Restricted Investments" shall mean all Investments, other
than:
(a) Investments by the Company and its Restricted
Subsidiaries in and to Wholly-owned Restricted Subsidiaries,
including any Investment in a corporation which, after
giving effect to such Investment, will become a Wholly-owned
Restricted Subsidiary;
(b) Investments representing loans or advances in the
usual and ordinary course of business to officers and
B-10
employees for expenses incidental to carrying on the
business of the Company or any Restricted Subsidiary;
(c) Investments in property or assets to be used in
the ordinary course of the business of the Company and its
Restricted Subsidiaries as described in Schedule C of this
Agreement;
(d) Investments in commercial paper of corporations
organized under the laws of the United States or any state
thereof and loan participations maturing in 270 days or less
from the date of issuance which, at the time of acquisition
by the Company or any Restricted Subsidiary, is accorded a
rating of _A-1_ or better by Standard & Poor's Ratings
Group, a division of McGraw-Hill, Inc., a New York
corporation, or _ P-1_ or better by Moody's Investors
Service, Inc.;
(e) Investments in direct obligations of the United
States of America or any agency or instrumentality of the
United States of America, the payment or guarantee of which
constitutes a full faith and credit obligation of the United
States of America, in either case, maturing within twelve
months from the date of acquisition thereof;
(f) Investments in direct obligations of other
governments maturing within twelve months from the date of
acquisition thereof by the Company or a Restricted
Subsidiary, provided that at the time of such acquisition,
the long-term Indebtedness of such government is rated
"AAA" by Standard & Poor's Ratings Group or by Moody's
Investor's Service, Inc.;
(g) Investments in certificates of deposit and time
deposits maturing within one year from the date of issuance
thereof, issued by a bank or trust company organized under
the laws of the United States or any State thereof, having
either (i) capital, surplus and undivided profits
aggregating at least $100,000,000 or (ii) total assets of
$1,000,000,000;
(h) Investments in repurchase agreements with respect
to any Security described in clause (e) entered into with a
depository institution or trust company acting as principal
described in clause (g) if such repurchase agreements:
(i) are by their terms to be performed by the repurchase
obligor and such repurchase agreements are deposited with a
bank or trust company of the type described in clause (g)
and (ii) mature within ninety days from the date of
execution and delivery thereof; and
(i) Investments of the Company not described in the
foregoing clauses (a) through (h); provided that the
aggregate amount of all such Investments shall not at the
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time any Investment is made within the limitations of this
clause (i) exceed 15% of Consolidated Adjusted Net Worth.
"Restricted Subsidiary" means any Subsidiary which is not
a Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Security" shall have the same meaning as in Section 2(1)
of the Securities Act.
"Senior Financial Officer" means the chief executive
officer, chief financial officer, principal accounting
officer, treasurer or controller of the Company.
"Senior Indebtedness" shall mean all Indebtedness for
borrowed money of the Company which is not expressed to be
subordinate or junior in rank to any other Indebtedness for
borrowed money of the Company.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one
or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors
(or Persons performing similar functions) of such entity, and any
partnership, limited liability company or joint venture if more
than a 50% interest in the profits or capital thereof or assets
upon dissolution is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one
or more of its Subsidiaries). Unless the context otherwise
clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"Subsidiary Stock" is defined in Section 10.9(c).
"Swaps" means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For
the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case,
the amount of such obligation shall be the net amount so
determined.
B-12
"Unrestricted Subsidiary" means any Subsidiary designated
by the Board of Directors as an "Unrestricted Subsidiary" on
Schedule 5.4 or pursuant to Section 10.13.
"Voting Stock" means Securities of any class or classes,
the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
"Wholly-owned Restricted Subsidiary" means, at any time,
any Restricted Subsidiary one hundred percent (100%) of all of
the equity interests (except directors' qualifying shares and
shares of a capital stock owned by one or more individuals who
are not citizens of the United States of America and whose
ownership of such capital stock is mandated by the law of any
country other than the United States of America) and voting
interests of which are owned by any one or more of the Company
and the Company's other Wholly-owned Restricted Subsidiaries at
such time.
B-13
SCHEDULE C
EXISTING INVESTMENTS
50% ownership of Oceanteam A/S
49% ownership of Norsk Subsea Cabel A/S
49% ownership of Solus Emirates
SCHEDULE 5.4
RESTRICTED SUBSIDIARIES, AFFILIATES AND DIRECTORS AND
SENIOR OFFICERS OF THE COMPANY
PERCENTAGE OF OWNERSHIP BY JURISDICTION
OCEANEERING INTERNATIONAL,INC. OF
AND RESTRICTED SUBSIDIARIES ORGANIZATION
RESTRICTED SUBSIDIARY
Oceaneering Australia Pty. 100% Australia
Limited
Oceaneering FSC, Inc. 100% Barbados
Marine Production Systems do 100% Brazil
Brasil Ltda.
Marine Production Systems 100% Brazil
Servicos Ltda.
Monocean Oceaneering 100% Brazil
Engenharia Submarina Ltda.
Ocean Systems do Brasil 100% Brazil
Servicos Subacquaticos, Ltda.
Oceaneering do Brasil 100% Brazil
Servicos Submarinos, Ltda.
Oceaneering Limited 100% Canada
Solus Offshore, Ltd. 100% Cayman Islands
Servicos Marinos Oceaneering 100% Chile
Chile Ltda.
Eastport International, Inc. 100% Delaware
Marine Production Systems, 100% Delaware
Ltd.
Oceaneering Space Systems, 100% Delaware
Inc.
Oceaneering Survey, Inc. 100% Delaware
Oceaneering Technologies, 100% Delaware
Inc.
Solus Ocean Systems, Inc. 100% Delaware
Ocean Systems Engineering 100% England
Limited
Oceaneering International 100% England
Services Limited
Solus Schall Limited 100% England
Oceaneering International (M) 100% Malaysia
Sdn. Bhd.
Oceaneering International, 100% Mexico
S.A. de C.V.
Oceaneering International 100% Netherlands
(Netherlands) B.V.
Oceaneering Services 100% Nigeria
(Nigeria) Limited
Oceaneering A/S 100% Norway
UEC 789 Limited 100% Scotland
Multiflex Limited 100% Scotland
Oceaneering International 100% Sharjah
(Sharjah) Limited
Oceaneering International Pte 100% Singapore
Ltd
Oceaneering International AG 100% Switzerland
Oceaneering Underwater GmbH 100% Switzerland
Multiflex, Inc. 100% Texas
Ocean Systems Engineering, 100% Texas
Inc.
Oil Industry Engineering, 100% Texas
Inc.
Specialty Wire and Cable 100% Texas
Company, Inc.
Oceaneering Geoscience Ltd. 100% United Kingdom
Steadfast Oceaneering, Inc. 100% Virginia
P. T. Calmarine 50% Indonesia
Solus Schall (Nigeria) 50% Nigeria
Limited
Oceaneering Arabia Ltd. 50% Saudi Arabia
Ocean Marine & Communications 49% Thailand
Systems Ltd.
Solus Oceaneering (Malaysia) 49% Malaysia
Sdn. Bhd.
* Remainder held by local
nominee and effectively
controlled by Oceaneering.
AFFILIATES, OTHER THAN
SUBSIDIARIES
Oceanteam A/S 50% Norway
Norsk Subsea Cabel A/S 49% Norway
Solus Emirates 49% Qatar
-2-
DIRECTORS AND SENIOR
OFFICERS
Name Position
Charles B. Evans Director
David S. Hooker Director
John R. Huff Chairman, President and
Chief Executive Officer
D. Michael Hughes Director
Harris J. Pappas Director
T. Jay Collins Executive Vice President
Marvin J. Migura Sr. Vice President and
Chief Financial Officer
George R. Haubenreich, Jr. Vice President, General Counsel
& Secretary
Robert P. Mingoia Treasurer
Bruce Crager Senior Vice President
Oceaneering Production Systems
M. Kevin McEvoy Vice President - Integrated Services
-3-
SCHEDULE 5.5
FINANCIAL STATEMENTS
Annual Report to shareholders for the 1998 fiscal year _
containing Form 10-K for the year ended March 31, 1998.
Annual Report to shareholders for the 1997 fiscal year _
containing Form 10-K for the year ended March 31, 1997.
Quarterly Report on Form 10-Q for the quarterly periods
ended June 30, 1998 and December 31, 1997.
SCHEDULE 5.14
USE OF PROCEEDS
GROSS PROCEEDS
$100,000,000
Agency Fee - Chase Securities 1,000,000
Repayment of outstanding principal under the 78,000,000
Credit Agreement
Estimated legal fees and other expenses 300,000
Total Applications 79,300,000
Available for General Corporate Purposes $20,700,000
SCHEDULE 5.15
EXISTING INDEBTEDNESS
Credit Agreement 78,000,000
Capital Lease _ IBM Credit Corporation 815,095
78,815,095
LIENS EXISTING ON THE DATE OF CLOSING
Cash Restricted and acting as $1,513,000
security in legal proceedings in
the United Kingdom, 900,000 Pounds
Sterling at $1.681
SCHEDULE 8.3
EXISTING AFFILIATES
JURISDICTION OF
AFFILIATED COMPANIES ORGANIZATION
Oceaneering Australia Pty. Limited Australia
Oceaneering FSC, Inc. Barbados
Marine Production Systems do Brasil Ltda. Brazil
Marine Production Systems Servicos Ltda. Brazil
Monocean Oceaneering Engenharia Submarina Brazil
Ltda.
Ocean Systems do Brasil Servicos Brazil
Subacquaticos, Ltda.
Oceaneering do Brasil Servicos Submarinos, Brazil
Ltda.
Oceaneering Limited Canada
Solus Offshore, Ltd. Cayman Islands
Servicos Marinos Oceaneering Chile Ltda. Chile
Eastport International, Inc. Delaware
Marine Production Systems, Ltd. Delaware
Oceaneering Space Systems, Inc. Delaware
Oceaneering Survey, Inc. Delaware
Oceaneering Technologies, Inc. Delaware
Solus Ocean Systems, Inc. Delaware
Ocean Systems Engineering Limited England
Oceaneering International Services Limited England
Solus Schall Limited England
Oceaneering International (M) Sdn. Bhd. Malaysia
Oceaneering International, S.A. de C.V. Mexico
Oceaneering International (Netherlands) B.V. Netherlands
Oceaneering Services (Nigeria) Limited Nigeria
Oceaneering A/S Norway
UEC 789 Limited Scotland
Multiflex Limited Scotland
Oceaneering International (Sharjah) Limited Sharjah
Oceaneering International Pte Ltd Singapore
Oceaneering International AG Switzerland
Oceaneering Underwater GmbH Switzerland
Multiflex, Inc. Texas
Ocean Systems Engineering, Inc. Texas
Oil Industry Engineering, Inc. Texas
Specialty Wire and Cable Company, Inc. Texas
Oceaneering Geoscience Ltd. United Kingdom
Steadfast Oceaneering, Inc. Virginia
P. T. Calmarine Indonesia
Solus Schall (Nigeria) Limited Nigeria
Oceaneering Arabia Ltd. Saudi Arabia
Ocean Marine & Communications Systems Ltd. Thailand
Solus Oceaneering (Malaysia) Sdn. Bhd. Malaysia
Oceanteam A/S Norway
Norsk Subsea Cabel A/S Norway
Solus Emirates Qatar
DIRECTORS AND EXECUTIVE OFFICERS
Name
Position
Charles B. Evans Director
David S. Hooker Director
John R. Huff Chairman,
President and Chief
Executive Officer
D. Michael Hughes Director
Harris J. Pappas Director
T. Jay Collins Executive Vice
President
Marvin J. Migura Sr. Vice President and
Chief Financial Officer
George R. Haubenreich, Jr. Vice President, General
Counsel & Secretary
Bruce Crager Senior Vice President,
Oceaneering Production
Systems
M. Kevin McEvoy Vice President-Integrated
Services
-2-
FORM OF NAIC CERTIFICATE
YEAR 2000 DUE DILIGENCE NOTICE
As part of its credit assessment procedures for not-rated
securities, the Securities Valuation Office has an obligation to
conduct due diligence on the obligor of each security before it
can assign the security an NAIC Designation. The Securities
Valuation Office has become increasingly aware in recent months
of the need to assess a company's Year 2000 preparedness as part
of this due diligence. The Securities Valuation Office has,
therefore, drafted a series of questions relating to Year 2000
compliance to be answered by the issuers/obligors of all
not-rated securities filed with the Securities Valuation Office.
Please include a response to this questionnaire with each initial
or annual update submission to the Securities Valuation Office of
securities not rated by an NRSRO. If a response is not included
as part of the submission, the filer will be contacted and asked
for the response before the submission can be assigned an NAIC
Designation for the current year.
YEAR 2000 (Y2K) DUE DILIGENCE QUESTIONS
1. What is the company doing to prepare its internal
computer systems and software for the year 2000?
2. What is the company doing to prepare its internal
operating systems and equipment with embedded chip technology for
the year 2000?
3. Will the year 2000 problem effect the company's
products, services and/or business activities (e.g., disruption
of service or discontinuance of product lines)?
4. Who in the company is responsible for directing its year
2000 efforts and what has been the Board of Directors' role in
reviewing and approving the company's year 2000 plan?
5. What is the company's schedule for fixing and testing
its systems? Please identify any third party or industry-wide
testing in which the company plans to participate.
6. If the company does not plan to do all its year 2000
work itself, please identify whether any outside consultants or
vendors have been or will be employed to do all or part of the
work. If the company plans to obtain a certificate of year 2000
compliance from any outside organization, please identify.
7. What has the company done to survey its vendors,
suppliers, trading partners, service providers or other third
parties with whom it interacts to ascertain what their status is
with respect to year 2000 readiness?
8. What is the company's contingency plan if some or all of
the company's systems will not be remediated in time for the year
2000?
9. How do the company's costs to address the year 2000
problem affect its bottom line? Do these costs have a material
financial effect? Can I see something in the company's recent
reports or other public statements in which the company discusses
its approach to the year 2000 problem?
10. Even if the company does not believe that the costs or
potential effects of the year 2000 are material, can you tell me
how much the year 2000 problem will cost the company?
11. Please identify any additional insurance the company has
obtained, including any directors and officers personal liability
insurance, specifically for the year 2000 problem?
12. If your company is a manufacturer or supplier of any
hardware, software or equipment systems, what are your concerns
about the potential liabilities associated with the company's
products or services? What is your best assessment of corporate
exposure to legal actions arising from equipment or software
failures associated with the company's products or services?
-2-
[FORM OF NOTE]
OCEANEERING INTERNATIONAL, INC.
6.72% Senior NOTE due September 8, 2010
No. _________ Date
$____________ PPN 675232 A*3
FOR VALUE RECEIVED, the undersigned, OCEANEERING
INTERNATIONAL, INC. (herein called the " Company"), a
corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ________________, or
registered assigns, the principal sum of ________________ DOLLARS
on September 8, 2010, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 6.72% per annum from the date hereof,
payable semiannually, on the eighth day of March and September in
each year, commencing with the March 8 or September 8 next
succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on
any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase
Agreements referred to below), payable semiannually as aforesaid
(or, at the option of the registered holder hereof, on demand),
at a rate per annum from time to time equal to the greater of
(i) 8.72% or (ii) 2% over the rate of interest publicly announced
by Morgan Guaranty Trust Company of New York from time to time in
New York City, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money
of the United States of America at Chase Manhattan Bank in New
York, New York or at such other place as the Company shall have
designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase
Agreements, dated as of September 1, 1998 (as from time to time
amended, the "Note Purchase Agreements"), between the Company
and the respective Purchasers named therein and is entitled to
the benefits thereof. Each holder of this Note will be deemed,
by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set
forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration
of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder
hereof or such holder's attorney duly authorized in writing, a
new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase
Agreements. This Note is also subject to optional prepayment, in
whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Make-Whole Amount)
and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance
with, and the rights and parties shall be governed by, the law of
the State of New York, excluding choice-of-law principles of the
law of such State which would require application of the laws of
the jurisdiction other than such State.
OCEANEERING INTERNATIONAL, INC.
By ______________________________
Title
E-1-2
LOAN AGREEMENT
($80,000,000 REVOLVING LOAN FACILITY)
DATED AS OF OCTOBER 23, 1998
AMONG
OCEANEERING INTERNATIONAL, INC.,
AS BORROWER,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS AGENT, LEAD ARRANGER AND BOOK MANAGER AND AS A LENDER,
CITICORP USA, INC.,
AS DOCUMENTATION AGENT,
WELLS FARGO BANK (TEXAS), N. A.,
AS SYNDICATION AGENT,
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
TABLE OF CONTENTS
Page
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . 1
1.2 Miscellaneous. . . . . . . . . . . . . . . . . . . . .20
2. Commitments and Loans . . . . . . . . . . . . . . . . . . .20
2.1 Loans. . . . . . . . . . . . . . . . . . . . . . . . .20
2.2 Terminations or Reductions of Commitments . . . . . .20
2.3 Commitment Fees. . . . . . . . . . . . . . . . . . . .20
2.4 Several Obligations. . . . . . . . . . . . . . . . . .21
2.5 Notes. . . . . . . . . . . . . . . . . . . . . . . . .21
2.6 Use of Proceeds. . . . . . . . . . . . . . . . . . . .21
3. Borrowings,Payments,Prepayments and Interest Options. . . .21
3.1 Borrowings . . . . . . . . . . . . . . . . . . . . . .21
3.2 Payments; Prepayments. . . . . . . . . . . . . . . . .22
3.3 Interest Options . . . . . . . . . . . . . . . . . . .22
4. Payments; Pro Rata Treatment; Computations, Etc.. . . . . .27
4.1 Payments . . . . . . . . . . . . . . . . . . . . . . .27
4.2 Pro Rata Treatment . . . . . . . . . . . . . . . . . .28
4.3 Certain Actions, Notices, Etc. . . . . . . . . . . . .29
4.4 Non-Receipt of Funds by Agent. . . . . . . . . . . . .29
4.5 Sharing of Payments, Etc.. . . . . . . . . . . . . . .29
5. Conditions Precedent. . . . . . . . . . . . . . . . . . . .30
5.1 Initial Loans . . . . . . . . . . . . . . . . . . . .30
5.2 All Loans. . . . . . . . . . . . . . . . . . . . . . .31
6. Representations and Warranties. . . . . . . . . . . . . . .32
6.1 Organization . . . . . . . . . . . . . . . . . . . . .32
6.2 Financial Statements . . . . . . . . . . . . . . . . .32
6.3 Enforceable Obligations; Authorization . . . . . . . .32
6.4 Other Debt . . . . . . . . . . . . . . . . . . . . . .33
6.5 Litigation . . . . . . . . . . . . . . . . . . . . . .33
6.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . .33
6.7 Regulations U and X. . . . . . . . . . . . . . . . . .33
6.8 Subsidiaries . . . . . . . . . . . . . . . . . . . . .33
6.9 No Untrue or Misleading Statements . . . . . . . . . .33
6.10 ERISA. . . . . . . . . . . . . . . . . . . . . . . . .33
6.11 Investment Company Act . . . . . . . . . . . . . . . .34
6.12 Public Utility Holding Company Act . . . . . . . . . .34
6.13 Fiscal Year. . . . . . . . . . . . . . . . . . . . . .34
6.14 Compliance . . . . . . . . . . . . . . . . . . . . . .34
6.15 Environmental Matters. . . . . . . . . . . . . . . . .34
7. Affirmative Covenants.. . . . . . . . . . . . . . . . . . .35
7.1 Taxes, Existence, Regulations, Property, Etc.. . . . .35
7.2 Financial Statements and Information . . . . . . . . .35
7.3 Financial Tests. . . . . . . . . . . . . . . . . . . .36
7.4 Inspection . . . . . . . . . . . . . . . . . . . . . .36
7.5 Further Assurances . . . . . . . . . . . . . . . . . .37
7.6 Books and Records. . . . . . . . . . . . . . . . . . .37
7.7 Insurance. . . . . . . . . . . . . . . . . . . . . . .37
7.8 Notice of Certain Matters. . . . . . . . . . . . . . .37
7.9 Capital Adequacy . . . . . . . . . . . . . . . . . . .37
7.10 ERISA Information and Compliance . . . . . . . . . . .38
7.11 Year 2000. . . . . . . . . . . . . . . . . . . . . . .39
8. Negative Covenants. . . . . . . . . . . . . . . . . . . . .39
8.1 Limitations on Indebtedness and Preferred Stock of
Restricted Subsidiaries. . . . . . . . . . . . . . . .39
8.2 Priority Liabilities . . . . . . . . . . . . . . . . .40
8.3 Limitations on Liens . . . . . . . . . . . . . . . . .41
8.4 Dividends, Stock Purchases and Restricted
Investments44
8.5 Mergers, Consolidations and Sales of Assets. . . . . .45
8.6 Limitation on Restricted Agreements. . . . . . . . . .48
8.7 Nature of Business . . . . . . . . . . . . . . . . . .49
8.8 Transactions with Affiliates . . . . . . . . . . . . .49
8.9 Designation of Subsidiaries. . . . . . . . . . . . . .49
9. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . .50
9.1 Events of Default. . . . . . . . . . . . . . . . . . .50
9.2 Right of Setoff. . . . . . . . . . . . . . . . . . . .53
9.3 Remedies Cumulative. . . . . . . . . . . . . . . . . .53
10. Agent . . . . . . . . . . . . . . . . . . . . . . . . . . .53
10.1 Appointment, Powers and Immunities . . . . . . . . . .53
10.2 Reliance . . . . . . . . . . . . . . . . . . . . . . .54
10.3 Defaults . . . . . . . . . . . . . . . . . . . . . . .54
10.4 Material Written Notices . . . . . . . . . . . . . . .55
10.5 Rights as a Lender . . . . . . . . . . . . . . . . . .55
10.6 Indemnification. . . . . . . . . . . . . . . . . . . .55
10.7 Non-Reliance on Agent and Other Lenders. . . . . . . .55
10.8 Failure to Act . . . . . . . . . . . . . . . . . . . .56
10.9 Resignation or Removal of Agent. . . . . . . . . . . .56
10.10 No Partnership. . . . . . . . . . . . . . . . . . . .57
10.11 Authority of Agent. . . . . . . . . . . . . . . . . .57
11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . .57
11.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . .57
11.2 Notices. . . . . . . . . . . . . . . . . . . . . . . .57
11.3 Expenses, Etc. . . . . . . . . . . . . . . . . . . . .58
11.4 Indemnification. . . . . . . . . . . . . . . . . . . .58
11.5 Amendments, Etc. . . . . . . . . . . . . . . . . . . .59
11.6 Successors and Assigns . . . . . . . . . . . . . . . .59
11.7 Limitation of Interest . . . . . . . . . . . . . . . .62
11.8 Survival . . . . . . . . . . . . . . . . . . . . . . .63
11.9 Captions . . . . . . . . . . . . . . . . . . . . . . .63
11.10 Counterparts. . . . . . . . . . . . . . . . . . . . .63
11.11 Governing Law . . . . . . . . . . . . . . . . . . . .63
11.12 Severability. . . . . . . . . . . . . . . . . . . . .63
11.13 Tax Forms . . . . . . . . . . . . . . . . . . . . . .63
11.14 Conflicts Between This Agreement and the Other Loan
Documents. . . . . . . . . . . . . . . . . . . . . . .64
11.15 Limitation on Charges; Substitute Lenders;
Non-Discrimination . . . . . . . . . . . . . . . . . .64
11.16 Confidentiality . . . . . . . . . . . . . . . . . . .64
EXHIBITS
A -- Request for Extension of Credit
B -- Rate Designation Notice
C -- Note
D -- Assignment and Acceptance
E -- Compliance Certificate
F -- Subsidiaries
G -- Existing Affiliates
H -- Existing Investments
I -- Existing Indebtedness and Liens
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made and entered into
as of October 23, 1998 (the "Effective Date"), by and among
OCEANEERING INTERNATIONAL, INC., a Delaware corporation
(together with its permitted successors and assigns, herein
called the "Borrower"); each of the lenders which is or may from
time to time become a party hereto (individually, a "Lender"
and, collectively, the "Lenders"); CITICORP USA, INC., as
Documentation Agent, WELLS FARGO BANK (TEXAS), N. A., as
Syndication Agent, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
("Chase Texas"), a national banking association, as
Administrative Agent, Lead Arranger and Book Manager (in such
capacity, together with its successors in such capacity, the
"Agent").
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
In this Agreement, terms defined above shall have the meanings
ascribed to them above. Unless a particular term, word or phrase
is otherwise defined or the context otherwise requires,
capitalized terms, words and phrases used herein or in the Loan
Documents (as hereinafter defined) have the following meanings
(all definitions that are defined in this Agreement or in the
Loan Documents in the singular have the same meanings when used
in the plural and vice versa):
Additional Interest means the aggregate of all amounts
accrued or paid pursuant to the Notes or any of the other Loan
Documents (other than interest on the Notes at the Stated Rate)
which, under applicable laws, are or may be deemed to constitute
interest on the indebtedness evidenced by the Notes or any other
amounts owing under any Loan Document.
Adjusted LIBOR means, with respect to each Interest Period
applicable to a LIBOR Borrowing, a rate per annum equal to the
quotient, expressed as a percentage, of (a) LIBOR with respect
to such Interest Period divided by (b) 1.0000 minus the
Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
Affiliate means any Person controlling, controlled by or under
common control with any other Person. For purposes of this
definition, "control" (including "controlled by" and "under
common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities or otherwise.
Agreement means this Loan Agreement, as it may from time to
time be amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial
statements of Borrower and its subsidiaries, including all notes
thereto, which statements shall include a balance sheet as of
the end of the fiscal year relating thereto and an income
statement and a statement of cash flows for such fiscal year,
all setting forth in comparative form the corresponding figures
from the previous fiscal year, all prepared in conformity with
GAAP in all material respects, and accompanied by the opinion of
independent certified public accountants of recognized national
standing, which shall state that such financial statements
present fairly in all material respects the consolidated
financial position of the applicable Persons as of the date
thereof and the results of operations of the applicable Persons
for the period covered thereby in conformity with GAAP. As long
as Borrower files an annual report on Form 10-K with the
Securities and Exchange Commission, such report and related
financial statements, including notes thereto and opinion of
independent certified public accountants, included thereon shall
be considered the "Annual Financial Statements".
Assignment and Acceptance shall have the meaning ascribed
to such term in Section 11.6(b) hereof.
Bankruptcy Code means the United States Bankruptcy Code, as
amended, and any successor statute.
Base Rate means for any day a rate per annum equal to the
lesser of (a) the then applicable Margin Percentage from time to
time in effect plus the greater of (1) the Prime Rate for that
day and (2) the Federal Funds Rate for that day plus 1/2 of 1%
or (b) the Ceiling Rate. If for any reason Agent shall have
determined (which determination shall be prima facie evidence of
the correctness thereof) that it is unable to ascertain the
Federal Funds Rate for any reason, including, without
limitation, the inability or failure of Agent to obtain
sufficient quotations in accordance with the terms hereof, the
Base Rate shall, until the circumstances giving rise to such
inability no longer exist, be the lesser of (a) the Prime Rate
plus the then applicable Margin Percentage from time to time in
effect or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal
balance of the Loans at any time bearing interest at the Base Rate.
Business Day means any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas.
Capitalized Lease means any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the lessee and its subsidiaries in
accordance with GAAP.
Ceiling Rate means, on any day, with respect to any Lender,
the maximum nonusurious rate of interest, if any, permitted for
that day under the law then applicable to such Lender, stated as
a rate per annum. On each day, if any, that Chapter 1D
establishes the Ceiling Rate for any Lender, the Ceiling Rate
for such Lender shall be the "weekly ceiling" (as defined in
Section303 of the Texas Finance Code) for that day. Agent may
from time to time, as to current and future balances, implement
any other ceiling under the Texas Finance Code or Chapter 1D by
notice to Borrower, if and to the extent applicable to any
Lender and permitted by the Texas Finance Code or Chapter 1D.
Without notice to Borrower or any other person or entity, the
Ceiling Rate shall automatically fluctuate upward and downward
as and in the amount by which such maximum nonusurious rate of
interest permitted by applicable law fluctuates.
Notwithstanding any choice of law set forth herein or in any
other Loan Document, to the maximum extent permitted under
applicable laws, any Lender may elect to have the usury laws of
another jurisdiction apply to the Note and the Loans held by
such Lender.
Change of Control shall be deemed to have occurred if any
person (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act as in effect on the date of the
Closing) or related persons constituting a group (as such term
is used in Rule 13d-5 under the Exchange Act), other than an
Affiliate described on Exhibit G,
(i) become the "beneficial owners" (as
such term is used in Rule 13d-3 under the Exchange Act
as in effect on the date hereof), directly or
indirectly, of more than 50% of the total voting power
of all classes then outstanding of Borrower's Voting
Stock, or
(ii) acquire after the date hereof (x) the
power to elect, appoint or cause the election or
appointment of at least a majority of the members of
the board of directors of Borrower, through beneficial
ownership of the capital stock of Borrower or
otherwise, or (y) all or substantially all of the
properties and assets of Borrower.
Chapter 1D means Chapter 1D of Title 79, Texas Rev. Civ.
Stats. 1925, as amended.
Code means the Internal Revenue Code of 1986, as amended, as
now or hereafter in effect, together with all regulations,
rulings and interpretations thereof or thereunder by the
Internal Revenue Service.
Commitment means, as to any Lender, the obligation, if any,
of such Lender to make Loans in an aggregate principal amount at
any one time outstanding up to (but not exceeding) the amount,
if any, set forth opposite such Lender's name on the signature
pages hereof under the caption "Commitment", or otherwise
provided for in an Assignment and Acceptance Agreement (as the
same may be reduced from time to time pursuant to Section 2.2
hereof).
Commitment Fee Percentage means (i) on any day prior to
October 1, 1998, 0.20% and (ii) on and after October 1, 1998,
the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt to
Capitalization Ratio as of the last day of the most recently
ended fiscal quarter of Borrower calculated by Agent as soon as
practicable after receipt by Agent of all financial reports
required under this Agreement with respect to such fiscal
quarter (including a Compliance Certificate) (provided, however,
that if the Commitment Fee Percentage is increased as a result
of the reported Debt to Capitalization Ratio, such increase
shall be retroactive to the date that Borrower was obligated to
deliver such financial reports to Agent pursuant to the terms of
this Agreement and provided further, however, that if the
Commitment Fee Percentage is decreased as a result of the
reported Debt to Capitalization Ratio, and such financial
reports are delivered to Agent not more than ten (10) calendar
days after the date required to be delivered pursuant to the
terms of this Agreement, such decrease shall be retroactive to
the date that Borrower was obligated to deliver such financial
reports to Agent pursuant to the terms of this Agreement):
Debt to Commitment
Capitalization Ratio Fee Percentage
Greater than or equal to 47.5% 0.25
Greater than or equal to 40%
but less than 47.5% 0.225
Less than 40% 0.20
Commitment Percentage means, as to any Lender, the
percentage equivalent of a fraction the numerator of which is
the amount of such Lender's Commitment (or if the Commitments
have terminated, such Lender's outstanding Loans) and the
denominator of which is the aggregate amount of the Commitments
of all Lenders (or if the Commitments have terminated, the
aggregate amount of all outstanding Loans).
Compliance Certificate shall have the meaning given to it
in Section 7.2(c) hereof.
Consolidated Adjusted Net Worth means as of the date of any
determination thereof Consolidated Net Worth excluding, to the
extent included in the determination of Consolidated Net Worth,
any translation gains or losses affecting cumulative foreign
currency translation adjustments as determined in accordance
with GAAP.
Consolidated EBITDA for any period means the sum of (a)(i)
Consolidated Net Income during such period plus (to the extent
deducted in determining Consolidated Net Income), (ii) all
provisions for any Federal, state or local income taxes made by
Borrower and its Restricted Subsidiaries during such period,
(iii) all provisions for depreciation and amortization (other
than amortization of debt discount) made by Borrower and its
Restricted Subsidiaries during such period, (iv) any other
non-cash charge to the extent such non-cash charge reduces
Consolidated Net Income (as reduced by any adjustment for the
amount of cash pay-outs of non-cash charges from prior fiscal
periods), and (v) Consolidated Interest Expense during such
period, minus (b) any gains or losses on the sale or other
disposition of Investments or fixed or capital investments
(other than gains or losses in the ordinary course of business
as determined in accordance with GAAP), and any taxes on such
excluded gains and any tax deductions or credits on account of
any such excluded losses, all determined on a consolidated basis
in accordance with GAAP.
Consolidated EBITDA Available for Fixed Charges for any
period means the sum of (a) Consolidated EBITDA during such
period plus (to the extent not included in determining
Consolidated EBITDA) (b) one-third of all Rentals (other than
Rentals on Capitalized Leases) payable during such period by
Borrower and its Restricted Subsidiaries pursuant to Long-Term
Leases.
Consolidated Fixed Charges for any period means on a
consolidated basis the sum of (a) one-third of all Rentals
(other than Rentals on Capitalized Leases) payable during such
period by Borrower and its Restricted Subsidiaries pursuant to
Long-Term Leases, and (b) Consolidated Interest Expense payable
during such period.
Consolidated Indebtedness means all Indebtedness of
Borrower and its Restricted Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
Consolidated Interest Expense means for any period all
interest (including the interest component on Rentals on
Capitalized Leases) and all amortization of debt discount and
expense on any particular Indebtedness (including, without
limitation, payment-in-kind, zero coupon and other like
Securities) of Borrower and its Restricted Subsidiaries for
which such calculations are being made as determined in
accordance with GAAP. Computations of Consolidated Interest
Expense on a pro-forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the
date of any determination.
Consolidated Net Income for any period means the gross
revenues of Borrower and its Restricted Subsidiaries for such
period less all expenses and other proper charges (including
taxes on income), determined on a consolidated basis after
eliminating earnings or losses attributable to outstanding
Minority Interests, but excluding in any event:
(a) the proceeds of any life insurance policy;
(b) net earnings and losses of any Restricted Subsidiary
of Borrower accrued prior to the date it became a Restricted
Subsidiary of Borrower;
(c) net earnings and losses of any corporation (other than
a Restricted Subsidiary of Borrower), substantially all the
assets of which have been acquired in any manner by Borrower or
any of its Restricted Subsidiaries, realized by such corporation
prior to the date of such acquisition;
(d) net earnings and losses of any corporation (other than
a Restricted Subsidiary of Borrower) with which Borrower or a
Restricted Subsidiary of Borrower shall have consolidated or
which shall have merged into or with Borrower or a Restricted
Subsidiary of Borrower prior to the date of such consolidation
or merger;
(e) net earnings of any business entity (other than a
Restricted Subsidiary of Borrower) in which Borrower or any
Restricted Subsidiary of Borrower has an ownership interest
unless such net earnings shall have actually been received by
Borrower or such Restricted Subsidiary of Borrower in the form
of cash distributions;
(f) any portion of the net earnings of any Restricted
Subsidiary of Borrower which for any reason is unavailable for
payment of dividends to Borrower or any other Restricted
Subsidiary of Borrower;
(g) earnings and losses resulting from any reappraisal,
revaluation, write-up or write-down of assets other than in the
ordinary course of business;
(h) any reversal of any contingency reserve to the extent
such contingency reserve was taken prior to the date of the
Effective Date, but including in any determination of
Consolidated Net Income changes in estimates made in accordance
with GAAP; and
(i) any other extraordinary gain or loss, including,
without limitation, the cumulative effect of changes to GAAP.
Consolidated Net Worth means, as of the date of any
determination thereof the amount of the capital stock accounts
(net of treasury stock, at cost) plus (or minus in the case of a
deficit) the surplus in retained earnings of Borrower and its
Restricted Subsidiaries as determined in accordance with GAAP.
Consolidated Total Capitalization means as of the date of
the end of the most recent prior fiscal quarter, the sum of (a)
Consolidated Indebtedness plus (b) Consolidated Adjusted Net Worth.
Controlled Group means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control which, together with
Borrower, are treated as a single employer under Section 414 of
the Code.
Corporation means any corporation, limited liability company,
partnership, joint venture, joint stock association, business
trust and other business entity.
Debt to Capitalization Ratio means, as of any day, the
ratio, expressed as a percentage, of (a) Consolidated
Indebtedness as of such date to (b) Consolidated Total
Capitalization as of such date.
Default means an Event of Default or an event which with
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
Distribution in respect of Borrower and its Restricted
Subsidiaries means:
(a) dividends or other distributions on capital stock
(including, without limitation, preferred stock) of a
corporation (except dividends or other distributions
payable solely in shares of common stock of such
corporation and dividends of to Borrower by any of its
Restricted Subsidiaries); and
(b) redemption, acquisition or retirement of any
shares of its capital stock or warrants, rights or other
options to purchase any shares of its capital stock (other
than the redemption, acquisition or retirement by Borrower
or any of its Restricted Subsidiaries of any shares of
capital stock of a Restricted Subsidiary of Borrower).
Dollars and $ means lawful money of the United States of
America.
Environmental Claim means any third party (including
Governmental Authorities and employees) action, lawsuit, claim
or proceeding (including claims or proceedings at common law or
under the Occupational Safety and Health Act or similar laws
relating to safety of employees) which seeks to impose liability
for (i) noise; (ii) pollution or contamination of the air,
surface water, ground water or land or the clean-up of such
pollution or contamination; (iii) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or
transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture,
processing, distribution in commerce or use of Hazardous
Substances. An "Environmental Claim" includes, but is not
limited to, a common law action, as well as a proceeding to
issue, modify or terminate an Environmental Permit, or to adopt
or amend a regulation to the extent that such a proceeding
attempts to redress violations of an applicable permit, license,
or regulation as alleged by any Governmental Authority.
Environmental Liabilities means all liabilities arising from
any Environmental Claim, Environmental Permit or Requirement of
Environmental Law under any theory of recovery, at law or in
equity, and whether based on negligence, strict liability or
otherwise, including but not limited to: remedial, removal,
response, abatement, investigative, monitoring, personal injury
and damage to Property or injuries to persons, and any other
related costs, expenses, losses, damages, penalties, fines,
liabilities and obligations, and all costs and expenses
necessary to cause the issuance, reissuance or renewal of any
Environmental Permit including reasonable attorneys' fees and
court costs.
Environmental Permit means any permit, license, approval or
other authorization under any applicable Legal Requirement
relating to pollution or protection of health or the
environment, including laws, regulations or other requirements
relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or hazardous substances or
toxic materials or wastes into ambient air, surface water,
ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous
Substances.
ERISA means the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules, regulations,
rulings and interpretations adopted by the Internal Revenue
Service or the U.S. Department of Labor thereunder.
Eurodollar Rate means for any day during an Interest Period for
a LIBOR Borrowing a rate per annum equal to the lesser of (a)
the sum of (1) the Adjusted LIBOR in effect on the first day of
such Interest Period plus (2) the then applicable Margin
Percentage from time to time in effect and (b) the Ceiling Rate.
Each Eurodollar Rate is subject to adjustments as provided for
in Sections 3.3(c) and 11.15 hereof.
Eurodollar Reserve Requirement means, on any day, that
percentage (expressed as a decimal fraction and rounded, if
necessary, to the next highest one ten thousandth [.0001]) which
is in effect on such day for determining all reserve
requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to
"Eurocurrency liabilities," as currently defined in Regulation
D. Each determination of the Eurodollar Reserve Requirement by
Agent shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and
attribution method.
Event of Default shall have the meaning assigned to it in
Section 9.1 hereof.
Federal Funds Rate means, for any day, a fluctuating
interest rate per annum equal for such day to the weighted
average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any such day which is a Business Day, the average
of the quotations for such day on such transactions received by
Agent from three Federal funds brokers of recognized standing
selected by Agent in its sole and absolute discretion.
Fixed Charge Coverage Ratio means, as of the end of any
fiscal quarter, the ratio, expressed as a percentage, of (a) the
sum of Consolidated EBITDA Available for Fixed Charges for the
four quarter period preceding such day to (b) Consolidated Fixed
Charges for such four quarter period.
Funding Loss means, with respect to (a) Borrower's payment of
principal of a LIBOR Borrowing on a day prior to the last day of
the applicable Interest Period; (b) Borrower's failure to borrow
a LIBOR Borrowing on the date specified by Borrower; (c)
Borrower's failure to make any prepayment of the Loans (other
than Base Rate Borrowings) on the date specified by Borrower, or
(d) any cessation of a Eurodollar Rate to apply to the Loans or
any part thereof pursuant to Section 3.3, in each case whether
voluntary or involuntary, any loss, expense, penalty, premium or
liability actually incurred by any Lender (including but not
limited to any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by any Lender to fund or maintain a Loan).
GAAP means generally accepted accounting principles as in
effect from time to time in the United States of America.
Governmental Authority means any foreign governmental
authority, the United States of America, any State of the United
States, and any political subdivision of any of the foregoing,
and any central bank, agency, department, commission, board,
bureau, court or other tribunal having jurisdiction over Agent,
any Lender, Borrower or their respective Property.
Guaranty means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any Indebtedness,
dividend or other obligation (other than performance obligations
(other than obligations for the payment of borrowed money)) of
any other Person in any manner, whether directly or indirectly,
including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or
any property constituting security therefore;
(b) to advance or supply funds (i) for the purchase
or payment of such Indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet
condition or any income statement condition of any other
Person or otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of any other
Person to make payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such
Indebtedness or obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of
the obligor under any Guaranty, the Indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
Hazardous Substance means petroleum products and any hazardous
or toxic waste or substance defined or regulated as such from
time to time by any law, rule, regulation or order described in
the definition of "Requirements of Environmental Law".
Indebtedness with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capitalized Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or
not it has assumed or otherwise become liable for such
liabilities);
(e) all its liabilities in respect of standby letters of
credit or instruments serving a similar function issued or
accepted for its account by banks and other financial
institutions (other than those representing obligations for
performance guarantees);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities (other than performance guaranties) of a type
described in any of clauses (a) through (f) hereof;
provided, that in the case of computations of "Indebtedness" of
Borrower or any of its Restricted Subsidiary, notwithstanding
clause (d) above, "Indebtedness" shall not include Indebtedness
secured by Liens permitted under Section 8.3(h).
Interest Coverage Ratio means, as of the end of any fiscal
quarter, the ratio, expressed as a percentage, of (a)
Consolidated EBITDA for the four quarter period preceding such
day to (b) Consolidated Interest Expense for such four quarter
period.
Interest Options means the Base Rate and each Eurodollar
Rate, and "Interest Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings,
September 30, 1998 and the last day of each March, June,
September and December thereafter prior to the Maturity Date,
and the Maturity Date; and (b) for LIBOR Borrowings, the end of
the applicable Interest Period (and if such Interest Period
exceeds three months' duration, quarterly, commencing on the
first quarterly anniversary of the first day of such Interest
Period) and the Maturity Date.
Interest Period means, for each LIBOR Borrowing, a period
commencing on the date such LIBOR Borrowing began and ending on
the numerically corresponding day which is, subject to
availability as set forth in Section 3.3(c)(iii), 1, 2, 3 or 6
months thereafter, as Borrower shall elect in accordance
herewith; provided, (1) unless Agent shall otherwise consent, no
Interest Period with respect to a LIBOR Borrowing shall commence
on a date earlier than three (3) Business Days after this
Agreement shall have been fully executed; (2) any Interest
Period with respect to a LIBOR Borrowing which would otherwise
end on a day which is not a LIBOR Business Day shall be extended
to the next succeeding LIBOR Business Day, unless such LIBOR
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding LIBOR Business
Day; (3) any Interest Period with respect to a LIBOR Borrowing
which begins on the last LIBOR Business Day of a calendar month
(or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall
end on the last LIBOR Business Day of the appropriate calendar
month, and (4) no Interest Period for a Loan shall ever extend
beyond the Maturity Date.
Investments shall mean all investments, in cash or by
delivery of property, made directly or indirectly in any
property or assets or in any Person, whether by acquisition of
shares of capital stock, Indebtedness or other obligations or
Securities or by loan, advance, capital contribution or
otherwise; provided that "Investments" shall not mean or include
routine investments in property to be used or consumed in the
ordinary course of business.
Legal Requirement means any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or
interpretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority, whether
presently existing or arising in the future.
LIBOR means, for each Interest Period for any LIBOR Borrowing,
the rate per annum (rounded upwards, if necessary, to the
nearest 1/16th of 1%) equal to the average of the offered
quotations appearing on Telerate Page 3750 (or if such Telerate
Page shall not be available, any successor or similar service as
may be selected by Agent and Borrower) as of 11:00 a.m.,
Houston, Texas time (or as soon thereafter as practicable) on
the day two LIBOR Business Days prior to the first day of such
Interest Period for deposits in United States dollars having a
term comparable to such Interest Period and in an amount
comparable to the principal amount of the LIBOR Borrowing to
which such Interest Period relates. If none of such Telerate
Page 3750 nor any successor or similar service is available,
then "LIBOR" shall mean, with respect to any Interest Period for
any applicable LIBOR Borrowing, the rate of interest per annum,
rounded upwards, if necessary, to the nearest 1/16th of 1%,
quoted by Agent at or before 11:00 a.m., Houston, Texas time (or
as soon thereafter as practicable), on the date two LIBOR
Business Days before the first day of such Interest Period, to
be the arithmetic average of the prevailing rates per annum at
the time of determination and in accordance with the then
existing practice in the applicable market, for the offering to
Agent by one or more prime banks selected by Agent in its sole
discretion, in the London interbank market, of deposits in
United States dollars for delivery on the first day of such
Interest Period and having a maturity equal to the length of
such Interest Period and in an amount equal (or as nearly equal
as may be) to the LIBOR Borrowing to which such Interest Period
relates. Each determination by Agent of LIBOR shall be prima
facie evidence of the correctness thereof, and may be computed
using any reasonable averaging and attribution method.
LIBOR Borrowing means each portion of the principal balance of
the Loans at any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions
in United States dollar deposits between lenders may be carried
on in the London interbank market.
Lien means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of
any kind, whether based on common law, constitutional provision,
statute or contract, and shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions,
restrictions and other title exceptions. For the purposes of
this Agreement, Borrower or any of its Subsidiaries shall be
deemed to be the owner of any property which it has acquired or
holds subject to a conditional sale agreement, Capitalized Lease
or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
Loans means the loans provided for in Section 2.1 hereof.
Loan Documents means, collectively, this Agreement, the Notes,
all instruments and agreements now or hereafter executed or
delivered by Borrower to Agent or any Lender pursuant to any of
the foregoing or in connection with the Obligations or any
commitment regarding the Obligations, and all amendments,
modifications, renewals, extensions, increases and
rearrangements of, and substitutions for, any of the foregoing.
Long-Term Lease means any lease of real or personal
property (other than a Capitalized Lease) having an original
term, including any period for which the lease may be renewed or
extended at the option of the lessor, of more than one year.
Majority Lenders means, at any time while no Loans are
outstanding, Lenders having greater than 60% of the aggregate
amount of Commitments, and at any time while Loans are
outstanding, Lenders having greater than 60% of the aggregate
amount of Loans outstanding plus available Commitments
outstanding.
MARAD Indebtedness means Indebtedness of Borrower or any of
its Restricted Subsidiaries owed to, or guaranteed by, the U.S.
Maritime Administration and incurred in connection with the
acquisition or purchase of fixed assets useful and intended to
be used in carrying on the business of Borrower or any of its
Restricted Subsidiaries, provided that with respect to such
Indebtedness, none of the property or assets of Borrower or any
of its Restricted Subsidiaries, other than the fixed asset so
acquired, shall be, directly or indirectly, liable for or secure
in any manner whatsoever the payment thereof.
Margin Percentage means (i) on any day prior to October 1,
1998, 0.00% with respect to Base Rate Borrowings and 0.50% with
respect to LIBOR Borrowings and (ii) on and after October 1,
1998, the applicable per annum percentage set forth at the
appropriate intersection in the table shown below, based on the
Debt to Capitalization Ratio as of the last day of the most
recently ended fiscal quarter of Borrower calculated by Agent as
soon as practicable after receipt by Agent of all financial
reports required under this Agreement with respect to such
fiscal quarter (including a Compliance Certificate) (provided,
however, that if the Margin Percentage is increased as a result
of the reported Debt to Capitalization Ratio, such increase
shall be retroactive to the date that Borrower was obligated to
deliver such financial reports to Agent pursuant to the terms of
this Agreement and provided further, however, that if the Margin
Percentage is decreased as a result of the reported Debt to
Capitalization Ratio, and such financial reports are delivered
to Agent not more than ten (10) calendar days after the date
required to be delivered pursuant to the terms of this
Agreement, such decrease shall be retroactive to the date that
Borrower was obligated to deliver such financial reports to
Agent pursuant to the terms of this Agreement):
Debt to LIBOR Borrowings Base Rate Borrowings
Capitalization Ratio Margin Percentage Margin Percentage
Greater than or equal to 50% 1.00 0.00
Greater than or equal to 47.5%
but less than 50% 0.875 0.00
Greater than or equal to 45%
but less than 47.5% 0.75 0.00
Greater than or equal to 40%
but less than 45% 0.625 0.00
Less than 40% 0.50 0.00
Material means material in relation to the business,
operations, affairs, financial condition, assets or properties
of Borrower and its Restricted Subsidiaries taken as a whole.
Material Adverse Effect means a material adverse effect on
(a) the business, operations, affairs, financial condition,
assets or properties of Borrower and its Restricted Subsidiaries
taken as a whole, or (b) the ability of Borrower to perform its
obligations under this Agreement, the Notes or the Loan
Documents, or (c) the validity or enforceability of this
Agreement or the Notes or the Loan Documents.
Maturity Date means the maturity of the Notes, October 31,
2003.
Minority Interests means any shares of stock of any class
of a Restricted Subsidiary of Borrower (other than directors'
qualifying shares or Regulatory Shares as required by law) that
are not owned by Borrower and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary
or involuntary liquidating value of such preferred stock,
whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect
any changes from the book value of such common stock required by
the foregoing method of valuing Minority Interests in preferred
stock.
Notes shall have the meaning assigned to such term in
Section 2.5 hereof.
Obligations means, as at any date of determination thereof,
the sum of the following: (i) the aggregate principal amount of
Loans outstanding hereunder on such date plus (ii) all other
outstanding liabilities, obligations and indebtedness of
Borrower under this Agreement, any Note or any other Loan
Document on such date.
Organizational Documents means, with respect to a corporation,
the certificate of incorporation, articles of incorporation and
bylaws of such corporation; with respect to a partnership, the
partnership agreement establishing such partnership and with
respect to a trust, the instrument establishing such trust and
with respect to any other Person, the agreements or instruments
pursuant to which such Person was formed; in each case including
any and all modifications thereof and any and all future
modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the
lesser of (i) the Ceiling Rate for that day or (ii) the Base
Rate plus the Margin Percentage for Base Rate Borrowings then in
effect plus two percent (2%).
PBGC means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
Person means any individual, Corporation, trust, limited
liability company, unincorporated organization, Governmental
Authority or any other form of entity.
Plan means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (a)
maintained by Borrower or any member of the Controlled Group for
employees of Borrower or any member of the Controlled Group or
(b) maintained pursuant to a collective bargaining agreement or
any other arrangement under which more than one employer makes
contributions and to which Borrower or any member of the
Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years
made contributions.
Preferred Stock means any class of capital stock of a
corporation that is preferred over any other class of capital
stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.
Prime Rate means, on any day, the prime rate for that day
as determined from time to time by Chase Texas. The Prime Rate
is a reference rate and does not necessarily represent the
lowest or best rate or a favored rate, and Chase Texas, Agent
and each Lender disclaims any statement, representation or
warranty to the contrary. Chase Texas, Agent or any Lender may
make commercial loans or other loans at rates of interest at,
above or below the Prime Rate.
Principal Office means the principal office of Agent,
presently located at 712 Main Street, Houston, Harris County,
Texas 77002.
Priority Liability means, as of the date of any
determination thereof, (a) any Indebtedness of Borrower secured
by a Lien created pursuant to Section 8.3(l) hereof and (b) any
Indebtedness and any Preferred Stock of Restricted Subsidiaries
other than Indebtedness or Preferred Stock permitted under
Section 8.1(a)(ii).
Proper Form means in form and substance reasonably satisfactory
to Agent.
Property means any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.
Quarterly Dates means the last day of each March, June,
September and December, provided that if any such date is not a
Business Day, then the relevant Quarterly Date shall be the next
succeeding Business Day.
Quarterly Financial Statements means the quarterly
financial statements of Borrower and its subsidiaries, which
statements shall include a balance sheet as of the end of such
fiscal quarter and an income statement and a statement of cash
flows for such fiscal quarter and for the fiscal year to date,
subject to normal year-end adjustments, all setting forth in
comparative form the corresponding figures as of the end of and
for the corresponding fiscal quarter of the preceding year,
prepared in accordance with GAAP in all material respects except
that such statements are condensed and exclude detailed footnote
disclosures and attested by the chief financial officer or other
authorized officer of Borrower as fairly presenting, in all
material respects, the consolidated financial condition of the
applicable Persons as of such date. As long as Borrower files a
quarterly report on Form 10-Q with the Securities and Exchange
Commission, such report and related financial statements,
including notes thereto, shall be considered the "Quarterly
Financial Statements".
Rate Designation Date means that Business Day which is (a) in
the case of Base Rate Borrowings, 11:00 a.m., Houston, Texas
time, on the date one Business Day preceding the date of such
borrowing and (b) in the case of LIBOR Borrowings, 11:00 a.m.,
Houston, Texas time, on the date three LIBOR Business Days
preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice
substantially in the form of Exhibit B.
Regulation D means Regulation D of the Board of Governors of
the Federal Reserve System from time to time in effect and
includes any successor or other regulation relating to reserve
requirements applicable to member banks of the Federal Reserve
System.
Regulatory Change means, with respect to any Lender, any
change on or after the Effective Date in any Legal Requirement
(including, without limitation, Regulation D) or the adoption or
change on or after such date of any interpretation, directive or
request applying to a class of lenders including such Lender
under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority.
Regulatory Shares means, with respect to any Person, shares
of the capital stock of such Person required to be issued as
qualifying shares to directors or shares issued to Persons other
than Borrower in response to regulatory requirements of foreign
jurisdictions pursuant to a resolution of the Board of Directors
of such Person.
Rentals means and include as of the date of any
determination thereof all fixed payments (including as such all
payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable
by Borrower or a Restricted Subsidiary of Borrower, as lessee or
sublessee under a lease of real or personal property, but shall
be exclusive of any amounts required to be paid by Borrower or a
Restricted Subsidiary of Borrower (whether or not designated as
rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges. Fixed rents under any
so-called "percentage leases" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the
lessee regardless of sales volume or gross revenues.
Request for Extension of Credit means a request for
extension of credit duly executed by any responsible officer,
which may include the president, the chief executive officer,
the chief financial officer, any vice president or the treasurer
of Borrower or any other officer of Borrower with responsibility
for the administration of this Agreement, appropriately
completed and substantially in the form of Exhibit A attached
hereto.
Requirements of Environmental Law means all requirements
imposed by any law (including for example and without limitation
The Resource Conservation and Recovery Act and The Comprehensive
Environmental Response, Compensation, and Liability Act), rule,
regulation, or order of any federal, state or local executive,
legislative, judicial, regulatory or administrative agency,
board or authority in effect at the applicable time which relate
to (i) noise; (ii) pollution, protection or clean-up of the air,
surface water, ground water or land; (iii) solid, gaseous or
liquid waste generation, treatment, storage, disposal or
transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the
manufacture, processing, distribution in commerce, use,
discharge or storage of Hazardous Substances.
Responsible Officer means any Senior Financial Officer and
any other officer of Borrower with responsibility for the
administration of the relevant portion of this Agreement.
Restricted Investments means all Investments, other than:
(a) Investments by Borrower and its Restricted
Subsidiaries in and to Wholly-owned Restricted
Subsidiaries, including any Investment in a corporation
which, after giving effect to such Investment, will become
a Wholly-owned Restricted Subsidiary;
(b) Investments representing loans or advances in the
usual and ordinary course of business to officers and
employees for expenses incidental to carrying on the
business of Borrower or any of its Restricted Subsidiaries;
(c) Investments in property or assets to be used in
the ordinary course of the business of Borrower and its
Restricted Subsidiaries as described on Exhibit H of this
Agreement;
(d) Investments in commercial paper of corporations
organized under the laws of the United States or any state
thereof and loan participations maturing in 270 days or
less from the date of issuance which, at the time of
acquisition by Borrower or any of its Restricted
Subsidiaries, are accorded a rating of "A-1" or better by
Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc., a New York corporation, or "P-1" or better by Moody's
Investors Service, Inc.;
(e) Investments in direct obligations in the United
States of America or any agency or instrumentality of the
United States of America, the payment or guarantee of which
constitutes a full faith and credit obligation of the
United States of America, in either case, maturing within
twelve months from the date of acquisition thereof;
(f) Investments in direct obligations of other
governments maturing within twelve months from the date of
acquisition thereof by Borrower or a Restricted Subsidiary
of Borrower; provided that at the time of such acquisition,
the long-term Indebtedness of such government is rated
"AAA" by Standard & Poor's Ratings Group or by Moody's
Investors Service, Inc.;
(g) Investments in certificates of deposit and time
deposits maturing within one year from the date of issuance
thereof, issues by a bank or trust company organized under
the laws of the United States or any State thereof, having
either (i) capital, surplus and undivided profits
aggregating at least $100,000,000 or (ii) total assets of
$1,000,000,000;
(h) Investments in repurchase agreements with respect
to any Security described in clause (e) entered into with a
depository institution or trust company acting as principal
described in clause (g) if such repurchase agreements: (i)
are by their terms to be performed by the repurchase
obligor and such repurchase agreements are deposited with a
bank or trust company of the type described in clause (g)
and (ii) mature within ninety days from the date of
execution and delivery thereof; and
(i) Investments of Borrower not described in the
foregoing clauses (a) through (h); provided that the
aggregate amount of all such Investments shall not at the
time any Investment is made within the limitations of this
clause (i) exceed 15% of Consolidated Adjusted Net Worth.
Restricted Subsidiary means any Subsidiary which is not an
Unrestricted Subsidiary.
Secretary's Certificate means a certificate, in Proper
Form, of the Secretary or an Assistant Secretary of a
corporation certifying (a) that attached thereto are true and
correct copies of resolutions of the Board of Directors of such
corporation authorizing the execution, delivery and performance
of the Loan Documents to be executed by such corporation; (b)
the incumbency and signature of the officer of such corporation
executing such Loan Documents on behalf of such corporation, and
(c) that attached thereto are true and correct copies of the
Organizational Documents of such corporation.
Securities Act means the Securities Act of 1933, as amended
from time to time.
Security shall have the same meaning as in Section 2(1) of
the Securities Act.
Senior Financial Officer means the chief executive officer,
chief financial officer, principal accounting officer, treasurer
or controller of Borrower.
Senior Indebtedness shall mean all Indebtedness for
borrowed money of Borrower which is not expressed to be
subordinate or junior in rank to any other Indebtedness for
borrowed money of Borrower.
Stated Rate means, with respect to any Lender, the effective
weighted per annum rate of interest applicable to the Loans made
by such Lender; provided, that if on any day such rate shall
exceed the Ceiling Rate for that day, the Stated Rate shall be
fixed at the Ceiling Rate on that day and on each day thereafter
until the total amount of interest accrued at the Stated Rate on
the unpaid principal balances of the Notes plus the Additional
Interest equals the total amount of interest which would have
accrued if there had been no Ceiling Rate. Without notice to
Borrower or any other Person, the Stated Rate shall
automatically fluctuate upward and downward in accordance with
the provisions of this definition.
Subsidiary means, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity
rights (whether outstanding capital stock or otherwise) is at
the time directly or indirectly owned by such parent Corporation.
Subsidiary Stock is defined in Section 8.5(c).
Swaps means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency.
For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net
amount so determined.
Unrestricted Subsidiary means any Subsidiary designated by
the Board of Directors of Borrower as an "Unrestricted
Subsidiary" on Exhibit F hereto or pursuant to Section 8.9 hereto.
Taxes shall have the meaning ascribed to it in Section 4.1(d)
hereof.
Voting Stock means Securities of any class or classes, the
holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
Wholly-owned Restricted Subsidiary means, at any time, any
Restricted Subsidiary of Borrower one hundred percent (100%) of
all of the equity interests (except directors' qualifying shares
and shares of capital stock owned by one or more individuals who
are not citizens of the United States of America and whose
ownership of such capital stock is mandated by the law of any
country other than the United States of America) and voting
interests of which are owned by any one or more of Borrower and
Borrower's other Wholly-owned Restricted Subsidiaries at such time.
Unfunded Liabilities means, with respect to any Plan, at
any time, the amount (if any) by which (a) the present value of
all benefits under such Plan exceeds (b) the fair market value
of all Plan assets allocable to such benefits, all determined as
of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a
potential liability of any member of the Controlled Group to the
PBGC or a Plan under Title IV of ERISA. With respect to
multi-employer Plans, the term "Unfunded Liabilities" shall also
include contingent liability for withdrawal liability under
Section 4201 of ERISA to all multi-employer Plans to which
Borrower or any member of a Controlled Group for employees of
Borrower contributes in the event of complete withdrawal from
such plans.
1.2 Miscellaneous. The words "hereof," "herein," and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not any
particular provision of this Agreement.
2. Commitments and Loans.
2.1 Loans. From time to time on or after the Effective Date
and prior to the Maturity Date, each Lender shall make loans
under this Section 2.1 to Borrower in an aggregate principal
amount at any one time outstanding up to but not exceeding such
Lender's Commitment Percentage of $80,000,000. Subject to the
conditions in this Agreement, any such Loan repaid prior to the
Maturity Date may be reborrowed pursuant to the terms of this
Agreement. Borrower, Agent and the Lenders agree pursuant to
Chapter 346 ("Chapter 346") of the Texas Finance Code, that
Chapter 346 (which relates to open-end line of credit revolving
loan accounts) shall not apply to this Agreement, the Notes or
any Obligation and that neither the Notes nor any Obligation
shall be governed by Chapter 346 or subject to its provisions in
any manner whatsoever. The aggregate of all Loans to be made by
the Lenders in connection with a particular borrowing shall be
equal to the lesser of (a) the remaining unused portion of the
Commitments or (b) a multiple of $100,000.
2.2 Terminations or Reductions of Commitments.
(a) Mandatory. On the Maturity Date, all Commitments shall be
terminated in their entirety.
(b) Optional. Borrower shall have the right to terminate
or reduce the unused portion of the Commitments at any time or
from time to time, provided that (i) Borrower shall give notice
of each such termination or reduction to Agent as provided in
Section 4.3 hereof and (ii) each such partial reduction shall be
in an integral multiple of $500,000.
(c) No Reinstatement. No termination or reduction of the
Commitments may be reinstated without the written approval of
Agent and the Lenders.
2.3 Commitment Fees.
(a) Borrower shall pay to Agent for the account of each
Lender revolving loan commitment fees at a rate per annum equal
to the Commitment Fee Percentage. Such revolving loan
commitment fees shall be computed (on the basis of the actual
number of days elapsed in a year composed of 365 or 366 days, as
the case may be) on each day and shall be based on the excess of
(x) the aggregate amount of each Lender's Commitment for such
day over (y) the aggregate unpaid principal balance of such
Lender's Note on such day. Accrued revolving loan commitment
fees shall be payable in arrears on the Quarterly Dates prior to
the Maturity Date and on the Maturity Date.
(b) All past due fees payable under this Section shall
bear interest at the Past Due Rate.
2.4 Several Obligations. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan on
such date, but neither Agent nor any Lender shall be responsible
or liable for the failure of any other Lender to make a Loan to
be made by such other Lender. Notwithstanding anything
contained herein to the contrary, (a) no Lender shall be
required to make or maintain Loans at any time outstanding if as
a result the total Obligations owed to such Lender shall exceed
the lesser of (1) such Lender's Commitment Percentage of all
Obligations and (2) such Lender's Commitment Percentage of
$80,000,000 and (b) if a Lender fails to make a Loan as and when
required hereunder, then upon each subsequent event which would
otherwise result in funds being paid to the defaulting Lender,
the amount which would have been paid to the defaulting Lender
shall be divided among the non-defaulting Lenders ratably
according to their respective shares of the outstanding
Commitment Percentages until the Obligations of each Lender
(including the defaulting Lender) are equal to such Lender's
Commitment Percentage of the total Obligations.
2.5 Notes. The Loans made by each Lender shall be evidenced by
a single promissory note of Borrower in substantially the form
of Exhibit C hereto payable to the order of such Lender in a
principal amount equal to the Commitment of such Lender, and
otherwise duly completed. The promissory notes described in
this Section are each, together with all renewals, extensions,
modifications and replacements thereof and substitutions
therefor, called a "Note" and collectively called the "Notes".
Each Lender is hereby authorized by Borrower to endorse on the
schedule (or a continuation thereof) that may be attached to
each Note of such Lender, to the extent applicable, the date,
amount, type of and the applicable period of interest for each
Loan made by such Lender to Borrower hereunder, and the amount
of each payment or prepayment of principal of such Loan received
by such Lender, provided that any failure by such Lender to make
any such endorsement shall not affect the obligations of
Borrower under such Note or hereunder in respect of such Loan.
2.6 Use of Proceeds. The proceeds of the Loans shall be used
for working capital and general corporate purposes. Neither
Agent nor any Lender shall have any responsibility as to the use
of any proceeds of the Loans.
3. Borrowings, Payments, Prepayments and Interest Options.
3.1 Borrowings. Borrower shall give Agent notice of each
borrowing to be made hereunder as provided in Section 4.3 hereof
and Agent shall promptly notify each Lender of such request.
Not later than 12:00 noon Houston time on the date specified for
each such borrowing hereunder, each Lender shall make available
the amount of the Loan, if any, to be made by it on such date to
Agent at its Principal Office, in immediately available funds,
for the account of Borrower. Such amounts received by Agent
will be held in an account maintained by Borrower with Agent.
The amounts so received by Agent shall, subject to the terms and
conditions of this Agreement, be made available to Borrower by
wiring or otherwise transferring, in immediately available
funds, such amount to an account designated by Borrower and
approved by Agent.
3.2 Payments; Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3
hereof, Borrower shall have the right to prepay, on any Business
Day, in whole or in part, without the payment of any premium,
penalty or fee, any Loans at any time or from time to time,
provided that Borrower shall give Agent notice of each such
prepayment as provided in Section 4.3 hereof. Each optional
prepayment on a Loan shall be in an amount equal to a minimum of
$500,000 plus integral multiples of $100,000.
(b) Interest Payments. Accrued and unpaid interest on the
unpaid principal balance of the Loans shall be due and payable
on the Interest Payment Dates.
(c) Interest on Past Due Payments. Subject to Section
11.7 hereof, Borrower will pay to Agent for the account of each
Lender interest at the applicable Past Due Rate on any amount
payable by Borrower hereunder to or for the account of such
Lender (but, if such amount is interest, only to the extent
legally allowed), which shall not be paid in full within five
(5) days after the date due (whether at stated maturity, by
acceleration or otherwise), for the period commencing on the
expiration of such five (5) day period until the same is paid in
full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of
the Notes shall bear interest at the Base Rate; provided, that
(1) subject to Section 3.2(c), all past due amounts, both
principal and accrued and unpaid interest, shall bear interest
at the Past Due Rate, and (2) subject to the provisions hereof,
Borrower shall have the option of having all or any portion of
the principal balances of the Notes from time to time
outstanding bear interest at a Eurodollar Rate. The records of
Agent and each of the Lenders with respect to Interest Options,
Interest Periods and the amounts of Loans to which they are
applicable shall be prima facie evidence of the correctness
thereof. Interest on the Loans shall be calculated at the Base
Rate except where it is expressly provided pursuant to this
Agreement that a Eurodollar Rate is to apply. Interest on the
amount of each advance against the Notes shall be computed on
the amount of that advance and from the date it is made to but
excluding the date of repayment thereof. Notwithstanding
anything in this Agreement to the contrary, for the full term of
the Notes the interest rate produced by the aggregate of all
sums paid or agreed to be paid to the holders of the Notes for
the use, forbearance or detention of the debt evidenced thereby
(including all interest on the Notes at the Stated Rate plus the
Additional Interest) shall not exceed the Ceiling Rate.
(b) Designation and Conversion. Borrower shall have the right
to designate or convert its Interest Options in accordance with
the provisions hereof. Provided no Event of Default has
occurred and is continuing and subject to the last sentence of
Section 3.3(a) and the provisions of Section 3.3(c), Borrower
may elect to have a Eurodollar Rate apply or continue to apply
to all or any portion of the principal balance of the Notes.
Each change in Interest Options shall be a conversion of the
rate of interest applicable to the specified portion of the
Loans, but such conversion shall not change the respective
outstanding principal balances of the Notes. The Interest
Options shall be designated or converted in the manner provided
below:
(i) Borrower shall give Agent telephonic notice, promptly
confirmed by a Rate Designation Notice (and Agent
shall promptly inform each Lender thereof). Each such
telephonic and written notice shall specify the amount
of the Loan which is the subject of the designation,
if any; the amount of borrowings into which such
borrowings are to be converted or for which an
Interest Option is designated; the proposed date for
the designation or conversion and the Interest Period
or Periods, if any, selected by Borrower. Such
telephonic notice shall be irrevocable and shall be
given to Agent no later than the applicable Rate
Designation Date.
(ii) No more than eight (8) LIBOR Borrowings shall be
in effect at any time.
(iii) Each advance, designation or conversion of a
LIBOR Borrowing shall occur on a LIBOR Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no
LIBOR Borrowing may be converted to a Base Rate
Borrowing or another LIBOR Borrowing on any day
other than the last day of the applicable
Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the
amount equal to $500,000 or an integral multiple of
$100,000 in excess thereof.
(vi) Subject to Section 3.3(c)(i), each designation of
an Interest Option with respect to the Notes
shall apply to all of the Notes ratably in
accordance with their respective outstanding
principal balances. If any Lender assigns an
interest in its Note when any LIBOR Borrowing is
outstanding with respect thereto, then such
assignee shall have its ratable interest in such
LIBOR Borrowing.
(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal
Requirement after the Effective Date or any change after the
Effective Date in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental
Authority or compliance by any Lender with any request or
directive (whether or not having the force of law) issued after
the Effective Date by any central bank or other Governmental
Authority shall at any time make it unlawful or impossible for
any Lender to permit the establishment of or to maintain any
LIBOR Borrowing, the commitment of such Lender to establish such
LIBOR Borrowing shall forthwith be canceled and Borrower shall
on the last day the Interest Period relating to any outstanding
LIBOR Borrowing (or within such earlier period as may be
required by applicable law) (1) convert the LIBOR Borrowing of
such Lender to a Base Rate Borrowing; (2) pay all accrued and
unpaid interest to date on the amount so converted; and (3) pay
any amounts required to compensate each Lender for any
additional cost or expense which any Lender may incur as a
result of such adoption of or change in such Legal Requirement
or in the interpretation or administration thereof and any
Funding Loss which any Lender may incur as a result of such
conversion. If, when Agent so notifies Borrower, Borrower has
given a Rate Designation Notice specifying a LIBOR Borrowing but
the selected Interest Period has not yet begun, as to the
applicable Lender such Rate Designation Notice shall be deemed
to be of no force and effect, as if never made, and the balance
of the Loans made by such Lender specified in such Rate
Designation Notice shall bear interest at the Base Rate until a
different available Interest Option shall be designated in
accordance herewith.
(ii) Increased Cost of Borrowings. Subject to Section
11.15, if the adoption after the Effective Date of any
applicable Legal Requirement or any change after the Effective
Date in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental
Authority or compliance by any Lender with any request or
directive (whether or not having the force of law) issued after
the Effective Date by any central bank or Governmental Authority
shall at any time as a result of any portion of the principal
balances of the Notes being maintained on the basis of a
Eurodollar Rate:
(1) subject any Lender to any Taxes, or any deduction
or withholding for any Taxes, on or from any
payment due under any LIBOR Borrowing or other
amount due hereunder, other than income and
franchise taxes of the United States or its
political subdivisions or such other jurisdiction
in which the applicable Lender has any office or
applicable lending office; or
(2) change the basis of taxation of payments due from
Borrower to any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of
taxation of the gross revenues or overall net
income of such Lender); or
(3) impose, modify, increase or deem applicable any
reserve requirement (excluding that portion of
any reserve requirement included in the
calculation of the applicable Eurodollar Rate),
special deposit requirement or similar
requirement (including, but not limited to, state
law requirements) against assets of any Lender,
or against deposits with any Lender, or against
loans made by any Lender, or against any other
funds, obligations or other Property owned or
held by any Lender; or
(4) impose on any Lender any other condition
regarding any LIBOR Borrowing;
and the result of any of the foregoing is to increase the cost
to any Lender of agreeing to make or of making, renewing or
maintaining such LIBOR Borrowing, or reduce the amount of
principal or interest received by any Lender, then, within 15
Business Days after demand by Agent (accompanied by a statement
setting forth in reasonable detail the applicable Lender's basis
therefor), Borrower shall pay to Agent additional amounts which
shall compensate each Lender for such increased cost or reduced
amount. The determination by any Lender of the amount of any
such increased cost, increased reserve requirement or reduced
amount shall be prima facie evidence of the correctness thereof.
Borrower shall have the right, if it receives from Agent any
notice referred to in this paragraph, upon three Business Days'
notice to Agent (which shall notify each affected Lender),
either (i) to repay in full (but not in part) any borrowing with
respect to which such notice was given, together with any
accrued interest thereon, or (ii) to convert the LIBOR Borrowing
which is the subject of the notice to a Base Rate Borrowing;
provided, that any such repayment or conversion shall be
accompanied by payment of (x) the amount required to compensate
each Lender for the increased cost or reduced amount referred to
in the preceding paragraph; (y) all accrued and unpaid interest
to date on the amount so repaid or converted, and (z) any
Funding Loss which any Lender may incur as a result of such
repayment or conversion. Each Lender will notify Borrower
through Agent of any event occurring after the date of this
Agreement which will entitle such Lender to compensation
pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such
compensation, and (if so requested by Borrower through Agent)
will designate a different lending office of such Lender for the
applicable LIBOR Borrowing or will take such other action as
Borrower may reasonably request if such designation or action is
consistent with the internal policy of such Lender and legal and
regulatory restrictions, will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion
of such Lender, be disadvantageous to such Lender (provided that
such Lender shall have no obligation so to designate a different
lending office which is located in the United States of America).
(iii) Inadequacy of Pricing and Rate Determination. If,
for any reason with respect to any Interest Period, Agent (or,
in the case of clause 3 below, the applicable Lender) shall have
reasonably determined that:
(1) Agent is unable through its customary general
practices to determine any applicable Eurodollar
Rate, or
(2) by reason of circumstances affecting the
applicable market, generally, Agent is not being
offered deposits in United States dollars in such
market, for the applicable Interest Period and in
an amount equal to the amount of any applicable
LIBOR Borrowing requested by Borrower, or
(3) any applicable Eurodollar Rate will not
adequately and fairly reflect the cost to any
Lender of making and maintaining such LIBOR
Borrowing hereunder for any proposed Interest
Period,
then Agent shall give Borrower notice thereof and thereupon, (A)
any Rate Designation Notice previously given by Borrower
designating the applicable LIBOR Borrowing which has not
commenced as of the date of such notice from Agent shall be
deemed for all purposes hereof to be of no force and effect, as
if never given, and (B) until Agent shall notify Borrower that
the circumstances giving rise to such notice from Agent no
longer exist, each Rate Designation Notice requesting the
applicable Eurodollar Rate shall be deemed a request for a Base
Rate Borrowing, and any applicable LIBOR Borrowing then
outstanding shall be converted, without any notice to or from
Borrower, upon the termination of the Interest Period then in
effect with respect to it, to a Base Rate Borrowing.
(iv) Funding Losses. Borrower shall indemnify each Lender
against and hold each Lender harmless from any Funding Loss.
Subject to Section 11.15, this indemnity shall survive the
payment of the Notes. Within 15 Business Days after demand by
Agent (accompanied by a certificate of such Lender setting forth
in reasonable detail the amount and calculation of the amount
claimed as to any Funding Losses, which shall be prima facie
evidence of the correctness thereof), Borrower shall pay to
Agent, for the account of such Lender, the amount of such
Funding Losses.
(d) Funding Offices; Adjustments Automatic; Calculation Year.
Any Lender may, if it so elects, fulfill its obligation as to
any LIBOR Borrowing by causing a branch or affiliate of such
Lender to make such Loan and may transfer and carry such Loan
at, to or for the account of any branch office or affiliate of
such Lender; provided, that in such event for the purposes of
this Agreement such Loan shall be deemed to have been made by
such Lender and the obligation of Borrower to repay such Loan
shall nevertheless be to such Lender and shall be deemed held by
it for the account of such branch or affiliate. Without notice
to Borrower or any other Person, each rate required to be
calculated or determined under this Agreement shall
automatically fluctuate upward and downward in accordance with
the provisions of this Agreement. Interest at the Prime Rate
shall be computed on the basis of the actual number of days
elapsed in a year consisting of 365 or 366 days, as the case may
be. All other interest required to be calculated or determined
under this Agreement shall be computed on the basis of the
actual number of days elapsed in a year consisting of 360 days,
unless the Ceiling Rate would thereby be exceeded, in which
event, to the extent necessary to avoid exceeding the Ceiling
Rate, the applicable interest shall be computed on the basis of
the actual number of days elapsed in the applicable calendar
year in which accrued.
(e) Funding Sources. Notwithstanding any provision of
this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of the Loans in
any manner it sees fit, it being understood, however, that for
the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and
maintained each LIBOR Borrowing during each Interest Period
through the purchase of deposits having a maturity corresponding
to such Interest Period and bearing an interest rate equal to
the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by
Borrower hereunder, under the Notes and under the other Loan
Documents shall be made in Dollars, in immediately available
funds, to Agent at the Principal Office (or in the case of a
successor Agent, at the principal office of such successor Agent
in the United States), not later than 11:00 a.m. Houston time on
the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day).
(b) Borrower shall, at the time of making each payment
hereunder, under any Note or under any other Loan Document,
specify to Agent the Loans or other amounts payable by Borrower
hereunder or thereunder to which such payment is to be applied.
Each payment received by Agent hereunder, under any Note or
under any other Loan Document for the account of a Lender shall
be paid promptly to such Lender, in immediately available funds.
If Agent fails to send to any Lender the applicable amount by
the close of business on the date any such payment is received
by Agent if such payment is received prior to 11:00 a.m. Houston
time (or on the next succeeding Business Day with respect to
payments which are received after 11:00 a.m. Houston time),
Agent shall pay to the applicable Lender interest on such amount
from such date at the Federal Funds Rate. Borrower, the Lenders
and Agent acknowledge and agree that this provision and each
other provision of this Agreement or any of the other Loan
Documents relating to the application of amounts in payment of
the Obligations shall be subject to the provisions of Section
4.2(d) regarding pro rata application of amounts after an Event
of Default shall have occurred and be continuing.
(c) If the due date of any payment hereunder or under any Note
falls on a day which is not a Business Day, the due date for
such payments (except as otherwise provided in clause (2) of the
definition of "Interest Period") shall be extended to the next
succeeding Business Day and interest shall be payable for any
principal so extended for the period of such extension.
(d) All payments by Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction
for or on account of any present or future income, stamp, or
other taxes, fees, duties, withholding or other charges of any
nature whatsoever imposed by any taxing authority excluding in
the case of Agent and each Lender taxes imposed on or measured
by its net income or franchise taxes imposed by the jurisdiction
in which it is organized or through which it acts for purposes
of this Agreement (such non-excluded items being hereinafter
referred to as "Taxes"). If as a result of any change in law
(or the interpretation thereof) after the date that Agent or the
applicable Lender became a party to this Agreement, any
withholding or deduction from any payment to be made to, or for
the account of, such Person by Borrower hereunder or under any
other Loan Document is required in respect of any Taxes pursuant
to any applicable law, rule, or regulation, then Borrower will
(i) pay to the relevant authority the full amount required to be
so withheld or deducted; (ii) to the extent available, promptly
forward to Agent an official receipt or other documentation
reasonably satisfactory to Agent evidencing such payment to such
authority; and (iii) pay to Agent, for the account of each
affected Person, such additional amount or amounts as are
necessary to ensure that the net amount actually received by
such Lender will equal the full amount such Person would have
received had no such withholding or deduction been required.
Each such Person shall determine such additional amount or
amounts payable to it (which determination shall be prima facie
evidence of the correctness thereof). If Agent or any Lender
becomes aware that any such withholding or deduction from any
payment to be made by Borrower hereunder or under any other Loan
Document is required, then such Person shall promptly notify
Agent and Borrower thereof stating the reasons therefor and the
additional amount required to be paid under this Section. Each
Lender shall execute and deliver to Agent and Borrower such
forms as it may be required to execute and deliver pursuant to
Section 11.13 hereof. To the extent that any such withholding
or deduction results from the failure of a Lender to provide a
form required by Section 11.13 hereof (unless such failure is
due to some prohibition under applicable Legal Requirements),
Borrower shall have no obligation to pay the additional amount
required by clause (iii) above. Anything in this Section
notwithstanding, if any Lender elects to require payment by
Borrower of any material amount under this Section, Borrower
may, within 60 days after the date of receiving notice thereof
and so long as no Default shall have occurred and be continuing,
elect to terminate such Lender as a party to this Agreement;
provided that, concurrently with such termination Borrower shall
(i) if Agent and each of the other Lenders shall consent, pay
that Lender all principal, interest and fees and other amounts
owed to such Lender through such date of termination or (ii)
have arranged for another financial institution approved by
Agent (such approval not to be unreasonably withheld or delayed)
as of such date, to become a substitute Lender for all purposes
under this Agreement in the manner provided in Section 11.6;
provided further that, prior to substitution for any Lender,
Borrower shall have given written notice to Agent of such
intention and the Lenders shall have the option, but no
obligation, for a period of 60 days after receipt of such
notice, to increase their Commitments in order to replace the
affected Lender in lieu of such substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing from the Lenders under
Section 2.1 hereof shall be made ratably from the Lenders in
accordance with their respective Commitments; (b) each payment
of revolving loan commitment fees shall be made for the account
of the Lenders, and each termination or reduction of the
Commitments of the Lenders under Section 2.2 hereof shall be
applied, pro rata, according to the Lenders' respective
Commitments, and (c) each payment by Borrower of principal of or
interest on the Loans shall be made to Agent for the account of
the Lenders pro rata in accordance with the respective unpaid
principal amounts of such Loans held by the Lenders.
4.3 Certain Actions, Notices, Etc. Notices to Agent of any
termination or reduction of Commitments and of borrowings and
optional prepayments of Loans shall be irrevocable and shall be
effective only if received by Agent not later than 11:00 a.m.
Houston time on the number of Business Days prior to the date of
the relevant termination, reduction, borrowing and/or prepayment
specified below:
Number of Business Days
Prior Notice
Termination or Reduction of
Commitments 3
Loan repayment 1
Borrowing at the Base Rate same day
Selection of a Eurodollar Rate 3 LIBOR
Business Days
Each such notice of termination or reduction shall specify the
amount of the applicable Commitment to be terminated or reduced.
Each such notice of borrowing or prepayment shall specify the
amount of the Loans to be borrowed or prepaid and the date of
borrowing or prepayment (which shall be a Business Day). Agent
shall promptly notify the affected Lenders of the contents of
each such notice.
4.4 Non-Receipt of Funds by Agent. Unless Agent shall have
been notified by a Lender or Borrower (the "Payor") prior to the
date on which such Lender is to make payment to Agent of the
proceeds of a Loan to be made by it hereunder or Borrower is to
make a payment to Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called
the "Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required
Payment to Agent, Agent may assume that the Required Payment has
been made and may, in reliance upon such assumption (but shall
not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in
fact made the Required Payment to Agent, the recipient of such
payment shall, on demand, pay to Agent the amount made available
by Agent, together with interest thereon in respect of the
period commencing on the date such amount was so made available
by Agent until the date Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment
of any principal of or interest on any Loan made by it under
this Agreement or on any other Obligation then due to such
Lender hereunder, through the exercise of any right of set-off
(including, without limitation, any right of setoff or Lien
granted under Section 9.2 hereof), banker's lien, counterclaim
or similar right or otherwise, it shall promptly purchase from
the other Lenders participations in the Loans made, or other
Obligations held, by the other Lenders in such amounts, and make
such other adjustments from time to time as shall be equitable
to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro rata in
accordance with the unpaid Obligations then due to each of them;
provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price
to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i)
the amount of such Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. To such end all the
Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. Borrower agrees, to
the fullest extent it may effectively do so under applicable
law, that any Lender so purchasing a participation in the Loans
made, or other Obligations held, by other Lenders may exercise
all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such
Lender were a direct holder of Loans or other Obligations in the
amount of such participation. Nothing contained herein shall
require any Lender to exercise any such right or shall affect
the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other
indebtedness or obligation of Borrower.
5. Conditions Precedent.
5.1 Initial Loans . The obligation of each Lender to make its
initial Loans hereunder is subject to the following conditions
precedent, each of which shall have been fulfilled or waived to
the satisfaction of Agent:
(a) Authorization and Status. Agent shall have received
(i) copies of the Organizational Documents of Borrower certified
as true and correct by its secretary, assistant secretary or
other equivalent officer, (ii) evidence reasonably satisfactory
to Agent of all action taken by Borrower authorizing the
execution, delivery and performance of the Loan Documents and
all other documents related to this Agreement to which it is a
party (including, without limitation, a certificate of the
secretary, assistant secretary or other equivalent officer of
each such party which is a corporation setting forth the
resolutions of its Board of Directors authorizing the
transactions contemplated thereby), and (iii) such certificates
as may be appropriate to demonstrate the qualification and good
standing of Borrower in the jurisdiction of its organization and
in each other jurisdiction where the failure in which to qualify
could reasonably be expected to have a Material Adverse Effect.
(b) Incumbency. Borrower shall have delivered to Agent a
certificate in respect of the name and signature of each of the
officers (i) who is authorized to sign on its behalf the
applicable Loan Documents to which it is a party related to any
Loan and (ii) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving
notices and other communications in connection with any Loan.
Agent and each Lender may conclusively rely on such certificates
until they receive notice in writing from Borrower to the contrary.
(c) Notes. Agent shall have received the appropriate
Notes of Borrower for each Lender, duly completed and executed.
(d) Loan Documents. Borrower shall have duly executed and
delivered the Loan Documents to which it is a party (in such
number of copies as Agent shall have requested). Each such Loan
Document shall be in substantially the form furnished to the
Lenders prior to their execution of this Agreement, together
with such changes therein as Agent may approve.
(e) Fees and Expenses. Borrower shall have paid to Agent
all unpaid fees in the amounts previously agreed upon in writing
among Borrower and Agent.
(f) Opinions of Counsel. Agent shall have received such
opinions of counsel to Borrower as Agent shall reasonably
request with respect to Borrower and the Loan Documents.
(g) Consents. Agent shall have received evidence
reasonably satisfactory to the Majority Lenders that all
material consents of each Governmental Authority and of each
other Person, if any, reasonably required in connection with (a)
the Loans and (b) the execution, delivery and performance of
this Agreement and the other Loan Documents have been
satisfactorily obtained.
(h) Other Documents. Agent shall have received such other
documents consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as Agent may
reasonably request.
5.2 All Loans. The obligation of each Lender to make any Loan
to be made by it hereunder is subject to: (a) the accuracy, in
all material respects, on the date of such Loan of all
representations and warranties of Borrower contained in this
Agreement and the other Loan Documents, except to the extent
expressly limited to an earlier date; (b) Agent shall have
received the following, all of which shall be duly executed and
in Proper Form: (1) a Request for Extension of Credit as to the
Loan no later than 10:00 a.m. Houston time on the Business Day
on which such Request for Extension of Credit must be given
under Section 4.3 hereof and (2) such other documents as Agent
may reasonably require; (c) prior to the making of such Loan,
there shall have occurred no event which could reasonably be
expected to have a Material Adverse Effect; (d) no Default or
Event of Default shall have occurred and be continuing, and (e)
the making of such Loan shall not be illegal or prohibited by
any Legal Requirement. The submission by Borrower of a Request
for Extension of Credit shall be deemed to be a representation
and warranty that the conditions precedent to the applicable
Loan have been satisfied.
6. Representations and Warranties.
To induce Agent and the Lenders to enter into this Agreement
and to make the Loans, Borrower represents and warrants (such
representations and warranties to survive any investigation and
the making of the Loans) to the Lenders and Agent as follows:
6.1 Organization. Borrower and each of its Restricted
Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) has all necessary power and authority to conduct its
business as presently conducted, and (c) is duly qualified to do
business and in good standing in the jurisdiction of its
organization and in all jurisdictions in which the failure to so
qualify could reasonably be expected to have a Material Adverse
Effect.
6.2 Financial Statements. Borrower has furnished to Agent (i)
audited financial statements (including a balance sheet) as to
Borrower which fairly present in all material respects, in
accordance with GAAP, the consolidated financial condition and
the results of operations of Borrower and its Subsidiaries as of
the end of the fiscal year ended March 31, 1998 and (ii)
unaudited financial statements (including a balance sheet) as to
Borrower which fairly present in all material respects, in
accordance with GAAP (subject to year-end adjustments and the
absence of notes), the consolidated financial condition and the
results of operations of Borrower and its Subsidiaries as of the
end of the fiscal quarter ended June 30, 1998. No events,
conditions or circumstances have occurred from the date that the
financial statements were delivered to Agent through the
Effective Date which would cause said financial statements to be
misleading in any material respect. There are no material
instruments or liabilities which should be reflected in such
financial statements provided to Agent which are not so
reflected that are necessary in order for such financial
statement presentation to conform to GAAP. Since March 31,
1998, no event has occurred and no circumstance has arisen which
could reasonably be expected to cause a Material Adverse Effect.
6.3 Enforceable Obligations; Authorization. The Loan Documents
are legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency and other similar laws
and judicial decisions affecting creditors' rights generally and
by general equitable principles. The execution, delivery and
performance of the Loan Documents by Borrower (a) have all been
duly authorized by all necessary action; (b) are within the
corporate power and authority of Borrower; (c) do not and will
not contravene or violate any Legal Requirement applicable to
Borrower or the Organizational Documents of Borrower, the
contravention or violation of which could reasonably be expected
to have a Material Adverse Effect; (d) do not and will not
result in the breach of, or constitute a default under, any
material agreement or instrument by which Borrower or any of its
Property may be bound, and (e) do not and will not result in the
creation of any Lien upon any Property of Borrower, except in
favor of Agent or as expressly contemplated herein or therein.
All necessary permits, registrations and consents for such
making and performance have been obtained.
6.4 Other Debt. Neither Borrower nor any its Restricted
Subsidiaries is in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust,
security agreement or lease to which it is a party and which
default could reasonably be expected to have a Material Adverse
Effect.
6.5 Litigation. There is no litigation or administrative
proceeding, to the knowledge of any executive officer of
Borrower, pending or threatened against, nor any outstanding
judgment, order or decree against, Borrower or any of its
Restricted Subsidiaries before or by any Governmental Authority
which does or could reasonably be expected to have a Material
Adverse Effect. Neither Borrower nor any its Restricted
Subsidiaries is in default with respect to any judgment, order
or decree of any Governmental Authority where such default could
reasonably be expected to have a Material Adverse Effect.
6.6 Taxes. Borrower and each of its Restricted Subsidiaries
has filed all tax returns required to have been filed and paid
all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being
contested in good faith or where the failure to make required
filings or pay required taxes could not reasonably be expected
to have a Material Adverse Effect.
6.7 Regulations U and X. None of the proceeds of any Loan will
be used for the purpose of purchasing or carrying directly or
indirectly any margin stock or for any other purpose would
constitute this transaction a "purpose credit" within the
meaning of Regulations U and X of the Board of Governors of the
Federal Reserve System, as any of them may be amended from time
to time.
6.8 Subsidiaries. As of the Effective Date, Borrower has no
Subsidiaries other than as set forth on Exhibit F hereto. There
are no Unrestricted Subsidiaries of Borrower as of the Effective
Date.
6.9 No Untrue or Misleading Statements. No document,
instrument or other writing furnished to the Lenders by or on
behalf of Borrower in connection with the transactions
contemplated in any Loan Document contains any untrue material
statement of fact or omits to state any such fact necessary to
make the representations, warranties and other statements
contained herein or in such other document, instrument or
writing not misleading in any material respect.
6.10 ERISA. With respect to each Plan, Borrower and each
member of the Controlled Group have fulfilled their obligations,
including obligations under the minimum funding standards of
ERISA and the Code and are in compliance in all material
respects with the provisions of ERISA and the Code. No event
has occurred which could result in a liability of Borrower or
any member of the Controlled Group to the PBGC or a Plan (other
than to make contributions in the ordinary course) could
reasonably be expected to have a Material Adverse Effect. There
have not been any nor are there now existing any events or
conditions that would cause the Lien provided under Section 4068
of ERISA to attach to any Property of Borrower or any member of
the Controlled Group. Unfunded Liabilities as of the date
hereof are not reasonably expected to result in a Material
Adverse Effect. No "prohibited transaction" has occurred with
respect to any Plan.
6.11 Investment Company Act. Neither Borrower nor any its
Restricted Subsidiaries is an investment company within the
meaning of the Investment Company Act of 1940, as amended, or,
directly or indirectly, controlled by or acting on behalf of any
Person which is an investment company, within the meaning of
said Act.
6.12 Public Utility Holding Company Act. Neither Borrower
nor any its Restricted Subsidiaries is an "affiliate" or a
"subsidiary company" of a "public utility company," or a
"holding company," or an "affiliate" or a "subsidiary company"
of a "holding company," as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
6.13 Fiscal Year. The fiscal year of Borrower ends on
March 31.
6.14 Compliance. Borrower and each of its Restricted
Subsidiaries is in compliance with all Legal Requirements
applicable to it, except to the extent that the failure to
comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.15 Environmental Matters. Borrower and each of its
Restricted Subsidiaries has, to the best knowledge of their
respective executive officers, obtained and maintained in effect
all Environmental Permits (or the applicable Person has
initiated the necessary steps to transfer the Environmental
Permits into its name or obtain such permits), the failure to
obtain which could reasonably be expected to have a Material
Adverse Effect. Borrower and each of its Restricted
Subsidiaries and their Properties, business and operations have
been and are, to the best knowledge of their respective
executive officers, in compliance with all applicable
Requirements of Environmental Law and Environmental Permits the
failure to comply with which could reasonably be expected to
have a Material Adverse Effect. Borrower and each of its
Restricted Subsidiaries and their Properties, business and
operations are not subject to any (A) Environmental Claims or
(B), to the best knowledge of their respective executive
officers (after making reasonable inquiry of the personnel and
records of their respective Corporations), Environmental
Liabilities, in either case direct or contingent, arising from
or based upon any act, omission, event, condition or
circumstance occurring or existing on or prior to the date
hereof which could reasonably be expected to have a Material
Adverse Effect. None of the officers of Borrower or any of its
Restricted Subsidiaries has received any notice of any violation
or alleged violation of any Requirements of Environmental Law or
Environmental Permit or any Environmental Claim in connection
with its Properties, liabilities, condition (financial or
otherwise), business or operations which could reasonably be
expected to have a Material Adverse Effect. Borrower does not
know of any event or condition with respect to currently enacted
Requirements of Environmental Laws presently scheduled to become
effective in the future with respect to any of the Properties of
Borrower or any of its Restricted Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, for
which good faith provisions have not been made by Borrower or
such Restricted Subsidiary in its business plan and projections
of financial performance.
7. Affirmative Covenants.
Borrower covenants and agrees with Agent and the Lenders that
prior to the termination of this Agreement it will do or cause
to be done, and cause each of its Restricted Subsidiaries to do
or cause to be done, each and all of the following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all
times, except where failure or noncompliance could not
reasonably be expected to have a Material Adverse Effect: (a)
pay when due all taxes and governmental charges of every kind
upon it or against its income, profits or Property, unless and
only to the extent that the same shall be contested diligently
in good faith and adequate reserves in accordance with GAAP have
been established therefor; (b) do all things necessary to
preserve its existence, qualifications, rights and franchises;
(c) comply with all applicable Legal Requirements (including
without limitation Requirements of Environmental Law) in respect
of the conduct of its business and the ownership of its
Property, and (d) cause its Property to be protected, maintained
and kept in good repair and make all replacements and additions
to such Property as may be reasonably necessary to conduct its
business properly and efficiently.
7.2 Financial Statements and Information. Furnish to Agent and
each Lender each of the following: (a) as soon as available and
in any event within 105 days after the end of each applicable
fiscal year, beginning with the fiscal year ending on March 31,
1999, Annual Financial Statements, together with a
Borrower-prepared reconciliation of such Annual Financial
Statements with annual financial statements of Borrower and its
Restricted Subsidiaries (attested by Borrower as true and
correct in all material respects); (b) as soon as available and
in any event within 60 days after the end of each fiscal quarter
of each applicable fiscal year, Quarterly Financial Statements,
together with a Borrower-prepared reconciliation of such
Quarterly Financial Statements with quarterly financial
statements of Borrower and its Restricted Subsidiaries (attested
by Borrower as true and correct in all material respects); (c)
concurrently with the financial statements provided for in
Subsections 7.2(a) and (b) hereof, such schedules, computations
and other information, in reasonable detail, as may be
reasonably required by Agent to demonstrate compliance with the
covenants set forth herein or reflecting any non-compliance
therewith as of the applicable date, all attested by a duly
authorized officer of Borrower as true and correct in all
material respects to the best knowledge of such officer and,
commencing with the quarterly financial statement prepared as of
September 30, 1998, a compliance certificate ("Compliance
Certificate") substantially in the form of Exhibit E hereto,
duly executed by such authorized officer; (d) promptly upon
their becoming publicly available, each financial statement,
report, notice or definitive proxy statements sent by Borrower
to shareholders generally and each regular or periodic report
and each registration statement, prospectus or written
communication (other than transmittal letters and other than
registrations on Form S-8 under the Securities Act,
registrations of equity securities pursuant to Rule 415 under
the Securities Act which do not involve an underwritten public
offering and reports on Form 11-K or pursuant to Section 16(a)
under the Exchange Act) in respect thereof filed by Borrower
with, or received by Borrower in connection therewith from, any
securities exchange or the Securities and Exchange Commission or
any successor agency, and (e) such other information relating to
the condition (financial or otherwise), operations, prospects or
business of Borrower or any of its Restricted Subsidiaries as
from time to time may be reasonably requested by Agent. Each
delivery of a financial statement pursuant to this Section 7.2
shall constitute a restatement of the representations contained
in the last two sentences of Section 6.2.
7.3 Financial Tests. Have and maintain:
(a) Consolidated Adjusted Net Worth - Consolidated
Adjusted Net Worth of not less than the sum of (1)
$125,000,000 plus (2) 50% of the net proceeds realized from
the issuance of any equity securities by Borrower during
that period plus (3) 50% of Consolidated Net Income
computed on a cumulative basis for each of the elapsed
fiscal quarters ending after March 31, 1998; provided that
notwithstanding that Consolidated Net Income for any such
elapsed fiscal quarter may be a deficit figure, no
reduction as a result thereof shall be made in the sum to
be maintained pursuant hereto.
(b) Debt to Capitalization Ratio - a Debt to
Capitalization Ratio of not greater than 55% at all times.
(c) Fixed Charge Coverage Ratio - a Fixed Charge
Coverage Ratio of not less than 2.00 to 1.00 at all times.
(d) Interest Coverage Ratio - an Interest Coverage
Ratio of not less than 2.50 to 1.00 at all times.
(e) Debt to Consolidated Net Worth Ratio - the ratio
of (i) the sum of, determined on a consolidated basis in
accordance with GAAP, (A) the aggregate amount of all
Indebtedness of Borrower secured by Liens within the
limitations of clauses (f) through (m) of Section 8.3 plus
(B) the aggregate amount of all Indebtedness of Restricted
Subsidiaries of Borrower (other than Indebtedness permitted
pursuant to Section 8.1(a)(ii)) plus (C) the aggregate
liquidation value of all Preferred Stock of Restricted
Subsidiaries of Borrower (other than Preferred Stock
permitted pursuant to Section 8.1(a)(ii)) to (ii)
Consolidated Adjusted Net Worth not to exceed 0.30 to 1.00.
7.4 Inspection. Permit Agent and each Lender upon 3 days'
prior notice (unless a Default or an Event of Default has
occurred which is continuing, in which case no prior notice is
required) to inspect its Property in a manner consistent with
applicable safety requirements and policies of insurance, to
examine its files, books and records, except classified
governmental material, and make and take away copies thereof,
and to discuss its affairs with its officers and accountants,
all during normal business hours and at such intervals and to
such extent as Agent may reasonably desire without unreasonably
interfering with Borrower's or its Restricted Subsidiaries'
operations or business.
7.5 Further Assurances. Promptly execute and deliver, at
Borrower's expense, any and all other and further instruments
which may be reasonably requested by Agent to cure any defect in
the execution and delivery of any Loan Document in order to
effectuate the transactions contemplated by the Loan Documents.
7.6 Books and Records. Maintain books of record and account
which permit financial statements to be prepared in accordance
with GAAP.
7.7 Insurance. Maintain insurance on its Property with
responsible companies in such amounts, with such deductibles and
against such risks as are usually carried by owners of similar
businesses and Properties in the same general areas in which
Borrower or any of its Restricted Subsidiaries operates, and
furnish Agent satisfactory evidence thereof promptly upon
reasonable request. Agent shall be provided with a certificate
showing coverages provided under the policies of insurance and
such policies shall be endorsed to the effect that they will not
be canceled for nonpayment of premium, reduced or affected in
any material manner without thirty (30) days' prior written
notice to Agent.
7.8 Notice of Certain Matters. Give Agent written notice of
the following promptly after any executive officer of Borrower
shall become aware of the same:
(a) the issuance by any court or governmental agency or
authority of any injunction, order or other restraint
prohibiting, or having the effect of prohibiting, the
performance of this Agreement, any other Loan Document, or the
making of the Loans or the initiation of any litigation, or any
claim or controversy which would reasonably be expected to
result in the initiation of any litigation, seeking any such
injunction, order or other restraint;
(b) the filing or commencement of any action, suit or
proceeding, whether at law or in equity or by or before any
court or any Governmental Authority involving claims which could
reasonably be expected to result in a Default hereunder or a
Material Adverse Effect; and
(c) any Event of Default or Default, specifying the nature
and extent thereof and the action (if any) which is proposed to
be taken with the respect thereto.
Borrower will also notify Agent in writing at least 30 days
prior to the date that it changes its name or the location of
its chief executive office or principal place of business or the
place where it keeps its books and records.
7.9 Capital Adequacy. If any Lender shall have determined
that the adoption after the Effective Date or effectiveness
after the Effective Date (whether or not previously announced)
of any applicable law, rule, regulation or treaty regarding
capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration
thereof after the Effective Date by any Governmental Authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date
regarding capital adequacy (whether or not having the force of
law) of any such Governmental Authority, central bank or
comparable agency has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of its obligations
hereunder, under the Notes or other Obligations held by it to a
level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance
(taking into consideration such Lender's policies with respect
to capital adequacy) by an amount deemed by such Lender or such
corporation to be material, then from time to time, upon
satisfaction of the conditions precedent set forth in this
Section, after demand by such Lender (with a copy to Agent) as
provided below, pay (subject to Sections 11.7 and 11.15 hereof)
to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.
The certificate of any Lender setting forth such amount or
amounts as shall be necessary to compensate it and the basis
thereof and reasons therefor shall be delivered as soon as
practicable to Borrower and shall be prima facie evidence of the
correctness thereof. Borrower shall pay the amount shown as due
on any such certificate within fifteen (15) Business Days after
the delivery of such certificate. In preparing such
certificate, a Lender may employ such assumptions and
allocations of costs and expenses as it shall in good faith deem
reasonable and may use any reasonable averaging and attribution
method.
7.10 ERISA Information and Compliance. Promptly furnish to
Agent (i) immediately upon receipt, a copy of any notice of
complete or partial withdrawal liability under Title IV of ERISA
and any notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan,
(ii) if requested by Agent, promptly after the filing thereof
with the United States Secretary of Labor or the PBGC or the
Internal Revenue Service, copies of each annual and other report
with respect to each Plan or any trust created thereunder, (iii)
immediately upon becoming aware of the occurrence of any
"reportable event," as such term is defined in Section 4043 of
ERISA, for which the disclosure requirements of Regulation
Section 2615.3 promulgated by the PBGC have not been waived, or
of any "prohibited transaction," as such term is defined in
Section 4975 of the Code, in connection with any Plan or any
trust created thereunder, a written notice signed by an
authorized officer of Borrower or the applicable member of the
Controlled Group specifying the nature thereof, what action
Borrower or the applicable member of the Controlled Group is
taking or proposes to take with respect thereto, and, when
known, any action taken by the PBGC, the Internal Revenue
Service or the Department of Labor with respect thereto, (iv)
promptly after the filing or receiving thereof by Borrower or
any member of the Controlled Group of any notice of the
institution of any proceedings or other actions which may result
in the termination of any Plan, and (v) each request for waiver
of the funding standards or extension of the amortization
periods required by Sections 303 and 304 of ERISA or Section 412
of the Code promptly after the request is submitted by Borrower
or any member of the Controlled Group to the Secretary of the
Treasury, the Department of Labor or the Internal Revenue
Service, as the case may be. To the extent required under
applicable statutory funding requirements, Borrower will fund,
or will cause the applicable member of the Controlled Group to
fund, all current service pension liabilities as they are
incurred under the provisions of all Plans from time to time in
effect, and comply with all applicable provisions of ERISA, in
each case, except to the extent that failure to do the same
could not reasonably be expected to have a Material Adverse
Effect. Borrower covenants that it shall and shall cause each
member of the Controlled Group to (1) make contributions to each
Plan in a timely manner and in an amount sufficient to comply
with the contribution obligations under such Plan and the
minimum funding standards requirements of ERISA; (2) prepare and
file in a timely manner all notices and reports required under
the terms of ERISA including but not limited to annual reports;
and (3) pay in a timely manner all required PBGC premiums, in
each case, except to the extent that failure to do the same
could not reasonably be expected to have a Material Adverse Effect.
7.11 Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i)
Borrower's and any of its Restricted Subsidiaries' computer
systems and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with
which Borrower's and any of its Restricted Subsidiaries' systems
interface) and the testing of all such systems and equipment
will be completed by January 1, 1999, except to the extent such
failure is not reasonably expected to result in a Material
Adverse Effect. The cost to Borrower and its Restricted
Subsidiaries of such reprogramming and testing and of reasonably
foreseeable consequences of year 2000 to Borrower and its
Restricted Subsidiaries (including, without limitation,
reprogramming errors and failure of others' systems or
equipment) will not result in an Event of Default or a Material
Adverse Effect. Except for such of the reprogramming referred
to in the preceding sentence as may be necessary, the computer
and management systems of Borrower and its Restricted
Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be,
sufficient to permit Borrower and its Restricted Subsidiaries to
conduct their business without Material Adverse Effect.
8. Negative Covenants.
Borrower covenants and agrees with Agent and the Lenders
that prior to the termination of this Agreement it will not, and
will not suffer or permit any of its Restricted Subsidiaries to,
do any of the following:
8.1 Limitations on Indebtedness and Preferred Stock of
Restricted Subsidiaries.
(a) Permit any Restricted Subsidiary of Borrower to
create, issue, assume, guarantee or otherwise incur or in any
manner become liable in respect of any Indebtedness or Preferred
Stock, except:
(i) Indebtedness or Preferred Stock of a Restricted
Subsidiary of Borrower outstanding as of the Effective Date
and described on Exhibit I hereto;
(ii) Indebtedness or Preferred Stock of a Restricted
Subsidiary of Borrower owing or issued to Borrower or to a
Wholly-owned Restricted Subsidiary; and
(iii) additional Indebtedness or Preferred Stock
of a Restricted Subsidiary of Borrower created, issued,
assumed, guaranteed or incurred within the limitations
provided in Sections 7.3(e) and 8.2(b) hereof.
(b) Indebtedness or Preferred Stock existing within the
limitations of Section 8.1(a)(i) may be renewed, extended or
refinanced (without increase in principal amount or liquidation
value, as the case may be, at the time of such renewal,
extension or refunding and subject only to covenants or
restrictions which are not materially more onerous than those
applicable to such Indebtedness or Preferred Stock, as the case
may be, at the time of original issuance thereof) without regard
to the limitations of Section 8.1(a)(iii), except that no such
Indebtedness or Preferred Stock may in any event be renewed,
extended or refinanced if at the time thereof and after giving
effect thereto and to the application of the proceeds thereof, a
Default or Event of Default would exist.
8.2 Priority Liabilities. Create, issue, assume, guarantee or
otherwise incur or in any manner become liable in respect of any
Priority Liability, unless:
(a) in the case of Indebtedness of Borrower or any of
its Restricted Subsidiaries secured by any Lien created
pursuant to Section 8.3(l), at the time of creation,
issuance, assumption, guarantee or incurrence thereof and
after giving effect thereto and to the application of the
proceeds thereof:
(i) no Default, including, without limitation, a
Default under Section 7.3(e), or Event of Default
would exist;
(ii) the aggregate amount of all Indebtedness of
Borrower or any of its Restricted Subsidiaries (other
than such Indebtedness permitted pursuant to Section
8.1(a)(ii)) secured by Liens created pursuant to
Section 8.3(l) (including the Indebtedness then to be
created, issued, assumed, guaranteed or incurred, but
excluding MARAD Indebtedness) would not exceed 15% of
Consolidated Adjusted Net Worth; and
(iii) the aggregate amount of all Indebtedness of
Borrower or any of its Restricted Subsidiaries (other
than such Indebtedness permitted pursuant to Section
8.1(a)(ii)) secured by Liens created pursuant to
Section 8.3(l) (including the Indebtedness then to be
created, issued, assumed, guaranteed or incurred and
any MARAD Indebtedness) would not exceed 25% of
Consolidated Adjusted Net Worth;
(b) in the case of Indebtedness or any Preferred
Stock of a Restricted Subsidiary of Borrower (other than
Indebtedness permitted pursuant to Section 8.1(a)(i) or
(ii) hereof), at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after
giving effect thereto and to the application of the
proceeds thereof:
(i) no Default, including, without limitation, a
Default under Section 7.3(e), or Event of Default
would exist; and
(ii) the aggregate amount of all Indebtedness of
Restricted Subsidiaries of Borrower (other than
Indebtedness permitted pursuant to Section 8.1(a)(ii)
hereof) plus the aggregate liquidation value of all
Preferred Stock of Restricted Subsidiaries of Borrower
(including the Indebtedness or Preferred Stock then to
be created, issued, assumed, guaranteed or incurred)
would not exceed 15% of Consolidated Adjusted Net Worth.
8.3 Limitations on Liens. Create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or
assets, whether now owned or hereafter acquired, or upon any
income or profits therefrom, or transfer any property for the
purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or
acquire or agree to acquire any property or assets upon
conditional sales agreements or other title retention devices,
except the following:
(a) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or
demands of mechanics, materialmen, vendors, carriers and
warehousemen and other like Persons; provided that payment
thereof is not at the time required by Section 7.1;
(b) Liens of or resulting from any judgment or award,
the time for the appeal or petition for rehearing of which
shall not have expired, or in respect of which Borrower or
a Restricted Subsidiary of Borrower shall at any time in
good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending
such appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or
the ownership of properties and assets (including Liens in
connection with worker's compensation, unemployment
insurance and other like laws, maritime, warehousemen's and
attorneys' liens and statutory landlords' liens and
deposits made to obtain insurance), customary statutory,
common law and contractual rights of a bank to set-off
claims of such bank against cash on deposit with such bank,
and Liens to secure the performance of bids, tenders or
trade contracts, or to secure statutory obligations, surety
or appeal bonds or other Liens of like general nature, in
any such case incurred in the ordinary course of business
and not in connection with the borrowing of money; provided
in each case, the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate
actions or proceedings;
(d) minor survey exceptions or minor defects,
irregularities in title, encumbrances, easements,
restrictions or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the
activities of Borrower and its Restricted Subsidiaries or
which customarily exist on properties of corporations
engaged in similar activities and similarly situated and
which do not in any event materially impair their use in
the operation of the business of Borrower and its
Restricted Subsidiaries;
(e) Liens securing Indebtedness owed Borrower or to
any Wholly-owned Subsidiary by any Restricted Subsidiary of
Borrower;
(f) Liens existing as of the Effective Date and
described on Exhibit I hereto;
(g) Liens on the capital stock, partnership or other
equity interests held, directly or indirectly, by Borrower
or any of its Restricted Subsidiaries in a joint venture,
provided that the proceeds of Indebtedness of Borrower or
such Restricted Subsidiary secured by such Liens are in
their entirety contributed or advanced to such joint
venture; provided, further, that (i) at the time of the
creation, issuance, assumption, guarantee or incurrence of
any such Indebtedness by Borrower or any of its Restricted
Subsidiaries and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of
Default would exist, (ii) any such Indebtedness, created,
issued, assumed, guaranteed or incurred by Borrower or any
of its Restricted Subsidiaries shall have been created
within the applicable limitations of Section 8.2, (iii)
with respect to any such Indebtedness neither Borrower or
any of its Restricted Subsidiaries, nor any of the property
or assets of Borrower or any of its Restricted
Subsidiaries, other than proceeds realized from the sale or
other disposition of such capital stock, partnership or
other equity interests shall, directly or indirectly, be
liable for or secure in any manner whatsoever the payment
thereof and (iv) other than Indebtedness arising from a
Lien on assets of Borrower or any of its Restricted
Subsidiaries consisting of equity interest in an
Unrestricted Subsidiary such Indebtedness shall be incurred
within the limitations provided in Section 7.3(e) and
Section 8.2(b) hereof;
(h) Liens on the capital stock, partnership or other
equity interests held, directly or indirectly, by Borrower
or any of its Restricted Subsidiaries in a joint venture,
provided that the proceeds of Indebtedness created by an
Unrestricted Subsidiary or any other Affiliate secured by
such Liens are in their entirety contributed or advanced to
such joint venture; provided, further, that with respect to
any such Indebtedness neither Borrower or any of its
Restricted Subsidiaries, nor any of the property or assets
of Borrower or any of its Restricted Subsidiaries, other
than proceeds realized from the sale or other disposition
of such capital stock, partnership or other equity
interests shall, directly or indirectly, be liable for or
secure in any manner whatsoever the payment thereof;
(i) Liens created or incurred after the Effective
Date given to secure the payment of the purchase price
incurred in connection with the acquisition or purchase of
assets useful and intended to be used in carrying on the
business of Borrower or any of its Restricted Subsidiaries,
so long as such Liens were not incurred, extended or
renewed in contemplation of such acquisition or purchase;
provided that (i) the Lien shall attach solely to the
assets acquired or purchased, (ii) such Lien shall have
been created or incurred no more than after 180 days of the
date of acquisition or purchase, (iii) at the time of
acquisition or purchase of such assets, the aggregate
amount remaining unpaid on all Indebtedness secured by
Liens on such assets, whether or not assumed by Borrower or
any of its Restricted Subsidiaries, shall not exceed an
amount equal to the lesser of the total purchase price or
fair market value at the time of acquisition or purchase of
such assets (as determined in good faith by the Board of
Directors of Borrower), (iv) if the Indebtedness secured by
such Liens shall have been incurred by a Restricted
Subsidiary of Borrower, then and in such event such
Indebtedness shall be incurred within the limitations
provided in Section 7.3(e) and Section 8.2(b) hereof, and
(v) at the time of the creation, issuance, assumption,
guarantee or incurrence of such Indebtedness and after
giving effect thereto and to the application of the
proceeds thereof, no Default, including, without
limitation, a Default under Section 7.3(e), or Event of
Default would exist;
(j) Liens created or incurred after the Effective
Date existing on such assets at the time of acquisition
thereof or at the time of acquisition or purchase by
Borrower or any of its Restricted Subsidiaries of any
business entity then owning such fixed assets, so long as
such Liens were not incurred, extended or renewed in
contemplation of such acquisition or purchase; provided
that (i) the Lien shall attach solely to the assets
acquired or purchased, (ii) if the Indebtedness secured by
such Lien shall have been assumed by a Restricted
Subsidiary of Borrower, then and in such event such
Indebtedness shall be incurred within the limitations
provided in Section 7.3(e) and Section 8.2(b) hereof, and
(iii) at the time of the assumption of such Indebtedness
and after the concurrent giving effect thereto, no Default,
including, without limitation, a Default under Section
7.3(e), or Event of Default would exist;
(k) Liens created under charters entered into by
Borrower or any of its Restricted Subsidiaries in the
ordinary course of its business, as owner or lessor of an
asset, creating leasehold interests therein; provided that
the creation of such Liens is otherwise permitted within
the terms of this Agreement;
(l) Liens created or incurred after the Effective
Date given to secure Indebtedness of Borrower or any of its
Restricted Subsidiaries in addition to the Liens permitted
by the preceding clauses (a) through (k) hereof; provided
that all Indebtedness secured by such Liens shall have been
incurred within the applicable limitations provided in
Section 8.2; and
(m) any extension, renewal or refunding of any Lien
permitted by the preceding clauses (f) through (k) of this
Section in respect of the same property theretofore subject
to such Lien in connection with the extension, renewal or
refunding of the Indebtedness secured thereby; provided
that (i) such extension, renewal or refunding of the
Indebtedness to which such Lien relates shall be without
increase in the principal amount remaining unpaid as of the
date of such extension, renewal or refunding, (ii) such
Lien shall attach solely to the same such property and
(iii) at the time of the extension, renewal or refunding of
such Indebtedness and after giving effect thereto and to
the application of the proceeds thereof, no Default,
including, without limitation, a Default under Section
7.3(e), or Event of Default would exist.
8.4 Dividends, Stock Purchases and Restricted Investments.
(a) Directly or indirectly, or through any Affiliate,
declare or make or incur any liability to declare or make any
Distribution (other than redemptions, acquisitions or
retirements of common stock to the extent of net cash proceeds
received from the substantially concurrent sale or exchange of
common stock of Borrower) or make or authorize any Restricted
Investment, unless, immediately after giving effect to the
proposed Distribution or Restricted Investment, the aggregate
amount of Distributions declared in the case of dividends or
made in the case of other Distributions plus the aggregate
amount of Restricted Investments then held by Borrower and its
Restricted Subsidiaries (valued immediately after the making of
such Restricted Investment as provided in the definition
thereof) during the period from and after the date of this
Agreement to and including the date of declaration in the case
of a dividend, the date of payment in the case of any other
Distribution and the date such Restricted Investment is made,
would not exceed the sum of:
(i) $25,000,000; plus
(ii) 50% of Consolidated Net Income (or if such
Consolidated Net Income is a deficit figure, then minus
100% of such deficit) for such period determined on a
cumulative basis commencing on April 1, 1998, to and
including the date of such declaration, payment or
commitment; plus
(iii) an amount equal to the aggregate net cash
proceeds received by Borrower from the sale on or after the
Effective Date of shares of its common stock or other
Securities convertible into common stock of Borrower or the
amount that Indebtedness of Borrower owing to a Person
other than a Subsidiary is reduced by the conversion or
exchange after the Effective Date of such Indebtedness into
common stock of Borrower; plus
(iv) to the extent not included in the determination
of Consolidated Net Income any repayments of or returns in
cash on any Restricted Investment previously made within
the limitations of this Section 8.4(a), including the
reissuance of treasury stock or issuance of new stock of
Borrower in satisfaction of usual and customary employee
benefit and other like obligations of Borrower and its
Subsidiaries that could otherwise be settled in cash; plus
(v) an amount equal to the aggregate cash paid by
Borrower for shares of common stock of Borrower to the
extent additional shares of common stock of Borrower were
issued by Borrower in connection with the acquisition by
Borrower of assets within the twelve calendar month period
immediately preceding the date of determination under this
Section.
(b) For the purposes of making computations under Section
8.4(a), the amount of any Distribution declared, paid or
distributed or Restricted Investment made in property or assets
of Borrower or any of its Restricted Subsidiaries shall be
deemed to be the book value of such property or assets as of the
date of declaration in the case of a dividend, the date of
payment in the case of any other Distribution and the date the
Restricted Investment is made. Any corporation which becomes a
Restricted Subsidiary of Borrower after the date of this
Agreement shall be deemed to have made, at the time it becomes a
Restricted Subsidiary of Borrower, all Restricted Investments of
such corporation existing immediately after it becomes a
Restricted Subsidiary of Borrower.
(c) Borrower will not authorize a Distribution on its
capital stock which is not payable within 60 days of
authorization. Borrower may make any Distribution within 60
days after the declaration thereof if at the time of declaration
such Distribution would have complied with this Section.
(d) Borrower will not authorize or make a Distribution on
its capital stock and neither Borrower nor any of its Restricted
Subsidiaries will make any Restricted Investment if after giving
effect to the proposed Distribution or Restricted Investment a
Default or an Event of Default would exist.
8.5 Mergers, Consolidations and Sales of Assets.
(a) Consolidate with or be a party to a merger with any
other Person, or sell, lease or otherwise dispose of all or
substantially all of its assets; provided that:
(i) any Restricted Subsidiary of Borrower may merge
or consolidate with or into Borrower or any Wholly-owned
Restricted Subsidiary so long as in (1) any merger or
consolidation involving Borrower, Borrower shall be the
surviving or continuing corporation and (2) in any merger
or consolidation involving a Wholly-owned Restricted
Subsidiary (and not Borrower), the Wholly-owned Restricted
Subsidiary shall be the surviving or continuing corporation;
(ii) Borrower may consolidate or merge with any other
corporation if (1) Borrower is the surviving corporation in
connection with such consolidation or merger and (2) at the
time of such consolidation or merger and immediately after
giving effect thereto, (A) no Default or Event of Default
would exist and (B) Borrower would be permitted by the
provisions of Section 8.2(a) to incur at least $1.00 of
additional Indebtedness.
(b) Sell, lease, transfer, abandon as obsolete or
otherwise dispose of assets (except assets sold, leased or
otherwise disposed of in the ordinary course of business for
fair market value and except as provided in Section 8.5(a)(c);
provided that the foregoing restrictions do not apply to:
(i) the sale, lease, transfer or other disposition of
assets to Borrower or a Wholly-owned Restricted Subsidiary
by a Restricted Subsidiary of Borrower; or
(ii) the sale, lease, transfer or other disposition of
assets for cash or other property to a Person or Persons if
all of the following conditions are met:
(1) in the opinion of (i) the Board of Directors of
Borrower if the fair market value of the assets
exceeds $2,500,000 or (ii) otherwise a Responsible
Officer, the sale is for fair value and is in the best
interests of Borrower;
(2) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist and (B)
Borrower would be permitted by the provisions of
Section 8.2(a) to incur at least $1.00 of additional
Indebtedness; and
(3) the entirety of the proceeds (net of
expenses and taxes arising in connection therewith)
("Net Proceeds") from any such sale or other
disposition shall be applied within 360 days of
receipt thereof by Borrower or a Restricted Subsidiary
of Borrower either (A) to the acquisition (directly or
through acquisition of a Restricted Subsidiary of
Borrower) of assets (other than cash, cash equivalents
or Securities) useful and intended to be used in the
operation of the business of Borrower and its
Restricted Subsidiaries and having a fair market value
(as determined in good faith by (i) the Board of
Directors of Borrower if the fair market value of the
assets exceeds $2,500,000 or (ii) otherwise a
Responsible Officer) at least equal to that of the
assets so disposed of or (B) towards the offer of
prepayment at any applicable prepayment premium of
Senior Indebtedness of Borrower owing to any Person
other than a Restricted Subsidiary of Borrower or an
Affiliate upon the terms and conditions hereinafter
provided; provided, that if for any reason whatsoever
Borrower does not apply all of the Net Proceeds from
any such sale in compliance with clause (A) or (B) of
this Section 8.5(b)(ii)(3) within such 360 day period,
then and in such event the Commitments of the Lenders
shall, unless the Majority Lenders otherwise agree in
writing, automatically be reduced effective as of the
expiration of such 360 day period by a sum equal to
the amount by which the aggregate Net Proceeds from
all sales or other dispositions not so applied exceed
$5,000,000 in the aggregate.
Computations pursuant to this Section 8.5(b) shall include
dispositions made pursuant to Section 8.5(c) and computations
pursuant to Section 8.5(c) shall include dispositions made
pursuant to this Section 8.5(b).
(c) Sell, pledge or otherwise dispose of any shares of the
stock or other ownership interests (including as "stock" for the
purposes of this Section 8.5(c) any options or warrants to
purchase stock or other Securities exchangeable for or
convertible into stock or other ownership interests) of a
Restricted Subsidiary of Borrower (said stock, options, warrants
and other Securities herein called "Subsidiary Stock") or any
Indebtedness of any Restricted Subsidiary of Borrower, nor will
any Restricted Subsidiary of Borrower issue, sell, pledge or
otherwise dispose of any shares of its own Subsidiary Stock,
provided that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares or
Regulatory Shares; or
(ii) the issue of Subsidiary Stock to Borrower; or
(iii) the sale or transfer by Borrower or any of
its Restricted Subsidiaries of any Subsidiary Stock to
Borrower or to a Wholly-owned Restricted Subsidiary; or
(iv) any other sale or other disposition at any one
time to a Person (other than directly or indirectly to an
Affiliate) of the entire Investment of Borrower and its
other Restricted Subsidiaries in any Restricted Subsidiary
of Borrower if all of the following conditions are met:
(1) in the opinion of (i)
Borrower's Board of Directors if the fair
market value of the assets exceeds
$2,500,000 or (ii) otherwise a Responsible
Officer, the sale is for fair value and is
in the best interests of Borrower;
(2) immediately after the
consummation of the transaction and after
giving effect thereto, such Restricted
Subsidiary shall have no Indebtedness of or
continuing Investment in the capital stock
of Borrower or of any of its Restricted
Subsidiaries and any such Indebtedness or
Investment shall have been discharged or
acquired, as the case may be, by Borrower
or a Restricted Subsidiary of Borrower; and
(3) immediately after the
consummation of the transaction and after
giving effect thereto, (A) no Default or
Event of Default would exist and (B)
Borrower would be permitted by the
provisions of Section 8.2(a) to incur at
least $1.00 of additional Indebtedness; and
(4) the entirety of the Net
Proceeds from any such sale or other
disposition shall be applied within 360
days of receipt thereof by Borrower or a
Restricted Subsidiary of Borrower either
(A) to the acquisition (directly or through
acquisition of a Restricted Subsidiary of
Borrower) of assets (other than cash, cash
equivalents or Securities) useful and
intended to be used in the operation of the
business of Borrower and its Restricted
Subsidiaries and having a fair market value
(as determined in good faith by (i) the
Board of Directors of Borrower if the fair
market value of the assets exceeds
$2,500,000 or (ii) otherwise a Responsible
Officer) at least equal to that of the
assets so disposed of or (B) towards the
offer of prepayment at any applicable
prepayment premium of Senior Indebtedness
of Borrower owing to any Person other than
a Restricted Subsidiary of Borrower or an
Affiliate upon the terms and conditions
hereinafter provided; provided, that if for
any reason whatsoever Borrower does not
apply all of the Net Proceeds from any such
sale in compliance with clause (A) or (B)
of this Section 8.5(c)(iv)(4) within such
360 day period, then and in such event the
Commitments of the Lenders shall, unless
the Majority Lenders otherwise agree in
writing, automatically be reduced effective
as of the expiration of such 360 day period
by a sum equal to the amount by which the
aggregate Net Proceeds from all sales or
other dispositions not so applied exceed
$5,000,000 in the aggregate.
Computations pursuant to this Section 8.5(c) shall include
dispositions made pursuant to Section 8.5(b) and computations
pursuant to Section 8.5(b) shall include dispositions made
pursuant to this Section 8.5(c).
8.6 Limitation on Restricted Agreements. Enter into, or suffer
to exist, any agreement with any Person which, directly or
indirectly, prohibits or limits the ability of any Restricted
Subsidiary of Borrower to (a) pay dividends or make other
distributions to Borrower or prepay any Indebtedness owed to
Borrower, (b) make loans or advances to Borrower or (c) transfer
any of its properties or assets to Borrower other than for such
restrictions existing under or by reason of (i) applicable law
or any order or ruling by any governmental authority; (ii) any
agreement relating to any Indebtedness permitted under this
Agreement; (iii) customary non-assignment provisions of any
contract; (iv) customary restrictions on cash or other deposits
imposed by customers under contracts entered into in the
ordinary course of business; (v) purchase money obligations for
property acquired in the ordinary course of business that impose
restrictions on the property so acquired; (vi) contracts for the
sale of assets, including, without limitation, customary
restrictions with respect to a Restricted Subsidiary of Borrower
pursuant to an agreement that has been entered into for the sale
of all or substantially all of the capital stock or assets of
such Restricted Subsidiary; (vii) any agreement or other
instrument governing Indebtedness of a Person acquired by
Borrower or any of its Restricted Subsidiaries (or of a
Subsidiary of such Person which becomes a Restricted Subsidiary
of Borrower) in existence at the time of such acquisition (but
not created in contemplation thereof), which restriction is not
applicable to Borrower or any of its Restricted Subsidiaries, or
assets of any such Person, other than the Person, or assets or
Subsidiaries of the Person, so acquired; or (viii) provisions
contained in agreements relating to Indebtedness which prohibit
the transfer of all or substantially al of the assets of the
obligor thereunder unless the transferee shall assume the
obligations of the obligor under such agreement or instrument.
8.7 Nature of Business. Engage in any business if, as a
result, the general nature of the business, taken on a
consolidated basis, which would then be engaged in by Borrower
and its Restricted Subsidiaries would be substantially changed
from the general nature of the business engaged in by Borrower
and its Restricted Subsidiaries on the date of this Agreement
and businesses related thereto.
8.8 Transactions with Affiliates. Enter into or be a party to
any transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or for, any
Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's or its applicable
Restricted Subsidiary's business and upon fair and reasonable
terms not significantly less favorable to Borrower or such
Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
8.9 Designation of Subsidiaries. Designate or redesignate
any Unrestricted Subsidiary as a Restricted Subsidiary of
Borrower or designate or redesignate any Restricted Subsidiary
of Borrower as an Unrestricted Subsidiary unless the following
conditions precedent have been satisfied:
(a) Borrower shall have given not less than 10 days'
prior written notice to Agent that a Senior Financial
Officer has made such determination,
(b) at the time of such designation or redesignation
and immediately after giving effect thereto: (i) no
Default or Event of Default would exist and (ii) Borrower
would be permitted by the provisions of Section 8.2(a) to
incur at least $1.00 of additional Indebtedness,
(c) in the case of the designation of a Restricted
Subsidiary of Borrower as an Unrestricted Subsidiary and
after giving effect thereto, (i) such Unrestricted
Subsidiary so designated shall not, directly or indirectly,
own any Indebtedness or capital stock of Borrower or any of
its Restricted Subsidiaries, (ii) such designation shall be
deemed a sale of assets and shall be permitted by the
provisions of Section 8.5(b)(ii), (iii) neither Borrower
nor any of its Restricted Subsidiaries shall be liable for
any Indebtedness of such Unrestricted Subsidiary so
designated (other than Indebtedness which at the time of
incurrence shall be permitted within the limitations of
Section 8.2(b) or at the time of such designation shall be
permitted within the limitations of Sections 8.4(a) and
8.2(b)), (iv) no default or condition in respect of any
Indebtedness of such Unrestricted Subsidiary so designated
could as a consequence of such default or condition cause
or permit any Indebtedness of Borrower or any of its
Restricted Subsidiaries to become, or to be declared, due
and payable before its stated maturity or before its
regularly scheduled dates of payment, (v) any continuing
Investment in the capital stock of such Subsidiary held by
Borrower or of any of its Restricted Subsidiaries shall at
the time of such designation be permitted (without
reference to paragraph (a) of the definition of "Restricted
Investments"), within the limitations of Section 8.4, and
(vi) such designation shall not result in the imposition of
a Lien on the assets of Borrower or any of its Restricted
Subsidiaries, other than a Lien permitted within the
limitations of Section 8.3,
(d) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary of Borrower and after
giving effect thereto: (i) all outstanding Indebtedness
and Preferred Stock of such Restricted Subsidiary so
designated shall be permitted within the applicable
limitations of Section 8.2(b) and (ii) all existing Liens
of such Restricted Subsidiary so designated shall be
permitted within the applicable limitations of Section 8.3,
other than Section 8.3(f) notwithstanding that any such
Lien existed as of the Effective Date),
(e) in the case of the designation of a Restricted
Subsidiary of Borrower as an Unrestricted Subsidiary, such
Restricted Subsidiary shall not at any time after the date
of this Agreement have previously been designated as an
Unrestricted Subsidiary more than once, and
(f) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary of Borrower, such
Unrestricted Subsidiary shall not at any time after the
date of this Agreement have previously been designated as a
Restricted Subsidiary of Borrower more than once.
9. Defaults.
9.1 Events of Default. If any one or more of the following
events (herein called "Events of Default") shall occur, then
Agent may (and at the direction of the Majority Lenders, shall)
do any or all of the following: (1) without notice to Borrower
or any other Person, declare the Commitments terminated
(whereupon the Commitments shall be terminated); (2) declare the
principal amount then outstanding of and the unpaid accrued
interest on the Loans and all fees and all other amounts payable
hereunder, under the Notes and under the other Loan Documents to
be forthwith due and payable, whereupon such amounts shall be
and become immediately due and payable, without notice
(including, without limitation, notice of acceleration and
notice of intent to accelerate), presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly
waived by Borrower; provided that in the case of the occurrence
of an Event of Default with respect to Borrower or any of its
Restricted Subsidiaries referred to in clause (f), (g) or (h) of
this Section 9.1, the Commitments shall be automatically
terminated and the principal amount then outstanding of and
unpaid accrued interest on the Loans and all fees and all other
amounts payable hereunder, under the Notes and under the other
Loan Documents shall be and become automatically and immediately
due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by Borrower, and (3)
exercise any or all other rights and remedies available to Agent
or any of the Lenders under the Loan Documents, at law or in
equity:
(a) Payments - (i) Borrower shall fail to make any
payment or required prepayment of any installment of
principal on the Loans payable under the Notes, this
Agreement or the other Loan Documents when due or (ii)
Borrower fails to make any payment or required payment of
interest with respect to the Loans or any other fee or
amount under the Notes, this Agreement or the other Loan
Documents when due and, in the case of clause (ii), such
failure to pay continues unremedied for a period of five
days; or
(b) Other Obligations - Borrower or any of its Restricted
Subsidiaries shall default in the payment when due of any
principal of or interest on any Indebtedness having an
outstanding principal amount (other than the Loans) of at
least, in the case of any single default, $3,000,000 and,
in the case of all defaults collectively, $5,000,000 and
such default shall continue beyond any applicable period of
grace and shall give rise to a right on the part of the
holder of such Indebtedness to accelerate such
Indebtedness; or any event or condition shall occur which
results in the acceleration of the maturity of any such
Indebtedness or enables (or, with the giving of notice or
lapse of time or both, would enable) the holder of any such
Indebtedness or any Person acting on such holder's behalf
to accelerate the maturity thereof and such event or
condition shall not be cured within any applicable period
of grace; or
(c) Representations and Warranties - any
representation or warranty made or deemed made by or on
behalf of Borrower in this Agreement or any other Loan
Document or in any certificate furnished or made by
Borrower to Agent or the Lenders in connection herewith or
therewith shall prove to have been incorrect, false or
misleading in any material respect as of the date thereof
or as of the date as of which the facts therein set forth
were stated or certified or deemed stated or certified; or
(d) Affirmative Covenants - (i) default shall be made
in the due observance or performance of any of the
covenants or agreements contained in Section 7.3 hereof or
(ii) default is made in the due observance or performance
of any of the other covenants and agreements contained in
Section 7 hereof or any other affirmative covenant of
Borrower contained in this Agreement or any other Loan
Document and such default continues unremedied for a period
of 30 days after (x) notice thereof is given by Agent to
Borrower or (y) such default otherwise becomes known to any
executive officer of Borrower, whichever is earlier; or
(e) Negative Covenants - default is made in the due
observance or performance by Borrower of any of the other
covenants or agreements contained in Section 8 of this
Agreement or of any other negative covenant of Borrower
contained in this Agreement or any other Loan Document; or
(f) Involuntary Bankruptcy or Receivership
Proceedings - a receiver, conservator, liquidator or
trustee of Borrower or any of its Restricted Subsidiaries
or of any Property of any such Person is appointed by the
order or decree of any court or agency or supervisory
authority having jurisdiction, and such decree or order
remains in effect for more than 60 days; or Borrower or any
of its Restricted Subsidiaries is adjudicated bankrupt or
insolvent; or any of such Person's Property is sequestered
by court order and such order remains in effect for more
than 60 days; or a petition is filed against Borrower or
any of its Restricted Subsidiaries under any state or
federal bankruptcy, reorganization, arrangement,
insolvency, readjustment or debt, dissolution, liquidation
or receivership law or any jurisdiction, whether now or
hereafter in effect, and is not dismissed within 60 days
after such filing; or
(g) Voluntary Petitions or Consents - Borrower or any
of its Restricted Subsidiaries commences a voluntary case
or other proceeding or order seeking liquidation,
reorganization, arrangement, insolvency, readjustment of
debt, dissolution, liquidation or other relief with respect
to itself or its debts or other liabilities under any
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its Property, or
consents to any such relief or to the appointment of or
taking possession by any such official in an involuntary
case or other proceeding commenced against it, or fails
generally to, or cannot, pay its debts generally as they
become due or takes any corporate action to authorize or
effect any of the foregoing; or
(h) Assignments for Benefit of Creditors or
Admissions of Insolvency - Borrower or any of its
Restricted Subsidiaries makes an assignment for the benefit
of its creditors, or admits in writing its inability to pay
its debts generally as they become due, or consents to the
appointment of a receiver, trustee, or liquidator of such
Person or of all or any substantial part of its Property; or
(i) Undischarged Judgments - a final judgment or
judgments for the payment of money exceeding, in the
aggregate, $5,000,000 (exclusive of amounts covered by
insurance) is rendered by any court or other governmental
body against Borrower or any of its Restricted Subsidiaries
and such Person does not discharge the same or provide for
its discharge in accordance with its terms, or procure a
stay of execution thereof within 30 days from the date of
entry thereof; or
(j) Change of Control - any Change of Control shall
occur.
9.2 Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby
authorized at any time and from time to time, without notice to
Borrower (any such notice being expressly waived by Borrower),
to setoff and apply any and all deposits, whether general or
special, time or demand, provisional or final (but excluding the
funds held in accounts clearly designated as escrow or trust
accounts held by Borrower for the benefit of Persons which are
not Affiliates of Borrower), whether or not such setoff results
in any loss of interest or other penalty, and including without
limitation all certificates of deposit, at any time held, and
any other funds or Property at any time held, and other
Indebtedness at any time owing by such Lender to or for the
credit or the account of Borrower against any and all of the
Obligations irrespective of whether or not such Lender or Agent
will have made any demand under this Agreement, the Notes or any
other Loan Document. Each Lender agrees to promptly notify
Borrower and Agent after any such setoff and application,
provided that the failure to give such notice will not affect
the validity of such setoff and application. The rights of
Agent and the Lenders under this Section are in addition to
other rights and remedies (including without limitation other
rights of setoff) which Agent or the Lenders may have. This
Section is subject to the terms and provisions of Sections 4.5
and 11.7 hereof.
9.3 Remedies Cumulative. No remedy, right or power conferred
upon Agent or any Lender is intended to be exclusive of any
other remedy, right or power given hereunder or now or hereafter
existing at law, in equity, or otherwise, and all such remedies,
rights and powers shall be cumulative.
10. Agent.
10.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent
hereunder and under the other Loan Documents with such powers as
are specifically delegated to Agent by the terms hereof and
thereof, together with such other powers as are reasonably
incidental thereto. Any Loan Documents executed in favor of
Agent shall be held by Agent for the ratable benefit of the
Lenders. Agent ("Agent" as used in this Section 10 shall include
reference to its Affiliates and its own and its Affiliates'
respective officers, shareholders, directors, employees and
agents) (a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and the other Loan
Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary for any Lender;
(b) shall not be responsible to any Lender for any recitals,
statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or
other document referred to or provided for in, or received by
any of them under, this Agreement or any other Loan Document, or
for the value, validity, effectiveness, genuineness,
enforceability, execution, filing, registration, collectibility,
recording, perfection, existence or sufficiency of this
Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or any Property
covered thereby or for any failure by Borrower or any other
Person to perform any of its obligations hereunder or
thereunder, and shall not have any duty to inquire into or pass
upon any of the foregoing matters; (c) shall not be required to
initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent
requested by the Majority Lenders; (d) shall not be responsible
for any mistake of law or fact or any action taken or omitted to
be taken by it hereunder or under any other Loan Document or any
other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, INCLUDING,
WITHOUT LIMITATION, PURSUANT TO ITS OWN NEGLIGENCE, except for
its own gross negligence or willful misconduct; (e) shall not be
bound by or obliged to recognize any agreement among or between
Borrower and any Lender to which Agent is not a party,
regardless of whether Agent has knowledge of the existence of
any such agreement or the terms and provisions thereof; (f)
shall not be charged with notice or knowledge of any fact or
information not herein set out or provided to Agent in
accordance with the terms of this Agreement or any other Loan
Document; (g) shall not be responsible for any delay, error,
omission or default of any mail, telegraph, cable or wireless
agency or operator, and (h) shall not be responsible for the
acts or edicts of any Governmental Authority. Agent may employ
agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
10.2 Reliance. Agent shall be entitled to rely upon any
certification, notice or other communication (including any
thereof by telephone, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel (which may be counsel for Borrower),
independent accountants and other experts selected by Agent.
Agent shall not be required in any way to determine the identity
or authority of any Person delivering or executing the same. As
to any matters not expressly provided for by this Agreement or
any other Loan Document, Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions of the Majority
Lenders, and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders. If any order, writ,
judgment or decree shall be made or entered by any court
affecting the rights, duties and obligations of Agent under this
Agreement or any other Loan Document, then and in any of such
events Agent is authorized, in its sole discretion, to rely upon
and comply with such order, writ, judgment or decree which it is
advised by legal counsel of its own choosing is binding upon it
under the terms of this Agreement, the relevant Loan Document or
otherwise; and if Agent complies with any such order, writ,
judgment or decree, then it shall not be liable to any Lender or
to any other Person by reason of such compliance even though
such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
10.3 Defaults. Agent shall not be deemed to have knowledge of
the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on Loans) unless Agent
has received notice from a Lender or Borrower specifying such
Default or Event of Default and stating that such notice is a
"Notice of Default." In the event that Agent receives such a
Notice of Default, Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender prompt notice of each such
non-payment). Agent shall (subject to Section 10.7 hereof) take
such action with respect to such Notice of Default as shall be
directed by the Majority Lenders and within its rights under the
Loan Documents and at law or in equity, provided that, unless
and until Agent shall have received such directions, Agent may
(but shall not be obligated to) take such action, or refrain
from taking such action, permitted hereby with respect to such
Notice of Default as it shall deem advisable in the best
interests of the Lenders and within its rights under the Loan
Documents, at law or in equity.
10.4 Material Written Notices. In the event that Agent
receives any written notice of a material nature from Borrower
under the Loan Documents, Agent shall promptly inform each of
the Lenders thereof.
10.5 Rights as a Lender. With respect to its Commitments and
the Loans made by it, Chase Texas in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not
acting in its agency capacity, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include
Agent in its individual capacity. Agent may (without having to
account therefor to any Lender) accept deposits from, lend money
to and generally engage in any kind of banking, trust, letter of
credit, agency or other business with Borrower (and any of its
Affiliates) as if it were not acting as Agent; and Agent may
accept fees and other consideration from Borrower (in addition
to the fees heretofore agreed to between Borrower and Agent) for
services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
10.6 Indemnification. The Lenders agree to indemnify Agent (to
the extent not reimbursed under Section 11.3 or Section 11.4
hereof, but without limiting the obligations of Borrower under
said Sections 11.3 and 11.4), ratably in accordance with the
Lenders' respective Commitments (or, after termination of the
Commitments, ratably in accordance with the Loans held by them,
respectively), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind and nature whatsoever, REGARDLESS
OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, which may be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of
this Agreement or any other Loan Document or any other documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which Borrower is obligated
to pay under Sections 11.3 and 11.4 hereof, interest, penalties,
attorneys' fees and amounts paid in settlement, but excluding,
unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of
its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided
that no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful
misconduct of the party to be indemnified. The obligations of
the Lenders under this Section 10.6 shall survive the
termination of this Agreement and the repayment of the Obligations.
10.7 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has received current financial information with
respect to Borrower that it has, independently and without
reliance on Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its
own credit analysis of Borrower and decision to enter into this
Agreement and that it will, independently and without reliance
upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue
to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents.
Agent shall not be required to keep itself informed as to the
performance or observance by Borrower of this Agreement or any
of the other Loan Documents or any other document referred to or
provided for herein or therein or to inspect the Properties or
books of any Person. Except for notices, reports and other
documents and information expressly required to be furnished to
the Lenders by Agent hereunder or under the other Loan
Documents, Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information
concerning the affairs, financial condition or business of any
Person which may come into the possession of Agent.
10.8 Failure to Act. Except for action expressly required of
Agent hereunder or under the other Loan Documents, Agent shall
in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Lenders of their
indemnification obligations under Section 10.6 hereof against
any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
10.9 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, Agent may resign at any time by giving notice thereof to
the Lenders and Borrower, and Agent may be removed at any time
with or without cause by the Majority Lenders; provided, that
Agent shall continue as Agent until such time as any successor
shall have accepted appointment as Agent hereunder. Upon any
such resignation or removal, (i) the Majority Lenders with the
consent of Borrower unless an Event of Default has occurred and
is continuing shall have the right to appoint a successor Agent
so long as such successor Agent is also a Lender at the time of
such appointment and (ii) the Majority Lenders shall have the
right to appoint a successor Agent that is not a Lender at the
time of such appointment so long as Borrower consents to such
appointment (which consent shall not be unreasonably withheld).
If no successor Agent shall have been so appointed by the
Majority Lenders and accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation or
the Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a
successor Agent. Any successor Agent shall be a bank which has
an office in the United States and a combined capital and
surplus of at least $250,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder and under any other Loan
Documents. Such successor Agent shall promptly specify by
notice to Borrower its Principal Office referred to in Section
3.1 and Section 4 hereof. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of
this Section 10 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 Agent.
10.10 No Partnership. Neither the execution and
delivery of this Agreement nor any of the other Loan Documents
nor any interest the Lenders, Agent or any of them may now or
hereafter have in all or any part of the Obligations shall
create or be construed as creating a partnership, joint venture
or other joint enterprise between the Lenders or among the
Lenders and Agent. The relationship between the Lenders, on the
one hand, and Agent, on the other, is and shall be that of
principals and agent only, and nothing in this Agreement or any
of the other Loan Documents shall be construed to constitute
Agent as trustee or other fiduciary for any Lender or to impose
on Agent any duty, responsibility or obligation other than those
expressly provided for herein and therein.
10.11 Authority of Agent. Each Lender acknowledges
that the rights and responsibilities of Agent under this
Agreement and the Loan Documents with respect to any action
taken by Agent or the exercise or non-exercise by Agent of any
option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this
Agreement and/or the other Loan Documents shall, as between
Agent and the Lenders, be governed by this Agreement and by such
other agreements with respect thereto as may exist from time to
time among them, but, as between Agent and Borrower, Agent shall
be conclusively presumed to be acting as agent for the Lenders
with full and valid authority so to act or refrain from acting;
and Borrower shall not be under any obligation, or entitlement,
to make any inquiry respecting such authority.
10.12 Documentation Agent and Syndication Agent. Neither
the Documentation Agent nor the Syndication Agent, in their
capacities as such, shall have any duties or responsibilities
under this Agreement.
11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default
shall be a waiver of any other Default or Event of Default. No
failure on the part of Agent or any Lender to exercise and no
delay in exercising, and no course of dealing with respect to,
any right, power or privilege under any Loan Document shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege thereunder preclude
any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided in the
Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.
11.2 Notices. All notices and other communications provided
for herein (including, without limitation, any modifications of,
or waivers or consents under, this Agreement) shall be given or
made by telegraph, telecopy (confirmed by mail), cable or other
writing and telecopied, telegraphed, cabled, mailed or delivered
to the intended recipient at the "Address for Notices" specified
below its name on the signature pages hereof (or provided for in
an Assignment and Acceptance); or, as to any party hereto, at
such other address as shall be designated by such party in a
notice (given in accordance with this Section) (i) as to
Borrower, to Agent, (ii) as to Agent, to Borrower and to each
Lender, and (iii) as to any Lender, to Borrower and Agent.
Except as otherwise provided in this Agreement, all such notices
or communications shall be deemed to have been duly given when
(i) transmitted by telecopier or delivered to the telegraph or
cable office, (ii) personally delivered (iii) one Business Day
after deposit with a nationally recognized overnight mail or
delivery service, postage prepaid or (iv) three Business Days'
after deposit in a receptacle maintained by the United States
Postal Service, postage prepaid, registered or certified mail,
return receipt requested, in each case given or addressed as
aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made,
Borrower shall pay or reimburse within 10 Business Days after
written demand (a) Agent for paying the reasonable fees and
expenses of legal counsel to Agent, together with the reasonable
fees and expenses of each local counsel to Agent, in connection
with the preparation, negotiation, execution and delivery of
this Agreement (including the exhibits and schedules hereto) and
the other Loan Documents and the making of the Loans, and any
modification, supplement or waiver of any of the terms of this
Agreement or any other Loan Document; (b) Agent for any
reasonable and customary lien search fees,; (c) Agent for
reasonable out-of-pocket expenses incurred in connection with
the preparation, documentation of the Loans or any of the Loan
Documents of the Loans; (d) Agent for paying all transfer,
stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in
respect of this Agreement or any other Loan Document or any
other document referred to herein or therein, and (e) following
the occurrence and during the continuation of an Event of
Default, any Lender or Agent for paying all amounts reasonably
expended, advanced or incurred by such Lender or Agent to
satisfy any obligation of Borrower under this Agreement or any
other Loan Document, to collect the Obligations or to enforce,
protect, preserve or defend the rights of the Lenders or Agent
under this Agreement or any other Loan Document, including,
without limitation, fees and expenses incurred in connection
with such Lender's or Agent's participation as a member of a
creditor's committee in a case commenced with Borrower or any of
its Restricted Subsidiaries as debtor under the Bankruptcy Code
or other similar law, fees and expenses incurred in connection
with lifting the automatic stay prescribed in Section 362 of the
Bankruptcy Code and fees and expenses incurred in connection
with any action pursuant to Section 1129 of the Bankruptcy Code
and all other reasonable and customary out-of-pocket expenses
incurred by such Lender or Agent in connection with such
matters, together with interest thereon at the Past Due Rate on
each such amount from the due date until the date of
reimbursement to such Lender or Agent.
11.4 Indemnification. Borrower shall indemnify each of Agent,
the Lenders, and each affiliate thereof and their respective
directors, officers, employees and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims
or damages to which any of them may become subject, REGARDLESS
OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, insofar as such losses, liabilities, claims
or damages arise out of or result from any (i) actual or
proposed use by Borrower of the proceeds of any extension of
credit (whether a Loan) by any Lender hereunder; (ii) breach by
Borrower of this Agreement or any other Loan Document; (iii)
violation by Borrower or any of its Restricted Subsidiaries of
any Legal Requirement, or (iv) investigation, litigation or
other proceeding relating to any of the foregoing, and Borrower
shall reimburse Agent, each Lender, and each Affiliate thereof
and their respective directors, officers, employees and agents,
upon demand for any reasonable and customary expenses (including
reasonable and customary legal fees) incurred in connection with
any such investigation or proceeding; provided, however, that
Borrower shall not have any obligations pursuant to this Section
with respect to any losses, liabilities, claims, damages or
expenses incurred by the Person seeking indemnification by
reason of the gross negligence or willful misconduct of that
Person or with respect to any disputes between or among any of
Agent and Lenders. Nothing in this Section is intended to limit
the obligations of Borrower under any other provision of this
Agreement. In the case of any indemnification hereunder, Agent
or the respective Lender, as appropriate, shall give written
notice to Borrower of any such claim or demand being made
against an indemnified person and Borrower shall have the
non-exclusive right to join in the defense against any such
claim or demand, provided that if Borrower provides a defense,
the indemnified person shall bear its own cost of defense unless
there is a conflict of interests between Borrower and such
indemnified person. No Indemnified Person may settle any claim
to be indemnified without the consent of Borrower, such consent
not to be unreasonably withheld or delayed.
11.5 Amendments, Etc. No amendment or modification of this
Agreement, the Notes or any other Loan Document shall in any
event be effective against Borrower unless the same shall be
agreed or consented to in writing by such Person. No amendment,
modification or waiver of any provision of this Agreement, the
Notes or any other Loan Document, nor any consent to any
departure by Borrower therefrom, shall in any event be effective
against the Lenders unless the same shall be agreed or consented
to in writing by the Majority Lenders, and each such waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, that no
amendment, modification, waiver or consent shall, unless in
writing and signed by each Lender affected thereby, do any of
the following: (a) increase any Commitment of any of the
Lenders (or reinstate any termination or reduction of the
Commitments) or subject any of the Lenders to any additional
obligations; (b) reduce the principal of, or interest on, any
Loan or fee hereunder; (c) postpone or extend the Maturity Date
or any scheduled date fixed for any payment of principal of, or
interest on, any Loan, fee or other sum to be paid hereunder or
waive any Event of Default described in Section 9.1(a) hereof;
(d) change the percentage of any of the Commitments or of the
aggregate unpaid principal amount of any of the Loans, or the
percentage of Lenders, which shall be required for the Lenders
or any of them to take any action under this Agreement, or (e)
change any provision contained in Sections 7.9, 11.3 or 11.4
hereof or this Section 11.5. Notwithstanding anything in this
Section 11.5 to the contrary, no amendment, modification, waiver
or consent shall be made with respect to Section 10 without the
consent of Agent to the extent it affects Agent, as Agent.
11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of Borrower, Agent and the Lenders and their respective
successors and permitted assigns; provided, however, that,
except as permitted by Section 8.5 hereof, Borrower may not
assign or transfer any of its rights or obligations hereunder
without the prior written consent of all of the Lenders, and any
such assignment or transfer without such consent shall be null
and void. Each Lender may sell participations to any Person in
all or part of any Loan, or all or part of its Notes or
Commitments, in which event, without limiting the foregoing, the
provisions of the Loan Documents shall inure to the benefit of
each purchaser of a participation; provided, however, the pro
rata treatment of payments, as described in Section 4.2 hereof
and rights to compensation under Sections 3.3 and 7.9 hereof,
shall be determined as if such Lender had not sold such
participation. Any Lender that sells one or more participations
to any Person shall not be relieved by virtue of such
participation from any of its obligations to Borrower under this
Agreement relating to the Loans. In the event any Lender shall
sell any participation, such Lender shall retain the sole right
and responsibility to enforce the obligations of Borrower
relating to the Loans, including, without limitation, the right
to approve any amendment, modification or waiver of any
provision of this Agreement other than amendments, modifications
or waivers with respect to (i) any fees payable hereunder to the
Lenders and (ii) the amount of principal or the rate of interest
payable on, or the dates fixed for the scheduled repayment of
principal of, the Loans.
(b) Each Lender may assign to one or more Lenders or any
other Person all or a portion of its interests, rights and
obligations under this Agreement; provided, however, that (i)
the amount of the Commitment of the assigning Lender subject to
each such assignment shall in no event be less than $10,000,000;
(ii) other than in the case of an assignment to another Lender
(that is, at the time of the assignment, a party hereto) or to
an Affiliate of such Lender or to a Federal Reserve Bank, Agent
and, so long as no Event of Default shall have occurred and be
continuing, Borrower must each give its prior written consent,
which consents shall not be unreasonably withheld, and (iii) the
parties to each such assignment shall execute and deliver to
Agent, for its acceptance an Assignment and Acceptance in
substantially the form of Exhibit D hereto (each an "Assignment
and Acceptance") with blanks appropriately completed, together
with any Note or Notes subject to such assignment and a
processing and recording fee of $3,000 paid by the assignee (for
which Borrower will have no liability). Upon such execution,
delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee
thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (B) the Lender thereunder
shall, to the extent provided in such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be
a party hereto except in respect of provisions of this Agreement
which survive payment of the Obligations and termination of the
Commitments). Notwithstanding anything contained in this
Agreement to the contrary, any Lender may at any time assign all
or any portion of its rights under this Agreement and the Notes
issued to it as collateral to a Federal Reserve Bank; provided
that no such assignment shall release such Lender from any of
its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties
hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse
claim, such Lender assignor 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 any of the other Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant thereto;
(ii) such Lender assignor makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of Borrower or the performance or observance by
Borrower of any of its obligations under this Agreement or any
of the other Loan Documents to which it is a party or any other
instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements most recently
delivered under either Section 6.2 or Section 7.2 hereof and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon Agent, such Lender
assignor 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 and the other Loan Documents; (v) such
assignee appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to Agent
by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all obligations that by
the terms of this Agreement and the other Loan Documents are
required to be performed by it as a Lender.
(d) The entries in the records of Agent as to each Assignment
and Acceptance delivered to it and the names and addresses of
the Lenders and the Commitments of, and principal amount of the
Loans owing to, each Lender from time to time shall be
conclusive, in the absence of manifest error, and Borrower,
Agent and the Lenders may treat each Person the name of which is
recorded in the books and records of Agent as a Lender hereunder
for all purposes of this Agreement and the other Loan Documents.
(e) Upon Agent's receipt of an Assignment and Acceptance
executed by an assigning Lender and the assignee thereunder,
together with any Note or Notes subject to such assignment and
the written consent to such assignment (to the extent consent is
required), Agent shall, if such Assignment and Acceptance has
been completed with blanks appropriately filled, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in its records and (iii) give prompt notice thereof to
Borrower. Within five Business Days after receipt of notice,
Borrower, at its own expense, shall execute and deliver to Agent
in exchange for the surrendered Note a new Note to the order of
such assignee in an amount equal to the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment hereunder, a new Note to the
order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be in
an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the respective Note. Thereafter, such
surrendered Notes shall be marked renewed and substituted and
the originals thereof delivered to Borrower (with copies to be
retained by Agent).
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant
to this Section 11.6, disclose to the assignee or participant or
proposed assignee or participant, any information relating to
Borrower furnished to such Lender by or on behalf of Borrower;
provided such Person agrees to maintain the confidentiality of
such information in accordance with Section 11.16.
11.7 Limitation of Interest. The parties hereto intend to
strictly comply with all applicable federal and Texas laws,
including applicable usury laws (or the usury laws of any
jurisdiction whose usury laws are deemed to apply to the Notes
or any other Loan Documents). Accordingly, the provisions of
this Section 11.7 shall govern and control over every other
provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section, even if such
provision declares that it controls. As used in this Section,
the term "interest" includes the aggregate of all charges, fees,
benefits or other compensation which constitute interest under
applicable law, provided that, to the maximum extent permitted
by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something
other than the use, forbearance or detention of money and not as
interest, and (b) all interest at any time contracted for,
reserved, charged or received shall be amortized, prorated,
allocated and spread, in equal parts during the full term of the
Obligations. In no event shall Borrower or any other Person be
obligated to pay, or Agent or any Lender have any right or
privilege to reserve, receive or retain, (a) any interest in
excess of the maximum amount of nonusurious interest permitted
under the laws of the State of Texas or the applicable laws (if
any) of the United States or of any other jurisdiction, or (b)
total interest in excess of the amount which such Person could
lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of
the Obligations at the Ceiling Rate. The daily interest rates
to be used in calculating interest at the Ceiling Rate shall be
determined by dividing the applicable Ceiling Rate per annum by
the number of days in the calendar year for which such
calculation is being made. None of the terms and provisions
contained in this Agreement or in any other Loan Document
(including, without limitation, Section 9.1 hereof) which
directly or indirectly relate to interest shall ever be
construed without reference to this Section 11.7, or be
construed to create a contract to pay for the use, forbearance
or detention of money at an interest rate in excess of the
Ceiling Rate. If the term of any Obligation is shortened by
reason of acceleration of maturity as a result of any Default or
by any other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason Agent or any
Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in
excess of interest calculated at the Ceiling Rate, then and in
any such event all of any such excess interest shall be canceled
automatically as of the date of such acceleration, prepayment or
other event which produces the excess, and, if such excess
interest has been paid to such Person, it shall be credited pro
tanto against the then-outstanding principal balance of
Borrower's obligations to such Person, effective as of the date
or dates when the event occurs which causes it to be excess
interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs
first, and any remaining balance of such excess shall be
promptly refunded to its payor.
11.8 Survival. The obligations of Borrower under Sections 7.9,
11.3 and 11.4 hereof and all other obligations of Borrower in
any other Loan Document (to the extent stated therein) and the
obligations of the Lenders under Sections 4.1(d), 10.6, 11.7,
11.13 and 11.16 hereof, shall, notwithstanding anything herein
to the contrary, survive the repayment of the Loans and the
termination of the Commitments.
11.9 Captions. Captions and section headings appearing
herein are included solely for convenience of reference and are
not intended to affect the interpretation of any provision of
this Agreement.
11.10 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same agreement and any of the parties
hereto may execute this Agreement by signing any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS
THEREIN PROVIDED) THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE
STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO
TIME IN EFFECT.
11.12 Severability. Whenever possible, each provision
of the Loan Documents shall be interpreted in such manner as to
be effective and valid under applicable law. If any provision
of any Loan Document shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan
Document shall not be affected or impaired thereby.
11.13 Tax Forms. Each Lender which is organized under
the laws of a jurisdiction outside the United States shall, on
the day of the initial borrowing from each such Lender hereunder
and from time to time thereafter if requested by Borrower or
Agent, provide Agent and Borrower with the forms prescribed by
the Internal Revenue Service of the United States certifying as
to such Lender's status for purposes of determining exemption
from United States withholding taxes with respect to all
payments to be made to such Lender hereunder or other documents
satisfactory to such Lender, Borrower and Agent indicating that
all payments to be made to such Lender hereunder are not subject
to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty. If a Lender
determines, as a result of any change in either (i) applicable
law, regulation or treaty, or in any official application
thereof or (ii) its circumstances, that it is unable to submit
any form or certificate that it is obligated to submit pursuant
to this Section, or that it is required to withdraw or cancel
any such form or certificate previously submitted, it shall
promptly notify Borrower and Agent of such fact. Unless
Borrower and Agent shall have received such forms or such
documents indicating that payments hereunder are not subject to
United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, Borrower or Agent
shall withhold taxes from such payments at the applicable
statutory rate. Each Lender agrees to indemnify and hold
harmless from any United States taxes, penalties, interest and
other expenses, costs and losses incurred or payable by (i)
Agent as a result of such Lender's failure to submit any form or
certificate that it required to provide pursuant to this Section
or (ii) Borrower or Agent as a result of their reliance on any
representation, form or certificate which such Lender has
provided to them pursuant to this Section.
11.14 Conflicts Between This Agreement and the Other Loan
Documents. In the event of any conflict between the terms of
this Agreement and the terms of any of the other Loan Documents,
the terms of this Agreement shall control.
11.15 Limitation on Charges; Substitute Lenders;
Non-Discrimination. Anything in Sections 3.3(c) or 7.9
notwithstanding:
(1) Borrower shall not be required to pay to any
Lender reimbursement or indemnification with regard to any
costs or expenses described in such Sections, unless such
Lender notifies Borrower of such costs or expenses within
90 days after the date paid or incurred;
(2) none of the Lenders shall be permitted to pass
through to Borrower charges and costs under such Sections
on a discriminatory basis (i.e., which are not also passed
through by such Lender to other customers of such Lender
similarly situated where such customer is subject to
documents providing for such pass through); and
(3) if any Lender elects to pass through to Borrower
any material charge or cost under such Sections or elects
to terminate the availability of LIBOR Borrowings for any
material period of time, Borrower may, within 60 days after
the date of such event and so long as no Default shall have
occurred and be continuing, elect to terminate such Lender
as a party to this Agreement; provided that, concurrently
with such termination Borrower shall (i) if Agent and each
of the other Lenders shall consent, pay that Lender all
principal, interest and fees and other amounts owed to such
Lender through such date of termination or (ii) have
arranged for another financial institution approved by
Agent (such approval not to be unreasonably withheld or
delayed) as of such date, to become a substitute Lender for
all purposes under this Agreement in the manner provided in
Section 11.6; provided further that, prior to substitution
for any Lender, Borrower shall have given written notice to
Agent of such intention and the Lenders shall have the
option, but no obligation, for a period of 60 days after
receipt of such notice, to increase their Commitments in
order to replace the affected Lender in lieu of such
substitution.
11.16 Confidentiality. Each Lender agrees to exercise its
best efforts to keep any information delivered or made available
by Borrower which is clearly indicated to be confidential
information, confidential from anyone other than Persons
employed or retained by such Lender or any of its Affiliates who
are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing
herein shall prevent any Lender from disclosing such information
(a) to any other Lender; (b) pursuant to subpoena or upon the
order of any court or administrative agency; (c) upon the
request or demand of any regulatory agency or authority having
jurisdiction over such Lender; (d) which has been publicly
disclosed; (e) to the extent reasonably required in connection
with any litigation to which Agent, any Lender, Borrower or
their respective Affiliates may be a party; (f) to the extent
reasonably required in connection with the exercise of any
remedy hereunder; (g) to such Lender's bank counsel and
independent auditors; and (h) to any actual or proposed
participant or assignee of all or part of its rights hereunder
which has agreed in writing to be bound by the provisions of
this Section.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SECTION26.02
THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL
OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO
OR SUBSTANTIALLY CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN
AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
OCEANEERING INTERNATIONAL, INC.,
a Delaware corporation
By:
Name:
Title:
Address for Notices:
11911 FM 529
Houston, Texas 77041
Attention: Chief Financial Officer
Telecopy No.: (713) 329-4653
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent, Lead
Arranger and Book Manager and as a Lender
By:
Name:
Title:
Address for Notices:
Commitment: 712 Main Street
Houston, Texas 77002
$30,000,000 Attention: Manager, Structured Finance - Oil Service
Telecopy No.: (713) 216-6710
WELLS FARGO BANK (TEXAS), N. A.,
as Syndication Agent and as a Lender
By:
Name:
Title:
Address for Notices:
Commitment: 1000 Louisiana, 3rd Floor
Houston, Texas 77002
$20,000,000 Attention: Mr. Frank W. Schageman
Telecopy No.: (713) 739-1087
CITICORP USA, INC.,
as Documentation Agent and as a Lender
By:
Name:
Title:
Address for Notices:
Commitment: c/o CitiBank, N.A.
One Penns Way
$20,000,000 New Castle, Delaware 19720
Attention: Ms. Courtney Whitlock
Telecopy No.: (302) 894-6120
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
Address for Notices:
Commitment: The Bank of Nova Scotia, Atlanta Office
600 Peachtree Street N.E.
$10,000,000 Suite 2700
Atlanta, Georgia 30308
Attention: Cleve Bushey
Telecopy No.: (404) 888-8998
with a copy to:
The Bank of Nova Scotia
1100 Louisiana, Suite 3000
Houston, Texas 77002
Attention: Mr. Spencer Smith
Telecopy No.: (713) 752-2439
